"No loss" recovery hedging system - page 8

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Jim Salib:

Hi jamess74

Have you thought of maybe attaching an ATR Indicator to your EA. Maybe that will help in detecting an oncoming trend.  I would be very interested in testing this EA.  Would you like to share the EA please?


Hi Jim, the EA that I am testing at the moment is called Killa Gorilla EA (just do a Google search).

I did think about using an ATR indicator on a separate chart, but this would involve some manual intervention and the idea behind my trading is to be completely automated.  The EA does say that you can trade 100% of the time in automated mode, so I guess I can use some of the safety mechanisms it has like the trend and spike protection.  It's definitely one of the better EAs I have come across in the last couple of years.

Thanks for your advice.

 
Trading in this kind of strategy using a 10k capital is just too risky, unless you have a lot of extra funds to burn, but if I am a wise trader why would I gamble such strategy, there are millions of people that has been into sufferings in life, I would rather donate this money to the needy because the end results to this kind of strategy will be a wiped out account.
 
Chris:

Hi guys,

I was thinking how to improve this system even more and I think I have succeeded in doing that. So the main problem occurs during the ranging market conditions. Then the EA will keep opening buy and sell positions every time the price will cross the recovery line levels. In worst case scenario it could open even 10 positions (or even more). This will totally destroy the FreeMargin level and introduce a risk of "unfinished recovery" cycle. So my idea

was to introduce a "moving recovery target" mechanism. The idea is to shift the recovery levels closer to the market, each time a new recovery trade is opened. Doing so, the EA would be targeting lower and lower recovery levels and this would increase the chance of successful recovery.

To test this improved recovery system the EA (version 01.1) is programmed to enter the market almost randomly, where every new market entry decision is based only on the information from the previous candle and a new position is automatically opened when the previous trade (or trade group) is closed. The entry logic is:

if(Close[1]>Open[1]) OpenBuy();

if(Close[1]<Open[1]) OpenSell();

This is of course the stupidest entry algorithm ever, so normally your account would be wiped out in several days. This kind of trading would end in a random walk towards the $0 line. So let's run a backtest from 2007 until now and see if this system can survive this worst case random test.

Simulation conditions:

- initial deposit $10000

- EA settings: see tester report

- EURUSD @ H4

- dukascopy data 2007-2014 is used

- fixed spread of 3pips (to simulate my broker's spread)

- backtest performed using tickdata with 99% of modelling quality, this is extremely important since the results are very

sensitive to small price changes

- back tester set to "every tick" mode

Strategy Tester Report:

Link to the full statement:

Strategy Tester: CoensioRecoveryEaV01

So as you can see, apparently this strategy can withstand even 7 years of random trading! Personally I think it is, a very GOOD result.

p.s.: I'll post the updated EA version 01.1 as soon as possible.

Greets,

Chris


Hi Chris! 

it is very interesting

 

is it something like this?

Files:
Screenshot_o1050.png  189 kb
 

i need help cuz i just looked it up and found it interesting

 
jeromeyeo86:

i need help cuz i just looked it up and found it interesting


Plenty of them in the market. Blackstar and cap zone use similar strategy.

 

This kind of system made of pure hedging is very difficult to elaborate, there's a lot of constraint. 

I never saw one stable with no stopout in long term.

 
Strategy seems to be working but for US citizens i dont think they are allowed to hedge in the futures market due to regulations :( but for non-us citizens hedging, have to consider the swaps and commission but swaps does not matter if you are day trading 
 
Since 2009, hedging is not permitted for US traders.
          NFA Enforces FIFO Rule, Bans Forex Hedging in US Forex Accounts - Trading Heroes
           FAQ: FIFO in the Forex Market - BabyPips.com
 
Don't waste your time on martingale/heding/grid, they all blow up, it's a mathematical FACT. And what's worse, they won't even let you compound your profits, your profit potential is small and loss unlimited (your whole account). 

You may aswell donate those 10k or burn them in the bin. 
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