Today I would like to introduce another seemingly worthwhile EA that I have recently discovered. It is called Forex Grid Bot. I have been demo trading this EA since May 25 and have been very impressed thus far. In those two and half weeks, I have seen about a 17% increase in my account, and part of that time I was even experimenting.
As the name implies, Forex Grid Bot is a grid trading robot. However, unlike many such systems, it does not employ a stop-loss-free strategy and hope that a strong trend doesn’t develop that will wipe out the account. Instead, it allows you to enter a maximum risk amount (in dollars) in its SafetyNet setting. The EA will then shut down all trades if the total losses should meet this number. Fortunately this does not happen very often at all. It has happened to me only once, and then it was because I mistakenly set my SafetyNet number too low.
Forex Grid Bot trades only during a certain time each day, specifically 12PM to 7PM ET, or 16GMT to 23GMT. By this time, the markets have usually quieted down a good bit, making the trading a bit more stress free. Additionally, the EA features a parameter called “RestartProfit”. This is basically the opposite of the SafetyNet parameter. Once your profits for the day reach this number, the robot shuts down any trades and takes the rest of the day off. I really like this feature of the robot. It gets in, gets its daily profit, and gets out. In my short experience, it has been in the market only an average of 2-3 hours per day. That adds to the safety of this particular EA.
The authors of Forex Grid Bot indicate that GBP/JPY is “highly recommended” and USD/JPY is “recommended” for trading with this EA. They also say that the majors are fair game as well. In my short demo period, I tried GBP/JPY and USD/JPY and found that GBP/JPY did much, much better than USD/JPY (which won only 3 of 9 trades), so midway through the demo I decided to trade only the GBP/JPY pair. It has done very well since that point. Incidentally, this is the only pair that the authors use in their live demo on their website as well. Looking at the forum in the member’s area, some have experimented trading with any and all pairs, but mostly with mixed results. I figure if the GBP/JPY works so well, why not just stick with it?
The current version of the EA does not have automatic money management. However, you are able to set your own lot sizes, and you are able to specify the maximum number of trades that you want the EA to have open at any one time. There is also an option to only trade on certain days of the week. These things enable the user to be able to effectively manage risk. Because the EA wins so much (especially with the GBP/JPY pair), I am sure the temptation will be to ramp up the risk. But as always, slow and steady wins the race, so I would advise caution in this area.
I am told that the next version of Forex Grid Bot, due out very soon, will include some money management capability, as well as a hedging feature for those whose brokers still allow this. I have also been informed that the new version will allow for the customizing of the spacing on the “grid”, meaning that it can probably be better tuned for other currency pairs. Good stuff!
I am quite excited about the Forex Grid Bot. It methodically takes a reasonable profit out of the market each day. The drawdowns are very reasonable (max drawdown of around 8% to date), and if used responsibly, there is little chance to blow up your account. For this reason it now has a place on our “Recommended EAs” list.
One final note. The developers recommend a broker called BeamFX, out of Chicago, which is an introducing broker for CMS Forex, based in New York. The Forex Grid Spot people are probably getting a kickback for each person they refer (BeamFX offers $100 for referrals). That said, I noticed that BeamFX has a spread of only 5 pips on GBP/JPY, which is excellent (most brokers are between 7 and 10). I have not tried the EA on any other broker yet, but it appears that it does work well on BeamFX! You can open an account there with only $200, incidentally.
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