I'm currently using this EA with no problems started with $800USD in January and now I'm up over 10%. My plan is to withdraw $800USD once the account reaches $1600USD (100% gain) and let it start over. Grid strategies seem to do great with small account sizes but crash once the account gets large. I feel this is due to the effect of leverage. 10 cents per pip is a lot different that 4 dollars per pip. Remember, just as leverage can work for you it can work against you just as fast.
Also, maybe consider making a bit of a change to whatever programming routine figures lot size. I assume it is using the account size in some formula to calculate lot size. If that is the case, if that were to be a user input you could put 1000 in as the setting and it would figure lot sizes based on the fact that the account size was $1000. It would result in smaller lot sizes for trading and smaller winners, but it would not expose the account to such significant risk and would allow you to better protect your gains.
I noticed that you reset the test - did the previous account crash? Are you running the new 3.4 version here? Do you still believe in the strategy? What changes have you made that you think will protect it now? What settings do you recommend for a 1:50 leverage account per $10K? Thanks.
gwrigh posted: I noticed that you reset the test - did the previous account crash? Are you running the new 3.4 version here? Do you still believe in the strategy? What changes have you made that you think will protect it now? What settings do you recommend for a 1:50 leverage account per $10K? Thanks.
The account had a big crash from mid January to early Feb. I was not running 3.4 but 3.2. The settings have been modified in 3.4 so that losses occur more frequently but with less damage to the account. I'm looking at other options (eg hedging) but this may take some time to implement. With a leverage of 1:50 and 10k the smartlot feature of GMU should trade with a lot size of 0.03 therefore the default settings of 3.4 should be safe enough.
Any major changes to your EA so that you want to start your account all over again? Or are you going to change something on the EA?
The account lost most of its 2011 profit in mid Jan 2012 with the big EUR rise. There have been some modifications to the settings to take losses earlier and to reduce the drawdown along with another filter added for market entry. I'm looking at adding a hedging option to the next version for the members that requested it but I'm not sure if this just adds extra risk to the trading 😕
Come on. Each time the EA crashes your account you will start over again?
That's not a fair behaviour. I am one of your paying customers and know about the risks of grid trading. I am trading real money and with 30.000 USD I was only trading 0.1 lots. Still I had a huge drawdown but decided to hedge my position manually as it became to risky and could trade me out of this with only a small loss. I was lucky doing this.
Anyway, you should not start over again, leaves a bad impression IMO.
Everybody who is grid trading should know that such things can happen. That's the risk. I would not consider this a problem or say that for this reason the EA is bad. You EA is good. You should not hide things or tell the people now about a new version which will be safer. That's not possible with a grid. You have to accept drawdowns. There is no way around.
I am also a paying customer of this EA and I have the chance to have stopped it before the crash. In fact, I think there is no solution to not crash an account with a grid system in the long run. It is statistic. The market WILL go against you 1 day. Maybe it will occur 1 time per 1 000, per 1 000 000... but the problem is that with a grid system, with a martingale, 1 time, ONLY 1, is sufficient to make you to lose all your money, all you won during the last months, the last years. The good strategy is to have a good setup for entry, a good timing for exit, and a good money management. This MUST be sufficient. Using a martingale just shows you are not self-confident in your own system.
It worked as designed - closed the basked at 30% DD - it just hit the unlucky grid basket this time. It is inevitable with this strategy (grid/martingale) - you have to be willing, and capable, to float the insane drawdown - like -2500 pips in this case. The only way not to blow up is to trade very small compared to your account size. Eventually it usually comes back up. Now I wonder if this would work if the money management was changed. He made over 700 pips for end of Feb + Mar, and 400 pips in April; He was at around 200 pips for May before this basket went bad. Before this 30% blowout, the worst floating drawdown was less than -200 pips (-185 I think). What if the DD limit was around -200 pips (whatever account % that would be, like 2-3%, instead of 30%)? Then the worst case scenario would only be a basket loss of -200 pips (about 2 weeks of profits) instead of a -2000 pips blowout. But then maybe they happen more often, eh? If the winning % supports it, it would still climb.
I am a former professional CDS trader, using GMU 3.7 for a couple of months now. As I get into forex, EA programming and getting accustomed to your system, I have a few comments and questions that, I believe, might be of interest of the community:
- what are the main indicators you found useful to decide when to get in or out ? I am not asking for your secrets or how they mingle with each other, but just the few raw basics indicators you use.
- The question has been asked previously, but can we set precise threshold (absolute or relative) which supercedes everything else, which triggers the closing of all trades and stop the bot, until manual intervention. I experienced drawdown and I am ok with them with proper risk management, but I would appreciate a firewall, if market goes unexpectedly crazy one day.
- GMU does not trigger position during news, which I like very much, but carries existing positions into news time. So potentially a very strong adverse news can affect us. Moreover what does it open new grid trades when existing trades have been losing because of news effect ?
- Last but not least, there is no 'gain over the target' management. When the target is reached it is automatically triggered. When I traded credit, we had trailing stop automatically adjusted according to our algorithm which were going up as trades got more into profit. Such sytem will set you up for (rare) big wins at a cost of a few bp in target profit. In credit it had a very positive expectation. In forex, I believe it may too. Have you looked into it all ? I have ideas and experience about it if you want to discuss.
Thanks Brenden for the quality of your EA and to have priced fairly enough to attract interested traders into the forex universe. Regards, David
it's not about being right, it's about making money
oshun123 posted: Grid trading is like smoking...you can do it for a while but one day it will kill you...
Nice simile. I would add to extend this out and say that the # of times the levels of the grid are reached represents the # of cigarettes that are being smoked. The smartest grids don't need to smoke as much; the dumbest ones keep chain smoking all the time. Martingales are another matter....after each level is reached, the martingale doubles the cigarettes smoked at one time, till 8 levels later and he is puffing away at 12, choking in smoke as his account is in flames.
“Ah, but a man's reach should exceed his grasp, or what's a heaven for?” Robert Browning
Yes grid trading is a dangerous activity but if managed correctly then it can be profitable. Choose the correct pair, withdraw profits regularly, limit the number of orders raised and don't make the lot multiplier too aggressive. Backtests have proven profitable over the last 5-6 years (Dukascopy tick data) and time will tell if it survives longer term in a LIVE environment 😉