What is Grid Trading?


Grid trading involves placing financial market orders above and below a set price on a trading platform. This creates a grid of orders that incrementally increases and decreases. The premise of grid trading is to capitalize on average price volatility in an asset by placing buy and sell orders at specific intervals above and below a predefined base price. For example, a trader would place a buy order every 20-pips above a set price and a sell order every 20-pips below that price. The trader will attempt to take advantage of ranging market conditions. One significant advantage of grid trading is that it requires minimal forecasting of market direction. However, we need to weigh the downside of such a strategy, including heavy losses if the trader fails to use stop-loss limits to help protect their capital.

So, how would traders put grid trading into practice? To construct a grid, there are multiple steps to follow, which include:

-        Choosing an interval, such as 10/50/100 pips

-        Choosing a starting price for the grid

-        Figuring out whether the grid will align with trends or ranges.

For example, the trader chooses to trend trade with the starting point at something like 1.1150 using a 10-pip interval. They would place buy orders at 1.1160, 1.1170, 1.1180, etc. Then, they would place sell orders at 1.1140, 1.1130, 1.1120, 1.1110, etc. If the trader decides to range trade, using the same starting point of 1.1150, with 10-pip intervals. The trader would place buys orders at 1.1110, 1.1120, 1.1130, 1.1140, and sell orders at 1.1190, 1.1180, 1.1170, 1.1160, etc.

Both strategies require you to lock in profits as the buy and sell orders execute, but you will also need a plan for managing losses such as stop orders. Overall, a comprehensive grid trading plan can prove itself in being a lucrative strategy if the trading plan remains balanced and accounts for unexpected shifts in market sentiment. 

Risk Disclosure- Trading financial instruments such as but not limited to off-exchange foreign currencies, cryptocurrency (cryptocurrencies), Futures, ETFs, Equities and Indexes contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Cryptocurrency,1,Forex,4,Top News,5,Trading Concepts,5,Trading Education,12,Trading Psychology,7,Trading Tips,9,
Forex Trading | Candlestick Patterns | Forex Strategies: What is Grid Trading?
What is Grid Trading?
Forex Trading | Candlestick Patterns | Forex Strategies
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy Table of Content