Dear Reader!
Recently, trading using a grid of orders has become quite widespread. The GMT Partner project has partnered with the Expert4x project and tried the Simple Grid Trader Expert Advisor.
The concept proposed by the developers of EA SGT certainly deserves your attention. During his work in the financial markets, the author of the GMT Partner project encountered many different opinions. This included the opinion of certain ‘gurus’ that opening two opposite positions on one financial instrument simultaneously is a foolish idea.
They ask, “Why pay the spread twice?” Having two opposite positions is, in their opinion, the same as having no positions. No matter where the market goes, if you have two opposite positions, you will never make money because your unrealised profits will always be offset by your unrealised losses. Even if the market stays where it is, the double spread on opening and closing positions and SWAP will result in a loss to your trading account balance.
However, these same ‘gurus’ fail to mention that, according to various estimates, any market spends between 50% and 75% of its time in a state of consolidation, i.e. market price fluctuations do not have any definite direction. While no one disputes that trading in the direction of the trend is preferable, understanding when a trend will begin, continue or end is only possible after the event.
Another aspect I would like to draw your attention to when discussing directional trading is a little-known secret of market organisers that is not usually discussed. All market makers, large or small, can see the stop orders of most retail clients ‘on the other side of the screen’ and will definitely move the price against them when the opportunity arises in order to obtain additional liquidity for deploying their own positions.
Under these conditions, it is almost impossible for retail clients to make a stable profit on the market. It is therefore unsurprising that statistics disclosed by brokers show that 85–95% of clients leave the market having made a loss.
This is where a trading strategy that does not use stop orders can help, as it opens both long and short positions simultaneously in anticipation of market consolidation. It should be noted that the results of trading with the SGT Expert Advisor are quite impressive. For testing on the market, we used five financial instruments — one for each segment (FX, energies, cryptocurrencies, precious metals and indices). Only financial instruments for which the balance of power favoured neutral market participants or had been mixed were selected.
Even without advanced settings, the basic version of SGT generates a profit of several percent every day. The most important thing is choosing the right financial instruments.
The video provided by the EA developer does a good job of explaining how the software works.