with a profit of 90 pips. In an ideal condition, all the points are ultimately profitable at which point traders liquidate or remove some of their positions. For this reason when market conditions are excessively volatile, it is often better to use a grid system that opens orders against the trend rather than into the trend. Disadvantages of Grid Strategy, there are a few disadvantages of the system that a trader should know before relying. Therefore, in this example, assuming price dropped to 3 levels and reversed from.3525, the total risked amount would have been 120 (level 1 100 (level 2 75 (level 3 a total of 295 pips. Assuming the pip value here was 1, this grid based system would have given 125 in profit. With grid trading, in general its best to consider the entire set up as a single system. The final P L is -316 pips. The position showing us a loss will be carried.
Such buy and sell orders, generally spaced at 10 or 15 pip intervals, create a trading grid. With grid trading, its imperative not be tempted to multiply order volume and exposure to any market beyond your accepted risk limits. Say for example the price dips below.3500 and the first one of our sell orders executes. For trending markets an alternative option is to use a vertical grid which aggregates the price to take advantage of a trend. A hedged grid is a market neutral strategy. Whats appealing with this style of trading is that you dont need to predict either a directional trend. When all trades are open, the hedged grid reaches maximum loss and the P/L is fixed at that point. Leave this field empty if you're human. This is why its good practice to place wide stop losses on all trades for safe measure. That being said, with a clear understanding about the basics and different aspects of this system, it is clear why a Forex grid trader use. Those above.3500 are buy stop orders, those below are sell stop orders.