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ForexGridMaster Strategy Development

What is Grid Trading? The essence of grid trading, as we practice it, is to catch and efficiently profit from as much of the price action as possible by configuring ForexGridMaster automatic trading strategies that place buy and or sell trades according to a pre-determined plan that creates a grid pattern of trade orders. With price always going up and down, even when the market is trending, grid trading automatically cashes in many profitable trades in the run of a day. In the past, the major complaint against grid trading has been the accumulation of too many open trades in the negative which may eventually margin out the account. This does not have to be a problem. When we developed ForexGridMaster and ForexTradeManager robots, we integrated many different settings that effectively eliminate accumulated negative trades to whatever degree the trader wishes. ForexGridMaster enables transparent and very precise control of risk.

View the ForexGridMaster v5.1 Manual to see all FGM Input settings and the descriptions of what they do.

View the ForexTradeManager v1.10 Manual to see all FTM Input settings and the descriptions of what they do.

Yea for Mathematics. We hear a lot about FOREX trading based on technical and or fundamental analysis and or sentimental analysis, but seldom do we hear about FOREX trading based solely on mathematical analysis. Grid trading is a mathematical approach that usually pays little attention to fundamentals such as news events, or to technical indicators, or to sentiment in the market place. There are exceptions of course. For instance you can set up straddle grids around market price just before scheduled major economic reports come out to catch the price breakout up or down.

After having traded and studied many grid trading robots and strategies for 3 years since 2002, I clearly saw what was lacking, so in August, 2005, I started creating my own grid trader, ForexGridMaster, aiming to build the perfect tool for (but not limited to) mathematically minded traders to create much more stable and consistent automatic trading system strategies. In all my years of trading, I have found that the simpler the approach is, the more effective and enjoyable it can be, and math based automated grid trading strategies fit that ticket very well for me. I prefer to work with probabilities based directly on price action and to skip the usual predictive methods using indicators and price patterns. I had years of experience with those too. Make no mistake about the fact that the forex market is much more random than you think and also heavily manipulated by the central banls and large institutional traders in collusion with those banks. They move the market whenever they like in whatever direction they want.

ForexGridMaster automates grid order spacing and spacing step, number of trades placed and allowed open at any one time, lot size, lot size increase percent, lot size increase percent step, order take profit targets and steps, stop-losses, trail-stops on individual grid orders or groups of orders, profit pips before trail stop, trail stop pips, and much more. FGM also uses automatic CloseRuns, optional automatic HedgeGrid settings integrated with MainGrid settings, and Time and Day settings. In fact the HedgeGrid settings can not only be used for hedging, but also to create a second grid trading on the same chart and currency pair, very powerful.

ForexGridMaster YouTube Channel - Videos of FGM v5 trading - Best to reset the YouTube viewing quality to 480p or better in Settings at the bottom right of the video screen, to see important details clearly. The 41 minute video shows FGM trading its default audnzd strategy in fast forward mode (paused here and there for explanations) for a full year up to the day the video was made. It profits on average, 7.92% per month, compounding monthly to 150% profit for the year. FORO is introduced in this video as well. The 51 minute video goes more into detail about FGM and strategy testing.

MainGrid setup - To create a very simple basic BuySell Trend grid strategy as an example, to trade the EURUSD, presently priced at 1.3885, we configure FGM to automatically place buy stop orders above grid center at 1.3885 and sell stop orders below 1.3885. If FGM settings MainGrid_Active=true, MainGrid_FixedCenter=False, Main_GridSpacing=20 pips, Main_MaxPendingBuyOrders=5, Main_MaxPendingSellOrders=5 and Main_TakeProfitPips=70 pips, then the initial grid layout of pending orders will look like this ...

Price   Order Type   OTP price
1.3980 Buy Stop 1.4050
1.3960 Buy Stop 1.4030
1.3940 Buy Stop 1.4010
1.3920 Buy Stop 1.3990
1.3900 Buy Stop 1.3970
1.3890 MovingCenter starting point for grid
1.3880 Sell Stop 1.3810
1.3860 Sell Stop 1.3790
1.3840 Sell Stop 1.3770
1.3820 Sell Stop 1.3750
1.3800 Sell Stop 1.3730

When the ForexGridMaster settings above have been chosen and you click the "OK" button, then FGM is initiated into trade on the first tick price move, and places the above grid of trades quickly and automatically. This would look similar to the image of the FGM v3.00k default strategy shown just below, except that in the image below the grid has been trading long enough for the Buys and Sells to overlap because MainGrid_FixedCenter=false (means a MovingCenter grid) and FGM setting BuySellOverlap=true were also configured. Please note that FGM has the the option to limit pending orders to one at a time and use the settings Main_MaxOpenBuyTrades and Main_MaxOpenSellTrades to control how many open trade orders are allowed at any one time. Also FGM v5 introduces new optional settings OpenBuyAtCurrentPrice and OpenSellAtCurrentPrice to enable an immediate open buy (or sell) at current price when a new grid Run starts.

FGM Grid Trading image

Once the grid of pending orders has been placed, price may move up quickly or slowly or it may move straight down. If price moves up to 1.3900, then the 1st pending buy stop order will be opened, up to 1.3920 then the 2nd pending buy order will be opened as well, and so on. If price moves 70 pips up from 1.3900 to 1.3970 then the 1st opened buy trade will close out capturing 70 pips of profit, if up to 1.3990, then 2 trades will be closed out for a total of 140 pips captured. If the price then turns and moves down as far as 1.3880, then the first sell order will be opened and if price remains active below, then the bottom half of the grid will respond the same as the top half does. Trades that are closed out are replaced by new pending orders. This grid can trade indefinitely above and below the MovingCenter price depending on account equity, lot size chosen and the range of price movement. Trader can set CR_ProfitPercent=3 to capture 3% net profit (total net value of open trades plus total net value of closed trades within the Run).when the CloseRun is triggered. Trader can also set CR_ProfitPercent=0 and simply decide the best time to close the grid by manually triggering a CloseRun by setting CLoseAllNow=true

The example above is very basic. There are actually an unlimited number of settings combinations and values that can be set when creating grid strategies, including the HedgeGrid settings for hedging or trading a second grid on the same chart and currency pair simultaneously with the first grid and both combined being controlled by the CloseRun settings.

Visit the ForexGridMaster forum for more info on strategy development. FGM Trial and Full-version owners have access to the forums ...

  • FGM Strategy Development
  • FGM Back-testing and Optimization
  • FGM Money Management Methods

... and more.

Keys to Grid Trading

Power of Compounding CloseRuns
Fast Back-testing, Optimization
and Walk Forward Testing
Traders VPS and Latency Chart
99% Modelling Quality Back-testing

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ForexGridMaster v5.1 Manual

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DISCLAIMER - ALL TRADING INVOLVES RISK OF LOSS - Past performance does not guarantee future results. Trading forex, gold or silver, or any financial instrument is speculative in nature. Therefore, only risk capital should be used. Forex trading is not appropriate for all investors. You should carefully consider whether such trading is appropriate for you based on your financial situation, investment objectives, and risk tolerance. Every investor should consider all advice and all offerings of products and services on their own merits and for suitability to the investor's personal needs and circumstances.