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Financial and Forex Regulators. Finding the Best Forex Broker: 7 Key Factors. Benefits of Micro and Nano Lot Brokers. Technical Indicators. Forex Basics. Training Videos. What is Grid Trading in Forex. A grid system can come in two flavours: Pure Grid Trading : buy and sell limits are set are within a predefined market range, regardless of market direction; Modified Grid Reading: the grid mechanism acts as a trade management component of directional entry system.

Pure Grid Trading: Beautiful in a range, Deadly in a Trend The Pure Grid Trading System does not care about the market direction for it places its buy and sell limits, each with specific target prices, at regularly spaced intervals above and below the current market price. Is this article helpful? Share it with a friend HTML Comment Box is loading comments Sign Up.

Remember Me. Join our mailing list? Receive contest notifications. Forgotten Password. In the chart above, the purple oval marks our current position. Let's say we expect the EUR to grow against USD, but we cannot estimate the horizon of this event. To compensate for possible losses from a fall in the Euro rate, we take our current position 1.

I personally prefer to calculate intervals based on extrema. Below we will analyze this case in more detail. To do this, let's look at the history of the chart and determine the distance from the current level to the nearest extreme. Since we are determining the interval for the first pending orders, they need to be executed within the development of the side channel.

Sofrom this extreme we go to the candlestick body or the high value in the case of a Sell order of the previous candlestick and round to whole numbers they act as a magnet for major players. We get Sell Limit order at the level of 1. We will move the stop loss by another points, setting it at the level of 1. Take profit is set approximately at a double interval, at the level of 1. To do this, we measure points down from the base price. Let's move the stop loss down another points and set it at the level of 1.

Set the take profit at 1. As a result, in the chart above, we see the classic Grid system with Sell blue line and Buy orange pending orders and automatic take profit green lines and stop loss levels red lines. As we can see, first the price hits is the Sell Limit order blue oval in the chart. After its opening, the price immediately moves down. After some time, the price reaches 1.

A little later, at the level of 1. Immediately after the order has been executed by take profit, we place exactly the same order with the same settings as the previous one. Our net profit without the spread was already 1, points. Then, the price goes up rapidly and crosses the take profit at the level 1. The Buy order is automatically closed, and our profit doubles up to 2, points.

The Sell order is activated and a pending Buy order is placed. As you can see, the price almost reaches the stop loss level of the Sell order and comes back down. The answer is simple - in this case, we would update the base price based on the result of the last formed candlestick, do a new calculation of the interval and re-place pending orders taking into account the new input data.

However, since there are no signs of the end of the sideways movement or its shift up or down, we continue to use the Forex grid system without changes.

After some upward movement, the price goes down in steps and reaches the lower Buy Limit order green oval. Then it crosses the take profit level of the Sell position, taking the current profit at 0. The total profit of the three closed positions now is 3, points without spreads. Then the price chart crosses the automatic stop loss level of the active Buy order see the red circle. Therefore, we subtract from the total profit the loss of points and it is now equal to 2, points. As I said above, the grid strategy allows you to hedge risks on the Forex market.

The remaining profit of 2, points would be enough to cover the losses in the main buy position in EURUSD in a comparable amount up to 1. The chart shows that until the moment of a strong upward impulse, we did not see the crossing of this level marked with a green ray. And given that the work of the grid strategy does not stop there and the profit will constantly expand the break-even range for the main position, we can talk about the grid system being effective as a hedging instrument.

I highly recommend testing this strategy in manual mode with small lots or even on a demo account. This will help you work out the mechanics of the strategy and understand how to work with it. All the necessary tools are available from LiteFinance.

After you gain experience trading with this strategy, the next big step for you is to use a quality Forex Grid master or Forex Grid trader. This will save a lot of time, as well as rid your trading system of the notorious human error. I will talk about this later in this article. As I said above, high volatility markets are considered difficult for most traders to profit from.

On the one hand, the limited range of price fluctuations does not provide any significant profit. On the other hand, the frequent change in the direction of price movement complicates the analysis, increasing the risks many times over.

But this is only true for classic trading methods. The Forex grid strategy is their exact opposite. Even its simplest version presented above demonstrates high accuracy. It therefore allows you to consistently profit from recurring price fluctuations. But at the same time, even the best Forex grid strategy demonstrates low efficiency in the case of a stable unidirectional trend movement.

Absolutely any grid hedge strategy is based on placing "mirror" opposite orders. In most cases, positions are placed against the trend, because during the back-and-forth development of the market, price movement in one direction inevitably leads to a quick reversal. The usual number of orders placed on each side of the base price is In this case, the setting interval can be either fixed or dynamic, and tied to the support and resistance levels of the Pivot indicator or any other instrument that allows you to identify the traded levels.

In principle, Forex hedging with a grid trading strategy is suitable for trend following. However, its effectiveness will be low. In this case, orders with a higher price are placed to buy, and orders with a lower one - to sell. Let's discuss how to implement a successful grid trading strategy, regardless of which of the methods below you will use:. The Forex grid hedge strategy is classic grid hedging. The essence of the method is to place pending orders opposite in direction, with stop-loss and take-profit orders for each of them.

I talked about placing such orders above. After the pending positions are set, there are three possible scenarios, two of which are favorable:. This strategy is neutral - it does not require the trader to predict the likely price movement.

At the same time, it has high requirements for the setting and execution of stop losses and take profits. One of the key differences in the Forex Double Grid Strategy is the double trading grid. Suppose the EURUSD currency pair is currently trading at 1. To create a grid, we need to do the following I indicated the prices in the tables without taking spread into account.

The grids in these tables are mirrored. It means when one group of positions is in profit, the other will be unprofitable and vice versa. The number of positions in each grid can be completely different: from two excluding market orders to 5, 10 or more. It is important that both grids contain the same number of positions of the same volume. Grids consisting of a small number of positions are easy to use, but they do not always allow flexible risk management.

There are several ways to trade the double grid system. The first way involves managing the two grids as separate systems. Each side has its own take profit and stop loss. The second option resembles a swing strategy: it involves separate management of trading pairs. It is effective when the market is experiencing sideways volatility requiring take profit and stops for each currency pair.

This option is suitable for large timeframes and a small number of positions in each of the grids. The key to getting the most out of your strategy is active experimenting. The intervals for setting take profit and stops will differ depending on the instrument traded.

Now let's talk about risk control. Each of the two trading grids must have clear boundaries for profit and loss. Take profits and stop losses are placed according to the same principle that I showed in the examples above. It makes sense to place stop losses at the level when the profit received from the open trades in one grid will exceed the loss from positions in another grid that is mirrored to it.

Therefore, the minimum possible placement of stops is considered to be slightly higher or lower than the level of the hedging position, depending on the direction. So the hedging trade must be opened before the stop loss is triggered. Frst of all, like other methods of grid trading, this strategy is not particularly effective during the formation of strong trends.

If we compare it with the classic Forex grid hedge strategy, the double grid is more complex in terms of management. Because of this, beginners often place orders at sub-optimal prices, make mistakes with take profit and stops, and deprive themselves of the opportunity to get high profits over and over again.

As I said above, the grid system is easily automated. Next I will do a Forex grid trading ea review of the Forex VR Smart Grid , a multifunctional advisor that allows you to trade using order grids. It can show positive results not only during the sideways movement of the market, but also in trend movements.

The grid trading robot is designed to work with any timeframes and financial instruments: currency pairs, futures, CFDs, cryptocurrencies, or metals. To start trading, it uses a simple algorithm based on the signals of the CCI indicator. When the indicator is in the oversold zone, the robot opens a long position, and when in the overbought zone - a short one.

When entering the breakeven zone by stop loss, the robot will add new positions, thereby increasing potential profit. The grid of orders against the trend is closed by hedging them. The grid trend multiplier can hedge all positions, or the last two, or the lowest, and the highest. There is also a Smart Hedging option available, when the robot chooses the most optimal method from the ones described above.

Positions are closed with a minimum profit set in the settings. In addition, positions with the highest risk can be closed using accumulated profit, taking into account broker commissions and swap costs.

Grid trend trading ea download: you can download VR Smart Grid here. In addition to the standard version, a demo version is available on the page. I will use it to show the principles of trading with an advisor. To install VR Smart Grid ea MT4 , first of all, you need to launch the terminal, select the "File" tab in the top menu, and "Open data directory".

This will open an explorer window. In it, go to the "MQL" folder, then to the "Experts" directory and copy the downloaded robot file into it. To complete the installation, restart Metatrader. To check if the installation was correct, open the "Navigator" menu, choose the "Advisors" tab and check for the name "VR Smart Grid" in the list.

I also recommend making sure that the platform settings are activated, which are necessary for the robot to work correctly. To do this, in the top menu select the "Service" tab, then in the drop-down menu select "Settings". In the window that opens, open the "Expert Advisors" tab. The items "Allow automatic trading", "Disable automatic trading when changing account", "Disable automatic trading when changing profile", "Allow DLL imports" and "Allow WebRequest for the following URLs" must be checked.

The VR Smart Grid settings window opens immediately after dragging the Expert Advisor from the Navigator window onto the chart. In the "Common" tab, you can configure the type of positions that will be used by the trading robot, allow or prohibit the EA to trade, and add or exclude import permissions.

The settings may differ for each trading instrument. The author of this advisor herself recommends testing the robot on a demo account or a test live account with a small amount for weeks.

The chart shows the VR Smart Grid Expert Advisor. The algorithm draws arrows in the chart for open positions and dashes for take profit levels. The trading robot is based on the principle of opening the maximum number of trades in both directions. Long and short positions are initially controlled separately from each other. They are combined into a single system only when the advisor detects the possibility of hedging one of the sides due to the excess total profit on the other side.

In the chart such combinations of orders look like a bundle of dotted lines, which converge at one point. VR Smart Grid Expert Advisor is an excellent example of grid strategy automation. Although it is not the Grail, in skilled hands with due diligence, risk management rules and continuous testing, it can bring positive results. I also recommend looking at the Grid Trend Multiplier trading advisor.

Not all brokers allow the use of such tools. Many are openly against such trading automation tools. LiteFinance clients can also rent VPS servers directly from their personal account. Trading quotes and server capacities are supplied by a single provider, thus ensuring reliable and fast operation of advisors around the clock. Cryptocurrency markets are highly volatile and therefore are great for applying grid strategies.

At the same time, cryptocurrency trading is no different from trading with conventional currency pairs.

Our focus is on Forex Grid Trading, but all information is relevant for using Grid Strategies on any financial instrument. We are on the cTrader platform in our session today, making use of the Adaptive Grid Blazer from Forexcove. However, all information is applicable on MT4, MT5 or any other platform you may be using. This is the first video in a series that is going to focus entirely on grid trading and grid systems, and it is going to form a playlist on our Youtube channel as well.

The first thing we want to talk about is what I call best practice, which essentially is getting to know your trading system very well. So this tip does obviously not only apply for grid training. Whatever your trading strategy is, especially when it comes to automated strategies, you really need to understand how the strategy works.

This is tremendously important. If you have a good dialogue with the vendor, the vendor obviously will be able to help you with settings, configurations and considerations. Remember, an automated trading strategy is a tool. Therefore, in order for you to get the most out of any tool, you have to understand the tool, find out how it works. If you are a trend trader, you want to get the most out of trending markets, and you want to get out of markets that move sideways.

So this obviously fares very well in ranging markets. We have strategies that will work well under certain conditions, and not so well under other conditions. They vary in terms of feature set, how much you can modify its trading behavior, and how much you can configure the algo. We have serious grid systems that are fully featured. You can also find good systems where the configurations are hardwired. When I say hardwired, it means that the vendor has selected for you the optimal currency pair, or the optional instrument and settings and then from time to time you get updated files or an updated algo with the new optimized sets for the new market reality.

The reasonable account size is something you would have to discuss with the vendor of your algo. It depends on the configuration of the grid system and, it depends on your trader profile as well. But as a rule of thumb, you will need some money as a grid system is a self financing trading strategy. Just as a simple example, if you are trading a simple trend trading cross-over strategy, you know that you will only have one position open at any given time, and you know how much you risk per trade.

But as mentioned previously, when you do grid trading, we have a varying number of trades open at any given time. It also means that we need to have some money to be able to do that, and we need to have some leverage.

Some offer , and many are pivoting towards , which is on the low side for grid systems. The multiplier setting is incredibly important, because it determines the trading behavior of your grid system.

The higher the multiplier is in general terms, the less prices have to retrace in order for you to exit with profit. So why is that? Well, when prices move up, se will open more sell trades, and the higher the multiplication is, the less retracement I need to see before I exit all my positions. Most grid systems operate with a multiplier of somewhere between 1. Pin It on Pinterest.

Based on my own experience and the given practical examples, the most effective trading grid system should be one that allows a flexible approach to revaluation of the channel width, intervals, base price and the maximum number of orders. However, when the grid based system is used on break outs, they can quickly turn into massive profits based on the levels involved and the target price. They then set buy orders at: 1. Ask me questions and comment below. If the market looks like it will move in a trend, a with-the-trend forex grid trading strategy may have a starting point of 1. In this method as price traveled from 1. After plotting a channel connecting the swing highs and lows, we see that price is in a downtrend and therefore, ideally we would be selling at the upper channel lines or when previous support lines are broken.

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