Grid Trading EA 18.0
Metatrader Expert Advisor (MT4/MT5)
Grid trading is an efficient mechanical trading strategy which has no reliance on direction, profits from volatility and uses the intrinsic wavy nature of the market. It uses fixed price levels to enter and exit trades in one or both directions. Such trades, generally spaced at 20-200 pip intervals, create a trading grid. Grid trading has several advantages:
- Easy to set up and supervise
- It is time-frame independent
- No indicators or hard analysis needed
- Trades price ranges, not trading setups
- Requires little forecasting of the market
- Extracts money out of the market regularly
This EA has a set of unique features:
- It can trade long, short or bidirectional
- It can trade many simultaneous symbols
- Grids can be closed or paused at the trader's discretion
- It implements directional and bidirectional profit targets
- It doesn't trade open ended grids, exposure is limited
- The grid configuration can be changed on the fly
- Risk and exposure is pre-calculated and displayed
- It implements three different behaviors
- It works for forex, CFDs and futures
This is arguably the most flexible Grid Trading EA you'll ever find and can be used in a myriad of different ways.
How to get started
- Load the EA to any chart and timeframe
- Choose a trading direction (buy, sell or bidirectional)
- Edit the spacing and amount of trades until risk is acceptable
- Start the grid
How to achieve better results
The profitability achieved depends on your ability to set wise price limits. Find reasonable price ranges to trade and enter those into the EA as anchor and limit prices. This practice concentrates the trading activity inside profitable price ranges. For instance, in EURUSD you might want to set a buy price limit of 1.35 and a sell price limit of 1.25. Use weekly and monthly charts to find these ranges.
- If the market is cheap, trade long only
- If the market is overpriced, trade short only
- Don't feel obligated to do bidirectional trading
- Don't load the EA twice on the same symbol
- Avoid trading in a direction with big swap costs
- Trade from a VPS or leave your trading computer turned on 24/5
- Do not unload the EA to assure the atomicity of the process
- There is no need to change the Magic Number from symbol to symbol
- Use the phase (cash-in multiplier) of each grid to compensate floting point
- Set a price limit for each grid on inputs, it will dramatically increase your profits
- Use the profit targets to reset the grid regularly and avoid piling up many trades
- The EA evaluates at M1 bar closing
- Trades have no stop-loss or take-profit orders
- The EA uses market orders, spread is not an issue
- The EA won't trade live if there is risk of a margin call with current settings
- However, the EA will trade in the tester with any settings, regardless of risk
- The EA trades a manual lot size: the tester won't reflect compounding profits
- Swap costs are displayed in the bottom-right corner of the chart
- When all trades are placed, the oldest trade is closed at a loss and the EA keeps trading
Verified trading results
One of our customers recently finished 9th in the ForexTime Game of Pips Championship using our Grid Trading EAs on a live account. In less than a month, he took his account from 500$ to almost 3,000$, trading currency pairs, indices and gold.
What is grid trading?
Grid trading has become very popular amongst traders because it does not use stops, is highly mechanical, has no reliance on direction, uses the intrinsic wavy nature of the market, does not require indicators or charts to trade and can be easily automated. Grid trading refers to the trading approach which uses fixed price levels to enter and exit trades.
On the bright side, a grid trading strategy can profit from the same absolute market movement several times and can even make money if the market is moving against your grid. On the downside it can appear complex and illogical initially, it can incur large drawdowns if poorly managed, requires more patience than normal and may require forex traders to make a huge paradigm shift it their thinking.
Once a grid has been allocated, the system will cash-in profits every time the market moves the desired spacing and replace the trade as soon as possible to repeat the process. Hence, the expert advisor can cash-in the same price movement several times, capturing up to four or five times more profits than a single trade with the same exposure.
Anatomy of a trading grid
A grid is nothing more than a single deal or position segmented into several trades, which are cashed out independently from each other at regular intervals. This allows us to profit several times from the same absolute price movement.
All grids have a set of basic variables which define their structure and behavior:
- Grid Size
- The grid size is the amount of trades the grid can allocate. A grid has normally between 10 and 25 orders. Open-ended grids should not be used, as the total market exposure cannot be controlled.
- Grid Spacing
- The spacing is the gap in pips between trades of the grid. Such trades are generally spaced at 20-200 pip intervals. Big intervals are stable, can cover wide price ranges and are the best choice for live trading. On the other hand, small intervals are aggressive and more suited for trading championships.
- Grid Lotsize
- The lotsize for each of the trades of the grid.
- Grid Range
- The grid range is the price distance covered in total by the grid. For example, a grid of 20 trades with a spacing of 100 pips covers a range of 2,000 pips.
- Grid Exposure
- The grid exposure is the theoretical market exposure acquired if the grid is fully allocated. For example, 20 trades of 0,01 lots represent a total exposure of 0,20 lots, or 20,000 U.S Dollars.
How to set up a grid
Grid trading is much more profitable and safe if grids are allocated and configured manually by a responsible trader. To set up a grid, just follow the next steps.
- 1. Load the EA to the chart
- You will notice that, by default, the EA does not trade. You have to configure it.
- 2. Choose a trading direction
- If you think the market is going up or is close to a support level, you can start a Long grid. Likewise, if you think the market is going down or is close to a resistance level, you can start a Short grid. If no trend is present, you might want to start a bidirectional grid.
- 3. Choose the grid size, spacing and lot size
- Enter the desired grid size, spacing and lotsize into the expert advisor. For live trading, a spacing somewhere between 80 and 200 pips is recommended. These parameters directly affect the equity risk of the grid, which is displayed on the top-right corner of the chart. You should change these values, decreasing trades, spacing and/or lotsize until the risk of the grid is less than 50% of your account. If not, the EA will not trade.
- 4. Done
- Once the EA is loaded with your settings, if the risk is not dangerous, it will start trading and cash-in trades at regular intervals until the the profit target, the market goes off range or you decide to close the grid. The EA offers many other options such as profit targets, cash-in multipliers, price limits and different grid behaviors. These are covered in the user guide in more detail.
- ≡ Input parameters
When loading the indicator or EA to any chart, you will be presented with a set of options as input parameters. Don't despair if you think they are too many, because parameters are grouped into self-explanatory blocks.
- Trading Direction
- It can be long, short or bidirectional.
- Bidirectional Profit Target
- When you are running a long and a short grid simultaneously, you can define a combined profit target. For example, one spacing unit. When the combined profits of both grids reaches your target, both grids are closed securing the profit, to later start trading again fresh.
- Grid Behavior
- This parameter controls how the grid operates and what it does when all the trades of the grid are allocated. In live trading, you would be changing the behavior of the grid according to what the market is doing and what you want to do with the grid -expand it or liquidate it-.
- Regular: The grid operates normally, adding and closing trades.
- Paused: The grid sits idle. Trades are not placed, nor closed.
- Averaging: Tries to exit the grid at the average price of all trades.
- This is the amount of trades in the grid.
- The spacing, also known as the gap, is the distance between the trades of the grid, and it is also the profit target for each individual trade. For live trading, a spacing between 80 pips and 200 pips can be considered safe.
- This is the lot size for each trade of the grid.
- The phase is the cash-in multiplier: a higher phase increases the profit target for each individual trade of the grid. For example, if we have a phase of 3 on a grid of 100 pips spacing, the profit target for each individual trade will be 300 pips.
- Take Profit
- The take profit for the grid is optional. A take-profit will cause the grid to reset, closing all trades and starting fresh, when a certain profit has been realized. This prevents the grid from over expanding. It is expressed in spacing units. For example, if the grid spacing is 100 pips and the Take-Profit is 10 spacing units, the grid will reset and start fresh when it has won 1,000 pips. This option is very useful if the symbol has high swap costs or if we are afraid of a trend going outside of the range of our grid.
- Limit Price
- This is the price limit for the grid: the grid will not continue trading beyond this price. This parameter enables us to configure grids that are only triggered if the market is inside a certain price range. For example, you can set up a buy grid on GOLD and instruct the grid to buy only if the price is below 1400$/oz. To do that, you would just enter 1400 in the Buy Limit Price parameters. The same applies for short but on the opposite side.
- Anchor Price
- Similar to the above parameter, the Grid Anchor is a price limit of the grid but on the negative side. This parameter enables us to limit the grid trading activity to a predefined trading range. For example, you might want to create a long grid on EURUSD from 1.0000 to 1.16250 and let the EA calculate the spacing for you. The EA won't trade EURUSD below 1.0000 or above 1.16250.
- Colors and sizes
- This parameter block sets the color and sizes for labels and lines.
- EA Settings
- If you know what you are doing, you can change the Magic Number of the EA, the comment for the trades and override the value of one pip, which can be useful if you are trading CFDs.
- ? FAQ
- Should I use this Expert Advisor if I ignore what grids are?
- No, you should not. Grid Trading is for amateur traders and beyond.
- Is grid trading a martingale?
- No, it is not. There is no intrinsic difference between a trade of 0,20 lots and 20 concurrent trades of 0,01 lots. A strategy is a martingale inasmuch it deals with independent events with fixed probability of occurrence and payoff. Grids, however, use a constant lotsize per trade.
- I have heard that grid trading is dangerous. Is it?
- Yes, it is: just like any other powerful tool. Poorly managed or allocated grids can decimate your trading account. However, if properly used, grid trading is not only safe but very profitable because it provides almost unlimited adaptability to what the market is doing. The key is not using too much leverage.
- Is grid trading NFA FIFO compliant?
- No, it is not.
- Can I set the stop-loss for each trade or for the grid?
- No, you can't. Make sure to configure the grid properly: the total grid exposure must never be above three times your account equity and the grid range has to be wide enough to reach a strong support or resistance. You can, however, stop all trading activity manually on certain drawdown levels.
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