Grid depth: the number that predicts the blow-up
A grid wins often and grows smoothly until one move goes too far. How deep a grid goes tells you how far that move must be, before it happens.
A grid strategy buys, and if price falls, buys again a little lower. If price keeps falling, it buys again, often with a bigger position each time (lot escalation). When price bounces back above the average entry, it closes everything at once at a profit, a basket close. Each extra position is one more level of the grid depth.
This works most of the time, which is exactly why it is dangerous. The strategy has no stop. It waits for a bounce, and while it waits, the open positions carry a loss that the balance does not show. The number of levels a history reached tells you how long it had to wait and how much it had to carry.
A grid you can break
The simulator below runs a simple grid on a market that moves 2 pips up or down at random, 10,000 times. The account starts with 10,000 dollars and a first position of 0.1 lots. It runs 500 such markets and counts how many ended with the account wiped out.
- Balance: closed baskets only
- Equity: with the open grid's floating loss
- Accounts wiped out, of 500
- 12%
- Median growth of the rest
- +26%
- This market: deepest level
- 8
- This market: worst floating loss
- the whole balance
Watch the two lines. The blue balance climbs in neat steps, because every basket the grid closes is a win. The red equity line dips each time the grid is deep in a losing move. A signal page that shows only the balance shows the neat steps.
Now drag the deepest level up. Two things happen at once. The accounts that survive grow faster, because a deeper grid can wait out bigger moves and still close them at a profit. And more accounts are wiped out, because the maximum concurrent lots at the bottom of a deep grid are large, and one long move against them reaches a margin call.
Up to 5 levels, not one of the 500 accounts was wiped out, and the survivors’ median growth was 13%. At 8 levels, the survivors grew 26%, and 12% of the accounts were gone. At 10 levels it was 33% and 25%. The better the survivors look, the more of their neighbors have disappeared, and a signal list only shows you the survivors.
What a real grid looks like
The same pattern is in real signal histories. One anonymized live signal in our fixtures made 1,419 trades and won 76% of them. Its grid went 22 levels deep. 30% of its trades were added while an earlier position in the same direction was still open, and those added trades made 77% of its profit.
The deeper trades also won more often: 73% of first-level trades won, and 84% of the trades at level 6 to 22. That is how a grid produces a high win rate. A deep trade is opened near the bottom of a move, and it wins on the smallest bounce. The rare time there is no bounce is the blow-up.
How common grids are
Monetio flags a history whose grid reached 3 levels or more, and treats 5 or more as severe. Across 2,321 live forex signal histories, the flag fired on 1,848 of them: 80%. Averaging down is the norm on signal lists, not the exception.
We have not yet measured how often each depth ended in a blown account across the whole corpus. That study needs the signals’ later histories, and we will publish it when it is done. Until then, the model above shows the mechanism, and the real signal shows it at work.
What to do with your own report
- Find the deepest level the history reached. On a trade list, count the positions open at the same time in the same direction.
- Ask what the grid carried at that depth: the open loss at the worst moment, not the closed result.
- Treat a very high win rate with a smooth balance line as a question, not as an answer.
Monetio counts the levels for you, shows how many trades and how much profit came from each level, and estimates the worst loss an open chain carried.