I have been in forex since 3 to 4 months after failing even in the best of cyclers, hyips, auto surfs, etc. In these few months I have been trying out various strategies in forex. My constraints are that I cannot spend lot of time on forex as this is a part time for me. Iam a software professional and get limited time to spend time on following news or my trades. I can't invest too much money with forex traders too to have an account maintained. I even can't subscribe to signal alerts and follow them. Still, I thought I can do forex and trying out various techniques where I would just spend total of 1 hr daily.

Recently, I came to know about grid strategy, I need your comments on how we can make best use of this.

To summarize, what grid strategy is..

In this technique, we put sell and buy orders at various intervals, say 20 or 50 whatever. Each order has a TP of the interval gap and NO STOPS !! Whenever an order gets executed and the trade is closed, we create a similar order again. In this way, whatever direction the trend is we still make profit. Only issues are we need to trade using only 3 to 5% of our capital as we need a lot of width. Advantages are we need to just setup our orders and monitor them once or twice a day spending less than an hour.

If you try this for 2 or 3 days, you will get the idea.

Please post back if you need more info on this strategy. I shall start posting all my trades very soon.

Thanks,
Gupta.

Sounds interesting...

Can you point us to a website or explain more details about this grid strategy. I can only catch some rough ideas from your post and still have some grey area like what is the start point we should set and how many sell and buy order to open to maximize our earning with this strategy.

seems nice.
if this strategy works, can you make a software to do that strategy automatically ?
(since you are a software profesional)
thenn you can make a lot more money.

Here is a good article on Grid. You can start at any point. At every interval of say 40pips you would need to set up both sell and buy orders. When the trend is going up, you would gain on your long trades and when it retraces, you would be gaining on the other set.

http://www2.oanda.com/cgi-bin/msgboard/ult...t=003696#000013

As I told you, you would need to start with just 3 to 5% of your capital.

You exactly read what is in my mind Iam planning to write software to create orders automatically. I have plans to use the Oanda API to do that. But it would take a little time may be a couple of months before I could pay 600$/month for the API. Creation of the software should not take more than a week. Anyway, thanks for your idea, that's what I was exactly looking at.

This was also discussed on strategybuilder forum and it got very bad reviews. I cant remember why, but, people did not like it. Please read more about it there.

http://www.strategybuilderfx.com/forums/sh...ead.php?t=13155

have to log in first.

Thanks for the link UncleJesse.
Main reasons why some people dont like this technique is

1. It's not good to trade more than 5% of our capital as if price moves against, we would need lot of width. So, the profit/trade would be less comparable to normal trades where people invest upto 30% to 40% on active trades.

2. Would need lot of patience to track the trades and create the closed ones.

However if we increase the grid interval to 50 or 100, we can manage easily. We would also gain atleast 50pips/day in the case of EUR/USD. Currently, Iam trading EUR/USD and GBP/USD on a 50pip grid. Looks ok so far.

Looks interesting....i shall read about it too.
Thanks slngupta

I've heard about grid strategy for along time now and know a person from moneytec who uses it with great sucess but his strategy is too to understand. I'll try and get some info from him and post it in here ...

Thanks for your information slngupta.

thanks for the info.

Keep us updated.


As a side note, there seem to be a lot of good strategies out there. Its just discipline and money management that will make or break your account

I have 2 accounts in Oanda. I trade GBP/USD

On 1st account I have long orders set at 1.7275 to 1.7975 for every 50 pips. i.e 1.7275, 1.7325, 1.7375....1.7975.

On 2nd account I have short orders set at same intervals and prices.

As Oanda, doesnt allow hedged positions, I had to maintain 2 accounts.

In the past few days(I think 3 days), I made a total of 550 pips.

Ofcourse there are trades going in loss, but this is part of the technique. At each swing one set of trades would be in profit. Please check the attached graphs. All the green dots you see are the closed trades with profit of 50 pips.

[attachmentid=2038] [attachmentid=2039]

Could you please explain about this system more
I would try but I need first understand it 110%

Try this link.
http://www2.oanda.com/cgi-bin/msgboard/ult...t=003696#000013
Please let me if you have any queries.

But what is more winnings or loosings???
Edit look at website: http://www2.oanda.com/cgi-bin/msgboard/ult...c;f=15;t=003780

slngupta could you please explain me more step by step because I do not understand

I will send you the step by step explanation soon.

Regarding the winnings or loosings, I wouldn't call them as loosings...as they are still open trades.

Regarding the pips, winnings(trades closed with profit) were 550pips and open trades in loss(400pips). So net profit of 150pips in 3 days.

The trades running in loss will be in profit whenever price retraces..

I should say, this is a NO LOSS technique, provided you do proper money management.

i have a doubt on platform. you told there is no hedging on oanda, what will happen there occur a margin call in an account? did it have same account balance or we have to fund seperately? if it fund seperately , there is a possibility of margin call.


thanks for your post, it made me think again about grid

Sarath, nice to see your post here
I created a sub account with Oanda(operates like an independent a/c but within the primary a/c)

You are right regarding the margin call but that situation wouldn't arise. Here are the reasons

1. We should not start with more than 5% on active trades. This will give us enough width for any situation.

2. We have a transfer feature between the accounts, which would help us to transfer funds from a/c in profit to a/c in loss.

3. Generally, the currency fluctuations go up and down and up and so on. This will help us to gain profit on both accounts. It depends on the interval of the grid. If the interval on the grid is less, say 20 to 30, it is more likely to get more profit on both accounts. We should look for an optimum interval anyway.

Last week, the GBP/USD moved from 7400 to 7700 and this week as you might have observed, it's almost back to where it started. We make profit in both directions trading on grid. For sometime some our trades would be in loss but we need to plan in such a way that we should be able to withstand a 500pip to 1000pip against trend.

As you know, I have been trying out various strategies since a long time...but this looks a no loss technique if we are patient and do proper money management.

Will post my findings here everyday. Do check out.

Here is a step by step explanation.

1. Choose a platform which allows hedged positions(trading both short and long at the same on the same currency). Atleast the platform should allow multiple accounts where you can trade all long positions on one a/c and short positions on another.

2. Think of an interval where you would like to create orders. For example, let's take the interval as 50 and the currency as GBP/USD. Now for every 50pip interval create sell orders and also buy orders at the same points. So, set up buy orders and sell orders at the following prices:

Sell Orders
1.7300, 1.7350, 1.7400, 1.7450, 1.7500, 1.7550, 1.5600, 1.5650, 1.5700, 1.5750, 1.5800

Buy Orders
1.7300, 1.7350, 1.7400, 1.7450, 1.7500, 1.7550, 1.5600, 1.5650, 1.5700, 1.5750, 1.5800

3. Set the targets for all the orders for 50pips. i.e the targets for your long orders would be 50pips more than the ordered price and 50pips less for the sell orders.

4. Now your set up is ready. Now assume that the GBP/USD price is moving from 1.7400 upwards. As it moves up your order at 1.7400 executes. Think that it moved till 1.7450. Now this order would be completed giving you 50 pips. At the same time your orders at 1.7450 executes now(one sell and one buy). Create another order for your 1.7400 which got closed with profit.

5. Now assume the GBP/USD is coming back to 1.7400. Now your short trade at 1.7450 would give you a profit of 50 pips.

6. You would be taking profit in whatever direction your trade goes. You need to just recreate those orders which got executed and closed with profit.

As I mentioned in my previous post, lastweek GBP/USD moved 300 pips up and this week 300pips down. I got a chance to get profit on both the trends. Made a total of 550 pips.

You need to take care regarding :

1. You need to have a large width as there can be situations where there would be many active trades opened and you should be able to withstand if all of them are in loss temporarily. You can do this by trading with 0.5 to 1% for each trade of your capital. Proper money management is needed to be precise.

2. Need to be patient enough to check all your trades and recreate whenever any trade is completed.

thanks for your reply. i tested grid few months back. though i like the theory oneday, while i tested grid, gbp rallied, and continued to rally for next few days. thats why i didn't like it at that time. i will try it this time too. anyway i think better use eur/usd or any jpy pair. jpy have more retracements so as chf , very volatile. and grids profit is on retracements. untill then your unrealized losses are more than your realised profit. though it will work for any pairs, i dont' preffer gbp, as if it start a trend, it will continue may be a 500+ pips on that trend without much retracements.

still thinking on it

It all depends on the interval you select. If you use a 100pip interval for GBP, you can trade it too

sorry but i dont quite get how you can make profit from this. mind to explain more?

Lets say you open 1 short and 1 long order at 1.7400

ok now, the currency now hit 1.7450 and you profit will looks like below without the gap between the bid and the offer price.

+50 for long
-50 for short

Now you open 1 short and 1 long order at 1.7450

lets think the currency now back to 1.400 and your profit:

+50 for short
-50 for long



So overall, you are not making any profit and probably losing pips to the gap between bid and offer price. did i misunderstand anything?

I still dont like the grid technigue, possibly because of my lack of understanding.

As far as I can see you lose interest and spreads.

Please see the profit/loss corresponding to each position if price moves from 1.7400 to 1.7450 and back to 1.7400

Long at 1.7400 +50(close this trade at 1.7450)
Short at 1.7400 0(as price has moved back to start)
Long at 1.7450 -50
Short at 1.7450 +50(close this trade at 1.7400)

So, you will be gaining 50pips overall(might be a few pips less for your spread). You always need to close any trade for 50pip profit but never close any trades in loss.

This strategy will not work if there were no retracements, but every currency has retracements sooner or later. Only you need to have enough margin.

But what is the best pips interval for gbp/usd???

Iam doing with 50pip interval.
You would surely get more profits with a lesser interval but you would need to have to even more margin then.

I have been trying something like this, the ptoblem comes when one pair moves away from you up to about 200 pips, you have to wait a long time for it to come back, otherwise it works well and is the only way I am finding to make money on forex

But what pair is most suitable for this kind strategy??

You got it right ! That's the reason I said, you will need a margin.. You should do an analysis of the currency you trade regarding the max and min prices. Depending on that you should prepare for atleast a 500pip against trend.

Thanx for all your explanation slngupta . I understand what you mean . This is the clearest explanation i've seen on grid trading . I think if u can have a margin which can take a loss upto 1000 pips this would be awsome but it will be a steady and slow growth in profit but thats not a issue. As u can see GPBUSD is on a downtrend in the longer time charts so when it reaches the peak high should u close the trade and not renter until it goes to the next 50 pips?? Iam talking about a peak at a daily chart timeframe??? It would be a nice strategy if u have a account level of $10k . How much would u need to start up using this strategy on oanda???

Thanks Hawk.
Even if it reaches a peak, I would still re enter if it's a daily peak. If it's a all time high or all time low, then I wouldn't enter. I would say at one day, I would have my positions on the entire GBP/USD range. It depends on each of us how can we streamline and optimize the strategy. If you start implementing it, you would get some ideas.

Well, we dont need 10k to implement this strategy in Oanda. Iam trading with just 200$ in Oanda, you dont believe this Oanda allows fractional lots. Iam trading 200 units/trade which just gives me 1$ for every 50pips. I will invest more once I optimize this strategy further.

The only down side I can see after trying it for a while is, when you have used up your margin, you may have to wait a few days for trades to move into profit

Thanx slngupta . It sounds cool . I am gonna set it up on my demo account n practice it until iam comfortable to go live with it . Does it matter where u set the 50 pips interval or can u just pick any point and enter it. I thought maybe setting them close to fibs, pivot, support and resistant points might be effective??? Is it possible to get a demo multiple account under one account if u know what i mean??

You can set the 50pip interval starting from any point. Iam not sure how much it would benefit if you set close to fibs or pivot.

First, open a demo. Then contact the live help support for a sub a/c. They should create it for you.

gupta you are doing great . i too agree its the clearest explanation on grid i have ever seen. compared to the thread in strategy builderfx , it took me 2 days to understand the concept and left few fogs . and his explanation cleared things. so for i can see with a proper money management to withstand a 1000 pips move ie, the to withstand even the worst condition , it didn't have a drawback. still trying to break the code. as you said, its profit is on retracement. but even if you didn't have retracement for 500 pips, your loss is only the spreads. and when it start retracemnt you will start getting profit.

i am also thinking on grid on fib levels.

Thanx Gupta I will look into it

thank slngupta, i understand it now

Sarath, the loss is not just spreads if there is no retracement..it's more..
For ex. if I have my long and short positions at 50pip intervals, and if price is increasing, say increased by 500pips.

Now my long positions would give 500pips profit. But I will have 10 short positions which are open whose loss would be much more than 500...got me? Just put it on paper, you would get it..

That's the reason we need margin

Started experimenting with grid trading at Oanda demo.

GBPJPY (Long)
10-pip interval
10-pip TP
1000-unit per order

Beginner's luck:



Updated: 20 Oct 2005

I will be using 20-pip interval/20-pip TP soon. Missed a few 'reloads' while I was sleeping and even while I was out for lunch.

hello chrysoveil,
10-pip interval
Please post the results when you done your expriment

I cant wait to see some results at the end of the week.

Thanks for your hard work!

yup got it . i was thinking to add, no T/P for lowest sell order and highest buy order so even if it exceed the limit then it will go fine. but i was wrong i forget about all open position and its cumilative loss. so we have to plan enough to withstand any unexpected move. i like it anyway. once the work is done and made enough grid to withstand any move and proper money management. then work is over. future work is maintanence of filled grids.

i am exp. on it. till now realised profit of 50 pips and unrealized loss of 30 pips.

Good sarath.
Looks, this weekend we would see some results posted here.
We can further work on improving the strategy.

another one took profit, adding another 50 to realised profit. now the total status is,

realized profit = 100
unrealized los = 32

Great going Sarath !

Singupta...what is the amount you need to have in order to trade this way. In the demo account they do give quite a huge sum. BUt in reality what would be the ideal amount that one can start of with ?

in oanda, you can trade a lot as little as 1$ for a lot , by adjusting leverage , unit size you trade. if you planned to withstand a 1000 pips loss in each direction ( we are taking it as worst case and we expect no much retracemtn in this move) and your gap is 50 pips you you have to trade,

1000/50 = 20 grid in one direction and total 20+20 = 40 grid.

if you adjust leverage , for 1$ a lot , you need atleast 40 $ for completing the grids, but not enough to trade. i preffer at least double the amount. ie, 80$.

Right! At oanda Iam trading with total of 200$ and adjusting my balances between 2 accounts.