Which currency pairs are you trading with Grid King?

Solar

Forex Intern
EURUSD, USDCHF, USDCAD, AUDNZD, AUDUSD, NZDUSD, EURCHF

This is a good currency type balance for my targets in this quarter.
 

whisquer

Forex Magician
All major crosses, so no pairs with non-major currencies.
I take a slightly different approach to identify what I should be trading.

I take all 28 pairs and backtest the 'socks' out of it; in this way identifying which pairs are likely to go into hedge and which are likely to not even go into hedge for up to all the test data I have (up to 17 years). I then trade those pairs which have not had a history of going into hedge for the entirety of the period.

I also play with different deposits to see what I can maximize in terms of my 'lot step risk' allocation settings.

I realize in this way that the past is never a concrete predictor of the future, but if the pair survives GFC, Covid, Brexit, etc. and other systemic shocks in between, then it might just survive our conditions today as well.

Happy to hear a critique of this approach. I'm sure it can be improved upon, in my search for 'safe' pairs. This will whittle your list of 28 pairs to probably just more than a handful but hey ho that goes with the territory....

My current list of currencies are:
AUDUSD; EURCAD; EURUSD; GBPAUD; NZDCAD; USDCAD; USDJPY
Note - as of Nov 2020, I may be revising this list.

whisquer
 
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Hulkson

Ready for Forex Prom!
I take a slightly different approach to identify what I should be trading.

I take all 28 pairs and backtest the 'socks' out of it; in this way identifying which pairs are likely to go into hedge and which are likely to not even go into hedge for up to all the test data I have (up to 17 years). I then trade those pairs which have not had a history of going into hedge for the entirety of the period.

I also play with different deposits to see what I can maximize in terms of my 'lot step risk' allocation settings.

I realize in this way that the past is never a concrete predictor of the future, but if the pair survives GFC, Covid, Brexit, etc. and other systemic shocks in between, then it might just survive our conditions today as well.

Happy to hear a critique of this approach. I'm sure it can be improved upon, in my search for 'safe' pairs. This will whittle your list of 28 pairs to probably just more than a handful but hey ho that goes with the territory....

My current list of currencies are:
AUDUSD; EURCAD; EURUSD; GBPAUD; NZDCAD; USDCAD; USDJPY

whisquer
Hey @whisquer ,totally get this approach. I've done similar backtests as well, but I've had a ton of hedges triggered on USDJPY and AUDUSD regardless of the spacing (read gap) that I use.

Another point I would add to what you posted is the way hedges are treated by brokers. With IC for example, a hedged position will start reducing your margin as it grows as they treat hedges as compensatory of your initial position. This Would mean the hedge gives you an extra advantage.

Are you staying away from Grid King hedging because it implies Grid King got into a messy situation😱, or simply because you don't like the hedging approach period?
 

whisquer

Forex Magician
Hey @whisquer ,totally get this approach. I've done similar backtests as well, but I've had a ton of hedges triggered on USDJPY and AUDUSD regardless of the spacing (read gap) that I use.

Another point I would add to what you posted is the way hedges are treated by brokers. With IC for example, a hedged position will start reducing your margin as it grows as they treat hedges as compensatory of your initial position. This Would mean the hedge gives you an extra advantage.

Are you staying away from Grid King hedging because it implies Grid King got into a messy situation😱, or simply because you don't like the hedging approach period?
Hey @Hulkson, I'd like to understand this better ;)

When you say "but I've had a ton of hedges triggered on USDJPY and AUDUSD"; were these in backtests or real live trading accounts?

If in backtests - let's exchange these backtests results here for these pairs, and see what might be different between our backtests. If in real live trading accounts, did you compare your trades going into hedge with those of Wim's signal on mql5, for instance - to see if his pairs also went into hedge?

With IC offering 1:500 usually margin isn't an issue even with the hedge (at least that was the case for me when I was still with them).

Between a pair that survives 17 years which experiences hedging vs no-hedging straight line growth, I tend to want to take my chances with the latter. For me it's about this: do the profits from running ALL pairs, with hedging and recovery, outweigh the comfort I get from getting less profits from running roughly 1/3 of those pairs, without hedging (but also without the pain of recovery from those hedges)?

If you see what the hedge does: DD hits max loss, and pair goes into a hedge automatically. The hedge locks your losses. Thereafter, the hedge closes in mini chunks, in a balanced buy/sell way, over the next X days as set up in your 'hedge breakdown' settings. In effect, what you're doing there is paying back in mini-installments, over the entire # of days in the 'hedge breakdown' setting, the loss that you should have taken (max loss) but for the hedge.

During this time, if all your other pairs are not in hedge, the profits gleaned from those other pairs may compensate you for the losses that will be caused as the hedge partially closes down on a daily basis. So you might (or might not) see red in your daily closed profits. It all depends on how the other pairs are doing, whether the market generates trades or not for you, and whether additional pairs go into hedge (bad luck).

Therefore, given the choice between trading in (a) all pairs - with the risk of getting into hedge for some pairs every now and then; but generating a lot more profits daily; and (b) selected pairs - while not totally eliminating the risk of hedge, has shown a propensity over 13-17 years not to get into hedge no matter what the market has thrown at it, I chose to go for (b) for now. In the past I did (a); but I did suffer pyschologically when a few pairs went into hedge around the time coronovirus hit in March/April this year.

Do have a think about the AUDUSD/USDJPY matter above, as well as the (a)/(b) choice; tell me what you think!

Additionally, there are additional options you can pick which do NOT require you using the hedging mechanism or taking a loss when 'max loss' is hit. For instance, you could apply a recovery manager EA (which may run its own specialized 'try to recover' orders by first locking the loss through a hedge and trying to close the difference thereafter with as little loss as possible) to take over when max loss for any particular pair is reached.

whisquer
 

CuteFx

Forex Tourist
Hey @Hulkson, I'd like to understand this better ;)

When you say "but I've had a ton of hedges triggered on USDJPY and AUDUSD"; were these in backtests or real live trading accounts?

If in backtests - let's exchange these backtests results here for these pairs, and see what might be different between our backtests. If in real live trading accounts, did you compare your trades going into hedge with those of Wim's signal on mql5, for instance - to see if his pairs also went into hedge?

With IC offering 1:500 usually margin isn't an issue even with the hedge (at least that was the case for me when I was still with them).

Between a pair that survives 17 years which experiences hedging vs no-hedging straight line growth, I tend to want to take my chances with the latter. For me it's about this: do the profits from running ALL pairs, with hedging and recovery, outweigh the comfort I get from getting less profits from running roughly 1/3 of those pairs, without hedging (but also without the pain of recovery from those hedges)?

If you see what the hedge does: DD hits max loss, and pair goes into a hedge automatically. The hedge locks your losses. Thereafter, the hedge closes in mini chunks, in a balanced buy/sell way, over the next X days as set up in your 'hedge breakdown' settings. In effect, what you're doing there is paying back in mini-installments, over the entire # of days in the 'hedge breakdown' setting, the loss that you should have taken (max loss) but for the hedge.

During this time, if all your other pairs are not in hedge, the profits gleaned from those other pairs may compensate you for the losses that will be caused as the hedge partially closes down on a daily basis. So you might (or might not) see red in your daily closed profits. It all depends on how the other pairs are doing, whether the market generates trades or not for you, and whether additional pairs go into hedge (bad luck).

Therefore, given the choice between trading in (a) all pairs - with the risk of getting into hedge for some pairs every now and then; but generating a lot more profits daily; and (b) selected pairs - while not totally eliminating the risk of hedge, has shown a propensity over 13-17 years not to get into hedge no matter what the market has thrown at it, I chose to go for (b) for now. In the past I did (a); but I did suffer pyschologically when a few pairs went into hedge around the time coronovirus hit in March/April this year.

Do have a think about the AUDUSD/USDJPY matter above, as well as the (a)/(b) choice; tell me what you think!

Additionally, there are additional options you can pick which do NOT require you using the hedging mechanism or taking a loss when 'max loss' is hit. For instance, you could apply a recovery manager EA (which may run its own specialized 'try to recover' orders by first locking the loss through a hedge and trying to close the difference thereafter with as little loss as possible) to take over when max loss for any particular pair is reached.

whisquer
OK I'll bite....

Look @whisquer ....I love your enthusiasm on this "backtesting Grid King" approach...but it's better to save your energy for other endeavors. There's very little point to back testing Grid King.... What do you think Wim is doing when he's "testing" each pair...? Well, he's curve fitting. It's that simple....so basically it's adjusted to deal with the conditions that come out of the backtests....he comes against a crash, recalibrates it, runs it again, rinse and repeat.....the results he gets do not reflect an understanding of the market movements, it's simply fitting the curve. What you are doing with your backtests, is basically adding a second layer of curve fitting....the difference is, that you get the "feel" that you are actually doing something "technically productive".....but are you?

You just need to go through that forum to see it again and again and again...blown account after blown account....

On top of that....what is Grid King's entry and exit criteria? What is the additional order placement criteria? No one knows! It's a true black box. So either you accept the black box as is, or don't trade it at all.

Don't get me wrong, Grid King is an OK EA...but to test and retest it is futile.
If you want to trade Grid King safely, you should pick a handful of currencies that don't fall or rise the same way when a crisis hits, and have a minimum of 1,000 per pair backing it up. That's it. There's no more science to it.

You want to backtest to death the same as all these other traders that lost it all....(again and again and again).....be my guest :) For the others, just stick to the basics above....doesn't mean you are 100% safe either...but it's as safe as I can trade accepting the risk of this EA, and still make a profit :)
 

Bean

Ready for Forex Prom!
OK I'll bite....

Look @whisquer ....I love your enthusiasm on this "backtesting Grid King" approach...but it's better to save your energy for other endeavors. There's very little point to back testing Grid King.... What do you think Wim is doing when he's "testing" each pair...? Well, he's curve fitting. It's that simple....so basically it's adjusted to deal with the conditions that come out of the backtests....he comes against a crash, recalibrates it, runs it again, rinse and repeat.....the results he gets do not reflect an understanding of the market movements, it's simply fitting the curve. What you are doing with your backtests, is basically adding a second layer of curve fitting....the difference is, that you get the "feel" that you are actually doing something "technically productive".....but are you?

You just need to go through that forum to see it again and again and again...blown account after blown account....

On top of that....what is Grid King's entry and exit criteria? What is the additional order placement criteria? No one knows! It's a true black box. So either you accept the black box as is, or don't trade it at all.

Don't get me wrong, Grid King is an OK EA...but to test and retest it is futile.
If you want to trade Grid King safely, you should pick a handful of currencies that don't fall or rise the same way when a crisis hits, and have a minimum of 1,000 per pair backing it up. That's it. There's no more science to it.

You want to backtest to death the same as all these other traders that lost it all....(again and again and again).....be my guest :) For the others, just stick to the basics above....doesn't mean you are 100% safe either...but it's as safe as I can trade accepting the risk of this EA, and still make a profit :)
For the most part....I agree with this @CuteFx .....backtesting for Grid King is not as useful as it is for other EAs. This is indeed a black box EA, and there's no doubt in my mind that Grid King is the result of a massive curve fitting exercise. Having said that, that doesn't make this a bad EA ;). The problem comes when people "think" there's a decipherable logic they can tap into via backtesting results.....this is NOT that sort of EA....Grid King is as much a gamble as actual gambling is :) No amount of backtests will make you the wiser when it comes GK.

Your approach of keeping a reduced number of pairs that balance each other out is way more sensible than going into this with "false confidence" arousing from back tests. This "balanced/reduced" approach is what I've been doing for a while now...and I'm happy to work like this with Grid King :)(y)

Grid King is an OK EA, just don't try make something out of it, that it's not ;)

Those are my 2 cents on this one ;)
 

whisquer

Forex Magician
OK I'll bite....

Look @whisquer ....I love your enthusiasm on this "backtesting Grid King" approach...but it's better to save your energy for other endeavors. There's very little point to back testing Grid King.... What do you think Wim is doing when he's "testing" each pair...? Well, he's curve fitting. It's that simple....so basically it's adjusted to deal with the conditions that come out of the backtests....he comes against a crash, recalibrates it, runs it again, rinse and repeat.....the results he gets do not reflect an understanding of the market movements, it's simply fitting the curve. What you are doing with your backtests, is basically adding a second layer of curve fitting....the difference is, that you get the "feel" that you are actually doing something "technically productive".....but are you?

You just need to go through that forum to see it again and again and again...blown account after blown account....

On top of that....what is Grid King's entry and exit criteria? What is the additional order placement criteria? No one knows! It's a true black box. So either you accept the black box as is, or don't trade it at all.

Don't get me wrong, Grid King is an OK EA...but to test and retest it is futile.
If you want to trade Grid King safely, you should pick a handful of currencies that don't fall or rise the same way when a crisis hits, and have a minimum of 1,000 per pair backing it up. That's it. There's no more science to it.

You want to backtest to death the same as all these other traders that lost it all....(again and again and again).....be my guest :) For the others, just stick to the basics above....doesn't mean you are 100% safe either...but it's as safe as I can trade accepting the risk of this EA, and still make a profit :)
Hi CuteFx,

Thank you for your thoughts on the subject. I think we actually agree on the principle of many things re GK. For instance, I'm sure the recommended "Min 3k deposit" on GK running up to 28 pairs even with 0.01 starting lots and a '5% ultra conservative' lot step setting is still asking for trouble. You only need a few pairs to go into a bad grid and boom.

I make a distinction between backtesting and optimimzation though (the latter of which I see as curve fitting).

For me backtesting is a study to see if the strategy even works and lands in profit (and then, how much). You would be surprised at the number of EAs that claim to be great while they either crash or remain unprofitable. I would say around 9 out of 10 even, based on my testing so far. So when I find one that actually survives the claim, I am interested and perhaps might test more, a longer period or whatever. Basically, in those cases that fail, you are no better than throwing a dice. Many even crash and burn upon testing. I use backtesting to filter those out. And I use long term backtesting, as far back as I can get to, to test those out.

To me, optimization is indeed all about curve fitting. No different from shooting an arrow, seeing where it lands, and then drawing circles around it to show you've hit the bullseye. Also, there's an element of curve fitting when a dev of any EA says, "run only on EURUSD, M5" - at least that's what I think. Worse still are those EAs that are either do not allow backtesting (I've made a recent comment on this in another thread re another EA) or allow backtesting only from a certain date onwards. If that isn't dubious, I don't know what is - and yes these do exist!

To the extent that Wim doesn't say, "only run on EURUSD, AUDNZD, AUDCAD etc. on H1", I think that he's putting himself out there and saying GK can work with pretty much all the majors and minors, and to some extent, it can. Backtests (non-optimized) show this - even at default setting, notwithstanding the occassional hedge or three. What I have issue is, is the recommended initial deposit. I don't think that $3k can survive a newbie deploying this on 28 pairs even at the lowest possible setting without blowing his / her account.

The GK EA as you've said, is a bit of a black box. It runs 2 strategies A/B and one is if I recall correctly based on velocity breakout. There are some settings but these are rudimentary. All one knows is, from time to time it will open up a trade and if it goes south a grid will build. If it goes well it takes TP without much of a grid. That said, as @Bean said, it does work, to some extent. I fully acknowledge that I have, through my own tests, done a 'pick of the lot' approach, (because my criteria is, over up to 17 years' best quality tick data, those pairs have not gone into hedge); but it could also be seen that these same 17 years have also seen a few crisis, be it COVID, SNB depegging, GFC etc. and have responded well when crisis had hit. While one could say that one can never predict what's going to happen next week and no one should derive any comfort just because the events of the past decade plus doesn't mean something novel won't happen tomorrow, I basically wanted to reduce my selection of pairs (originally 28 or so) to a more quality choice, and that's what I've gone with. As always, I welcome alternative ideas which would help me make a better choice ;).

Thank you both for your insights, views and warnings. I acknowledge that this is a risky EA and not for the uninitiated... especially those without enough capital or reserve that they can afford to lose!
 
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CuteFx

Forex Tourist
Hi CuteFx,

Thank you for your thoughts on the subject. I think we actually agree on the principle of many things re GK. For instance, I'm sure the recommended "Min 3k deposit" on GK running up to 28 pairs even with 0.01 starting lots and a '5% ultra conservative' lot step setting is still asking for trouble. You only need a few pairs to go into a bad grid and boom.

I make a distinction between backtesting and optimimzation though (the latter of which I see as curve fitting).

For me backtesting is a study to see if the strategy even works and lands in profit (and then, how much). You would be surprised at the number of EAs that claim to be great while they either crash or remain unprofitable. I would say around 9 out of 10 even, based on my testing so far. So when I find one that actually survives the claim, I am interested and perhaps might test more, a longer period or whatever. Basically, in those cases that fail, you are no better than throwing a dice. Many even crash and burn upon testing. I use backtesting to filter those out. And I use long term backtesting, as far back as I can get to, to test those out.

To me, optimization is indeed all about curve fitting. No different from shooting an arrow, seeing where it lands, and then drawing circles around it to show you've hit the bullseye. Also, there's an element of curve fitting when a dev of any EA says, "run only on EURUSD, M5" - at least that's what I think. Worse still are those EAs that are either do not allow backtesting (I've made a recent comment on this in another thread re another EA) or allow backtesting only from a certain date onwards. If that isn't dubious, I don't know what is - and yes these do exist!

To the extent that Wim doesn't say, "only run on EURUSD, AUDNZD, AUDCAD etc. on H1", I think that he's putting himself out there and saying GK can work with pretty much all the majors and minors, and to some extent, it can. Backtests (non-optimized) show this - even at default setting, notwithstanding the occassional hedge or three. What I have issue is, is the recommended initial deposit. I don't think that $3k can survive a newbie deploying this on 28 pairs even at the lowest possible setting without blowing his / her account.

The GK EA as you've said, is a bit of a black box. It runs 2 strategies A/B and one is if I recall correctly based on velocity breakout. There are some settings but these are rudimentary. All one knows is, from time to time it will open up a trade and if it goes south a grid will build. If it goes well it takes TP without much of a grid. That said, as @Bean said, it does work, to some extent. I fully acknowledge that I have, through my own tests, done a 'pick of the lot' approach, (because my criteria is, over up to 17 years' best quality tick data, those pairs have not gone into hedge); but it could also be seen that these same 17 years have also seen a few crisis, be it COVID, SNB depegging, GFC etc. and have responded well when crisis had hit. While one could say that one can never predict what's going to happen next week and no one should derive any comfort just because the events of the past decade plus doesn't mean something novel won't happen tomorrow, I basically wanted to reduce my selection of pairs (originally 28 or so) to a more quality choice, and that's what I've gone with. As always, I welcome alternative ideas which would help me make a better choice ;).

Thank you both for your insights, views and warnings. I acknowledge that this is a risky EA and not for the uninitiated... especially those without enough capital or reserve that they can afford to lose!
I think one of the main issues of the traders running Grid King is their mentality. Grid King is an algorithm, that's it. It doesn't analyze fundamentals...which is basically the reason no EA is "fire and forget". Central Bank policy changes hugely influence the volumes and liquidity that directly affect the indicators GK uses to place trades...and through time, you will come to see GK placing some really WTF trades...and this becomes exponential when you run even a 1/4 of the available currency pairs. Is this a GK flaw? Nope. It's just how this works....the market cannot be predicted...and GK, like any black box EA, will only know how to behave profitably with ~85%...the other 15% you will grids stomping out. If I look at Wim's forum thread I would say 15% is even too kind, as there are so many blown accounts on that thread is not even funny....but the bottom line, it's not the EAs fault...it's the traders that don't understand how to use it. It would help if Wim would not subtly encourage people to go BIG....but ultimately it's the trader's responsibility, and that is what I see very little of with Grid King traders -understanding that it's THEIR responsibility and not GK's.

Which EA where you not allowed to backtest?

And just for the record...I am running GK on 2 pairs only at the moment: EURUSD and AUDUSD
 

whisquer

Forex Magician

Paul

Forex Intern

CuteFx

Forex Tourist

Applepine

Forex Trader
Thanks Applepine, what is the basis of your picking these? It would be interesting to hear.
Hey @whisquer must have missed this one...

It has been a combination of backtesting, and looking at the specifics of how a currency is responding to the current set of market affecting circumstances.

Grid King has handled these pretty well, no home runs on these, but they are steady + low risk profit:
EURUSD, USDCHF, EURCHF

These are bit more wild, and they have triggered hedges this year, but so far, manageable ones (for me at least):
AUDNZD, AUDCHF, EURAUD, GBPUSD
 
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