5 - Trade't Grid Risk Simulator

What Is Grid Trading?
Grid trading is a systematic approach where you place a series of buy and/or sell orders at fixed price intervals (the “grid spacing”) above and below a reference level, without trying to predict which way the market will move. As price oscillates, each order is triggered and closed at predefined profit targets, allowing you to capture small moves in both directions.

Understanding Grid Risk

• Stacking Losses: If the market trends strongly away from your entry, multiple losing orders accumulate and draw down your account.

• Distance to Last Level: Each trade’s unrealized loss equals its lot size × pip-value × number of spacing steps it has moved against you. When you sum those losses across all N levels, you see your worst-case drawdown.

• Rounding Impact: Brokers enforce minimum lot increments (e.g. 0.01). Rounding each order up slightly increases true drawdown.

• Execution Factors: Wider spreads, slippage during news, and differing broker price feeds can deepen losses beyond theoretical calculations.
  
  

How the Calculator Works

• Risk Budget: Specify either a dollar amount you’re willing to lose, or a percentage of your account.

• Grid Settings: Enter your chosen spacing (in points), number of levels (N), multiplier (m) between lot sizes, and pip-value ($ per point per standard lot).

• Calculation:

  • It sums each level’s loss = (rounded lot size × pip-value × distance from entry) for all N orders.

  • It then solves for the initial lot size that caps that total at your risk budget.

  • All lots are rounded up to your broker’s minimum increment.
    
    

• Results Table: You’ll see:

  • Your exact and rounded starting lot.

  • Per-trade losses if price walks through all N levels.

  • Total grid loss if price moves out to the final grid level.

  • Extra “+1, +2, +3 steps” scenarios showing how much deeper losses go if price continues past your last order.

By walking through these numbers before you trade, you’ll understand your true worst-case drawdown and can size your grid orders safely. Always do your own analysis—this is simple math, not financial advice.