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Agree with your points on scale/grid trading. It is countertrend by design which complements trend methods that I have. It does accumulate inventory and losses as the trend goes against you. Adequate capitalization and planning allow you to come out at the other end of a drawdown intact and hopefully with a profit.

I would also add that diversification is important, not only in assets but also methods such as willingness to short. I will supply an example later.

Price is indeed relative and 25 year high or low prices can be broken. The caveat is that a physical commodity will not go to zero.

I like to build the grid in a pyramid fashion. That is, smaller intervals or larger size near the base of the pyramid. Some of these contracts I will hold for more than one or a few steps back up the ladder in order to participate in some of the upswing.

As far as manipulating the markets, I cannot comment. Maybe I can add that to my scheme. ;o)
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