- Most Forex traders lose all their money.
- Using the robot posted here in trading Forex does not guarantee success.
- Trading this robot could lead to serious financial loss.
- Trading this robot without understanding its underlying trading strategies guarantees traders will lose their money.
Y0U MUST NOT USE THIS ROBOT ON A LIVE ACCOUNT. IT IS EXPERIMENTAL.
This one arises from Brijon's Amazing Magic, which led to the EA that generates signals, which led to DC's 6 pairs thingy and the principle of Rinse and Repeat, where you take balanced trading baskets, close out the winners at whatever moment suits you, then re-enter in the same direction immediately.
One of the ideas is to use hedging to get out of the hole created by a big loser; this gave me an idea.
- take simultaneous buy and sell trades, then use mptm to:
- trail the winner by 10 pips
- hedge the loser at 10 pips, to x2 lot size.
- In an ideal scenario, the hedge takes out the loser at breakeven and the winner continues to run until a retrace takes out the stop. Return to 1) and start again.
- When a hedge is not working and the market has moved against it, hedge-the-hedge at -10; this process continues until the winner has closed and the hedged position reaches breakeven and closes. Rinse and repeat by returning to 1).
I had planned leaving this running for a couple of days before deciding whether to release it or not, but I had a bath and realised during it that there are a host of different ways of approaching this. Here are just a few of the questions that occurred to me:
- are there not many combinations of trailing/jumping stop that can be used on the winning trade?
- should we be going longer before hedging the loser?
- is x2 lots too aggressive?
- instead of a trail/jump, should we go for a simple tp and use hedging to deal with a trade that does not make it to tp before retracing?
- do we need a maximum hedging depth to ensure we do not blow the account?
I could go on, but you can start playing with different combinations yourselves. Attached is the original R&R code bolted on top of mptm.
You can blow your account in minutes with R&R
As posited, R&R uses Martingale hedging to get out of losing trades at breakeven. Martingale is simple and seductive: if a trade hits its stop loss enter the next trade at double the lot size of the previous one.
The idea is that the market only has to move in your favour by a few pips for you to make back your losses. It works. It is brilliant. It will grow your account at an enormous speed.
Right up to the day it kills your account.
What happens is this: the markets enter a sustained move in one direction; all your indicators and stuff have been telling you it will move in the opposite direction; your trades keep hitting their stops; you keep re-entering at double the previous lot size. Here is what happens to a sequence of lot sizes starting at 0.1.
It does not take long for a level 6 trade to blow our account. R&R is even wose because the trades do not close. By the time we reach level 5, we would have 3.1 lots of trades open. Ouch.
This is why nobody must use R&R live. To do so were must first:
- decide what percentage of lot size to use as our hedge
- decide at which point to have hedging kick in
- work out how tiny our lot sizes have to be in order to survive the kind of run that the xxxJPY pairs are anjoying at the moment.
Martingale safety features
There are two protections to stop R&R overtrading and blowing your account:
- FkMinimumMarginPercent: this prevents R&R from sending any more hedge trades when your margin percent falls below this figure.
- FreezeTradingAtLotSize: this stops the bot from doing anything at all when a hedge is sent at this lot size. It immediately sends a further hedge to the trade it has just sent, freezing the entire position. R&R stops any activity and you have to manage the position manually. This post explains the rationale behind this filter http://www.forexfactory.com/showpost...&postcount=143
Remember to always have:
- ManageThisPairOnly set to true
- All the other 'Management styles' set to false.
Muck these inputs up and you will cause chaos.
The two biggest, fundamental questions are huge.
- How long before the Martingale-style hedging blows the account.
- Assuming it is possible for the account to survive, is the stress of a run-away sequence worth the comparatively small profits that each run generates?
If the bot turns out to have legs, I will add trading times and pseudo-random post-closure sleep periods to try to hide from the crims what we are up to. Let's give this a whirl and see.
I have restricted the ability to post in this thread to: traders with at least 1 voucher; and traders on my 'buddy' list. I have done this because I do not want the thread cluttered with 'newbie' questions about the basics. New/inexperienced traders, this is not intended as a direct insult. What I want here is discussion with traders who fully understand what it is they are doing; when you newbs have been around a while, you will come to understand what a difference experience makes to the posts a member writes and shudder at the recollection of some of the questions you asked. I do. http://cdn.forexfactory.com/images/s..._the_floor.gif Go to your profile page; there is a link to the FF page that describes the voucher process.
Do not attempt to get around this by sending me pm's asking for help with your basic problems. Doing so will earn you an automatic ban from all of my threads.
I have set up a partner thread to this one and Nanningbob's at http://www.forexfactory.com/showthre...66#post3948666
There, you can post the questions that you cannot post here, about anything you need to know. Someone with the knowledge and experience you need will answer - just not necessarily me.
Traders/coders with experience who have not yet been vouched for, can get around this restriction be being added to my 'buddy' list; all you have to do is pm me to ask me to do this.
Ignore this guys. I have put this link here so I do not lose the post.