M TTT M

A key priority in this current H1 TS Order 3 is to finish the cycle net positive.

This will allow the next cycle to be traded with 0.4% (0.2 + 0.2) Risk per Trade.

Lets see how it turns out.

Masterrmind.............

Update on current H1 TS Order 3

Masterrmind............

EURCAD [H1]

Winning trade

+0.8 %

Masterrmind.............

EURUSD [H1] Update

SL moved to BE+ pips to lock in some profit (about US$5) and reduce the risk of a reversal taking back more than I would want to see.
It was tempting to close it out at the 0.2% gain but I'll attempt to let it run until just before the end of the month.
If a reversal takes out the stop then so be it (profit is already locked in).

The idea behind this move is to ensure that the equity at the end of this cycle of trades is greater than the previous cycles closing equity.

Previous Cycles closing Equity was US$11 046.06.

This will force a higher risk per trade, meaning that 0.4% (0.2% + 0.2) will be applied from the start of the next H1 TS Order 3.

This might appear as counter intuitive but as long as a cycle completes in positive territory then the idea should be to get to the upper Risk per Trade Limit (+2%) as fast as possible.

If the cycles start to run negative returns then the reduction in the applied Risk per Trade will take care of it.

Current Account situation is as follows:

1 open position on EURUSD and
1 pending order on EURGBP.

Masterrmind..............

Risk Profile

As the MTTTM strategy unfolds its important to keep tabs on the risk profile via observation of the following chart.

The risk profile dictates that 0.2% risk per trade will be added to the risk profile of the next cycle if a positive net cycle outcome occurs.
The risk profile dictates that 0.4% risk per trade will be subtracted from the risk profile of the next cycle if a negative net cycle outcome occurs.

Cycle 1: Start Risk per Trade = 1%
Next cycles Risk per Trade based on self assigned steps (as above) adding 0.2% or deducting 0.4% based on previous cycle outcome.

An upper limit was also assigned on the Risk per Trade which is 2%.

A lower limit was not assigned however, it was outlined that Risk per Trade will reduce in a sequence of losing cycles at the assigned rate of 0.4% until such time that current Risk per Trade is at or close to 0.4% after which the Risk per Trade will be halved down to a level that would allow a minimal broker lot size to be traded (typically 0.01 lots at most commonly used retail brokerage firms).

Recall that the Risk per Trade values were self assigned.

Ofcourse other values can be used that imply a higher or a lower risk profile.

The choice is that of the responsible trader but it is my hope that traders reading through the pages of this thread will see the importance of managing the risk profile and how a reducing Risk per Trade in the losing series of cycles can prolong the trading activity.

If the outcomes are going to continue to be negative cycles then we would want the losses to be minimized as much as possible.

Just as there are losing streaks in any trading methodology so too there will be winning streaks.

Gains on the account are far more impressive when a relatively higher Risk per Trade is being applied but it must be applied based on account progress NOT on trader desires.

If the account generates slightly higher cycle gains then reward yourself by slowly stepping up the Risk per Trade figures.

Do not be tempted to slot in maximum self assigned Risk per Trade after several losing cycles because the next cycle could also be a losing one and the losses will be unecessarily magnified.

Also notice that my self assigned maximum upper limit is set at a Risk per Trade of 2% meaning that once I hit this level any future positive cycle will also be traded at 2% Risk per Trade.

The first cycle, however, was started at the mid point being 1% Risk per Trade, so I did not start off at maximum Risk per Trade (2%).

I need to be able to reward myself when cycles are positive so starting at 2% on the very first traded cycle would defeat the purpose.

Always start the first cycle with a Risk per Trade of less than or equal to 50% of the upper limit !

Masterrmind...............

Seeking out an Asymmetric Risk Return Outcome

The MTTTM strategy just like any other trading strategy seeks to maximize the gains and attempt to reduce the losses as much as possible.

Attempt to have the average positive returns greater than the average losing returns over the longer term.

As losses mount it is the traders responsibility to:
a) address the situation dynamically in a timely manner;
b) analyze all trading activity regularly;
c) draw relevant conclusions from the data depicted in the form of charts or tables; and
d) implement any changes deemed critical to improving the outcome of the trading strategy.

This suggests that when a series of losses occur that the risk is contained somewhat and certainly minimized as much as possible.
Afterall we know we must apply some risk in order to make some potential gain (nothing is guaranteed afterall in this business).

This risk containment approach has been outlined in the post above however, it can get rather more complex than what I have posted.
But I'm not going to get into the complex side of risk control just yet (this I will elaborate on over the coming months).

For now I want to address the issue of Asymmetric Risk Return Outcome.

The following chart shows 2 overlapping bell shaped curves (one normally distributed and the other with fat tails)

Typically it is the region within the fat tails (or outliers) where the higher gains are to be expected.
The mean afterall produces outcomes that are closer to average gains.

What we want to achieve is a greater proportion of the higher outlier or fat tail outcomes.

Win Rate

The MTTTM Strategy currently shows a win rate of 28.7% (source: TE)

Formula:

[ (1 / winrate) – 1 ]
= (1/ (28.7/100)) - 1
= 2.48.

So the strategy with a win rate of 28.7% requires a 2.5 Profit to Risk payout in order to break even.

Clearly the strategy is exceeding the BE threshold since the return is currently positive (>10.8%).

Yet a basic analysis of the trading results points to the fact that improvements should be made to improve the net gain.

On the one hand this strategy is currently being traded on a demo account with no broker commisions applied.
So we need to consider the impact of spread and other typical trading costs that apply on a real account.

I won't elaborate on the impact of spread and broker commision costs at this time since these values may vary widely based on the trading conditions of the chosen broker and the retail pricing model being applied.

The trading analytics show that 142 trades have been closed out and although a far higher number of closed trades would be statistically pleasing we can still consider implementing ONE key idea.

Question

Based on what I have typed out in this post can anyone tell me what that key idea might be ?

Masterrmind.............

MT5 EA progress.

Manual MML Range can be over-ridden by the user.


For example on the following chart of EURUSD, only 1 pair set to trade on a fixed MML Grid.

MML 8/8 = 1.17000
MML 0/8 = 1.15000

Multiple pairs can then be traded with Standard MML calculation mode or Manual MML calculation mode.

You could set 3 pairs to trade within defined MML price ranges and 6 to trade based on Standard calc mode.

I have not yet decided whether to add in 18 more symbols for a total of 27 so that 1 EA instance can control all 27 entries or simply to leave the EA in its current 9 symbol trading state.

If 27 pairs needed to be traded then its a simple case of applying the EA to 3 charts all with unique magics (eg. 1001, 2002 and 3003).

Symbol design can be input into each EA to get 9 symbols * 3 charts = 27 symbols (either all unique symbols or repeating in some cases).

A trader might seek to trade the EURUSD (or any other available symbol) in each of the EA instances but trade in TF's such as M15, H1 and H4.

Trailing options currently include a choice of 5 but this might change later.

Almost no limit to the possibilities.

Development shall continue including the all important testing phase (currently in action).

Note: the EA settings or design layout have not yet been finalised but there are currently more than 115 parameters being used.

Masterrmind............

In Post 806 I mentioned Asymmetric Risk Return outcome.

A question was also presented in blue font color.

Does any trader have a clue as to what the key idea might be ?

We seek to improve the strike rate.

How might we set out to achieve this goal and what can we do about it now ?

Anything ? Or do we simply pack it in and take our bat and ball and go home.

Masterrmind...............

SOME HINTS

Asymmetric suggests having a return profile with higher positive outcomes and at the same time having lower and less frequent negative returns.

FX retail trading losses need to be contained ... The MTTTM strategy applies hard stops on all entries thereby containing risk.

FX retail trading Reward to Risk Ratio (RRR) should be greater than 1 ... The MTTTM strategy applies a RRR of 4 to 1.

Asymmetric outcome dictates that when profit is generated it must be significant ... Is the MTTTM strategy living up to this expectation ?
a) firstly define significant ? Here significant in terms of FX suggests a meaningful Return on Equity per individual trade.
b) when profit is gained from a trade is the Return on Equity significant ? Depends how you look at it.
Often the win comes after a string of losses so in my mind the win is not so significant except to counteract a continuing fall in the Equity curve.

In other words the MTTTM Strategy has shown that on average it usually generates 3 to 4 losses in a row on every cycle traded before a winner comes along.

Often there is a longer wait for a winning trade than 3 to 4 losses in a row, sometimes as many as 6 to 8 or even more.

When a winner comes along, if its a full target winner it might be 4 times that of a losing trade (4 to 1 RRR), so in effect the winning trade is simply stabilizing the Equity Curve and propping it up marginally by erasing the impact from the losing trades.

A winning trade is simply halting the downward trajectory of the curve but this might only be a temporary measure.

A significant series of losses in a row when the Equity is close to BE or below can be rather detrimental, so timing is critical too.

The strike rate stands out as the major determinant of the overall Equity Curve shape (UP, DOWN or flat).

A minimal strike rate is required to BE (we already know what this level is as per Post 1).

Less than BE and things are looking bad.

A strike rate greater than BE and the Equity Curve will likely soar high.

How do we set about to accomplish the task of improving the strike rate ?

Masterrmind.............

How about some of these examples.

1. Change the RRR ;
2. Trade more symbols ;
3. Trade less symbols ;
4. Trade symbols related to sessions (JPY, AUD,NZD in Asian session; EUR, GBP in London session and USD, CAD in New York session);
5. other ideas ...

What we could do is use the EA to test a previously traded session on the same brokers data using the same pairs and make changes over multiple scenarios and analyze the results.

This is simply to find out if there is any change that creates a major difference in the results.

Its important to realize here that we are simply testing a small data sample and that the results may not be statistically significant.

Nevertheless, it costs very little to run the testing only some time.

Masterrmind............

New ESMA rules 27 pairs with Majors 20:1 others 10:1 multiple entries and trades running
Hmmmmmmmmmmmmmmm

For those traders not affected by ESMA rules it is business as usual.

Whilst the affected ESMA traders will need to be more selective and more creative in their FX trade planning.

Perhaps trading only a few pairs and at much lower volumes than what they might be used too.

Leverage as low as 1 to 1 still allows a trader to open say 0.01 lots with Equity as low as $1300-$1400 depending on overall broker margin reqts.

With 2K-5K start capital a trader can open several small positions at a leverage of only 1 to 1 so 10, 20 or 30:1 is going to be even better.

At the end of the day a trader has to deal with what has been dealt to them, good or bad.

Either work with it or move on to other things.

As always it is the little guy that suffers the most here because lower funding usually equates to less favorable trading conditions in general.

Not all traders have a million dollars !

Masterrmind.............

Margin Requirements Examples

Margin requirement Fromula:

Margin amount ($) = [Market Quote * Volume (base currency)] / Leverage

Open 0.01 lots on GBPUSD @ 1.31230 (USD denominated account)

Account Equity: US$ 1000
Leverage: 1 to 1

Margin amount ($) = [1.31230 * 1000] / 1
= $1,312.30

So a trader needs at least $1,312.30 in free margin to open 1 position @ 0.01 lots on the GBPUSD pair at the current quote price.

Account Equity: US$ 1000
Leverage: 10 to 1

Margin amount ($) = [1.31230 * 1000] / 10
= $131.23

So a trader needs at least $131.23 in free margin to open 1 position @ 0.01 lots on the GBPUSD pair at the current quote price.

Account Equity: US$ 1000
Leverage: 30 to 1

Margin amount ($) = [1.31230 * 1000] / 30
= $43.74

So a trader needs at least $43.74 in free margin to open 1 position @ 0.01 lots on the GBPUSD pair at the current quote price.

Masterrmind.............

EURUSD [H1]

Winner trade

~ +0.1%

Stop taken out at BE + pips.

Masterrmind.............

Final pending order has now been deleted on EURGBP.

This concludes the current H1 TS Order 3.

A summary will be posted shortly.

Masterrmind.............

Summary of H1:TS Order 3-#3-S2 (the 2nd setup)

TS Order 3-#3-S2

TS1: AUDCAD + EURAUD = EURCAD
TS2: EURGBP + EURUSD = GBPUSD
TS3: GBPJPY + GBPNZD = NZDJPY

8 trades opened
1 pending order [EURGBP] did not trigger.

Total setup risk was 1.8% (0.2% risk per trade over a possible 9 entries) .
8 trades from 9 triggered so actual risk was less than maximum.

4 winners @ 0.2, 0.2, 0.8% and 0.05%.
4 losers @ -0.2%, -0.2%, -0.2% and -0.2%.

Net Cycle (Gain/Loss) = (0.2 + 0.2 + 0.8 + 0.05)% - (0.2 + 0.2 + 0.2 + 0.2)% = 1.25% - 0.8% = 0.45% (approx).

A net winning cycle of US$ 27.49 causes the account balance to increase which now stands at $11 073.53.

+10.7% gain on the account.

Masterrmind............

I am unable to locate the updates to the two indicators which expired in June.

END OF JULY ACCOUNT SUMMARY

Trading Analytics:

Drawdown since inception

Statistics & Monthly Progress

FXBlue (July Basic Trade Stats)


Note 1: FXBlue data may vary slightly from that of myfxbook.
Note 2: The account data can be checked by visiting either link provided in Post 1.

Masterrmind..............

I will update Post 1 later today.

Masterrmind.............

Post 1 updated.

7 indicators
2 templates

Note:

If participation remains low, there may not be any further updates to the MT4 tools.

Updated and coded tools may then only be provided to those traders who make an effort and post something useful to the thread.

In any case I have a preference to prioritise updates and coding issues for the MT5 tool kit rather than MT4.

The MT4 updating is therefore likely to end as soon as the demo test concludes on the current MT4 trading account.

After which it will all be on MT5 or other trading platforms.

Masterrmind............