Why trigger?
What does this really mean??
Very good questions!
In the event that you fairly new to Grid Style Trading or new to some of my logic, this might not make a lot of sense...
When you construct a Grid - from primary to following trades, there is a Standard distance between every transaction. . .thus the term GRID. .
That is easy.
What this basically is, is a minimum distance between trades. Coding this in, comes out to be rather accurate as price execution on Forex is fairly quickly, so pretty simple thought.
However, the issues come in under a term a lot of Grid Traders are familiar with, called The Death Candle.
What's a death candle?
It is when price, in a particular defined timeframe or thought, moves grossly contrary to your current trade and beneath a Standard Grid Trader, moves in multiple trades which are now contrary to the trend and counting down to if not the complete DEATH of your equity.
It is like this. . .and we do not see it frequently, but frequently enough. . .you are in a series of Shit Trades - ie - trades against the trend. The market continues to proceed against you and you retain price averaging in...
You are now in a Fuck situation in that involving your margin and current DD, you can no more sustain all trades.
Add in a Massive Leverage and your cash begins to evaporate FAST!
Huge closing of trades because you don't have the funds requirements to maintain everything open or with leverage, and speed of management, everything comes to a CRASHING FUCKING ACCOUNT!
When I first started trading, there was an estimated 2000 new traders every day!
I theorized that, given the ideas and data available, there was probably an equal number of accounts blown daily.
Don't believe me?
Proceed throughforexintuitiveor some other Forex exchange forum and you'll be able to see all of those Egomaniacs and Newbies with massive articles, only fall off of the pages.
Why?
Well. . .they work very similar to Grid Style Trading without acceptable margin to pay the accounts.
I have been there...
Fuck...I have been there more instances automated than I'd care to discuss.
Nobody wants to take a reduction. . .but when your margin is called, you're fucked!
You cannot unring those bells.
SO. . .rather than price averaging according to a BLIND GRID, I have worked on logic that will be a lot more individual.
Does not always work out. . .but will save a lot of accounts from the Death Spike.
What it does, is wait patiently for price to SLOW DOWN and market to show some weakness when price is moving against the current or any/all present trades.
This is a precarious balance, but in the long run, has shown enough market restraint to maintain a steady flow of capital and decrease market risk. Well. . .Mostly. . .there's always risk, but more general than specific to Black Swan events.