This isn't really a specific trading system per-se but I have trouble grasping the logic behind a grid trading system.
Please correct me if I'm wrong.
Grid trading sets a number of buystops and sell stops above/below the current price all with takeprofits of 10 pips. As the price moves up or down, the buy/sell stops are hit along with their takeprofits. This system seems to do best when there is a strong breakout or considerably strong trend forming.
What I don't understand is what the various grids do when the price moves in the opposite direction, are the opposing trades adjusted somehow to offset the floating losses?
Please correct me if I'm wrong.
Grid trading sets a number of buystops and sell stops above/below the current price all with takeprofits of 10 pips. As the price moves up or down, the buy/sell stops are hit along with their takeprofits. This system seems to do best when there is a strong breakout or considerably strong trend forming.
What I don't understand is what the various grids do when the price moves in the opposite direction, are the opposing trades adjusted somehow to offset the floating losses?