A Martinglale question.

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There are lots of season traders on this forum that have history as there wisdom. I have a question for you to chew on. Now I am not asking a for or a against answer on the use of martingale systems .

What I am asking is to take a look at the 2 scenarios below and if you can choose one that seems much more probable than the other please.

1. equity=20,000 lot multiplier is .10,.20,.30,.50,.80,.1.20,2.70,4.20....

to keep going making profit we need a 40 pip retraction with each step to hit TP

2. equity=20,000 lot multiplier is .20,.60,1,1.60,2.40,5.40,8.40....

to keep going making profit we need a 20 pip retraction with each step to hit TP

Given this which which one would you feel has a better chance of hitting the TP most of the time also taking consideration of the chance of blowing your account . So if you had to put money down which one would you feel more comfortable with?

Thanks

Randy

 

Well, there is not an easy answer for that, as in the short term 2nd choice would most probably be more profitable, but in the long run would certainly be more prone to a margin call. The only way to answer this is to put two forward tests under the same condition and test them for 2 or 3 months and see what happens.

Still, you have to remember that taking the maximum profit is not the goal, rather, to take the maximum profit with the lower risk. May be 1st option is not as profitable but would be more stable and less risky.

Garisan

 

Thank you Garisan for your feed back.Here is my idea for a EA I am working on.

We start with a good trend indicator and our starting lot size is .5 now it waits until it gets the trend signal and it opens the trade with the trend. We have a TP at 20 pips so we make $100 if it goes straight to the TP. Now if it goes against the trend from the get go more than 5 pips we have the martingale system that takes over . If the trade goes against the trend less than 5 pips nothing happens. If it goes in direction of the trend we have a trailing SL. so with the trend we make money the easy way never a loss and against the trend we make money the harder way with the martingale. Now when the martingale is engage it stays that way until we hit the TP which is at 20 pips. When it's finished in profit it cycles back to where it was when we turned it on looking for a trend again.

I do have have some good ideas on how to lower the risk with the martingale.

What say you?

Thanks

Randy

garisan:
Well, there is not an easy answer for that, as in the short term 2nd choice would most probably be more profitable, but in the long run would certainly be more prone to a margin call. The only way to answer this is to put two forward tests under the same condition and test them for 2 or 3 months and see what happens.

Still, you have to remember that taking the maximum profit is not the goal, rather, to take the maximum profit with the lower risk. May be 1st option is not as profitable but would be more stable and less risky.

Garisan
 

You'd have to find a broker that allows hedging, i.e. non-US based brokers.

On extremely volatile pairs, the fluctuation can easily wear your margin out. I have written a similar hedging tool for a client on Dukascopy platform where we've experienced a severe drawdown, even with a starting lot of 0.1 and a distance of 120-150 on GBP/JPY.

 

Thanks your exactly correct I have lots of experience in the hedging EA(s)

First I would use the aud/usd it's less volatile than the euro/usd and has a smaller pip range average.I need to really do the math so see what the best starting lot size would be and the size of the multiplier. Second being a modified martingale EA it would only engage the martingale if the trade went against the trend. This is were really good indicators come in. There are 2 brokers I current use for hedging Alpari UK and FXOpen I have been happy with both.

I trade with a martingale now and make around 10% per week on a 20k account but I really watch my trades and I am not afraid to pull the trigger if trades are going bad. However I feel this version I am talking about will be a safer EA and a good EA if it's programed correctly.

I would like the EA to have a multiper that I can set.

Do you do coding professionally feel free to PM me on that.

Thanks

Randy

beckham.is.619:
You'd have to find a broker that allows hedging, i.e. non-US based brokers. On extremely volatile pairs, the fluctuation can easily wear your margin out. I have written a similar hedging tool for a client on Dukascopy platform where we've experienced a severe drawdown, even with a starting lot of 0.1 and a distance of 120-150 on GBP/JPY.
 

There is a lot of ways to set a Multiplier, normally in the EA you can set Multiplier: 2 means this will double your last trade like this:

1,2,4,8,16,32,64 lot

A Multiplier: 1,5 is much safer and its almost the same as a 2 multiplier.-

then it go like this 1 2 3 5 8 12 lots...

You can also another multiplier like 1,3 but then you need a larger tp...

So you can answer your question yourself if you test which multiplier is the best for you.

Regards

 

Thank you , the jury is still out which version would work best less pips to hit the TP and close out but use more equity or more pips to hit TP and use less equity.

sentaco:
There is a lot of ways to set a Multiplier, normally in the EA you can set Multiplier: 2 means this will double your last trade like this:

1,2,4,8,16,32,64 lot

A Multiplier: 1,5 is much safer and its almost the same as a 2 multiplier.-

then it go like this 1 2 3 5 8 12 lots...

You can also another multiplier like 1,3 but then you need a larger tp...

So you can answer your question yourself if you test which multiplier is the best for you.

Regards
 

A bit of coding help please

A question would a very simple EA like all it does is open a trade does not close in profit unless it will retrace 20 pips and then have a setting for 40 pips work for this back test? Can anyone here write the code for such a EA.

All I want to see in the course of a few years how often the 20 pip TP gets hit vs the 40 pip TP

Thanks

Randy

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