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Grand Master strategy - a guarantor of profitable trades + earnings on swaps



Friends, in this article I want to review one of the effective trading strategies for making money on long-term price movements, which is known as the "Grand Master". In the circles of traders, this system has also received the status of a win-win system, since it allows you to get rid of the fear of losses, in other words, the trader does not have to deal with negative transactions


For the correct implementation of trading according to the Grand Master strategy, only 2 currency pairs are used: AUD / USD and EUR / AUD. Time periods (i.e. timeframes on Forex) do not matter here and you can choose any one that suits you for trading.

So, if we look at the charts with the above currency pairs in separate windows, we will see that they have a negative correlation, that is, they mirror each other's movements.

When the price of the AUD / USD instrument goes down, the EUR / AUD pair goes up (and vice versa).

On lower timeframes, such a correlation is also observed, of course, not as accurately as on older ones, but in general we can observe such a mirror image of these 2 pairs and, accordingly, use it to insure positions on one pair with open positions on another.


Let's take a look at the idea of the Grand Master strategy to understand the essence of how it works.

If we look at the weekly chart for the AUD / USD pair separately, we can see that the long-term trend here is directed downward, there are, of course, periodic drawdowns, but in general it is aimed at a downward movement.

If we open our second pair EUR / AUD, we will see the long-term trend for this instrument is directed upwards.

It follows from this that if we open orders on these pairs in the direction of their long-term trend, then we can assume that these deals will sooner or later come out in a plus. As a rule, the period for gaining profit on open orders can be from several hours to several months.

Since some positions will inevitably go into negative territory, we can insure and average them, for this we need to buy more on the pair on which the drawdown is shown and enter the opposite trade on the second pair. Thus, we use a kind of hedging tactic, that is, we reduce the risks by trading on 2 pairs with a negative correlation.


So, what specific algorithm of actions should a trader follow to trade according to the Grand Master strategy?

We should open market orders for 2 pairs simultaneously in the direction of their long-term trend without stop loss and with a take profit of 20-30 points for each trade. It is optimal to enter a position on a specific pair, for example, to buy on EUR / AUD, preferably during the oversold period (respectively, on AUD / USD during the overbought period), oscillators (for example, such as Stochastic) can help us with this, there are 2 scenarios here:

1) If 2 deals closed with a plus, wait for signals (or immediately after the previous ones were closed) and open new orders in the same directions.

2) If the price went in the opposite direction from our open orders, we must wait out the drawdown to 120 points, and after that open additional similar positions for 2 pairs.


For the 2nd scenario, if the drawdown period continues, after every 120 pips from the first transaction and further, we can open a maximum of 5 positions for each currency pair, i.e. as a result, a maximum of 10 (5 Buy for one pair, and 5 Sell for another and no more!).

In addition to taking profit by take profit, there is another interesting point. For such systems, where a deal can be opened for a long time (from several hours to several days), a trader has the opportunity to make a profit every day for each open position in the form of a Forex swap. That is, when orders remain on the next trading day, regardless of whether they are in drawdown or in profit, additional profit will be accrued for each of them.


Well, I think the essence of the Grand Master strategy is clear to you, the tactics itself is very interesting, since you get profit not only from positions in the direction of the long-term trend, but at the same time, every day you can get additional profit from swaps on the same open trades.





Published on: 9/14/20, 5:51 PM