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-   -   Success with Martingale & Hedge - Possible? (https://www.forexfactory.com/showthread.php?t=765739)

KashifNawaz May 16, 2018 10:38am | Post# 1

4 Attachment(s)
Hundreds of threads on the same topic, thousands of posts and millions of discussions here on FF and lot of experts had already proved many times that Martingale, Grid and Hedge systems will never work in the long run unless one has huge capital in his bank. But still, there are many traders (maybe day-dreamers ) who believe that these systems can work in reality even with low capital and proper Money Management.

Possible? Well, I am one of those day-dreamers who believe this is possible despite already lost so much money in this. We all are well aware that by using any system, we cannot turn our 100 or 500 bucks into millions but in my opinion, we can generate decent monthly income using such automated systems. I am not here to claim that I found a martingale and hedge holy grail and want to sell it to you guys. Not at all.

Since a year, I am continuously following every thread here on FF which is related to Martingale, Grid and Hedge because simply I love these systems (or because I don't know how to trade or don't have time at all for manual trade). Most of the threads are dead already and most of the people have left hope in such systems. But maybe there are some successful traders who are already trading such systems on real account and making good pips and not disclosing here.

Anyway, I want to share a simple Martingale + Hedge EA; there is nothing unique in this and you can find on internet hundreds, if not thousands, martingale EA's similar to this. So why should we try this? Because it has less ingredients of greed and worth to try once at least.

Since my last account stopped out with blast last year by a martingale EA, I kept thinking what could have saved that account. Maybe hedging? I requested coder (from whom I purchased that EA) to make some necessary changes and add few parameters but he refused to do so. So recently I hired another coder to build this EA as per my own requirements. He did a really wonderful job.

Strategy:
Kindly see attached excel sheet for the details of strategy. This is not unique one, a lot of EA's available over internet with similar strategies. We know that Martingale is best for ranging and trend or spike kills it. So to give some extra life to martingale, I thought to try hedge in crucial moments. Last year, I was using martingale EA Quanttec with very dangerous setting; Distance 10 pips and Multiplier 2 which was not changeable parameter (I wish I backtested that EA before going live because at that time, I was not believer of BT). Anyhow, with 5000$ deposit, EA was able to survive a spike of maximum 150 pips without retracement but one day I survived 220+ pips on GBPUSD because I was in front of system and I used hedge for high lot trades and closed as soon as 1st H1 bar of London session completed. Price moved to opposite direction and martingale cycle closed. But on other day, my account stopped out because EURJPY got mad without any major news and moved 180+ pips and I was not there in front of system (I was driving to office and saw live crash on my mobile and could do nothing about that.)

Once your martingale EA is near to crash your account, either you may save it by additional deposit or hedge. No one will risk additional deposit at that stage so i started searching for most hedge friendly broker and found one which offers Zero Hedge Margin. I wanted a Martingale EA with hedge function at crucial stage, I thought a lot about this and just started with this strategy (attached here) which is not perfect yet but at least can provide us a start to make improvement. With this strategy, if you are using hedge friendly broker and you have enough deposit to bear spread cost, you can survive spike of 750+ pips even but this will fail if price stuck in range after hitting crucial hedge level. Mostly, when price moves in one direction for 300+ or 500+ pips then it retraces for 100+ pips at least. If this happen, then this EA will survive with minimum losses.

I know, most of the expert traders will say, this way of hedging is really foolish and stupid idea to save martingale but I believe, this can work, only we need find best setting for engine 2 or improve its parameters.

EA has 2 Engines;
Engine 1 only made to collect pips from both directions. As soon as EA starts, Engine 1 start grabbing pips whatever is the market direction. It works best in ranging. Engine 2 is bouncer or security guard for Engine 1. Once Engine 1 reaches risk level, Engine 2 steps in to Hedge and gives extra life to EA. Once price become friendly, Engine 2 will sleep again but again wakes up (reborn) if required. This Engine 2 is basically first defense line but its not perfect. I need ideas and help from you guys, how to make it more strong. Should we add more parameters or should add some extra defense via Engine 3? My email ID is available in EA parameters to reach me.

Engine 1 (Martingale):
This is purely martingale engine and you all know the settings parameters very well. These are; initial lot size, grid distance, multiplier, maximum lot size, allowed spread, take profit etc. New trades will keep opening using multiplier at every grid level and cycle will close by either profit with enough price retracement or account blowup (or account locking)

Engine 2 (Hedge):
Hedge Level: The grid level from where you want a hedge trade in place. Hedge trade will cover all open martingale trades. For example if total lot size of all martingale trades is 7.6 lot then a single hedge trade of 7.6 lot will open. (but if you chose 5.12 in Max Lot for Engine 2, then only 5.12 hedge trade will be placed). So here you can chose, you want to hedge completely or only few trades. Hedge trade can be closed either hitting SL or TP.
Trailing Stop-loss: This is for hedge trades only. As soon, as price will make given pips retracement, Hedge Trade will hit TSL (at profit or loss)
Trailing Step: After how many pips, trailing stop-loss should modify.
Stop-loss: This is also for hedge trades only. If you keep it low, it will hit again and again with smaller losses but if you will increase the value then it will hit lesser times but with greater losses.
Hedge Reborn: Your hedge trade already hit SL or Trailing SL and price start moving again against martingale trades then you may need hedge trade again to save your account. Here also you have option to completely hedge all trades or partially hedge by using Max Lot Size for Engine 2. The larger the size will be for this hedge trade, the more defense it will provide against martingale but in case of bad luck, if this hedge trade hit SL, the more bigger losses you will see.

Risk of this EA
Volatility/Red News/Spikes are not so dangerous for this EA but the most dangerous phase is range once Hedge Level started. If price stuck in range, hedge trades will keep hitting SL and then will keep opening and closing unless you will run out of equity.

NOT RECOMMENDED TO RUN THIS ON REAL ACCOUNT.
===================================
If you still want to trade on real at your own risk then;
*Start with minimum 5000$ on standard or 50$ on cent account
*Start with lot 0.01 (all default setting)
*Avoid Major Red News. Stop the EA 30 minutes before the news and close all open trades
*Resume the EA after 1 hour of Major Red News
*Trade only one pair EURUSD
*Account leverage must be 1:500 or more
*Withdraw your profits weekly/monthly
*Enter maximum $ amount in account locking setting which you can afford to lose

I have got really good back testing results from last 4 years tick data on EURUSD. (a smooth curve - dream of every trader). Back tests of one user is not enough to prove success of any EA so I need help of you guys to back test this on your historical data, and on demo as well. Lets see if we find any flaws then we can make it more safer and better because coder is really supportive and willing to make changes if required.

Details of my back testing:
To see step by step procedure, please visit here.

In my back tests, you will see "Modeling Quality" n/a instead of 99.9% but it doesn't matter as I have full green line and 0 mismatched chart errors. To get 99.9%, you need to purchase latest version of Tickstory and then open MT4 terminal from inside Tickstory. I exported with manual procedure, why should I pay to get this number only when results are same.

MyFxBook
I have placed this EA on VPS Demo Account with initial deposit of 3000 Euro (leverage 1:500) and you can check results here.

Back Test Results
Here are my Back Testing Results with 99.9% Modeling Quality Tick Data.
Broker: XM (Standard Account)
Leverage: 1:500
Pair: EURUSD
Initial Deposit: 3000 Euro
Date Range: Jan 1, 2014 till May 13, 2018
Setting: Default Setting

Also you can see back test results of GBPUSD here.

===========================================================
Update: 13-08-2018
Received emails from lot of members requesting for code of this EA. Here you go friends; make experiment with it and do share good results in case you find better setting, add some better engine to improve profitability and to reduce DD. Thanks
===========================================================
Update: 11-10-2018
Added Investor Account Details for anyone who is interested to see current trades and trades history. Here you can see screen shot of setting which I am using for all 3 pairs in my demo account.
===========================================================
Update: 15-11-2018
I believe 6 months demo testing is enough to reveal the bugs and loop holes of this version. I have stopped my demo VPS account because needed the slot for testing of some other EA.
Click to Enlarge

Name: Results.png
Size: 22 KB
Click to Enlarge

Name: EURUSD Graph.png
Size: 18 KB
GoWithFlow.mq4
GoWithFlow - Strategy.xlsx

jdva May 16, 2018 10:49am | Post# 2

Thx my friend for this interesting thread....!

I got an error message on trying looking in your MyFxbook account..perhaps you have to make it accessible for public...

londonboy May 16, 2018 11:02am | Post# 3

Hundreds of threads on the same topic, thousands of posts and millions of discussions here on FF and lot of experts had already proved many times that Martingale, Grid and Hedge systems will never work in the long run unless one has huge capital in his bank. But still, there are many traders (maybe day-dreamers ) who believe that these systems can work in reality even with low capital and proper Money Management. Possible? Well, I am one of those day-dreamers who believe this is possible despite already lost so much money in this. We all...
Rule number 1: BACK TESTING IS FOR LOSERS!

Backtesting will not prove a strategy works. I have lost count on the number of posts or comments people have said about this. Yet there is always one more idiot who wants to backtest.

I tell you what will happen. The backtest will show it as profitable, you will then demo it and that will show it profitable, and then you will trade on a live account and it will fail.

Have the balls and conviction to use a live account straight away on your own developed EA. That is the only tur way to see if it works.
Invest 200 in a live account and go for it. If you can invest in making an EA you can invest in testing it properly.

KashifNawaz May 16, 2018 11:30am | Post# 4

Thx my friend for this interesting thread....! I got an error message on trying looking in your MyFxbook account..perhaps you have to make it accessible for public...
Hello Mate,

Please check now, its Public. Previously it was not verified, that is why public option was disables. I just created this account and placed EA on VPS 1 hour ago, don't know why its showing 15 hours in history.

Also, I have added this account to my FF Trade Explorer, any one can see the results on top of first post.

{quote} Rule number 1: BACK TESTING IS FOR LOSERS! Backtesting will not prove a strategy works. I have lost count on the number of posts or comments people have said about this. Yet there is always one more idiot who wants to backtest. I tell you what will happen. The backtest will show it as profitable, you will then demo it and that will show it profitable, and then you will trade on a live account and it will fail. Have the balls and conviction to use a live account straight away on your own developed EA. That is the only tur way to see if it...
Thanks friend for your comments. Yes, I am aware about this but BT is first step to get the glimpse of any EA;s performance. I have tested difference of BT, FT Demo, FT Real on some other EA's. As per my findings;

Back testing with 90% modeling quality will give you 20% of EA's performance
Back testing with 99.9% modeling quality will give you 70% of EA's performance
Back testing with Demo VPS will give you 80% of EA's performance

After testing for few weeks on Demo VPS, definitely I will go live and will share link here. Thanks for your feedback any way.

Aimak May 16, 2018 11:36am | Post# 5

MT4 bactester is trash. You should have invested the money in a EA for MT5 instead.
But now you are in MT4 use TickData Suite to simulate slippage, variable spread, trading commissions and swaps. Also do a in-sample bactest (as shown above plus an out-sample backtest like from 2010).
You can play all the time you want with backtests. Live market is what counts.

KashifNawaz May 16, 2018 11:48am | Post# 6

MT4 bactester is trash. You should have invested the money in a EA for MT5 instead. But now you are in MT4 use TickData Suite to simulate slippage, variable spread, trading commissions and swaps. Also do a in-sample bactest (as shown above plus an out-sample backtest like from 2010). You can play all the time you want with backtests. Live market is what counts.
Thanks dear for your time.

Luckily, my broker offers me free of commission and swap account. So my cost is only 1.6 - 1.7 pips.

So far, I have never used MT5 so not comfortable with that for now. Most of the material available over internet and especially on FF only works on MT4. So I believe, we have more to play with old platform. Thanks for suggestion though, I will definitely consider.

londonboy May 16, 2018 12:00pm | Post# 7

{quote} Hello Mate, Please check now, its Public. Previously it was not verified, that is why public option was disables. I just created this account and placed EA on VPS 1 hour ago, don't know why its showing 15 hours in history. Also, I have added this account to my FF Trade Explorer, any one can see the results on top of first post. {quote} Thanks friend for your comments. Yes, I am aware about this but BT is first step to get the glimpse of any EA;s performance. I have tested difference of BT, FT Demo, FT Real on some other EA's. As per my findings;...
I just think backtesting is pointless, a waste of time and creates unrealistic expectations.

I look forward to seeing the LIVE account :-)

mrdfx May 16, 2018 12:15pm | Post# 8

Hi I'm always curious of these kinds of EA's, can you share more info on the logic of the strategy the EA is using to trade?

Aimak May 16, 2018 12:20pm | Post# 9

{quote} So my cost is only 1.6 - 1.7 pips.
You are paying 1 pip too much

Aimak May 16, 2018 12:31pm | Post# 10

Could you elaborate on how you open the first trade?
Have you considered using anti-martingale instead?

londonboy May 16, 2018 12:33pm | Post# 11

Could you elaborate on how you open the first trade? Have you considered using anti-martingale instead?
10 posts in and someone has already suggested adding or taking something away from the original posters "system"

***ROLLS EYES***

KashifNawaz May 16, 2018 12:34pm | Post# 12

{quote} I just think backtesting is pointless, a waste of time and creates unrealistic expectations. I look forward to seeing the LIVE account :-)
I do agree, 30 Euro on Real Account will have more thrill than 3000 Euro on demo. I have stopped the demo VPS.
I have deposited 30 Euro in Real Micro Account and will post the link soon.

Aimak May 16, 2018 12:38pm | Post# 13

{quote} 10 posts in and someone has already suggested adding or taking something away from the original posters "system" ***ROLLS EYES***
I am exploring a similar approach.

Is your head blown away now?

KashifNawaz May 16, 2018 12:54pm | Post# 14

Hi I'm always curious of these kinds of EA's, can you share more info on the logic of the strategy the EA is using to trade?
I will share the detailed strategy soon in first post. Meanwhile you can back test with visuals and you will get the idea, what every martingale EA does.

{quote} You are paying 1 pip too much
I know, some brokers offer only half pip, but they don't offer other benefits like zero hedge margin (means if your sell lots or equal to buy then no margin will be used at all), also Swap free, also commission free. So 1.7 pips spread is okay for me

Could you elaborate on how you open the first trade? Have you considered using anti-martingale instead?
No Entry criteria at all. As soon, as you place the EA, it will be in the business on the spot. Anti martingale is also included in this strategy but in different way. Will explain later


{quote} 10 posts in and someone has already suggested adding or taking something away from the original posters "system" ***ROLLS EYES***
Friend, I don't have any issue with that. all suggestions are welcomed here


{quote} I am exploring a similar approach. Is your head blown away now?
No fight please

carddard May 16, 2018 7:22pm | Post# 15

Good luck my friend. Will be here to observe how this pans out.

Ezios May 16, 2018 8:27pm | Post# 16

Can this ea go only in backtest or it runs in every demo/real account?
and it has expiry date? and what tf and pair suggested?
thanks.

Drolph May 17, 2018 4:18am | Post# 17

1 Attachment(s)
{quote} Rule number 1: BACK TESTING IS FOR LOSERS! Backtesting will not prove a strategy works. I have lost count on the number of posts or comments people have said about this. Yet there is always one more idiot who wants to backtest. I tell you what will happen. The backtest will show it as profitable, you will then demo it and that will show it profitable, and then you will trade on a live account and it will fail. Have the balls and conviction to use a live account straight away on your own developed EA. That is the only tur way to see if it...
Bullshit! Demotrading is for losers!

Just because the default MT4 backtesting is crap it does not mean backtesting is useless. It is as always: you get what you pay for!

You will get the best possible result by using (paid) tickdata enhancements including slippage simulation and historical data based on real spreads. Of course the spread values depend on the broker you are receiving the tickdata from, but it is a large step forward.

THIS way you get a way better result and impression than wasting time on demo, as you wont get realistic execution here plus are not able to cover a large enough timescale of observation.

Back to topic:

I was putting your grid on birts suite with dukascopy tickdata and simulated avg slippage of 1.5 pips - here is the result:
Click to Enlarge

Name: 2018-05-17.png
Size: 119 KB

londonboy May 17, 2018 4:29am | Post# 18

{quote} bullshit! Demotrading is for losers! Just because the default mt4 backtesting is crap it does not mean backtesting is useless. It is as always: You get what you pay for! You will get the best possible result by using (paid) tickdata enhancements including slippage simulation and historical data based on real spreads. Of course the spread values depend on the broker you are receiving the tickdata from, but it is a large step forward. This way you get a way better result and impression than wasting time on demo, as you wont get realistic execution...

read what i said not what you hope it said!

Back testing is bullshit

Drolph May 17, 2018 4:38am | Post# 19

{quote} read what i said not what you hope it said! Back testing is bullshit
Repeating bullshit makes it better in any way ... NOT! But thanks for your valuable input to this thread.

Meanwhile I maybe saved KashifNawaz some lifetime by proving the limits of his strategy, even if he is going to be successful live for some time.

rockit May 17, 2018 4:38am | Post# 20

Back testing is bullshit
That is certainly not true in one case:
If your strategy works not in the tester, it is highly unlikely it will work in reality..


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