When it comes to grid trading, I am generally very skeptical. Like most people, I associate grid EAs with crashed Forex accounts so when I heard about the Grid Trading Course I was wondering whether it’s yet another scam or if there’s anything to it, so I decided to contact the author and ask some more details.
We’re dealing with a 1 month live course and by “live” I understand real-time and interactive, the participants being able to ask questions and request clarifications from the method developer. There’s also an EA included that is reportedly tailor-fit to the course material and it’s mentioned that the course sessions will detail its usage. The product webpage has some account statements and while some of them look nice, I can’t figure out much about the product from these.
The idea behind the whole thing is that grid trading can be very profitable if properly traded. Grid trading usually thrives in ranging markets and since currency pairs are ranging most of the time, it follows that grid trading is profitable most of the time. The system proposes combining the dependability of automatic trading with the intelligence and intuition of a human guiding touch. From what I understand, the users are expected to select the currency pairs they want to trade (obviously, those that are not in a strong trend) and engage into a somewhat ongoing tweaking of the EA settings. The course proposes to deal with lots of topics regarding grid trading, from risk and money management to how to select the pairs traded and how to use the EA that ships with the course.
We’ve all seen grid accounts displaying sky-high returns for a while and then crashing into the ground, so the most important item in my conversations with the author was getting an overview of how the system proposes to avoid margin calls and stop-outs. The author mentioned the method proposed by him has three safeguards in place: individual trade stop losses, a global stop loss limit that can be set for instance at 20% of the account and finally a dynamically hedged grid.
While grid trading with an individual trade SL is not new and neither is the global stop loss limit, the dynamically hedged grid seems to be a novel concept. The classic approach to grid trading is to open trades both long and short pretty much all the time. When the currency pair starts trending, this tends to go boom. The proposed dynamic hedging approach simply trades grid-style but without hedging when the currency pair is trending, thus eliminating losses caused by taking the wrong side of the market. How well does this work? I have no clue, but I am very curious. In my experience, grid trading with a stop loss of any kind leads to a balance chart that resembles the left half of the roof from the classical house drawn by children: the EA gains-gains-gains then drops and erases all profits only to repeat the process after that. It remains to be seen whether the dynamic hedge thing is going to make a difference or not.
The next course starts on 26.09.2011 and lasts until 20.10.2011, being composed of 8 sessions of about 1 hour, starting at 9PM EDT. This translates to 2AM GMT which might be a problem for Europeans but luckily the sessions are recorded and sent as video files to all participants, so missing one or a few is not going to be the end of the world.
Unfortunately, I am going to be away (honeymoon :)) for most of the course duration so I can’t attend even though I was invited. If you sign up, I am really interested to hear your feedback – please post your thoughts in the comments here if you have first-hand experience, no matter if you’ve formed a positive or negative opinion about it. The price of the course is rather high – $495 – but it kind of makes sense seeing that it’s interactive. What remains to be seen is whether it’s any good and whether it lives up to its promises in times of trending. As a heads-up, refunds are not possible, but I guess that’s normal given the nature of the product.
If you use this system and you’re publishing the results through myfxbook, please drop me a line if you want them posted here.
More info about the Grid Trading Course