GridTechinque why not? - Page 2

JoZo · #11 (**permalink**) 03-27-2006, 07:57 PM

Quote:

Originally Posted by keris2112

There are a lot of grid-building scripts floating around on a lot of forums. You just need to do a little searching.

The biggest drawback of grids is that you have to be willing to live through the unrealized drawdowns. On your 50k account, are you willing to see an unrealized drawdown of 20, 30, even 40K when your grid is "fanning out", and still hold your position, "knowing" that the grid is going to close eventually?

The grid systems that I've seen rely on you being hedged until the market trends enough for you to close the whole grid for a profit. The problem with using a TP in this is that once you take profit, the hedge is gone. Now you've exposed yourself to unlimited risk.

I'm not saying grids don't work. I'm testing a couple right now and I see a lot of potential to have a really solid trading system. (I know I "preach" a lot about learning to Trade, not Follow. This is my one venture into purely mechanical Following.) All I'm saying is that you need to be very conservative with your margin. The grids I'm testing now, I make sure I have between $750 - $1,000 capital / pair, trading at $0.01/pip. (yes, that's really 1 cent/pip) With 50K, I'd be trading 4 pairs at $0.12 - 0.15/pip.

I'm not sure I really have a point in all of this. I guess I'm just rambling.

Oh, I know... Whoever tries to use grids, just make sure that you trade very, very conservatively with regards to your margin. Break that rule at your own peril. There's nothing worse than being in the middle of a large grid and you run out of margin. Everything goes to hell as your account blows up.

Keris

Keris,
You are right. I was testing the Grid Techinque. Initial capital 10k lots 0.10 and was working really good but I had a drawdown of 50%

, and I'm trading only one pair. EUR/USD but think that USD/JPY is better.
I don't want to have a drawdown of 50%, I tjink that's the problem in the GridT. You need a big margin and that's all.
Do tou have an EA to test?

Thanks

BC Brett · #12 (**permalink**) 04-22-2006, 06:48 AM

Just finished writing my grid EA today.
Naturally I wanted to test it out on Strategy Tester.

I've heard ST is not that reliable, but the results it was showing were out of this world.
I downloaded Data from Alpari for GBP/USD for Dec 2004 to Apr 2006 and followed all the instructions from Coder's Guru on setting up ST.

The Strategy Tester showed that if I traded my grid system on GBP/USD for this period, I would have turned my original balance of $5,000 into $137,000 in roughly a year and 4 months, and that's without ever increasing the lot size.
I was expecting positive results, but come on!

kumawat · #13 (**permalink**) 04-22-2006, 07:33 AM

i am also testing this techniques but you i am using manual intervention, i mean i take one side either long or short depends on trend of market. and it seams it works fine but we need to do more research on this system.

eric79 · #14 (**permalink**) 04-22-2006, 10:39 AM

Hi BC Brett. And what was the modelling quality that ST got for your test? And what was the largest drawdown?
Thank you.

eric79 · #15 (**permalink**) 04-22-2006, 10:40 AM

Quote:

Originally Posted by JoZo

I can make with and initial balance of 50k in two years around 150k and I think that is a great result but the problem is that I have to trade manually

Did you test the system manually for 2 years? Thanks.
Eric

BC Brett · #16 (**permalink**) 04-22-2006, 04:36 PM

Quote:

Originally Posted by eric79

Hi BC Brett. And what was the modelling quality that ST got for your test? And what was the largest drawdown?
Thank you.

25 pip grid.
1000 unit lot size.

(see attachment)

BC Brett · #17 (**permalink**) 04-24-2006, 05:45 PM

Quote:

Originally Posted by BC Brett

The Strategy Tester showed that if I traded my grid system on GBP/USD for this period, I would have turned my original balance of $5,000 into $137,000 in roughly a year and 4 months, and that's without ever increasing the lot size.

Check-out the Strategy Tester report (last post).

I have confidence in system, but 2,646% Profit in 1 yr. & 4 mo.???

What's wrong with Strategy Tester?

keris2112 · #18 (**permalink**) 04-24-2006, 06:06 PM

Quote:

Originally Posted by BC Brett

Check-out the Strategy Tester report (last post).

I have confidence in system, but 2,646% Profit in 1 yr. & 4 mo.???

What's wrong with Strategy Tester?

Your Modeling Quality is 41%. The results from the strategy tester will not be accurate.

Keris

eric79 · #19 (**permalink**) 04-24-2006, 06:08 PM

You have a modelling quality of about 40%. I think that is so low, that the result might be pretty inaccurate. This does not mean that the strategy is not good of course

BC Brett · #20 (**permalink**) 04-24-2006, 06:50 PM

First of all, I know modelling quality is low, but what is that anyway?
I don't understand what modelling quality really means.

All I know is I followed CG's instructions for setting up ST and ran the test.
If it says modilling quality is low, whose fault is that?

Besides, I'm using a 25 pip grid. If modelling quality is refering to the simulated ticks, I doubt that would make much difference to the overall results since they are derived from 1 minute data. I don't think there would be more than a very low percentage of 1 minute bars with a range >= 25 pips, so how many false crossovers could ST be generating?

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

LinkBacks (?) LinkBack to this Thread: http://www.forex-tsd.com/metatrader-4/1455-gridtechinque-why-not.html
Posted By	For	Type	Date
hekenberg's bookmarks on del.icio.us	This thread	Refback	08-29-2007 03:13 PM

Register in Forex TSD!
Trading Systems Leaders in this forum (automated trading systems) are winning more than 3000 pips in a month (30000$ investing one lot every time). Click here to register and get more information