Forex Grid Trading
Hints: TradingSystems.ws recommends the FibGrid trading system.Learn About Forex Grid Trading Systems Bot
Is the Forex Grid Bot just another automated trading system scam? After testing out various currency trading systems and software, I came across this robot called FX Grid Bot that promised to trade and make money for me automatically. It can be installed in five minutes or less and runs on the MetaTrader 4 platform. Having tested this software for a few weeks now since its launch, I am now making a steady income with it without me having to analyze the price charts manually myself.
1. Does the Forex Grid Bot Really Work, or Is It Just a Scam?
I knew I had my doubts about automated Forex trading software at first. In fact, most of my tests with other versions of robots have been major failures, losing me a lot of money in the process. Luckily, I did not give up my search for a profitable software system. I eventually decided to purchase the Forex Grid Bot after finding out that it was used by hedge funds and banks to profit from the Foreign Exchange.
2. Why I Like Using the Forex Grid Bot to Trade for Me Now
Once I downloaded and installed this software, I did not have to touch or make any more changes to its settings. It runs completely automated for me, making trades in various currency pairs. It also has built in advanced money management features that calculate maximum possible losses and limit draw-downs by increasing and decreasing lot trading sizes accordingly.
3. Downloading and Installing the Forex Grid Bot
Before you purchase this software, you should ensure that you have the right hardware and software requirements. You can see this information on its main website. Then, you will need to get a MetaTrader 4 platform setup on your PC to attach this robot onto it before you can start making money with it.
Using A Fibonacci Grid For Forex Trading
A fibonacci grid, such as Fib Click Grid can help to enhance your trading.
This article outlines how to use a Fibonacci Grid to time trade entries to ensure the optimum entry level to maximise profits when trading trends.
Traders are always looking for an edge, an edge that will make the difference between profits or a loss. Traders need trends to make money. The trend may just last two or three minutes for intra-day trades or go on for months on end for longer term traders.
Firstly, let me outline the wrong way to trade. There are a good many trading books that have a simple buy and sell strategy, it's this: Buy new highs and sell new lows. Now the problem with this is that the major part of the move has been completed before it gets to the old high or low, before it can break through it to create a new high or low. Also, reversals are most likely to take place in the region of old highs and lows! So either, get in much earlier or wait until a pull back after the new high or low.
The failure rate of buying new highs and selling new lows is very high, that is, the odds are not in favour of a continuation. Also, market manipulators (more on this in another article) like to push prices through to new highs or lows and then promptly run the price back in the opposite direction.
So here is the technique to correctly trade trends using the Fibonacci Grid. Firstly find an established trend. A trend is defined by a sequence of higher highs and higher lows for an uptrend. Once a new high has been formed do nothing - wait for the inevitable correction or pull back.
Place the Fibonacci Grid between the last higher low and the current high, as price retreats wait for it to turn back up at one of the key Fibonacci retracement lines and then buy in for a low risk high probability trade.
Learn How You Can Make Money From The Forex Trading Grid System
We are now coming to the heart of how to make money using the no stop, hedged, Forex trading strategy. In the previous articles in this series we discussed trading without stops, not being concerned about which way the price goes and places to cash in on profitable trades. We are now going to explain how it is possible to make money buying and selling at the same time using the grid structure.
The no stop, hedged grid trading system uses the principle that one should be able to cash in at a gain no matter which way the market moves. The only way this is logically possible is that one would have a buy and a sell transaction active at the same time. Most traders will say that doing this is trading suicide but let's investigate this in more detail.
Let's say that a trader enters the market with a buy (buy 1) and sell (sell 1) active when a currency is at a level of say 1.0100. The price then moves to level 1.0200. The buy will then be positive by 100 pips. The sell will be negative by 100 pips. At this point we would cash in our positive deal and bank 100 pips. The sell is now however carrying a loss of -100 pips. The grid system requires one to make sure that the trader can cash in on any movement in the market. To do this one would again enter into a buy (buy 2) and a sell (sell 2) transaction at this level (level 1.0200).
Now for convenience let's assume that the price moves back to level 1.0100 (the starting point).
The second sell (sell 2) has now gone positive by 100 pips and the second buy (buy 2) is carrying a loss of -100 pips. According to the rules you would cash the sell (sell 2) in and another 100 pips will be added to your account. That brings the total cashed in at this point to 200 pips (buy 1 and sell 2). Now the first sell that remained active has moved from level 1.0200 where it was -100 to level 1.0100 where it is now breaking even.
The 4 transactions added together now magically show a gain:- 1st buy (buy 1) cashed in +100, 2nd sell (sell 2) cashed in +100, 1st sell (sell 1) now breaking even and the 2nd buy (buy 2) is -100. This gives an overall a gain of 100 pips in total. We can liquidate all the transactions and have some champagne as we have made a gain of 100 pips.
Please make sure you understand the mathematics behind the movements discussed above. You may have to reread and draw the movements on a piece of paper to make sure you understand the concept.
This formation is the 100% retracement formation where the price moves up to a grid level and then returns back to the starting grid level and results in a nice gain for the forex trader. There are many other market movements that turn this strange "buy and sell at the same time" activity into gains. The next article will cover the 50% retracement formation which produces the same amount of profit.
There will be much more on the no stop, hedged grid trading system in future articles in this directory. Don't miss them.
How To Make Money By Overcoming Forex Grid Trading Obstacles
This unusual forex trading system requires a buy and a sell of the same currency in order for a hedge to be created. You would need to determine a trading grid consisting of price levels above the current price and below the current price. These price levels are normally the same distance apart; let's say for example 200 pips. Every time the price reaches one of the price levels you would buy and sell the currency again, thereby creating another hedge. You would also cash in your positive deals at that time. This de-hedges the first transaction and provides the profit making opportunity. While all the transactions are fully hedged you will never make a profit and you will only be making your broker rich. Sooner or later the amounts you cash in will be bigger than the cost of your open transactions and you would be able to close all your positions at a net profit.
From the above, it is clear that one of the first things you need is a broker's account that allows these types of transactions. This can be problematic in parts of the world where legislation prohibits buy and sell transactions to be open at the same time. This further extends the ability to place other entry or target orders that will automatically activate at predetermined price levels. Some traders who don't have the ability to open broker accounts which allow simultaneous buy and sell entries simply open 2 broker accounts and use the one account for buy transactions and the other for sell transactions. Some are lucky enough to have international brokers who will allow them to transfer their account to another country.
So once you have the required account, you need to overcome another obstacle. The next obstacle is boredom or the trading mindset. Forex traders are mostly day traders who very seldom allow deals to be active beyond a few days. To be safe and also profitable you have to use fairly large sized grids of between 150 pips to 400 pips. This means that sometimes the grid system may take up to a week to trigger a transaction and up to a month to trigger a result. This slowness is not often part of a day trader's psychological make up. This can cause Forex traders to lose interest in the system or even worse, reduce the grid sizes to levels where more transactions are triggered but where trading risk becomes very high.
The most obvious requirement is a very good understanding of the trading system and how it fits into an experienced trader's arsenal of trading techniques. Like most Forex trading techniques (although mechanical) this system does need to be traded in the appropriate market conditions, using the appropriate currency, and applying well thought out grid sizes and good risk and money management. Like all Forex trading techniques this technique especially needs to be treated with respect.
This is an investment system requiring you to risk small amounts of your capital to generate a reasonable return, twenty to thirty percent per annum. It is not suitable for the aggressive Forex traders wanting to double their account every month.
If you can overcome the above trading obstacles, you can surely benefit from this easy to trade Forex technique.
4. Learn To Make Money Trading The Forex Grid System
You can make money trading without stops. We are now coming to the heart of how to make money using the no stop, hedged, forex trading strategy. In the previous articles in this series we discussed trading without stops, not being concerned about which way the price goes and places to cash in on profitable trades. We are now going to explain how it is possible to make money buying and selling at the same time using the grid structure.
One should always be able to cash in at a gain no matter which way the market moves when trading the no stop, hedged grid trading system. The only way this is logically possible is that one would have a buy and a sell transaction active at the same time. This sounds like trading suicide to most traders but let's take a closer look.
Let's assume that a forex trader starts trading with a sell (sell 1) and a buy (buy 1) when the price is at a level of say 1.0100. The currency price then goes to level 1.0200. The buy transaction will then show a gain of 100 pips. The sell transaction has now become negative by 100 pips. At this stage we would close our positive transacion and add 100 pips to our account. The sell transaction now has a loss of 100 pips. The grid system requires one to make sure that the trader can cash in on any movement in the market. To do this one would again enter into a sell (sell 2) and a buy (buy 2) deal at this level (level 1.0200).
Now for convenience let's assume that the price moves back to level 1.0100 (the starting point).
The second sell (sell 2) has now gone positive by 100 pips and the second buy (buy 2) is carrying a loss of -100 pips. According to the rule of cashing in positive deals at grid levels you would close the sell (sell 2) at a gain of 100 pips which you can now add to your account. This makes the total cashed in at this point 200 pips (sell 2 and buy 1). The first sell in now on level 1 and still active.0200 where it was -100 to level 1.0100 where it is now breaking even.
The four forex trading deals now magically show a gain when added together:- 1st buy (buy 1) cashed in +100, 2nd sell (sell 2) cashed in +100, 1st sell (sell 1) now breaking even and the 2nd buy (buy 2) is -100. The gives a total profit of 100 pips. We can own cash in all our deals and celebrate as we have made a profit of 100 pips.
Please make sure that you are comfortable with the above calculations. Make sure you understand the concepts by rereading this article.
This formation is the 100% retracement formation where the price moves up to a grid level and then returns back to the starting grid level and results in a nice gain for the forex trader. There are many other market movements that turn this strange "buy and sell at the same time" activity into gains. The next article will cover the 50% retracement formation which produces the same amount of profit.
There will be much more on the no stop, hedged grid trading system in future articles in this directory. Don't miss them.