Testing a Long-Only Multi-Stock Averaging Grid Through a Market Selloff

Summary

The article evaluates a multi-currency Expert Advisor that applies a long-only averaging grid to US stocks. RSI readings trigger entries, positions are added as price moves against the trade, and the number of grid steps is capped; at the limit, existing positions are closed. It compares fixed-lot averaging with a gradual increase in lot size, discusses how grid length affects stop-loss exposure, and selects instruments using earlier optimization and forward-testing results.

The author combines selected stocks to examine diversification before and during the 2020 market decline. The reported tests show smoother combined balance behavior and provide recovery factor, profit factor, drawdown, trade-count, and profit figures for the tested periods. These are historical simulations over selected instruments and settings, not proof of future resilience. The article emphasizes that margin needs exceed drawdown alone and that averaging or martingale-style sizing still requires a defined stop and limited grid depth; the results depend on its optimization choices and market sample.

Key ideas

• The tested system opens long positions using asset-specific RSI thresholds and adds positions as prices decline.
• A fixed maximum grid depth caps averaging exposure, with positions closed when another step would be required.
• Increasing lots by a fixed increment produces larger stop-loss exposure than fixed-lot averaging.
• The author tests selected US stocks individually and as a combined portfolio across pre-drop and selloff periods.
• Historical test performance does not remove margin requirements or the risk of losses during sustained adverse moves.

Tags

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