Martingale, Hedging and Grid : MHG - page 4

Khalil Abokwaik · 2025-03-12T13:28:32.0000000Z

M artingale, H edging and G rid <<< MHG >>> M y H oly G rail Over 50% of freelance jobs can be classified as one form or another of MHG. I wonder why ? Martingale : A gambling system of continually doubling the stakes in the hope of an eventual win that must yield a net profit. Hedging : Taking equal and opposite positions in two different markets . However what most traders do is hedging on same pair at same price or on losing positions . Grid : Adding positions on fixed distance in one or both directions regardless of price action. So what's so special and tempting about these concepts ? Do you really think you will find your holy grail using these methods ? I understand that better custom forms of these methods can be used in trading, provided that you already have a trading system with an edge : Hedging : Hedging on price divergence of correlated pairs Hedging on negatively correlated pairs Scalping against your profitable longer-term positions for smaller gains on trend retraces Martingale : Averaging Down with a preset range and SL. For example, you defined a support zone between 1.0030 and 1.0010, so instead of buying one big position at 1.1020, you divide it into 3 positions, and buy at 1.0030, 1.0020 and 1.0010, all positions will share the same SL, for example at 1.0000. Grid : Dynamic (price action sensitive) Grid in the direction of existing profitable positions.

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Evren Caglar 2025.03.12 13:28 #31

Khalil Abokwaik:

There are many freelance jobs related to grid systems, most likely because many retail traders do not like to accept losses and/or do not know where and how to set stop losses (SL). I do not blame them; the system simply works this way. Trading is a zero-sum game, meaning for someone to win, someone else needs to lose. That said,

The truth is, price action is full of traps, and deciding where to place SL can be a tricky issue that requires experience and screentime. Considering that most retail traders approach trading as a part-time job, deciding on SL becomes even more complex.

Regarding your question,

Because the markets are full of traps, Grid and/or Martingale systems can be your friend as long as they are carefully estimated. Quantitative tools are necessary here, but we need more.

The first trade location is extremely important in grid systems. Perhaps you should devote 70-80% of your time to this purpose.

The second important factor is the Martingale system itself. You need to work on the distance mechanism. For example, even if you set the distance as 50 pips, will the EA place the grid, or will it scan for more conditions to decide if placing a grid position is appropriate?

In conclusion,

In my opinion, the use of Martingale could help us cope with the complexity of price action. However, it needs to be carefully designed as a whole: the first entry + Martingale system.

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