How to Make Money Trading the Forex Grid Strategy in Olymp Trade.

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What is the Forex Grid Strategy?

The Forex Grid Strategy is a trading technique that involves placing Buy and Sell Stop Pending orders at regular intervals above and below a certain set price.

This creates a grid of both buy and sell orders above and below a set price, which we call a Forex Grid. The Buy and Sell Stop Pending Orders must always be accompanied with appropriate Stop Loss orders.

For example, you can decide to place 5 buy orders every 10 Pips from 1.1620 and 5 sell orders every 10 pips from the same price.

That will make 1.1630, 1.1640, 1.1650, 1.1660, and 1.1670 for your Buy Stop Pending Orders and, 1. 1610, 1.1600, 1.1590, 1.1580 and 1.1570 levels for your Sell Stop Pending Orders.

Forex grid trading strategy

You can use the Forex Grid Strategy to trade both market trends and market ranges.

This means that there will be two types of Forex Grid systems, each for each market condition. The Forex Grid system we use to trade trending markets is called the With-the-trend Forex Grid while one which we use to trade ranging markets is the Against-the-trend Forex Grid.

The With-the-trend Forex Grid involves placing progressive;

  • Buy stop pending orders at regular intervals above the set price
  • Sell stop pending orders at regular intervals below the set price.

The Against-the-trend Forex Grid involves placing progressive;

  • Buy stop pending orders at regular intervals below the set price.
  • Sell Stop pending orders at regular intervals above the set price.

The Principle Behind the Forex Grid.

1. With-the-trend Forex Grid.

The With-the-trend Forex Grid system capitalizes on having a big price move in a particular direction.

 
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If the trend keeps growing upwards with respect to the set price, more Buy Stop Pending orders will get activated. As the trend grows further, more profits are realized in such a price move.

You must however pay keen attention as the trend keeps growing gaining profits to finally determine where to exit from such winning trades.

If you don’t, the price may as well reverse back downwards wiping off all the gained profits and leading to increasing losses.

You may arguably say that the price will activate the Sell stop pending orders placed below the set price which is true. But remember, you have a huge open trade sustaining losses as you activate your sell orders downwards.

The same thing happens if the trend grows downwards with respect to the set price. More Sell Stop Pending orders will get activated realizing more profits as the trend grows downwards. You need to pay keen attention to exit such winning trades lest the trend reverses again upwards and the profits vanish.

In another scenario, the price may not trigger all the Buy or Sell Stop Pending Orders.

It may move up triggering some buy orders and then down triggering some sell orders and that leads to a loss in the activated Buy orders. This action of the price is the one which we may refer to as a ranging market which calls for the Against-the-trend Forex Grid.

Forex grid trading strategy

2. Against-the-trend Forex Grid.

The Against-the-trend Forex Grid system capitalizes on price oscillating about a given level and not moving hugely in a particular direction.

You had placed your Buy Stop Pending Orders below the set price about which the price oscillates. You had also placed your Sell Stop Pending orders above that set price.

As the price falls, you are pretty sure that it will reach a certain level and then reverse upwards activating your Buy Stop Pending Orders.

It will also continue rising above your set price – up to a certain level then come falling again, activating your Sell Stop Pending Orders.

Be keen to exit your Buy positions as the price reaches the upper limit of the range and exit your Sell positions as the price reaches the lower limit of the range.

The problem with using the Against-the-trend Forex Grid will only be if the price breaks out of the range and keeps moving towards a particular direction. You, therefore, need to be sure that it is truly a ranging market you are dealing with before constructing such a grid.

In case things go south, apply a Stop Loss to exit the losing trades.

Trading the Forex Grid Strategy in Olymp Trade.

How then do you make money trading the Forex Grid Strategy on Olymp Trade? This is what we are about to establish in a few.

Trade the Forex Grid Strategy on Olymp Trade in the following simple steps.

  1. Determine the type of market.
  2. Determine the Start Price, number and interval of Buy and Sell Stop Pending orders.
  3. Construct the Forex Grid.
  4. Observe your Trades Keenly.
  5. Exit winning Trades Appropriately.
  6. Exiting Losing Trades.

1. Determining the type of Market.

We said the type of Forex Grid you will use will be determined by the type of market you are dealing with, whether a trending or a ranging market.

If you find yourself in a trending market, the with-the-trend Forex Grid will do. If it is a ranging market, the against-the-trend Forex Grid will do well.

2. Determining the Start Price, number and interval of Buy and Sell Stop Pending Orders.

Are you in a trending market?

The start price needs to be a price in between a recent low and a recent high which seems to act as support and resistance levels.

Is it a ranging market you are dealing with?

Then establish the upper and lower limits of the range and let your start price be in between the two limits.

According to the size of the trend moves or the market range, you can determine how many Buy and Sell Stop Orders you will have in your grid.

If it is a huge trending price move or a huge market range, you can use a reasonably larger number than when the trend and market range is just small.

According to the size of the trend moves or the market range also, you can determine the interval between your Buy and Sell Stop Orders. If it is a huge trending price move or a huge market range, you can use a reasonably larger interval than when the trend and market range is just small.

3. Constructing the Forex Grid.

You are on a trending market and so you will construct a With-the-trend Forex Grid. You determined your start price to be 1.1620, the number of Buy and Sell Stop Pending Orders to be 5, and the interval to be 10 Pips.

Your Buy Stop Pending Orders will be;

  • 1630
  • 1640
  • 1650
  • 1660
  • 1670

Your Sell Stop Pending Orders will be;

  • 1610
  • 1600
  • 1590
  • 1580
  • 1570

If you are on a ranging market, you will construct an Against-the-trend Forex Grid. You determine your start price to be 1.1620, the number of Buy and Sell Stop Pending Orders to be 5, and the interval to be 10 Pips.

Your Buy Stop Pending Orders will be;

  • 1610
  • 1600
  • 1590
  • 1580
  • 1570

Your Sell Stop Pending Orders will be;

  • 1630
  • 1640
  • 1650
  • 1660
  • 1670

4. Observing your Trades Keenly.

We said that you need to keep an eye on your trades lest it reverses wiping off all your gains, both in trending and ranging markets.

Do not leave your trades running because such can harm your account a big deal.

5. Exiting Winning Trades Appropriately.

In a trending market, you must pay keen attention as the trend keeps growing gaining profits to finally determine where to exit from such winning trades.

Determine an appropriate level where after all your Buy Stop Pending Orders have been activated, you feel that you have had enough profit and exit. Do the same when the price falls activating all your Sell Stop Pending Orders.

In a ranging market, be keen to exit your Buy positions as the price reaches the upper limit of the range and exit your Sell positions as the price reaches the lower limit of the range.

6. Exiting Losing Trades.

This Strategy is not the Holy Grail.

There are times you will make mistakes or the market will just not favor you. Do not hold losing trades in hope of price reversals in your favor as this might be catastrophic.

Exit losing trades as soon as you realize that the market is going against you.

Conclusion.

Trading the Forex Grid Strategy can make a lasting difference in your Olymp Trade account. Try it today.

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One Response to “How to Make Money Trading the Forex Grid Strategy in Olymp Trade.”

  1. The jargon is just too much .I need a very simplistic shot explanation of how to Trade online.

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