Classic Grid Trading with Geometrically Increased Hedge Positions

Summary

The article explains a classic grid approach for both long and short trades, then describes automating it as an MQL5 Expert Advisor and reviewing it in the strategy tester. Starting with a small position, the system adds another trade each time price moves against the position by a fixed distance, increasing each new lot by a multiplier. The weighted average entry price across the open trades is treated as the approximate break-even level; a move back through that level returns the basket to around zero before further movement toward the take-profit can generate gains.

Worked examples use EURUSD, a 15-pip grid spacing, and a multiplier of two to show how the average entry shifts as positions accumulate. The article says the examples simplify by ignoring spreads and notes rounding effects in the calculations. It presents initial test results but frames parameter tuning and the choice of starting direction as future work. Because exposure grows with each added position, the break-even arithmetic alone does not establish that the strategy is safe or profitable across market conditions.

Key ideas

• A grid adds a new position when price moves against the existing basket by a chosen distance.
• Each new position can be sized as a multiple of the previous one, increasing total exposure.
• The volume-weighted average entry price gives the basket’s approximate break-even level before costs.
• The same grid logic can be applied symmetrically to buy and sell baskets.
• Spreads are omitted from the examples, and parameter optimization is left for later work.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.