How best to use high risk / high reward trading systems – Analytics & Forecasts – 23 November 2023

Let’s start with a hard truth, ALL grid based systems eventually end in a margin call / blown accounts. It can happen tomorrow or it can happen in 10 years from now. It really depends on the market. No algorithm, no matter how sophisticated, can with 100% certainty predict how the markets behave in the future. Does that mean that traders should steer clear of such systems altogether? Personally I do not believe so, but we need to be clever in how we use these systems, otherwise we risk losing more than we can afford to. Using grid systems such as Aussie Victor definitely is not for everyone, hopefully this blog post can help you decide if it fits your risk tolerance and psychology.

I personally use these systems to generate high returns in a short time and withdraw profits at least once per month. As long as I withdraw more than the accounts I blow every now and again I am profitable. With a good grid system that is not over-leveraging I can double my account in about two to three months. Once my account is doubled, I am essentially trading risk free, as my initial investment is out of the market. From that point I withdraw profits once per month or sometimes every few weeks if trading has been especially profitable in a period. 

I do not consider grid systems as a part of my long term investment strategy in itself. They are a means of generating short term income, which I then put to work in safer assets. 

I personally allocate around 5% of my capital for high risk/high return strategies.

The profits I generate with these aggressive systems, I put into safer long term systems/EA’s, ETF’s, Bonds, high interest savings accounts etc for long slow steady growth where I aim at anything between 5% to 30% yearly growth.

If you are considering using grid based systems, you have to first think about the risk associated with it. Most of us focus on the potential money we can make with such high return systems, not considering seriously enough the potential money we can lose. There is a lot of truth in the saying that our number one job as traders is to preserve our capital.   

To some it all up. I believe grid systems are great at generating high returns in a short time. But I would never put a grid system on an account size that I can afford to lose.  

Think long term – have a plan, follow it – be ok with taking losses, it’s a part of trading – know the systems you are using and especially understand the associated risk with each system – go slow and steady – think in years not weeks and months and you will be successful. 

Stay green!