How to Grid Trade Forex

Learning how to grid trade Forex is not always an easy endeavor, even for those somewhat experienced in Forex trading. It takes understanding the concept of managing pairs so that you can predetermine when to buy and sell in small intervals, holding onto losses while selling gains. Most people find that this particular method is best utilized with bots that automate transactions at prespecified intervals. It is not advisable that beginners tangle with grid trading because it takes letting the market ride over periods of time. If the individual investor starts experiencing a series of losses it might cause panic leading him/her to sell just before the market starts gaining again. Many people have lost significant amounts of money by panicking when they should have ridden it out. In order to better understand how to grid trade Forex, it is crucial to have a solid foundation in the concepts of Forex.

Learning How to Ride the Waves – Patience
There isn’t a market on earth that doesn’t rise and fall in waves and Forex is really no different. The very first thing you will need to understand when learning how to grid trade Forex is to learn how to ride the waves. As mentioned above, most investors predetermine small buy/sell intervals to set as their grid. In so doing, gains will be small but so too will any losses be. The key is to sell gains at small intervals so that those profits can add up while holding on to losses until the market goes back up to your preset interval above market price. At that point the automated Forex bot (software) will automatically sell those gains. Again, it should be emphasized that you cannot afford to panic if some of your pairs continue on a downward trend. Try to ride the wave until it crests at your predetermined interval. This is the first lesson to be learned when asking how to grid trade Forex – patience!

Setting Intervals Above and Below Market Prices
Now that you understand that you are selling at intervals above market price, what about intervals below market price? This is where you set your bot to purchase pairs. Unfortunately, many people have the wrong idea and believe that this is the most loss they should take on and set the bot to sell. Wrong! Keep riding the wave as long as possible until the market peaks. That interval below market price is where you set your bot to buy predetermined currencies. It stands to reason that you buy when your currencies are down because that is where, should market trends hold, they should start an upward trend. The key is in knowing how far below market price you want to set your Forex trading software interval at so that you can realize the greatest gain. However, you can also set your bot to sell pairs at intervals below market price but this is not suggested because you could continue on that path with a series of losses.

This is just the beginning of the concept in grid trading. It presupposes that you understand pairs, including which is your base currency. It also presupposes that you understand pips and how to convert them into dollars and cents so that you will know just how much money you are gaining or losing at any given point. While you need to understand these concepts, the beauty as well as the strength of grid trading is that you just set your intervals and sit back while the bot does the trading. Learning how to grid trade Forex is often as simple as learning how to use the software. The most important lesson to be learned is how to avoid panic! You can ride the waves with relative peace of mind if you set the intervals small enough. That’s the concept behind how to grid trade in a nutshell.

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