Grid systems are bullshit, right?

Discussion in 'Trading' started by 1a2b3cppp, Apr 13, 2009.

  1. I saw this on a forum where it's being tested in real time.

    I followed a thread for 6 months on Oanda's forum that was a grid trading system and the guy was doing extremely well, until one day when he lost $80k.

    Is Grid just another modified Martingale bullshit?

  2. ATLien


    XTREME mean reversion.
  3. I found this thread searching for "Grid". I've heard a lot of people talk about them but it seems too good to be true.

    Under what market conditions does a grid system blow an account?
  4. anyone doing, RTM can tell you THERE are always stocks/pairs that blowout, and taking the loss is required. I think IT would be suicide IF all you did was a simple grid system on 1 stock, or index. RTM, pays because you are automated AND have hundreds of positions at any 1 time - which take care of your blowup(s), over time.
  5. Craig66


    A grid is just martingale mean reversion with no edge. Any nice trend will tank the account.
  6. your wrong.

    a grid can be many things. but mostly its a way to enter based on an edge/ magnify an edge and manage accounts without blowout if done correctly even through large losing streaks. Nice trends can magnify profits as well as long as the trend is moving through its Average area and you stop out in an area where price normally doesnt go.
  7. Craig66


    I think you will find the expression is 'you're wrong'.
  8. Anyone knows of a published grid system (even without an edge)? Like another poster I heard the term often, but dont find anything that acutally shows me how it should work. An example would be appreciated.
  9. All it does is magnify the execution loss. High MR stat-vol will produce gains, but any trend takes it out. It's moronic. The grid trader is better-off trading a single random entry at say 4/1 risk and pray that the hit-rate is better than 80%.

    To answer the question asked in the thread-title; yes, it's BS to anyone with more sense than an 8yo.
  10. i disagree. The reason why is this without revealing prop info. It can be a great way to spread risk over a spread statistical gradient depending on the market. For example in FX most fluxations in the currency create an equal or just slightly one sided binomial distribution if you can spread risk amount through reversal area as it pushes through its distribution. As long as volatility is taken into account it can provide significant profits. Of course most grid users do not use stops or fully take into account volatility and correct position sizing, I do no advocate that at all. if you look at stop-non-hedged systems then it makes since to increase position as the probability of movement increases in favor of the total position.

    even with single entry stop tactic price may still fluctuate to near stop for every tick that occurs and moves price if price moves one tick towards stop and one tick away from take profit your risk -reward is in a constant state of flux at the moment of initiation your risk to reward is X at X% but as price fluctuates its not always the case. It better to control the position by knowing points of failure and bleeding into position as probabilities increase and risk decreases.

    As of right now i use an automated grid method for lower risk accounts my stats have a 0% chance of 10% draw down or more as of right now average duration of one month per position never more than 4:1 leverage 0 correlation with the S&P growth over 5 months is a modest 32.74% over the course of over 3000 trades.

    nothing works sometimes the way people imagine them my grid has stops my grid is nonhedged and i only enter in one direction.. on a couple of FX pairs. Also I already have an edge and i use the grid to enter intelligently based on that researched edge.

    people tend to think you can enter randomly and not care with a grid and make money its the free money for nothing that everyone who trades no-a-days seems to has, but to say a grid doesnt work because a bunch of people dont understand where the edge comes from is nutz.


    p.s. Math and stats is my strongest point not grammar is you got a problem with my grammar just keep it to yourself.
    #10     Oct 17, 2009