Yet Another Martingale System - page 2
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Khan,
Hats off to your enthisiasm and planning efforts. Having experimented extensively with these types of systems, I only have one tip or word of advice for you. When you're planning your model around pip step intervals, don't lock yourself into considering things like ATR or the biggest expected daily move. The thing that clobbers the hell out of people using Martingale models is what I refer to as the "quiet drift" syndrome. In other words, you might have a period of ranging activity where successive lot layers slowly accumulate while you're knocking down nice blocks of profit, and then all the sudden you have a big news bar or trend shift. Your maxtrade setting might be something like 8 or 10, and by the time the big swing hits, you've already got 5 or 6 pending intervals committed. Next thing you know, you're 60 pips out beyond your last maxtrades interval, drawdown is building and you start getting jittery.
I suppose in a nutshell, the thing I'm saying is don't limit the scope of your thought to expected "daily" activity. The way these Martingale models will sneak up on you and bonk your margin is insideous.Thank you for your advice bluto, I completely understand. Worst than news move is the move that gradualy goes against you in matter of 1-2 days or more, slow and steady. And all you can do is watch your account die slowly.
I do love the idea of using Mathematics in forex rather than MA crossess or other really complicated systems where reading 3 lines of text you are lost already. I played around the idea to hedge while going from 1 level to another, but that works well till level4-5 or even 6 but the profit curve starts going down and by level9 or above you are actually in loss when you close all trades. Using normal martingale with +1 to the new level works ok but the profit is not worth the 5 or 10 lots per trade.
You guys have more experience than me using the martingale. I can only back test which is not the same as forward. But in the very short time I watched martingale in action, I love the result. I like the idea of not loosing regardless of which direction you trade in. I looked at grids, but they open so many trades that its ridiculous. To the point where I cannot even see the candles.
Hopefully within the next day or two the EA will be done and I will post it, and lets see how it does. 1 Problem is still not addressed and that is the one about what to do when you reach level10 or more. I cannot put a time limit on the trades because that will tilt the math over. The trades have to be a certain pips apart if not then I will have to enter more lots at next level in order to make up the missed pips in between levels. I donot want to hedge because that brings the total profit down and it does not reduce the margin required by that much to warrant its use.
If you look at it, the patterns for price movement can be narrowed down. It not just up or down, its actually more than that...
Example1:
B
A C
If price goes from A to B, and you sold at A, then you sold again at B, and at you close both A and B you end up in profit.
Example2:
C
B D
A
If price goes from A to B, you sold at A, then at B , now price at C, you sold some more, now if it goes to D you close all and you end up in profit. But, lets say you got 38 pips in Example1, and now you got 56 pips in example2. As you can see, the example2 has double the lots in play than example1 but yet the pips profit are not doubled. As you progress that profit pips number will actually goto negative.
Martingale progression.
My experience in months of forward testing a variety of martingale modifications suggests that instead of worrying about the profit level from the third progression be worried about getting out of the trade with as little damage to the account as possible.
In other words seek out a method of bailing effectively giving the EA chance to pause and redirect. David has done a lot of work in that direction with V12 and it's successor RB26 making them the most effective martingale EAs that I have tested so far.
I am not a programmer and have no mathematical skills but in trading it is good to come back to the PC to find that the progression has ended with a small profit and the direction has changed and into the next profit. Far better than still in the mire and getting deeper towards the margin call whilst trying to get those elusive extra pips.
John
yeoeleven, I like that idea.
...In other words seek out a method of bailing effectively giving the EA chance to pause and redirect. David has done a lot of work in that direction with V12 and it's successor RB26 making them the most effective martingale EAs that I have tested so far. ...
So, why don't you share some insight on how bailing out should be done?
We would appreciate some info.
Some basic math with regards to yeoeleven's suggestion. Level9 is cut off level, so once we reach level9 or 180 pips with no retrace we intend to close grid with loss. These calculations are based on 0.01 initial lot. The total lots in the spreadsheet are not in 0.01 format, but the margin and profit is calculated based on 0.01 with 200:1 leverage on EURUSD. The green are is the positive profit zone. It's a +/- 140 Pips zone. Level9 is not something that happens every week or every month, but once in a year or twice in a year maybe, in that situation we take a loss.
So, why don't you share some insight on how bailing out should be done? We would appreciate some info.
Only way to bail is with a loss, as far as I can tell.
Only way to bail is with a loss, as far as I can tell.
Don't be afraid of losses. I am happy to bail out with a decent loss at a higher level instead of hitting the SL wall.
Some people have addressed this problem with partial success and I would like to learn more about it.
Bailing out.
All I need from you guys is feed back. Pros, Cons, anything, the idea is to get collective collaboaration on the EA. I can only see the EA from a certain angle, and can only think of a few cons or pros. But the more people look at it the more pros and cons will appear.
I am not a programmer and have no mathematical skills but in trading it is good to come back to the PC to find that the progression has ended with a small profit and the direction has changed and into the next profit. Far better than still in the mire and getting deeper towards the margin call whilst trying to get those elusive extra pips.
JohnSo, why don't you share some insight on how bailing out should be done? We would appreciate some info.
Unfortunately I have no idea as to how put ideas into practice, in discussions with David when V12 was being formulated I suggested that was the way to go and with other suggestions the EA evolved. Actually performing the work to put the ideas into practice was David's and he gets the credit for that I was just the bouncing board.
The purpose of my post was to make a suggestion rather than to offer a solution. After all KillerKahn is asking for feedback.
John
That is definately good feedback. I am already trying to update the flowchart for the EA.
I look forward to this Ea!
Ok, after looking at all these martingale systems and trying almost all combinations and variations. I came to the conclusion that you can win using Martingale, but need to keep the following in mind...
1: Need deep pockets to withstand up to 10 normal lots in 1 direction. 10 lots means up to 200 pips move without a 20 pips retrace. I have not seen 1 yet but better safe than sorry, so good to prepare from the get go.
2: Trade in the direction of the major trend. So if Trend is up, then buys only, if the trend is down, then sells only. (Need to discuss this, I donot like indicators as they are useless but I think they might play a minor role here as a filter)
3: Trade in the positive swap direction. Believe it or not, this actually helps the end result of the closed positions, positive swap will help the end pips+profit is always positive and no end up in breakeven or worse loss.
4: Lots increment needs to be in such a manner then when the trades are closed you get double the pips if the trades would have been closed in the previous level. exception is the level1, I start with Level0, so level0 and level1 have the same lots.
So far, here is the lots increments I have been getting at...
level-----Lots
level0----1
level1----1
level2----2
level3----5
level4----12
level5----27
level6----60
using 0.01 as initial lots, you will get...
level-----Lots
level0----0.01
level1----0.01
level2----0.02
level3----0.05
level4----0.12
level5----0.27
level6----0.60
I will update these level requirement later, since I have not calculated the rest of the levels. But as you can see the incrementation is not as low as previous*2 or previous*2+1, but the end result is you get double the pips as levels rise. Here is the math for pips...
level-----Lots----Pips
level0----0.01----20
level1----0.01----18
level2----0.02----18
level3----0.05----36
level4----0.12----90
level5----0.27----196
level6----0.60----406
As you can see, even though you increase the lots, the reward doubles as well. In normal martingale, you double your bet but your reward is still same as winning the initial bet. Which sucks, if you have 10 normal lots open to make just 10 cents.
I have hired a very good programmer for this EA. And he will be done with it pretty soon. And once done I will post the ea here free of charge ofcourse.
Once I do post it, please donot modify it and repost in this thread, start a new thread for it, I donot want to see any mods of the EA unless I made the modifications or I authorized it. If I see a mod I did not authorize I will ask newdigital to move that post to a new thread or something.
All I need from you guys is feed back. Pros, Cons, anything, the idea is to get collective collaboaration on the EA. I can only see the EA from a certain angle, and can only think of a few cons or pros. But the more people look at it the more pros and cons will appear. I am still not sure to use a trend detection indicator or not? I am interested in long term trend not M5 or M15 trends, long term trends only.
Here is the filter:
If long term trend and the positive swap direction are in sync, then trade in that direction.
e.g. GBPJPY, seems like GBPJPY will be going up lets say, and obviously the GBPJPY Buys swap is in our favor then we keep on buying even if price keeps dropping, and when we get a 20 pips or user defined pips retrace we close all buys and take profit. If we buy and trade goes in our direction for x amount of pips then we TP and open a new trade and that trade is now Level0 and go from there, if level0 is in profit then open a new Buy and now that is Level0, and create buylimits below level0 with proper lots pet level and buystops above level0 with lots=initiallots variable.
This is exactly as the blessing system posted by rifo, great post by the way, worth a reading, only exception is that I use differend lots increments and also donot hedge, and only trade when positive swap and trend are in sync.
Sorry no EA to post yet, but as soon as it's done I will post it here. While we wait, all responses welcome, positive or negative. Thank you very much for reading and keep an eye out for the EA.
World Interest Rates Table:
http://www.fxstreet.com/fundamental/interest-rates-table/
:: For those of you interested in some forward testing, I been running the Blessing system on 4 majors for over 10 days now. Remember, the blessing system does not have any trend or swap positive filters. And, also it hedges. So My EA will not have same kind of profit or same amount or # of trades but this forward testing account will give you an idea as what a martingale system is capable of. Initial Lots=0.01
Broker: Velocity 4X
Login: 9009126
Password: m7vehpmI am looking forward to this EA I am a fan of Martingale so I will certainly try it out!