No Gridding

Gridding is where you believe the price to be moving in one direction, so you set up a whole bunch of limit orders at regular intervals (let's say every 10 pips) both above and below the current price.

It means you're buying more and more regardless of where the price is going in the short-term. The theory is that because the price is eventually going to go in your favour, you want to keep buying more and more at hopefully cheaper prices. When the big move comes, you rake in the dough.

And just to finish off the gridding explanation, I think also when one limit order is taken up, you're supposed to place another one so that you've always got 10 limit orders at any one time. Or maybe it's 10 limit orders on either side of the current price. Or whatever.

It's a lot like dollar-cost-averaging, which I already said I don't like. The reason I don't like either of these is because prices don't always come back. Sure you're buying cheaper than what you originally got in at, and this is fantastic if the price does rebound, but it's no help at all if the price never makes it back to these "cheap" prices. In fact you're just multiplying your losses.

Now when I say "No Gridding" in the title, I don't really mean to say to you that you shouldn't do gridding. I wouldn't. But then I wouldn't set up a website for people to post videos and 2 years later rake in $1.5 billion.

What I mean by "No Gridding" in this context, is that the Thinking Stuff software will not be able to support gridding. Sure you could have made 20 different trading systems which were set to place their entry orders at "Close Minus 10 Pips", "Close Minus 20 Pips", etc, but even so I made a change in v0.8.3 that just won't allow it.

Gain Capital has a heart attack if you try to put a Long limit order below the current price. But Oanda allows it, and such a limit order will be taken up when the price pushes *down* through the limit order price, rather than pushing up through it as normal.

I had this as a bug - a limit order had been placed, and due to some latency between retrieving the price and placing the order, the price had already shot up above where the Long limit order was put. What to do in this case? The problem is of course, that the algorithm which works out if we should be in a trade will think that we should be in a trade - a Long limit order was placed during the previous bar, and the current price is above where it was placed. "We're in a trade!", the algorithm will think to itself. And then it will discover that it should be in a Long trade, but actually there's no trade and still a Long order. "Huh?" it'll say.

So, I decided the best thing to do would be to cancel the order altogether, and when the current bar finishes, recalculate where the order should be placed.

i.e. No Gridding.

I know I didn't have to say all that, because it's in the Change Log. And I know that everyone reads the Change Log because it's so fantastically interesting.