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Would some special kind of the trailing stop be good as the temporary solution ?Could be based on max drawdown of equity in backtest for the given size of balance,and widen together with the growth of the balance,all in the suitable proportion.This looked somehow so as below on graph.The success in the farther work at EA!
Hi Patataj,
Unfortunately, stops based on equity drop don't help. Here are two tests, both from 1999.01.01 with a 20% stop. The first is the setup I am using to broadcast the signals (the signals use no stop). The second is a setup that would have survived ( ! ! ! ) this week's "meteor strike". I have tested cutting losses from 1 to 99%. The EA is really very dangerous as it is now. This week, the loss could have been smaller, taking prompt action when the explosion came. But I have seen such surges revert almost as quickly, killing all who tried to chase. There is no 100% safe option. But I still believe there is the possibility of building safety mechanisms to mitigate the losses and I will keep working on them. Thank you for your words of encouragement. Trade carefully.
Safety lock
A "big move detector" has been implemented and the EA is running this new version now. In the first tests, it almost eliminated the catastrophic losses. Below are two of these tests: March 2009 and since 1999. The anomalies at the end of the test from 1999 come from the lot sizes reaching the broker's upper limit for instant execution. The EA is not prepared yet to handle order splitting. The final collapse was due to this limitation as well.
There will be no significant difference in the EA behaviour from now on, except that it is harder for it to be fooled by the market now. Obviously, this is not a guarantee of success. The market can always do something that it has never done before and defeat the algorithm. But there are many improvements to be implemented yet.
What can be seen in these pictures? A curve fitting exercise? I don't believe. The ideas implemented are too simple. Can a straight line fit a complex long curve? Looks like nonsense to me.
One of the next steps is to reduce aggressiveness gradually as the account equity increases. It is rational to risk proportionally more with a $10K account than with a $100K account or with a $1M account.
The EA is now able to hedge if caught against strong sudden moves and reduce aggressiveness gradually as equity increases. The second feature is not in use.
Hi Jairo,
I have been running this EA for some time now and the results are excellent. Thank you for sharing this and continuing the enhancement. When you decide to charge for it, I will gladly sign up.
As I plan to go live, I have a question on the lot size. I have a live IBFXm account with 10,000 initial deposit. Leverage 400:1. What would I set the lots multiplier to in this case? Or do you suggest I change to a standard account with 100:1 leverage?
Thank you.
NazmulHi Nazmul,
Thank you for the praise. This EA will run free of charge at least until the end of this month. For a future commercial run, I will probably have to cast the signals from a 4K acount, to avoid the fractional lots multiplier problem. Then, it will start every cycle with 0.01 lot. With a 10K account, you should use lots multiplier=2.
The EA was written for standard 100:1 accounts. I didn't test it with different leverage or on mini accounts. Mini should not be a problem, but 400:1 leverage should be considered very carefully. I don't know the margin requirements for 400:1 accounts. I never used this leverage. For simplicity and safeness, if you plan to use the signals in your live account, I recommend you convert it from mini to standard and change leverage to 100:1.
Thanks NFA and CFTC
ID 648 started two days ago... but must die soon. Compliance rule from illuminated people within NFA banned what they label "hedging" from USA based brokers. So, within a few days, I will have to stop both my signals, because they run with InterbankFX, that must comply. As an alternative to profound and time consuming changes in the code (just buying or just selling doesn't work with this plan), I am searching a reliable, well capitalized, regulated (not by NFA or CFTC) broker where it can run. I have already checked Alpari. Looks like this EA needs a USD 40K account with them to work with the same risk level (minimum lots = 0.1). I would appreciate any help from RAS community. Good trading to all.
As far as i know FXDD.com is not regulated... Maybe in this case that would be a plus?
ID 648 started two days ago... but must die soon. Compliance rule from illuminated people within NFA banned what they label "hedging" from USA based brokers. So, within a few days, I will have to stop both my signals, because they run with InterbankFX, that must comply. As an alternative to profound and time consuming changes in the code (just buying or just selling doesn't work with this plan), I am searching a reliable, well capitalized, regulated (not by NFA or CFTC) broker where it can run. I have already checked Alpari. Looks like this EA needs a USD 40K account with them to work with the same risk level (minimum lots = 0.1). I would appreciate any help from RAS community. Good trading to all.
Alpari (UK) have micro accounts where the min lot size is 0.01 and max is 2.0
So you would need $4000.00
Thank you Terminex and Weirdgod for your input.
FXDD is not a member of NFA, but since CFTC approved the ban, I think they must comply, too (?).
The maximum 2 lots is the problem with mini accounts at Alpari. I need max = 4 mini lots. With minimum lots = 0.01, I would need only $400 in the account, but 4 mini lots max is necessary.
Thinking better on the hedge ban, it is not so hard to comply (force the EA to take just one side of the market). Some improvements on its trend awareness will be good. Maybe in a few weeks I will (not ironically) thank NFA and CFTC for the change.
Well, I have one month to adapt to the new "one legged volatility exploring".
Good trading to all.
Hmm, wont this ban affect the grid systems as well?