Grid Bot RSIGrid Bot Simulator. Based on RSI levels.
How it works:
Prices are divided into grids, or trade zones, that are based on RSI levels. Buys will trigger when the RSI crosses into a higher zone, after descending. Sells will trigger when the RSI crosses into a lower zone, after ascending. After triggering, a new signal will not be produced until the RSI progresses into better zone.
Standard Settings :
RSI Length
Number of Grids
RSI Type : Standard RSI or Jurik RSX (based on Everget’s formula)
Show All Grids
Experimental Features (Adjust in settings menu) :
No Trade Zone : RSI Levels where no trades will be signaled. Adjust to prevent over-buying/selling in narrow markets. Default: 35-65:
No Trade Zone (40-60)
Aggression Level : Increase aggressiveness to stack buys/sells at extreme RSI levels:
Aggression = high
Aggression = low
Market Direction : If market is trending up, the bot will skip every other sell ( = more buys than sells). If down, will skip every other buy (more sells than buys). Default: neutral.
Market Direction: down
Market Direction: neutral
Search in scripts for "grid"
Gridimus MaximusGridimus Maximus draws N grid lines stepping by price or percent in chosen direction from set price, or draws N grid lines stepping by pivots.
The queue function method used is adapted from an example provided on the PineCoders website, much gratitude to LucF for this gem!
To prevent grid lines out of range from causing chart to rescale right click on chart's price column and enable Scale Price Chart Only.
Pictured example above is using Type Of Increment: Steps By Pivot, Number Of Steps: 5.
Pictured example below is using Type Of Increment: Steps By Price, Number Of Steps: 6, Starts From Price: $10k, Steps By Percent Or Price: $10k.
Pictured example below is using Type Of Increment: Steps By Percent, Number Of Steps: 7, Starts From Price: $10k, Steps By Percent Or Price: 33%.
NOTICE: This is an example script and not meant to be used as an actual strategy. By using this script or any portion thereof, you acknowledge that you have read and understood that this is for research purposes only and I am not responsible for any financial losses you may incur by using this script!
GRID EXTENSIONGRID EXTENSION
Overview
The GRID EXTENSION is a simple grid-based indicator for TradingView, built with Pine Script v6. It plots horizontal price levels starting from a user-defined anchor price, with spacing set by a tick increment. Use it to identify key support, resistance, or price zones on charts for Crypto, Forex, or Futures.
Key Features
Custom Grid Levels: Plot up to 22 levels (e.g., 0, 0.25, 1.25, -2.50) with options to show/hide, set values, and choose colors.
Market-Specific Tick Increments: Select your asset type (Crypto, Forex, Futures) and choose from a range of tick increments tailored for each market:
Crypto: 1 to 5000 ticks (e.g., 100 ticks = $0.001 on ADA/USD, 5000 ticks = $50 on BTC/USD).
Forex: 5 to 5000 ticks (e.g., 100 ticks = 1 pip on EUR/USD, 5000 ticks = 50 pips).
Futures: 1 to 2500 ticks (e.g., 25 ticks = 6.25 points on E-mini S&P 500, $312.50 per contract).
Visual Options:
Extend lines to the right.
Show price and level labels (as values or percentages).
Place labels on the left or right.
Adjust background transparency for filled areas between levels.
How to Use
Set Asset Type: Choose "Crypto," "Forex," or "Futures" to match your chart.
Set Anchor Price: Enter a starting price for the grid.
Pick Tick Increment: Select a tick increment from the dropdown, following the guidance for your asset type (see Key Features).
Customize Levels: Turn levels on/off, set values, and pick colors.
Add to Chart: Apply the indicator to see the grid on your chart.
Tips
Use levels to mark support/resistance zones for entries or exits.
Extend lines to project future price zones.
Choose smaller increments (e.g., 5 ticks) for scalping, or larger ones (e.g., 1000 ticks) for swing trading.
Combine with indicators like moving averages for better signals.
Settings
Asset Type: Select "Crypto," "Forex," or "Futures" (default: "Crypto").
Anchor Price: Starting price for the grid (default: 0.0).
Tick Increment: Space between levels (options: 1, 5, 10, 25, 50, 100, 250, 500, 1000, 2500, 5000). Choose based on asset type.
Extend Right: Extend lines to the right (default: true).
Show Prices: Show price labels (default: true).
Show Levels: Show level values or percentages (default: true).
Format: Display levels as "Values" or "Percent" (default: "Values").
Labels Position: Place labels on "Left" or "Right" (default: "Left").
Background Transparency: Set transparency for filled areas (default: 100, range 0-100).
Level Options: Enable/disable levels, set values, and choose colors.
Notes
Set the anchor price to a key level (like a recent high or low) for best results.
Check the tick increment tooltip to ensure the spacing suits your market type.
Works on any chart, best for clear price trends or ranges.
Acknowledgments
Made with Pine Script v6 for TradingView. This is v1.0—feedback welcome for future updates!
Grid Bot Parabolic [xxattaxx]🟩 The Grid Bot Parabolic, a continuation of the Grid Bot Simulator Series , enhances traditional gridbot theory by employing a dynamic parabolic curve to visualize potential support and resistance levels. This adaptability is particularly useful in volatile or trending markets, enabling traders to explore grid-based strategies and gain deeper market insights. The grids are divided into customizable trade zones that trigger signals as prices move into new zones, empowering traders to gain deeper insights into market dynamics and potential turning points.
While traditional grid bots excel in ranging markets, the Grid Bot Parabolic’s introduction of acceleration and curvature adds new dimensions, enabling its use in trending markets as well. It can function as a traditional grid bot with horizontal lines, a tilted grid bot with linear slopes, or a fully parabolic grid with curves. This dynamic nature allows the indicator to adapt to various market conditions, providing traders with a versatile tool for visualizing dynamic support and resistance levels.
🔑 KEY FEATURES 🔑
Adaptable Grid Structures (Horizontal, Linear, Curved)
Buy and Sell Signals with Multiple Trigger/Confirmation Conditions
Secondary Buy and Secondary Sell Signals
Projected Grid Lines
Customizable Grid Spacing and Zones
Acceleration and Curvature Control
Sensitivity Adjustments
📐 GRID STRUCTURES 📐
Beyond its core parabolic functionality, the Parabolic Grid Bot offers a range of grid configurations to suit different market conditions and trading preferences. By adjusting the "Acceleration" and "Curvature" parameters, you can transform the grid's structure:
Parabolic Grids
Setting both acceleration and curvature to non-zero values results in a parabolic grid.This configuration can be particularly useful for visualizing potential turning points and trend reversals. Example: Accel = 10, Curve = -10)
Linear Grids
With a non-zero acceleration and zero curvature, the grid tilts to represent a linear trend, aiding in identifying potential support and resistance levels during trending phases. Example: Accel =1.75, Curve = 0
Horizontal Grids
When both acceleration and curvature are set to zero, the indicator reverts to a traditional grid bot with horizontal lines, suitable for ranging markets. Example: Accel=0, Curve=0
⚙️ INITIAL SETUP ⚙️
1.Adding the Indicator to Your Chart
Locate a Starting Point: To begin, visually identify a price point on your chart where you want the grid to start.This point will anchor your grid.
2. Setting Up the Grid
Add the Grid Bot Parabolic Indicator to your chart. A “Start Time/Price” dialog will appear
CLICK on the chart at your chosen start point. This will anchor the start point and open a "Confirm Inputs" dialog box.
3. Configure Settings. In the dialog box, you can set the following:
Acceleration: Adjust how quickly the grid reacts to price changes.
Curve: Define the shape of the parabola.
Intervals: Determine the distance between grid levels.
If you choose to keep the default settings, with acceleration set to 0 and curve set to 0, the grid will display as traditional horizontal lines. The grid will align with your selected price point, and you can adjust the settings at any time through the indicator’s settings panel.
⚙️ CONFIGURATION AND SETTINGS ⚙️
Grid Settings
Accel (Acceleration): Controls how quickly the price reacts to changes over time.
Curve (Curvature): Defines the overall shape of the parabola.
Intervals (Grid Spacing): Determines the vertical spacing between the grid lines.
Sensitivity: Fine tunes the magnitude of Acceleration and Curve.
Buy Zones & Sell Zones: Define the number of grid levels used for potential buy and sell signals.
* Each zone is represented on the chart with different colors:
* Green: Buy Zones
* Red: Sell Zones
* Yellow: Overlap (Buy and Sell Zones intersect)
* Gray: Neutral areas
Trigger: Chooses which part of the candlestick is used to trigger a signal.
* `Wick`: Uses the high or low of the candlestick
* `Close`: Uses the closing price of the candlestick
* `Midpoint`: Uses the middle point between the high and low of the candlestick
* `SWMA`: Uses the Symmetrical Weighted Moving Average
Confirm: Specifies how a signal is confirmed.
* `Reverse`: The signal is confirmed if the price moves in the opposite direction of the initial trigger
* `Touch`: The signal is confirmed when the price touches the specified level or zone
Sentiment: Determines the market sentiment, which can influence signal generation.
* `Slope`: Sentiment is based on the direction of the curve, reflecting the current trend
* `Long`: Sentiment is bullish, favoring buy signals
* `Short`: Sentiment is bearish, favoring sell signals
* `Neutral`: Sentiment is neutral. No secondary signals will be generated
Show Signals: Toggles the display of buy and sell signals on the chart
Chart Settings
Grid Colors: These colors define the visual appearance of the grid lines
Projected: These colors define the visual appearance of the projected lines
Parabola/SWMA: Adjust colors as needed. These are disabled by default.
Time/Price
Start Time & Start Price: These set the starting point for the parabolic curve.
* These fields are automatically populated when you add the indicator to the chart and click on an initial location
* These can be adjusted manually in the settings panel, but he easiest way to change these is by directly interacting with the start point on the chart
Please note: Time and Price must be adjusted for each chart when switching assets. For example, a Start Price on BTCUSD of $60,000 will not work on an ETHUSD chart.
🤖 ALGORITHM AND CALCULATION 🤖
The Parabolic Function
At the core of the Parabolic Grid Bot lies the parabolic function, which calculates a dynamic curve that adapts to price action over time. This curve serves as the foundation for visualizing potential support and resistance levels.
The shape and behavior of the parabola are influenced by three key user-defined parameters:
Acceleration: This parameter controls the rate of change of the curve's slope, influencing its tilt or steepness. A higher acceleration value results in a more pronounced tilt, while a lower value leads to a gentler slope. This applies to both curved and linear grid configurations.
Curvature: This parameter introduces and controls the curvature or bend of the grid. A higher curvature value results in a more pronounced parabolic shape, while a lower value leads to a flatter curve or even a straight line (when set to zero).
Sensitivity: This setting fine-tunes the overall responsiveness of the grid, influencing how strongly the Acceleration and Curvature parameters affect its shape. Increasing sensitivity amplifies the impact of these parameters, making the grid more adaptable to price changes but potentially leading to more frequent adjustments. Decreasing sensitivity reduces their impact, resulting in a more stable grid structure with fewer adjustments. It may be necessary to adjust Sensitivity when switching between different assets or timeframes to ensure optimal scaling and responsiveness.
The parabolic function combines these parameters to generate a curve that visually represents the potential path of price movement. By understanding how these inputs influence the parabola's shape and behavior, traders can gain valuable insights into potential support and resistance areas, aiding in their decision-making process.
Sentiment
The Parabolic Grid Bot incorporates sentiment to enhance signal generation. The "Sentiment" input allows you to either:
Manually specify the market sentiment: Choose between 'Long' (bullish), 'Short' (bearish), or 'Neutral'.
Let the script determine sentiment based on the slope of the parabolic curve: If 'Slope' is selected, the sentiment will be considered 'Long' when the curve is sloping upwards, 'Short' when it's sloping downwards, and 'Neutral' when it's flat.
Buy and Sell Signals
The Parabolic Grid Bot generates buy and sell signals based on the interaction between the price and the grid levels.
Trigger: The "Trigger" input determines which part of the candlestick is used to trigger a signal (wick, close, midpoint, or SWMA).
Confirmation: The "Confirm" input specifies how a signal is confirmed ('Reverse' or 'Touch').
Zones: The number of "Buy Zones" and "Sell Zones" determines the areas on the grid where buy and sell signals can be generated.
When the trigger condition is met within a buy zone and the confirmation criteria are satisfied, a buy signal is generated. Similarly, a sell signal is generated when the trigger and confirmation occur within a sell zone.
Secondary Signals
Secondary signals are generated when a regular buy or sell signal contradicts the prevailing sentiment. For example:
A buy signal in a bearish market (Sentiment = 'Short') would be considered a "secondary buy" signal.
A sell signal in a bullish market (Sentiment = 'Long') would be considered a "secondary sell" signal.
These secondary signals are visually represented on the chart using hollow triangles, differentiating them from regular signals (filled triangles).
While they can be interpreted as potential contrarian trade opportunities, secondary signals can also serve other purposes within a grid trading strategy:
Exit Signals: A secondary signal can suggest a potential shift in market sentiment or a weakening trend. This could be a cue to consider exiting an existing position, even if it's currently profitable, to lock in gains before a potential reversal
Risk Management: In a strong trend, secondary signals might offer opportunities for cautious counter-trend trades with controlled risk. These trades could utilize smaller position sizes or tighter stop-losses to manage potential downside if the main trend continues
Dollar-Cost Averaging (DCA): During a prolonged trend, the parabolic curve might generate multiple secondary signals in the opposite direction. These signals could be used to implement a DCA strategy, gradually accumulating a position at potentially favorable prices as the market retraces or consolidates within the larger trend
Secondary signals should be interpreted with caution and considered in conjunction with other technical indicators and market context. They provide additional insights into potential market reversals or consolidation phases within a broader trend, aiding in adapting your grid trading strategy to the evolving market dynamics.
Examples
Trigger=Wick, Confirm=Touch. Signals are generated when the wick touches the next gridline.
Trigger=Close, Confirm=Touch. Signals require the close to touch the next gridline.
Trigger=SWMA, Confirm=Reverse. Signals are triggered when the Symmetrically Weighted Moving Average reverse crosses the next gridline.
🧠THEORY AND RATIONALE 🧠
The innovative approach of the Parabolic Grid Bot can be better understood by first examining the limitations of traditional grid trading strategies and exploring how this indicator addresses them by incorporating principles of market cycles and dynamic price behavior
Traditional Grid Bots: One-Dimensional and Static
Traditional grid bots operate on a simple premise: they divide the price chart into a series of equally spaced horizontal lines, creating a grid of trading zones. These bots excel in ranging markets where prices oscillate within a defined range. Buy and sell orders are placed at these grid levels, aiming to profit from mean reversion as prices bounce between the support and resistance zones.
However, traditional grid bots face challenges in trending markets. As the market moves in one direction, the bot continues to place orders in that direction, leading to a stacking of positions. If the market eventually reverses, these stacked trades can be profitable, amplifying gains. But the risk lies in the potential for the market to continue trending, leaving the trader with a series of losing trades on the wrong side of the market
The Parabolic Grid Bot: Adding Dimensions
The Parabolic Grid Bot addresses the limitations of traditional grid bots by introducing two additional dimensions:
Acceleration (Second Dimension): This parameter introduces a second dimension to the grid, allowing it to tilt upwards or downwards to align with the prevailing market trend. A positive acceleration creates an upward-sloping grid, suitable for uptrends, while a negative acceleration results in a downward-sloping grid, ideal for downtrends. The magnitude of acceleration controls the steepness of the tilt, enabling you to fine-tune the grid's responsiveness to the trend's strength
Curvature (Third Dimension): This parameter adds a third dimension to the grid by introducing a parabolic curve. The curve's shape, ranging from gentle bends to sharp turns, is controlled by the curvature value. This flexibility allows the grid to closely mirror the market's evolving structure, potentially identifying turning points and trend reversals.
Mean Reversion in Trending Markets
Even in trending markets, the Parabolic Grid Bot can help identify opportunities for mean reversion strategies. While the grid may be tilted to reflect the trend, the buy and sell zones can capture short-term price oscillations or consolidations within the broader trend. This allows traders to potentially pinpoint entry and exit points based on temporary pullbacks or reversals.
Visualize and Adapt
The Parabolic Grid Bot acts as a visual aid, enhancing your understanding of market dynamics. It allows you to "see the curve" by adapting the grid to the market's patterns. If the market shows a parabolic shape, like an upward curve followed by a peak and a downward turn (similar to a head and shoulders pattern), adjust the Accel and Curve to match. This highlights potential areas of interest for further analysis.
Beyond Straight Lines: Visualizing Market Cycle
Traditional technical analysis often employs straight lines, such as trend lines and support/resistance levels, to interpret market movements. However, many analysts, including Brian Millard, contend that these lines can be misleading. They propose that what might appear as a straight line could represent just a small part of a larger curve or cycle that's not fully visible on the chart.
Markets are inherently cyclical, marked by phases of expansion, contraction, and reversal. The Parabolic Grid Bot acknowledges this cyclical behavior by offering a dynamic, curved grid that adapts to these shifts. This approach helps traders move beyond the limitations of straight lines and visualize potential support and resistance levels in a way that better reflects the market's true nature
By capturing these cyclical patterns, whether subtle or pronounced, the Parabolic Grid Bot offers a nuanced understanding of market dynamics, potentially leading to more accurate interpretations of price action and informed trading decisions.
⚠️ DISCLAIMER⚠️
This indicator utilizes a parabolic curve fitting approach to visualize potential support and resistance levels. The mathematical formulas employed have been designed with adaptability and scalability in mind, aiming to accommodate various assets and price ranges. While the resulting curves may visually resemble parabolas, it's important to note that they might not strictly adhere to the precise mathematical definition of a parabola.
The indicator's calculations have been tested and generally produce reliable results. However, no guarantees are made regarding their absolute mathematical accuracy. Traders are encouraged to use this tool as part of their broader analysis and decision-making process, combining it with other technical indicators and market context.
Please remember that trading involves inherent risks, and past performance is not indicative of future results. It is always advisable to conduct your own research and exercise prudent risk management before making any trading decisions.
🧠 BEYOND THE CODE 🧠
The Parabolic Grid Bot, like the other grid bots in this series, is designed with education and community collaboration in mind. Its open-source nature encourages exploration, experimentation, and the development of new grid trading strategies. We hope this indicator serves as a framework and a starting point for future innovations in the field of grid trading.
Your comments, suggestions, and discussions are invaluable in shaping the future of this project. We welcome your feedback and look forward to seeing how you utilize and enhance the Parabolic Grid Bot.
Grid Bot AutoThis script is an auto-adjusting grid bot simulator. This is an improved version of the original Grid Bot Simulator. The grid bot is best used for ranging/choppy markets. Prices are divided into grids, or trade zones, that will trigger signals each time a new zone is entered. During ranging markets, each transaction is followed by a “take profit.” As the market starts to trend, transactions are stacked (compare to DCA ), until the market consolidates. No signals are triggered above the Upper Limit or Below the Lower Limit. Unlike the previous version, the upper and lower limits are calculated automatically. Grid levels are determined by four factors: Smoothing, Laziness, Elasticity, and Grid Intervals.
Smoothing:
A moving average (or linear regression) is applied to each close price as a basis. Options for smoothing are Linear Regression, Simple Moving Average, Exponential Moving Average, Volume-Weighted Moving Average, Triple-Exponential Moving Average.
Laziness:
Laziness is the percentage change required to reach the next level. If laziness is 1.5, the price must move up or down by 1.5% before the grid will change. This concept is based on Alex Grover’s Efficient Trend Step. This allows the grids to be based on even price levels, as opposed to jagged moving averages.
Elasticity:
Elasticity is the degree of “stickiness” to the current price trend. If the smoothing line remains above (or below) the current grid center without reverting but still not enough to reach the next grid level, the grid line will start to curve toward the next grid level. Elasticity is added to (or subtracted from) the gridline by a factor of minimum system ticks for the current pair. Elasticity of zero will keep the gridlines horizontal. If elasticity is too high, the grid will distort.
Grid Intervals:
Grid intervals are the percentage of space between each grid.
Laziness = 4%, Elasticity = 0. Price must move at least 4% before reaching the next level. With zero elasticity, gridlines are straight.
Laziness = 5%, Elasticity = 100. For each bar at a new grid level, the grid will start “curve” toward the next price level (up if price is greater than the middle grid, down if less than middle grid). Elasticity is calculated by the user-inputted “Elasticity” multiplied by the minimum tick for the current pair (ELSTX = syminfo.mintick * iELSTX)
Try experimenting with different combinations of the Smoothing Length, Smoothing Type, Laziness, Elasticity, and Grid Intervals to find the optimum settings for each chart. Lower-priced pairs (e.g. XRP/ADA/DODGE) will require lower Elasticity. Also note that different exchanges may have different minimum tick values. For example, minimum tick for BITMEX:XBTUSD and BYBIT:BTCUSD is .5, but BINANCE:BTCUSDT and COINBASE:BTCUSD is .01.
s3.tradingview.com
DODGEUSDT, 5min. Laziness: 4%, Elasticity 2.5
Number of Grids: 2. Laziness: 3.75%. Elasticity: 150. Grid Interval 2%.
Settings Overview
Smoothing Length : Smoothing period
Smoothing Type : Linear Regression, Simple Moving Average, Exponential Moving Average, Volume-Weighted Moving Average, Triple-Exponential Moving Average
Laziness : Percentage required for price to move until it reaches the next level. If price does not reach the next level (up or down), the grid will remain the same as previous grid (because it’s lazy).
Elasticity : Amount of curvature toward the next grid, based on the current price trend. As elasticity increases, gridlines will curve up or down by a factor of the number of ticks since the last grid change.
Grid Interval : Percent between grid levels.
Number of Grids : Number of grids to show.
Cooldown : Number of bars to wait to prevent consecutive signals.
Grid Line Transparency : Lower transparencies brighten the gridlines; higher transparencies dim the gridlines. To hide the gridlines completely, enter 100.
Fill Transparency: Lower transparencies brighten the fill box; higher transparencies dim the fill box. To hide the fill box completely, enter 100.
Signal Size : Make signal triangles large or small.
Reset Buy/Sell Index When Grids Change : When a new grid is formed, resetting the index may prevent false signals (experimental)
Use Highs/Lows for Signals : If enabled, signals are triggered as soon as the price touches the next zone. If disabled, signals are triggered after bar closes. Enable this for “Once Per Bar alerts. Disable for “Once Per Bar Close” alerts.
Show Min Tick : If checked, syminfo.mintick is displayed in upper-righthand corner. Useful for estimating Laziness.
Reverse Fill Colors : Default fill for fill boxes is green after buy and red after sell. Check this box to reverse.
Note: The Grid Bot Simulator scripts are experimental and works in progress. Please feel free to comment or contact me if you have suggestions/complaints.
GRID SPOT TRADING ALGORITHM - GRID BOT TRADING STRATEGYGRID SPOT TRADING ALGORITHM : LONG ONLY STRATEGY OPEN SOURCE
This is a long only strategy for spot assets.
HOW IT WORKS
Grid trading is a trading strategy where an investor creates a so-called "price grid". The basic idea of the strategy is to repeatedly buy at the pre-specified price and then wait for the price to rise above that level and then sell the position (and vice versa with shorting or hedging).
FEATURES
Grids: This algorithm has a total of 10 grids.
Take profit: The trader can increase or decrease the distance between the grids from the User Interface panel, the distance between one grid and another represents the take profit.
Management: The algorithm buys 10% of the capital every time the price breaks down a grid and sells during a rise to the next higher grid. The initial capital is invested in 10 sizes which represent 10% of the capital per trade.
Stop Loss: The algorithm knows no stop loss as long as it is not activated from the User Interface panel. By activating the stop loss from the User Interface panel the algorithm will insert a close condition on all trades which will be calculated from the last lower grid.
Trades: Trades are opened only if the price is within the grid. If the market leaves the grid the algorithm will not buy new positions or sell new positions.
Optimal market conditions: The favorable market for this algorithm is the sideways market.
LIMITATIONS OF THE MODEL
The trader must take into account that this is a static model. It only works perfectly well if the market is in a sideways phase and incurs heavy losses if the market takes a downward trend. The model is unusable for an uptrend. The trader must therefore carefully analyze the market where he intends to use this strategy, making sure that the price is in a sideways phase.
USES
Indispensable research and backtesting tool for those using bots for their investments. The algorithm produces a backtesting of the strategy for past history. It is used by professional traders to understand if this strategy has been profitable on a market and what parameters to use for bots using this strategy (Kucoin, Binance etc.).
If you would like to develop your own algorithm with customized conditions based on a grid strategy, please contact us.
If you need help in using this tool, please contact us without hesitation.
Grid Bot SimulatorThis script is a grid bot simulator for ranging/choppy markets. Prices are divided into grids, or trade zones, that will trigger signals each time a new zone is entered. During ranging markets, each transaction is followed by a “take profit.” As the market starts to trend, transactions are stacked (compare to DCA), until the market consolidates. No signals are triggered above the Upper Limit or Below the Lower Limit.
Settings overview:
Upper Limit/Lower Limit : Highest and Lowest values for entire grid.
Number of Grids : Number of trade zones.
Show Grids : Show or hide all gridlines.
Show Only Current Grids : Only display the grids just above and just below the current trade zone.
High/Low for signals : If enabled, signals are triggered as soon as the price touches the next zone. If disabled, signals are triggered after bar closes. Enable this for “Once Per Bar alerts. Disable for “Once Per Bar Close” alerts.
Highlight Trade Zones
The grid bot should work well during ranging/choppy markets. Each zone will have only one trade, and then will immediately take profit in the next zone.
Ranging/Choppy Market
However, trending markets can produce multiple signals in rapid succession:
Trending Market
If the gridlines are compressing the chart space, enable the “Show Only Current Grids” in settings.
Show Only Current Grids disabled
Show Only Current Grids enabled
When changing symbols, adjust the Upper and Lower Limits to accommodate the new symbol. Otherwise, the chart will look compressed.
XBTUSD chart with ETHUSDT settings
The bot is a proof-of-concept and is considered experimental . Possible future updates will include Fibonacci grids and “smart entry/exits,” depending on the current trend. Comments and suggestions are encouraged.
Grid Spot Trading Algorithm V2 - The Quant ScienceGrid Spot Trading Algorithm V2 is the last grid trading algorithm made by our developer team.
Grid Spot Trading Algorithm V2 is a fixed 10-level grid trading algorithm. The grid is divided into an accumulation area (red) and a selling area (green).
In the accumulation area, the algorithm will place new buy orders, selling the long positions on the top of the grid.
BUYING AND SELLING LOGIC
The algorithm places up to 5 limit orders on the accumulation section of the grid, each time the price cross through the middle grid. Each single order uses 20% of the equity.
Positions are closed at the top of the grid by default, with the algorithm closing all orders at the first sell level. The exit level can be adjusted using the user interface, from the first level up to the fifth level above.
CONFIGURING THE ALGORITHM
1) Add it to the chart: Add the script to the current chart that you want to analyze.
2) Select the top of the grid: Confirm a price level with the mouse on which to fix the top of the grid.
3) Select the bottom of the grid: Confirm a price level with the mouse on which to fix the bottom of the grid.
4) Wait for the automatic creation of the grid.
USING THE ALGORITHM
Once the grid configuration process is completed, the algorithm will generate automatic backtesting.
You can add a stop loss that destroys the grid by setting the destruction price and activating the feature from the user interface. When the stop loss is activated, you can view it on the chart.
Grid Indicator - The Quant ScienceQuickly draw a 10-level grid on your chart with our open-source tool.
Our grid tool offers a unique solution to traders looking to maximize their profits in volatile market conditions. With its advanced features, you can create customized grids based on your preferred start price and line distance, allowing you to easily execute trades and capitalize on price movements. The tool works automatically, freeing up your time to focus on other important aspects of your trading strategy.
The benefits of using this tool are numerous. Firstly, it eliminates the need for manual calculation, making the analysis process much more efficient. Secondly, the automatic nature of the tool ensures that each grids are draw at precisely prices, giving you the best possible chance of maximizing your analysis. Finally, the ability to easily customize grids means that you can adapt your strategy quickly and effectively, even in rapidly changing market conditions.
So why wait? Take control of your trading and start using our innovative grid tool today! With its advanced features and ease of use, it's the perfect solution for traders of all levels looking to take their trading to the next level.
HOW TO USE
Using it is easy. Add the script to your chart and set the price and distance between the grids.
Grid SystemThis script plots a a square composed of 8 equilateral triangles ("grid"). User can set the frequency of calculation/interval by adjusting the 't' parameter.
Steps for calculating grid:
1. Find the highest high and lowest low for last 't' periods.
2. Calculate midpoint for prices during that interval (highest high + lowest low) / 2.
3. Center of the grid = {time , price midpoint}.
Interpretation:
Volatility : If price is volatile for a given period, the area of the grid will expand, since the top and bottom sides are based on the highest high and lowest low for the period. So as range for a given period increases, the grid's area increases.
Support and resistance : The grid's center line often acts as the support / resistance line.
Trend Following : The example chart shows Cognex (CGNX) price using an interval of t=365. When the stock's trend was bullish, the area of the grids became increasingly larger and the y-coordinate of each grid was greater than that of the previous grid.
Grid Strategy Back Tester (Long/Short/Neutral)Preface
I'd like to send a thank you to @xxattaxx-DisDev.
The 'Line' Code, which was the most difficult to plan the Grid Indicator, was solved through the 'Grid Bot Simulator' script of @xxattaxx-DisDev.
A brief description of the indicators
These indicators are designed for backtesting of grid trading that can be opened on various exchanges.
Grid trading is a method of selling at particular intervals as prices rise and fall for gird interval price range.
This indicator is actually designed to see what the Long / Short / Neutral grid has achieved and how much it has achieved over a given period of time.
How to use
1. Lower Limit and Upper Limit are required when putting indicators on the chart.
After that, choose the 'Time' when to open the grid.
Also, select Long / Short / Neutral direction if necessary.
2. Statistics Table
Matched Grid shows how many grid pairs were engaged during the backtesting period.
The Daily Average Matching Profit is calculated based on the number of these closed grids.
Total Matching Profit is calculated as Matching Grid * Per Matching Profit.
Position Profit/Loss shows the benefits and losses from your current position.
Total Profit/Loss is sum of Total Matching Profit and Position Profit/Loss.
The Expanded APY shows the benefits of running the strategy on these terms for a year.
Max Loss of Upper is the maximum loss assumed to be directly at the top of the grid range.
BEP days (Upper) show how many days of maintenance relative to Average Matching Profit can result in greater profit than maximum loss if the grid continues to move within range.
(In the case of Long Strategy, it appears to be 'Min Profit', which shows minimal benefit if it reaches the top.)
Max Loss of Lower and BEP days (Lower) shows the opposite.
(In the case of Short Strategy, it is also referred to as 'Min Profit', which shows minimal benefit if it reaches the bottom.)
3. Grid Info
Total Grid Number, Upper Limit, and Lower Limit show the values you set in INPUT.
Grid Open Price shows the price for the period you decide to open.
Starting Position shows the number of positions that were initially held in the case of a Long / Short Strategy.
(0 for Neutral Strategy)
Per Grid qty shows how many positions are allocated to one grid
Grid Interval shows the spacing of each grid.
Per Matched Profit shows how much profit is generated when a single grid is matched.
Caution
Backtesting results for these indicators may vary depending on the time frame.
Therefore, I recommend that you use it only to compare Profit/Loss over time.
*In addition, there is a problem that all lines in the grid are not implemented, but it is independent of the backtest results.
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서문
지표를 기획함에 있어서 가장 어려웠던 line 코드를 @xxattaxx-DisDev의 'Grid Bot Simulator' 스크립트를 통해 해결할 수 있었습니다.
이에 감사의 말씀을 드립니다.
해당 지표에 대한 간단한 설명
해당 지표는 다양한 거래소에서 오픈할 수 있는 그리드 매매에 대한 백테스팅을 위해 만들어졌습니다.
그리드매매는, 특정 가격 구간에 대해 가격이 오르고 내림에 따라 일정 간격에 맞춰 매매를 하는 방식입니다.
이 지표는 실질적으로 롱/숏/중립 그리드가 어떠한 성과를, 특정 기간동안 얼마나 냈는지를 확인하고자 만들어졌습니다.
사용방법
1. 인풋
지표를 차트위에 넣을 때, Lower Limit과 Upper Limit이 필요합니다.
그 후 그리드를 언제부터 오픈할 것인지를 선택하세요.
또, 필요하다면 Long / Short / Neutral의 방향을 선택하세요.
2. 그리드 통계
Matched Grid는, 백테스팅 기간동안 체결된 그리드 쌍이 몇개인지를 보여줍니다.
이 체결된 그리드의 갯수를 바탕으로 Daily Average Matched Profit이 계산됩니다.
Total Matched Profit은, Matched Grid * Per Matched Profit으로 계산됩니다.
Position Profit/Loss는, 현재 갖고 있는 포지션으로 인한 이익과 손실을 보여줍니다.
Total Matched Profit과 Position Profit/Loss를 합친 금액이 Total Profit/Loss가 됩니다.
Expcted APY는, 이러한 조건으로 전략을 1년동안 운영했을 때의 이익을 보여줍니다.
Max Loss of Upper는, 그리드 범위의 최상단에 바로 도달했을 경우를 가정한 최대 손실입니다.
BEP days(Upper)는, 그리드가 범위 내에서 계속 움직일 경우, Average Matched Profit을 기준으로 며칠동안 유지되어야 최대손실보다 더 큰 이익이 발생할 수 있는지를 보여줍니다.
(Long Strategy의 경우, ‘Min Profit’이라고 나타나는데, 최상단에 도달했을 경우 최소한의 이익을 보여줍니다)
Max Loss of Lower는 그 반대의 경우를 보여줍니다.
(Short Strategy의 경우, 역시 ‘Min Profit’이라고 나타나는데, 최하단에 도착했을 경우 최소한의 이익을 보여줍니다)
3. 그리드 정보
그리드 갯수, Upper Limt, Lower Limt은 자신이 설정한 값을 보여줍니다.
Grid Open Price는, 자신이 오픈하기로 정했던 기간의 가격을 보여줍니다.
Starting Position은, 롱/숏 그리드의 경우에 처음에 들고 시작했던 포지션의 갯수를 보여줍니다.
Neutral Strategy의 경우 0입니다.
Per Grid qty는, 하나의 그리드에 얼마만큼의 포지션이 배분되었는지를 보여주며
Grid Interval은 각 그리드의 간격을 보여줍니다.
또, Per Matched Profit은 하나의 그리드가 체결될 때 얼마만큼의 이익이 발생하는 지를 보여줍니다.
이러한 지표에 대한 역테스트 결과는 시간 프레임에 따라 달라질 수 있습니다.
따라서 시간 경과에 따른 손익을 비교할 때만 사용하는 것이 좋습니다.
*추가로, 그리드의 라인이 모두 구현되지 않는 문제가 있지만, 백테스팅 결과와는 무관합니다.
Grid TLong V1The “Grid TLong V1” strategy is based on the classic Grid strategy, but in the mode of buying and selling in favor of the trend and only on Long. This allows to take advantage of large uptrend movements to maximize profits in bull markets. For this reason, excessively sideways or bearish markets may not be very conducive to this strategy.
Like our Grid strategies in favor of the trend, you can enter and exit with the balance with controlled risk, as the distance between each grid functions as a natural and adaptable stop loss and take profit. What differentiates it from bidirectional strategies is that Short uses a minimum amount of follow-through, so that the percentage distance between the grids is maintained.
In this version of the script the entries and exits can be chosen at market or limit , and are based on the profit or loss of the current position, not on the percentage change in price.
The user may also notice that the strategy setup is risk-controlled, because it risks 5% on each trade, has a fairly standard commission and modest initial capital, all in order to protect the strategy user from unrealistic results.
As with all strategies, it is strongly recommended to optimize the parameters for the strategy to be effective for each asset and for each time frame.
Grid Tendence V1The “Grid Tendence V1” strategy is based on the classic Grid strategy, only in this case the entries and exits are made in favor of the trend, which allows to take advantage of large movements to maximize profits, since it is also possible to enter and exit with the balance with a controlled risk, because precisely the distance between each Grid works as a natural and adaptable stop loss and take profit. This fact helps to avoid overlapping entries and exits that would result from using stop loss and take profit as limit orders.
In this version of the script the entries and exits are always at market, and based on the percentage change of the price, not on the profit or loss of the current position.
The user will notice that the strategy setup is based on a controlled risk, risking 5% on each trade, a fairly standard commission and a modest initial capital, all this in order to protect the user of the strategy from unexpected or unrealistic results.
However, it is always recommended to optimize the parameters so that the strategy is effective for each asset and for each time frame.
Grid Settings & MMThis script is designed to help you plan your grid trading or when averaging your position in the spot market.
The script has a small error (due to the simplification of the code), it does not take into account the size of the commission.
You can set any values on all parameters on any timeframe, except for the number of orders in the grid (from 2 to 5).
The usage algorithm is quite simple:
1. Connect the script
2. Install a Fibo grid on the chart - optional (settings at the bottom of the description)
3.On the selected pair, determine the HighPrice & LowPrice levels and insert their values
4.Evaluate grid data (levels, estimated profit ’%’, possible profit ‘$’...)
And it's all)
Block of variables for calculating grid and MM parameters
Variables used regularly
--- HighPrice and LowPrice - constant update when changing pairs
--- Deposit - deposit amount - periodically set the actual amount
Variables that do not require permanent changes
--- Grids - set the planned number of grids, default 5
--- Steps - the planned number of orders in the grid, by default 5
--- C_Order - coefficient of increasing the size of orders in the base coin, by default 1.2
--- C_Price - trading levels offset coefficient, default 1.1
--- FirstLevel - location of the first buy level, default 0.5
--- Back_HL - number of candles back, default 150
*** For C_Order and C_Price variables, the value 1 means the same order size and the same distance between buy levels.
The fibo grid is used for visualization, you can do without it, ! it is not tied to the script code !
You can calculate the levels of the Fibo grid using the formula:
(level price - minimum price) / (maximum price - minimum price)
For default values, grid levels are as follows:
1 ... 0.5
2...0.359
3 ... 0.211
4...0.0564
5...-0.1043
Short description:
in the upper right corner
--- indicator of the price movement for the last 150 candles, in % !!! there is no task here to "catch" the peak values - only a relative estimate.
in the upper left corner
--- total amount of the deposit
--- the planned number of grids
--- “cost” of one grid
--- the size of the estimated profit depending on the specified HighPrice & LowPrice
in the lower left corner
--- Buy - price levels for buy orders
--- Amount - the number of purchased coins in the corresponding order
--- Sell - levels of profit taking by the sum of market orders in the grid
--- $$$ - the sum of all orders in the grid, taking into account the last active order
--- TP - profit amount by the amount of orders in the grid
Grid by Volatility (Expo)█ Overview
The Grid by Volatility is designed to provide a dynamic grid overlay on your price chart. This grid is calculated based on the volatility and adjusts in real-time as market conditions change. The indicator uses Standard Deviation to determine volatility and is useful for traders looking to understand price volatility patterns, determine potential support and resistance levels, or validate other trading signals.
█ How It Works
The indicator initiates its computations by assessing the market volatility through an established statistical model: the Standard Deviation. Following the volatility determination, the algorithm calculates a central equilibrium line—commonly referred to as the "mid-line"—on the chart to serve as a baseline for additional computations. Subsequently, upper and lower grid lines are algorithmically generated and plotted equidistantly from the central mid-line, with the distance being dictated by the previously calculated volatility metrics.
█ How to Use
Trend Analysis: The grid can be used to analyze the underlying trend of the asset. For example, if the price is above the Average Line and moves toward the Upper Range, it indicates a strong bullish trend.
Support and Resistance: The grid lines can act as dynamic support and resistance levels. Price tends to bounce off these levels or breakthrough, providing potential trade opportunities.
Volatility Gauge: The distance between the grid lines serves as a measure of market volatility. Wider lines indicate higher volatility, while narrower lines suggest low volatility.
█ Settings
Volatility Length: Number of bars to calculate the Standard Deviation (Default: 200)
Squeeze Adjustment: Multiplier for the Standard Deviation (Default: 6)
Grid Confirmation Length: Number of bars to calculate the weighted moving average for smoothing the grid lines (Default: 2)
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Disclaimer
The information contained in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
Grid Bot BacktestingBinance, Bybit, Bitget, and other cross-exchange (grid) trading bot backtesting.
Auto bound: Automatically setting upper and lower price bounds.
Manual: Setting upper and lower price bounds manually.
The graph below represents the overall asset changes (initial investment amount + current position profit + grid profit).
Try using backtesting when setting up a grid bot on the exchange!
바이낸스, 바이비트, 비트겟 등 교차거래(그리드) 봇 백테스팅
Auto bound : 자동으로 상,하단 가격 설정
Manual : 직접 상,하단 가격 설정
아래 그래프는 총 자산 변화입니다.(초기투자금액 + 현재 포지션 수익 + 그리드 수익)
거래소에서 그리드 봇 설정할 때 백테스팅 유용하게 써보세요!
Grid bot development I have completed the next stage of my grid bot which is to isolate the instances in which the market will move sideways in a narrow range.
Grid Level Visualizer v1.0Overview
This indicator draws a customizable grid of horizontal price levels directly on your chart. It's designed to help traders visualize potential support and resistance zones, manage grid trading strategies, or simply divide a price range into equal segments. The script offers interactive controls, extensive customization options, and alert functionality.
Key Features:
Customizable Grid: Draws a grid based on user-defined Upper Price Bound and Lower Price Bound.
Interactive Bounds: Easily adjust the Upper and Lower bounds by dragging the corresponding lines directly on the chart (click the line first to select, then drag). Bounds can also be set numerically in the settings.
Adjustable Levels: Specify the total number of horizontal lines in the grid (Number of Grid Levels), including bounds.
Custom Styling: Independently configure the color, width, and style (Solid, Dashed, Dotted) for the boundary lines and the intermediate grid lines.
Price Labels: Optional display of price values for each grid level, positioned on the right side near the current bar.
Labels for boundary levels automatically inherit the boundary line colors.
Adjustable horizontal offset (Price Label Offset (X)) for labels.
Customizable text size (Text Size) and color (Price Text Color (Mid)) for mid-levels.
Grid Start Time: Define a specific date and time (Grid Start Time) from which the grid lines should start appearing on the chart (defaults to the beginning of the current month).
Line Extension: Grid lines automatically extend to the right margin of the chart.
Alert Condition: Provides a "Grid Level Cross" condition for creating custom alerts when price crosses any active grid level.
Alert Toggle: An option (Enable Alert Condition?) in the settings to enable or disable the availability of the "Grid Level Cross" condition when creating alerts.
Real-time Calculation: Uses calc_on_every_tick=true for responsive alert checking against the current price.
How to Use:
Add the "Improved Grid Level Visualizer" indicator to your chart.
Set Bounds: Adjust the Upper Price Bound and Lower Price Bound lines by clicking and dragging them on the chart, or set precise values in the indicator settings.
Set Levels: Define the Number of Grid Levels you need in the settings.
Set Start Time: Use the Grid Start Time input to control when the grid visualization begins.
Customize: Configure colors, line styles, label visibility, etc., in the settings panel.
Set Alerts (Optional): Follow the steps below.
Notes:
The grid levels are calculated purely based on the mathematical division of the specified price range. They do not automatically adapt to market structure unless you manually adjust the bounds.
When changing the Grid Start Time after the indicator has been running, you might need to refresh the chart or remove/re-add the indicator for the visual starting point to update correctly.
Grid ToolThe core idea of this grid tool is that you have to concentrate less on the trade entries (this happens automatically time-independent but price-dependant) but rather on the validity of the macro trend. Exiting a trend when it is no longer valid is more important than entering a trade. But as long as the trend is valid, the trader participates exponentially in the overall trend.
It is advisable to start with a basic position and then "set up" the grid on this in a ratio of 1/10.
A major advantage of grid trading is that the average entry price in a trend moves further and further away from the current market price while the position continues to grow.
A small timeframe should be used so that the distance between the trades corresponds as closely as possible to the selected grid gap and since TV backtests are carried out with closed bars.
Before starting a grid, pre-analysis the market to make sure it is trending. Select the grid gap and grid position size that you are comfortable with. Monitor the trend and from time to time take some profit :).
PS: The ADX filter looks interesting.
Grid Like StrategyIt is possible to use progressive position sizing in order to recover from past losses, a well-known position sizing system being the "martingale", which consists of doubling your position size after a loss, this allows you to recover any previous losses in a losing streak + winning an extra. This system has seen a lot of attention from the trading community (mostly from beginners), and many strategies have been designed around the martingale, one of them being "grid trading strategies".
While such strategies often shows promising results on paper, they are often subjects to many frictions during live trading that makes them totally unusable and dangerous to the trader. The motivations behind posting such a strategy isn't to glorify such systems, but rather to present the problems behind them, many users come to me with their ideas and glorious ways to make money, sometimes they present strategies using the martingale, and it is important to present the flaws of this methodology rather than blindly saying "you shouldn't use it".
Strategy Settings
Point determines the "grid" size and should be adjusted accordingly to the scale of the symbol you are applying the strategy to. Higher value would require larger price movements in order to trigger a trade, as such higher values will generate fewer trades.
The order size determines the number of contracts/shares to purchase.
The martingale multiplier determines the factor by which the position size is multiplied after a loss, using values higher to 2 will "squarify" your balance, while a value of 1 would use a constant position sizing.
Finally, the anti-martingale parameter determines whether the strategy uses a reverse martingale or not, if set to true then the position size is multiplied after any wins.
The Grid
Grid strategies are commons and do not present huge problems until we use certain position sizing methods such as the martingale. A martingale is extremely sensitive to any kind of friction (frictional costs, slippage...etc), the grid strategy aims to provide a stable and simple environment where a martingale might possibly behave well.
The goal of a simple grid strategy is to go long once the price crossover a certain level, a take profit is set at the level above the current one and stop loss is placed at the level below the current one, in a winning scenario the price reach the take profit, the position is closed and a new one is opened with the same setup. In a losing scenario, the price reaches the stop loss level, the position is closed and a short one is opened, the take profit is set at the level below the current one, and a stop loss is set at the level above the current one. Note that all levels are equally spaced.
It follows from this strategy that wins and losses should be constant over time, as such our balance would evolve in a linear fashion. This is a great setup for a martingale, as we are theoretically assured to recover all the looses in a losing streak.
Martingale - Exponential Decays - Risk/Reward
By using a martingale we double our position size (exposure) each time we lose a trade, if we look at our balance when using a martingale we see significant drawdowns, with our balance peaking down significantly. The martingale sequence is subject to exponential growth, as such using a martingale makes our balance exposed to exponential decays, that's really bad, we could basically lose all the initially invested capital in a short amount of time, it follows from this that the theoretical success of a martingale is determined by what is the maximum losing streak you can endure
Now consider how a martingale affects our risk-reward ratio, assuming unity position sizing our martingale sequence can be described by 2^(x-1) , using this formula we would get the amount of shares/contracts we need to purchase at the x trade of a losing streak, we would need to purchase 256 contracts in order to recover from a losing streak of size 9, this is enormous when you take into account that your wins are way smaller, the risk-reward ratio is totally unfair.
Of course, some users might think that a losing streak of size 9 is pretty unlikely, if the probability of winning and losing are both equal to 0.5, then the probability of 9 consecutive losses is equal to 0.5^9 , there are approximately 0.2% of chance of having such large losing streak, note however that under a ranging market such case scenario could happen, but we will see later that the length of a losing streak is not the only problem.
Other Problems
Having a capital large enough to tank 9any number of consecutive losses is not the only thing one should focus on, as we have to take into account market prices and trading dynamics, that's where the ugly part start.
Our first problem is frictional costs, one example being the spread, but this is a common problem for any strategy, however here a martingale is extra sensitive to it, if the strategy does not account for it then we will still double our positions costs but we might not recover all the losses of a losing streak, instead we would be recovering only a proportion of it, under such scenario you would be certain to lose over time.
Another problem are gaps, market price might open under a stop-loss without triggering it, and this is a big no-no.
Equity of the strategy on AMD, in a desired scenario the equity at the second arrow should have been at a higher position than the equity at the first arrow.
In order for the strategy to be more effective, we would need to trade a market that does not close, such as the cryptocurrency market. Finally, we might be affected by slippage, altho only extreme values might drastically affect our balance.
The Anti Martingale
The strategy lets you use an anti-martingale, which double the position size after a win instead of a loss, the goal here is not to recover from a losing strike but instead to profit from a potential winning streak.
Here we are exposing your balance to exponential gross but you might also lose a trade at the end a winning streak, you will generally want to reinitialize your position size after a few wins instead of waiting for the end of a streak.
Alternative
You can use other-kind of progressions for position sizing, such as a linear one, increasing your position size by a constant number each time you lose. More gentle progressions will recover a proportion of your losses in a losing streak.
You can also simulate the effect of a martingale without doubling your position size by doubling your target profit, if for example you have a 10$ profit-target/stop-loss and lose a trade, you can use a 20$ profit target to recover from the lost trade + gain a profit of 10$. While this approach does not introduce exponential decay in your balance, you are betting on the market reaching your take profits, considering the fact that you are doubling their size you are expecting market volatility to increase drastically over time, as such this approach would not be extremely effective for high losing streak.
Conclusion
You will see a lot of auto-trading strategies that are based on a grid approach, they might even use a martingale. While the backtests will look appealing, you should think twice before using such kind of strategy, remember that frictional costs will be a huge challenge for the strategy, and that it assumes that the trader has an important initial capital. We have also seen that the risk/reward ratio is theoretically the worst you can have on a strategy, having a low reward and a high risk. This does not mean that progressive position sizing is bad, but it should not be pushed to the extreme.
It is nice to note that the martingale is originally a betting system designed for casino games, which unlike trading are not subject to frictional costs, but even casino players don't use it, so why would you?
Thx for reading
Grid System With Fake MartingaleThe proposed strategy is based on a grid system with a money management that tries to replicate the effect of a martingale without having to double your position size after each loss, hence the name "fake martingale". Note that a balance using this strategy is still subject to exponential decay, the risk is not minimized, as such, it would be dangerous to use this strategy.
For more information on the martingale and grid systems see:
Strategy Settings
Point determines the "grid" size and should be adjusted accordingly to the scale of the security you are applying the strategy to. Higher value would require larger price movements in order to trigger a trade, generating fewer trades as a result.
The order size determines the number of contracts/shares to purchase.
The martingale multiplier determines the factor by which the position size is multiplied after a loss, using values higher to 2 will "squarify" your balance, while a value of 1 would use a constant position sizing.
Finally, the anti-martingale parameter determines whether the strategy uses a reverse martingale or not, if set to true then the position size is multiplied after each win.
How It Works
Let's illustrate how we replicate a martingale without doubling our exposure with a simple casino example. Imagine you are playing roulette, and that you are betting on colors (black/red), your payout is 1 to 1, in the case you win, you will have your initial stake back plus a profit equal to your initial stake.
If your strategy is to recover any previous losses, you can double your stake each time you lose, once you win you will get back the previous losses plus a profit equal to your original stake, this is the martingale system. So how can we win back previous losses without having to double our stake? We could do that by doubling the payout ratio after a loss, so after a loss, we must use a payout ratio of 2:1, if we lose once again we must use a payout of 4:1...etc, our payout ratio would be subject to exponential growth instead of our stake.
Of course, the payout ratio is fixed with casino games, but in trading, we can manipulate the position of our take profit in order to replicate such effect, this is what this strategy is doing. So after a loss, we place our take profit such that a win recover our losses back plus generate a profit.
Advantages
The advantage of this approach is that unlike the martingale we don't double our position size, which instead can remain constant, this is a huge advantage as a martingale will require a significant capital in order to tank a series of losses.
Disadvantages
The main disadvantage of this method is that the price might never reach our take profit after a long losing streak, our balance would remain in the red and we couldn't do anything about it except reset the strategy.
Frictional costs are still a disadvantage, as such, we would need to place our take profits in order to account for them, while this is still better than purchasing additional shares, it minimizes the chances of the price reaching the take profit.
Conclusions
An alternative money management system replicating the effect of a martingale as been presented, we can see that such a system is far from being perfect, and it would be foolish to use it, however, it stills offer a convenient alternative to less aggressive progressive position sizing systems.
I have been receiving some messages from users criticizing me for exposing the martingale money management system, and I understand why but I can't agree, talking about it allow me to warn users against it, the grid-martingale methodology is will create more harm than anything else, the reward is only one side of the story and should always be compared against the risk, so always take a look at all the statics in a backtest.
Thanks for reading!
Shout-Out
This post was made possible thanks to my patrons:
@Happymono, @AmariMars, @kkhaial, @Nugehe, @LucF, @Nosmok, @iflostio, @DankBeans, @ecletv, @Neverstorm, @alex.crown.jr, @uk503, @xkingshotss, @vsov, @jbelka, @yatrader2, @hughza, @ganh
Grid Range Volatility BasedThis TradingView Pine script implements a grid range volatility based indicator that displays dynamic horizontal lines on the chart. The lines are calculated based on the average true range (ATR) of the security being plotted, and the range can be adjusted using an input parameter. The distance between the top and bottom lines is displayed as a percentage in a dynamic label that updates with each new bar.
The script allows the user to choose whether to use red or black lines, and also provides options to set the number of days for range calculations, and the calculation type (either ATR(1) or ATR(x)). The script is designed to work with stocks, forex, and other securities that have price data.
To use this script, simply attach it to a chart and adjust the input parameters to suit your analysis needs. The dynamic lines and percentage label will be displayed on the chart, providing a visual representation of the range volatility of the security being plotted. The values of the highest and lowest lines can also be displayed as labels on the price axis, providing additional context for the range volatility.
