Grid Long & Short Strategy [ trader_N08 ]

Core Logic & Methodology

1. Trend & Momentum Filters:

• The strategy uses two Exponential Moving Averages (EMAs): a slow EMA (default 200) for trend direction, and a fast EMA (default 50) for additional confirmation.
  
• For long trades: the price must be above both EMAs and the RSI (Relative Strength Index, period 14) must be above a user-defined threshold (default 40).
  
• For short trades: the price must be below both EMAs and the RSI must be below a user-defined threshold (default 60).
  

2. Volume Confirmation:

• Trades are only considered when the current volume exceeds a multiple (default 1.2x) of the 20-period average volume, aiming to avoid low-liquidity signals.
  

3. Grid Entry System:

• Upon a valid signal, the strategy opens an initial position and sets a “base price.”
  
• Additional entries (“grid levels”) are added if the price moves against the initial position by a multiple of the Average True Range (ATR), with each subsequent grid level spaced further apart using an expansion factor.
  
• The number of grid levels is capped (default: 1, user-adjustable) to control risk and position sizing.
  

4. Risk Management:

• Each position uses both a fixed stop loss and take profit, defined as a percentage of the base entry price (defaults: 0.3% stop, 4% take profit).
  
• A trailing stop is also applied, based on a user-defined multiple of ATR.
  
• Only one grid is active per direction at a time; grids reset when all positions are closed.
  

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Default Properties & Backtest Settings

• Account Size: 10000$
  
• Commission: 0.01 %
  
• Slippage: 5 ticks
  
• Risk Per Trade: The default settings are designed to risk a small percentage of equity per grid level, but users should verify that their position sizing does not exceed sustainable risk (generally not more than 5–10% per trade).
  
• Sample Size: The strategy is intended to generate a sufficient number of trades when applied to liquid markets and appropriate timeframes (e.g., 15m–4h charts on major FX, crypto, or indices).
  

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Underlying Concepts

• Grid Trading: A method of adding positions at predefined intervals as price moves, aiming to capture mean reversion or trend continuation.
  
• Trend & Momentum Confirmation: Reduces false entries by requiring alignment of price, moving averages, and RSI.
  
• ATR-Based Spacing: Uses market volatility to dynamically set grid distances and trailing stops.
  
• Volume Filter: Seeks to avoid signals during low-activity periods.