If you are not familiar with grid trading strategies for forex trading, add them to the way you navigate the market。This technology allows you to easily automate your trading, just like an automated stop loss。

Introduction to Grid Trading

Grid trading is when a trader attempts to profit from price trends and natural movements in the market, placing buy and sell orders in increments or decreases above or below the current price。

Alternatively, they can place sell orders at incremental levels above the current price, or buy orders at incremental levels below the current price, in order to take advantage of changes in market trends。

Who is suitable for grid trading?？

The strategy is also suitable for CFD trading, but not for new traders or beginners, it is suitable for those who are quite professional, confident and tenacious。Before attempting grid trading, you should learn how to trade CFDs, have a comprehensive understanding of all techniques, and build your portfolio, expertise, and planning skills。

If you are a novice, try it in theory while learning all the trading basics and other major strategies。

As you gain experience, record your trading history, because when you reach the level of trading with this strategy, you will not be completely new to it。

Incorporating CFDs would be much riskier than normal, but so would the returns, and would require reserve funds。

Types of Grid Transactions

There are two types of grid transactions:

1. Pure trading grid: both buy and sell orders are set, regardless of market direction or range, regardless of whether the market is trending or consolidating.
2. Modified trading grid: The modified trading grid is different because it is affected by the current direction of the market。Your direction deviation will be influenced by other market factors such as technical indicators or fundamental analysis。The modified trading grid was established to take advantage of trending markets。

Why You Need a Grid？

Grid trading is an excellent way to trade, and if used properly, it can bring extremely high profits。

It also simplifies trading, does not require technical indicators or complex fundamental analysis, just select the key level you want to enter, set the grid and make it work。Of course, trading is not that easy, but the trading grid does simplify the concept。

Finally, increasing positions and closing positions are an important aspect of grid trading systems。Many amateur traders will buy in large quantities and exit in one go if they lose money。Grid trading allows you to reduce risk by breaking down size and gradually moving into smaller positions.

Advantages of Grid Trading

• Gradually increase position size。You don't need to risk a lot of money in one entry, and you can expand or reduce your position.
• When using a pure trading grid, you can leverage the trend market and the consolidation market.
• It can be easily automated and run without much intervention。Just set the order level and let the system work。It requires less skill and management than other trading strategies.
• The strategy does not require high algorithms or technical indicators, is easy to understand and easy to use.
• You will not be expelled from the market when the price fluctuates significantly, because you have multiple entry opportunities at different levels.

Disadvantages of Grid Trading

• In a fast-moving and volatile market, your entry and exit may not deviate from your specified level, which may cause problems with the risk / reward parameters and the grid itself.
• The temptation to make a quick profit。Grid trading is about following market trends, and if you withdraw too quickly, your losses will be even greater, causing your funds to pull back significantly.
• Consolidating the market may require you to pay significant swap fees。If you set up a grid system and one or more orders hit, but the market does not move much for a considerable period of time, you may end up holding multiple orders for a long time。This means you will pay the overnight charge for these orders。

Grid Robot

What is a Grid Robot?？

Grid trading robots can help you automate your trading grid system so you don't need to constantly check and manage your trades。Grid trading robots will allow you to create entry and exit rules that are automatically executed by a computer。

Why Use Grid Robots？

You only need a small number of operations, most grid transactions are usually managed by robots。All you need to do is select the robot you want to use, enter the level and the rules for entering and exiting, and then let the robot start working, execute the position。

Advantages of Grid Robots

Now, while using trading robots may sound complicated, it's not。Here are some of the advantages:

• Minimize trading emotions: Using grid trading robots eliminates temptation and other emotions。You can let the robot do its job with minimal input.
• Backtesting: Grid trading robots need a set of defined rules, and in order to determine these rules, you need to constantly backtest your strategy to see what works best for you.。Without these predetermined rules, you will not be able to use the trading grid robot.
• Time: Using a grid trading robot saves time, you don't need to constantly manage trades or watch charts。Once set up, you can make it work and check it often。

Disadvantages of Grid Trading Robots

Some of the disadvantages of using a grid trading robot are:

• Mechanical failure: While using a robot may seem simple, mechanical servers are always at risk。Of course, this depends on the type of robot you are using, and it is also important to understand the problems that may arise when using grid trading robots。
• Need to monitor: While it may seem like a good idea to set up a bot and keep it going for a day, it may not be wise。Because you need to monitor the robot to ensure that mechanical failure does not occur, and manage it in time when mechanical failure occurs。

How to build a grid trading strategy

To build a grid trading strategy, you need to perform the following steps:

1. First, you need to choose the assets that your strategy will use to trade. Not all assets move in the same way, so it is vital to choose an asset that has a strong level and is suitable for your system.
2. Choose the type of grid trading system you want to use.
3. Choose the starting price of the grid, i.e. the position associated with the current price level.
4. Decide whether you want to trade with the current price trend.
5. Choose your entry level, i.e. the level at which you will open a position. Of course, you will also need to determine whether these are buy or sell orders and how long the position will be held to set the appropriate level.
6. Choose an appropriate trade size. Not too big, but enough to build a strong position size overall.
7. Finally, manage risk. It is related to your position size and must be considered in detail.

If you want to control the potential downside risk of each trade, you may be able to set a trailing or fixed stop loss, etc.。Managing risk is the most critical part of this setup to keep your money safe。