Gridtrading from daily open

[Zennor]

Gertje I see what you mean about a roller coaster ride. But this is Monday and is to be fully expected.

The secret is to keep your lot size low and I agree with 0.01 per $1000. Also not to panic when you see a bit of draw-down. Just keep placing the EA with new magic number on any pairs which have not closed.

Whilst manually back testing I have seen many trades last for 5 - 7 days and all the subsequent days trading closing within a day slowly increasing the bank and eventually the market making a move to negate sometimes quite high numbers of negative trades,

If DD concerns you there are many solutions to reduce this at the risk of being in the trade for a longer period of time or profits achieved.

Reduce your lot sizing, reduce your TP or global TP, whilst not capable by the EA increase the grid size on subsequent grids, for example if 1st grid is 10 pips, have the next open at +50% of first, so next grid is 15 pips, next would be 22 pips next 33 pips and so on. Or increase after first two grids, or open at +30% there are so many permutations. A feature such as this would reduce your DD and when the market makes a move should have little impact other than time spent in the trade.

Another feature could be that you have a BE feature, say if you have 4 grids go against you, instead of chasing your pip gain the EA shuts down the trade when enough positive trades have offset the negative ones.

Just throwing these ideas out there for consideration.

[Gertje]

Hi Zennor,

DD doesn't really bother me, margin does...

I understand what you are saying, I recognise a lot of discoveries I made last weeks.
One thing I disagree, lowering the TP of 0,5ADR since the more trades are involved, the easier it will be to reach this TP after BE is reached.

To win 0,5ADR with a 1/10thADR grid, you need 3 winning trades with no losing ones. The TP of 0,5ADR needs to be brought by these 3 trades.
With 1 trade against you, you need 5 winners to close. There will be 4 trades to reach TP.
With 2 trades against you, you need 7 winners to close. There will be 5 trades to reach TP.
With 3 trades against you, you need 9 winners to close. There will be 6 trades to reach TP.
For every trade against you, you need 2 winners + the 3 original winners to reach BE and TP.

This week will tell if this EA can earn it's VPS-rent.

[Zennor]

Gertje, apologies my friend, I was not implying that DD was of concern to you.

Whilst not clear only the first sentence of my last comment was aimed at you. The rest of the post was open to all.

Like yourself provided I can keep a healthy margin the system DD is of no concern to me because sooner or later all markets will move it's just a case of juggling the number of trades taken to keep enough margin for the trades to eventually close.

[Gertje]

Gertje, apologies my friend, I was not implying that DD was of concern to you.

Whilst not clear only the first sentence of my last comment was aimed at you. The rest of the post was open to all.

Like yourself provided I can keep a healthy margin the system DD is of no concern to me because sooner or later all markets will move it's just a case of juggling the number of trades taken to keep enough margin for the trades to eventually close.

Apologies are not necessary Zennor, we're all on the same page here.

I love the way people co-operate here at SHF to get to our commone goal; beat the markets.

[Gertje]

Little update from my side.
Some more pairs closed, DD remains constant.

Greedy Wotsit.png

I added more pairs, tonight I'll have 26 crosses trading. All major pairs except EURGBP and EURCHF.
0.01 lots/ $1.000 balance so DD should be half then it is now when the 0.02 lot trades have closed.

[Foreverforex]

Little update from my side.
Some more pairs closed, DD remains constant.

I added more pairs, tonight I'll have 26 crosses trading. All major pairs except EURGBP and EURCHF.
0.01 lots/ $1.000 balance so DD should be half then it is now when the 0.02 lot trades have closed.

Gertje,

Could you be so kind as to post set file? Just trying to decipher my way through all the new settings.

Thanks in advance - and many thanks for sharing this system!!

Good trading,

FF

[Gertje]

Gertje,

Could you be so kind as to post set file? Just trying to decipher my way through all the new settings.

Thanks in advance - and many thanks for sharing this system!!

Good trading,

FF

Sure.
I saved sets for every ADR I came across, so it's easier to swap around when needed.

[Foreverforex]

Sure.
I saved sets for every ADR I came across, so it's easier to swap around when needed.

You are a true gentleman. :hi:

[Gertje]

Little update from my side.
Some more pairs closed, DD remains constant.

7 pairs left, 5 xxxjpy crosses, AUDCAD and GBPNZD that was left over from last week. Closed USDCAD myself around BE, was going nowhere for hours.

887 pips banked, amazing.
I will leave the pairs with open baskets alone, and see what happens.
Adding another basket with a different magic# might complicatie things to much at this stadium.

2 hours to go till rollover......

[kayaktri]

Not to say this EA should be changed, but on the subject of drawdowns in the Grid, here is a possible solution for minimizing the DD when ranging, while maintaining the upside once price decides to start trending out of the Grid.

As Gertje has mentioned on a few occasions, once mutliple long and short orders are triggered on the same pair (due to price ranging), it takes a pretty substantial price movement in a single direction to close that basket out and either get back to BE or realize the profit target.

If we have a 10 pip grid, and price ranges up and down within this Grid and more longs and shorts are taken, the table below shows us the DD value at each level. For example, if we have 5 longs, and 5 shorts opened on the grid, no matter where the current price is inside the grid (from our zero line to +50 pips or our zero line to -50 pips below), we are at a -300 pip drawdown. Only when price breaks out of this grid in a singular direction can we begin to reduce our drawdown.

No Hedge_1.PNG

However, if one were to close out the longs as price headed down when in the upper half of the grid (or one could place a short at the same level as the long to create a hedge with the same outcome), and do the opposite to the shorts as price rises in the lower half of the grid while price was ranging (effectively 'hedging' the longs in the grid with the shorts in the grid at each level), the DD would look more like this:

Grid 9 level.PNG

In any case, no matter how many grid levels were triggered you would only be left with the highest long and the lowest short, rather than all the longs above the zero (initial EA entry) line and all the shorts below the zero line.

When looking at how this would help the drawdown in the way the EA currently operates and using this type of 'hedging' to minimize drawdown, one can look at the numbers in Red at each level to get an idea of how much (percentage wise) this would minimize the drawdown over the current EA. (DDR % = DrawDown Reduction percent)

Grid DDR%.PNG

Here is a chart showing the drawdowns for each of the nine grid levels above for the current EA in Blue, and the proposed 'hedged' drawdown in Red.

Grid Graph.PNG

Thanks for your consideration.....