Category Archives: Grid Trading Myths

Top 10 Myths about Grid Trading

I contributed to the Grid Trading System blog today with an article about the Top 10 Myths about Grid Trading. I outlined the most popular ones (in my opinion) there and gave a brief description of each. However I plan to elaborate further on them, perhaps dedicate a separate post to each one here.  I believe it is really important to clarify these.

On a side note, we are travelling to Europe at the beginning of next week and I probably won’t be able to post for some time.  I’ll need a few days to get settled there (and to overcome the jet lag). Then hopefully will be able to upload some fresh Grid Trading videos too, particularly more trading sessions examples…

Myth: Grid Trading will Blow Up Your Account

Ok, let’s talk about the pink elephant in the room. It is a topic that often comes up.  It is the first myth that I would like to discuss. It is that Grid Trading will blow up your account with time, that this is inevitable and will happen to everyone who dares to trade with a grid.  This is the biggest, most persistent and completely illogical myth I’ve heard about Grid Trading. It is not true.

Let me state this loud and clear – there’s nothing wrong with Grid Trading. It will not blow up your account. It is not flawed by design. In fact Grid Trading is a viable and profitable system, it has passed the test of time and it has proven that it can make money. It can make you money too.

Ok, then, where do all these negative stories about Grid Trading come from? Well, first of all there are negative stories about any other system or EA out there. People have lost their money to all kinds of strategies and trading robots.  And while some of the EAs are clearly a scam, others are profitable, viable systems. The reality is that people often lose their accounts not because of a faulty system, but due to lack of understanding how it works, inability to follow its rules, not using any risk nor money management and so on and so on. The same old, well known reasons…

One thing I noticed in all these “blown up account” stories is that they come from people who traded with the so called “No Stop Hedged Grid Trading”. No Stop?! Really?! So, they take a trading system that they know doesn’t have a stop loss (a BIG red flag), they apply it to their live accounts, they don’t use ANY risk management  (not even a simple stop loss) and then they are surprised that they lost their money! That they blew up their accounts! And then these people blame Grid Trading for this! Seriously?!

Having no risk management is completely irresponsible and is the actual reason for “blowing up” your account. It is NOT Grid Trading that causes you to lose your money, not at all. It is you trading with no risk management, no money management, no trading plan, nothing. Not even a simple stop loss. These are the same old reasons that caused numerous traders before you to lose their money with all kinds of trading systems. The same reasons that are valid for ANY trading system. That’s it really.

Grid Trading is a solid trading approach. You use it properly, it can and it will make you money.

Hope the above helps! Thank you.