Candlestick wrote:

Interesting Strategy John, both v1 and v2. I spent some time trying it out and had some great consistant results in testing.

v1 Makes a little more sense as the order mangement works as when your TP is hit you end up in a profit, following the doubling up sequence each time, ie 1,3,6,12,24,48 etc

However without being negative or sounding ungrateful about any of this and you hard work, the problem arises when your stuck on a tight range for a considerable time and unfortunatley no one knows when that is going to occur, it can happen at anytime of day or night and then we dont know when its going to end, infact the duration of it is really secondary, its if your unlucky enough for it to keep going backwards anf forwards activating more and more orders without hitting your TP.

And to make it work to ensure a profit in the end you have to keep placing orders for double the position size each time you exit the hedging zone in either direction. So this type of grid strategy when it works is absolutly awesome, but the one time you get caught out in a long term range then the inevitable "Death Trade" will occur and this will be a case of when, not, if that happens.

After trading full time for 4 years I would say you cant beat basically learning how to trade, but I enjoyed your strategy and will keep an eye on it, maybe there is a solution somewhere that will eliminate the "Death Trade"

Good analysis there. In all of my demo and real money trading, I have not yet encountered the death trade (!). If the 9th trade fails, I take the loss; once, I freaked out during an 8th trade and bailed out when I was 2/3 on the way to the TP so as to have limited losses (the 9th trade would have been the winner, but fear overcame me!). The way I work this strategy is to spread my risk across 5 pairs (that way instead of starting with a .05 on one pair, I start with a .01 on 5 pairs (initial capital 5K€ or 5K$)). Also, I use this second strategy as the risk is lower: .01/.02/.04/.08/etc... vs .01/.03/.06/.12/etc on the version 1 strategy.

The way I see it, if you use this strategy all year round and diversify across 5 pairs, you double your money each year. And each time you encounter a "death trade", you take off around 20% (ex: 2 "death trades" in the year = 60% profit during the year). The thing to remember is to not force yourself into a trade when the market is flat (and markets only trend around half the time, roughly). No trading is better then bad trading.

johnedward wrote:

If ever your stop loss is hit and the new order has not been triggered because price has reversed, place this new order on the opposite side, where price is now headed towards (in this situation you will have both a buy stop and sell stop order set up for the same lot size).

Hi John,
Could you explain and give an example about this part of your strategy

Candlestick wrote:

John, you have clearly done considerable research into your strategy and there maybe things I could be missing, but to make sure you have a winner when your TP is eventually hit you have to use the 1,3,6,12,24 progression as mathimatically thats what makes you always end on a winner.

That is the progression of version 1 of this strategy, Ver 2 (see first message of this thread) has a 1/2/4/8/16... progression. As you double instead of triple your second position, your future positions are smaller.

Candlestick wrote:

Ive done similar stuff in the past and if you remove profits each successful day/week/month or whatever suits and just maintain a trading balance to trade with rather than compound continuiously, then this will go someway to ensuring that you protect profits you make and once you exceed your initial investment, then you are trading with previous profits only, so can then maybe afford to have the odd "DeathTrade" senerio once in a while.

This is what professional traders do. My goal is to eventually trade off a 100K account and only withdraw the profits.

In my experience, the V2 always leads to better than BE (break even), plus as your stop is at 29 pips while TP is at 30, you pick up another pip along the way each time you have a new position. As you mention, you DO need to start with a relatively large account balance in relation to your first positions. If all goes well, I should resume testing of this strategy today, my new broker has received a portion of my trading funds, and I shall once again post my results in real time. :)

Hi all, have been back testing this strat, its good but does get frightenly close to a complete blow out. DD is huge.
So using it along with another strat such as a Asian breakout, might increase the odds, but even then, what can happen will happen.
Plus isn’t this the same strat that was used on a robot a few years ago that claimed to never lose ?  then after the massive launch with live results published, it lost and blew the account ?