IMPORTANT UPDATE : THIS STRATEGY HAS A SETBACK DUE TO A HIGH IMPACT NEWS EVENT. TO PREVENT THIS FROM HAPPENING AGIAN WE HAVE ADDED A NEWS FILTER 2 HOURS THAT WILL PREVENT TRADING 2 HOURS BEFORE AND AFTER IMPACTING NEWS EVENTS.
Our entries are automated. The market is monitored 24/5 by GROWEX proprietary software which ensures our entries are precise, and optimal. Trades are entered into after 'stronger than normal markets movements' when the pair becomes over or undersold, and a pullback becomes highly probable. This is one of the strongest forces to influence price movement in forex and one of the backbones of our success.
It should be noted that our trading cannot be backtested because it is a combination of automated entries and manual management.
Our trading is not based on martingale principals.
Martingale is defined as:
1. When you double up your positions sizes
2. Open up unlimited positions
3. Trade with out a safety stop
There is a lot of negative publicity around grid style systems because most traders cannot manage them properly. However, in the hands of an expert trader it can be a very powerful tool. An EA grid system cannot be left to trade 'on its own' - the trader have to monitor fundamental and technical factors influencing position consistently for long term success.
We use a controlled, manually managed grid system, and although we do increase lot sizes in a mild manner, we do not practice martingale principals as we have a set 'Safety Hard Stop', and we limit the number of positions to 6 per pair to protect our capital from market spikes.
We manage our trading fairly conservatively, and will sometimes close at breakeven, or a small loss.
In line with this we avoid trading on Fridays and having positions open over weekends, if possible.
At GROWEX we put a very strong emphasis on monitoring the trades, and analyzing fundamental and technical factors impacting it.
This is core to our risk management and sets us apart from most other similar services.
Without manual intervention 'when required' a grid can be a dangerous system ( if left unattended); But in the hands of an expert it is a very powerful tool.
The logic behind opening more positions is that that a pullback becomes more probable, as pairs move closer to support or resistance levels, as it becomes more over- or undersold. Our Trader will consistently assess whether a pullback is probable, or not - and make a decision to protect capital, if required.
We want our clients to understand that the 'for the logic of the strategy to work' it will need ' breathing space' from time to time. This means that the strategy requires to go into 'some drawdown' from time to time to be able to function optimally.
This is normal, and as you get to trade with us, it will be one of the things you will get use to.
The benefit of going into more positions is that you are then optimally positioned to benefit from smaller pullbacks, and you can potentially also get bigger profits.
We have always ended up getting reward for the risk that is taken - a good confirmation that the strategy works. We only trade currencies that are range bound which helps ensure that we succeed.
The maximum positions per pair is 6.
We use a pip step of around +-25 pips, which makes our trading ideal for copying as it is a non scalping strategy.
We trade 10 carefully selected varied pairs. WE WILL ONLY ENTER ONE PAIR AT A TIME.
We use a mild lot multiplier of 1.6 for balances below $1600, and on balances above that we use the following a risk multiplier formula:
Follower account balance / Master account balance * Master account lot size = Follower account lot size
The opening lot sizes are calculated each time a new trade is opened and is automatically calculated according to:1. The Investment level selected 2. The account balance.
Opening lot sizes at a specific balance
1K = 0.01 lots
2K = 0.02 lots
3K = 0.03 lots
Gain +- 8 p/m
35 %Safety stop