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USING ENTRY (WAITING) ORDERS

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One of the advantages of grid trading is that one can load all Buy and Sell transactions in a grid as entry (waiting orders) and preload the targets. This is huge advantages which “almost” turns the system into a set and forget system. One should always have a fully loaded grid with orders at least 4 grid gaps away from the current price levels,

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View an example of a grid by clicking the picture below to enlarge it

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.There are however 2 exceptions where you would have to enter stops and more entry orders. They are:

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• When a transaction is cashed in this transaction has to be replaced to keep the grid complete. This can be done at any time before the price reaches the entry point of the previous cashed in transaction. For Example: Let’s assume that a buy with an entry of 1.0103 is cashed in as it reaches its target of 1.0200. This transaction is no longer in the grid anymore. You would have to replace it as quickly as possible but no later than if the price goes to 1.0103 again. You would replace the transaction exactly as it was previously.

• The other time where you would have to enter transactions is when your grid group of transactions has the potential of being positive when a grid line in touched. You will then enter stops to make sure that all unnecessary transactions are closed. PLEASE REFER TO MODULE 8 on the automation of the trading process for more details on when stops need to be enterred.

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Click to enlarge

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SIMULTANEOUS TRANSACTIONS

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An important aspect of preloading transactions is that we want Buy and Sell transactions to activate at the same time (simultaneously) to create the perfect hedges.

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Remember that charts generally reflect the selling price of the currency. Therefore, assuming a 3 pip spread, when the sell price is for instance at 2.0100 the buy entry will be 2.0103. Therefore, when we enter a sell at 2.0100 and a buy at 2.0103 the transactions will activate at the same time when the sell price reaches 2.0100.

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The same concept applies to targets and stops. A target or stop is always the opposite of the transaction you used to enter. If you buy to get in then you need to sell to get out. If you sell to get in then you need to buy to get out. .

The diagram below illustrates the concepts (Click to enlarge):-

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QUESTIONS OR COMMENTS REGARDING THIS MODULE

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