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Money management: Capital needed per 0.07 USD per microlot 0 replies

The Volume Detective 411 replies

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(binned per thread starter’s request) MM (Money Maker) Detective

  • #5,381
  • Jul 31, 2019 1:09am Jul 31, 2019 1:09am
Quoting robots4me
{quote} @Viktory -- it's not that these are not good ideas but, rather, this is just hand waving. It's an abstraction -- i.e. a scheme -- for how money management could be better handled. You suggest using X% ADR -- okay, so what is X, or MinDistanceBetweenOrders , X max positions? Who's gonna figure those out? Or, we leave it to every user to figure out what values to use? Seriously -- create a thread with a trading system and tell people it works great as long as they figure out the right values to use. That's reminiscent of @George -- hand waving,...
ADR, when close To the 20 day average on the daily it will return to the mean. How true Is this statement. How often does it occur. That’s all we need to know here.
  • #5,382
  • Jul 31, 2019 1:12am Jul 31, 2019 1:12am
We'll see if they're going up.
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  • #5,383
  • Jul 31, 2019 1:15am Jul 31, 2019 1:15am
Quoting robots4me
{quote} @Viktory -- it's not that these are not good ideas but, rather, this is just hand waving. It's an abstraction -- i.e. a scheme -- for how money management could be better handled. You suggest using X% ADR -- okay, so what is X, or MinDistanceBetweenOrders , X max positions? Who's gonna figure those out? Or, we leave it to every user to figure out what values to use? Seriously -- create a thread with a trading system and tell people it works great as long as they figure out the right values to use. That's reminiscent of @George -- hand waving,...
Hi R4m,

That's why my Money Management works, because the EA is always looking at the distance from the TP Target for its trading decisions, which will be different for every single trade/currency pair, therefore it is infinitely changing for every new trade and no one needs to tell you the best settings because it does it automatically.

Regards

RT
Some people say I'm lucky, but the more I practice the luckier I get
  • #5,384
  • Jul 31, 2019 1:20am Jul 31, 2019 1:20am
Quoting robots4me
{quote} @benjun9 -- I'm not sure that I follow. I don't think there are priorities. There are several conditions that have to be met. If all conditions are met then we have a signal. If any single condition is not met, then it is not a signal. With regards to Original Recipe -- yes, there can be several clustered signals. And it has been discussed in previous posts how to "thin-out" the number of signals. I am not inclined to add another setting that would need to be optimized per pair and time frame and for which no one knows the best value.
Hello R4M!

Sorry cant explain well, English is not my native language. What I mean is if all 3 conditions are met (numbered conditions previous post above), the MinPercentAdrCup is prioritized over CC or Fractals. Example, the current candle is a trigger signal (all 3 conditions met) but it's NOT YET the fractal or the CC signal. What happens is that it's a GO to open a trade, right?, even no fractal or cc?
  • #5,385
  • Jul 31, 2019 1:27am Jul 31, 2019 1:27am
Quoting Pip-Miner
{quote} ADR, when close To the 20 day average on the daily it will return to the mean. How true Is this statement. How often does it occur. That’s all we need to know here.
@Pip-Miner -- that's easy, I have a definitive answer: I don't know -- I'm not the MM.

Are you questioning whether price returns to a "fair value" or equilibrium?

@parisboy, oh @parisboy -- where are you? Please help...
  • #5,386
  • Jul 31, 2019 1:36am Jul 31, 2019 1:36am
Quoting benjun9
{quote} Hello R4M! Sorry cant explain well, English is not my native language. What I mean is if all 3 conditions are met (numbered conditions previous post above), the MinPercentAdrCup is prioritized over CC or Fractals. Example, the current candle is a trigger signal (all 3 conditions met) but it's NOT YET the fractal or the CC signal. What happens is that it's a GO to open a trade, right?, even no fractal or cc?
@benjun9 -- you're English is fine -- you should never have to apologize for that. The problem is me -- I can't speak Filipino.

The Fractal and CC filters are optional. If you use the 'Original Recipe' then CC and Fractal filters are not used.

However, if you do choose to use CC or Fractal then they become part of the conditions -- that is, instead of 3 conditions there are now 4. And they are all equal -- no priorities.

For example -- suppose I want to buy a 6-pack of beer. What are the conditions? 1. I need money, and 2. I need to be over 21. Both conditions have to be met and neither has priority over the other.
  • #5,387
  • Jul 31, 2019 1:38am Jul 31, 2019 1:38am
Quoting robots4me
{quote} @Pip-Miner -- that's easy, I have a definitive answer: I don't know -- I'm not the MM. Are you questioning whether price returns to a "fair value" or equilibrium? @parisboy, oh @parisboy -- where are you? Please help...
Yes. Fair value. It must return to this point only matter when and it’s linked to ADR. Paris boy could explain.
  • #5,388
  • Jul 31, 2019 1:44am Jul 31, 2019 1:44am
Quoting Robot Trader
{quote} Hi R4m, That's why my Money Management works, because the EA is always looking at the distance from the TP Target for its trading decisions, which will be different for every single trade/currency pair, therefore it is infinitely changing for every new trade and no one needs to tell you the best settings because it does it automatically. Regards RT
Quote
EA is always looking at the distance from the TP Target for its trading decisions
@Robot Trader -- no, it's not.

Again, the rules:
1. Previous bar closes above the band.
2. Current bar opens above the band.
3. MinPercentAdrCup condition is met.

Nothing about TP being used for trading decisions.

Quote
therefore it is infinitely changing for every new trade and no one needs to tell you the best settings because it does it automatically
Okay -- right now. GBPJPY-H4 -- tell me the best settings. Give me the rule that "automatically" computes the best settings -- for each pair and every time frame. Also, you can't use 'X' or 'N' -- that's not a rule.

EDIT:
Below is a straight line. The equation for a straight line is: y = mx + b

Tell me what 'm' and 'b' are. 'm' and 'b' are the settings for the line.

Attached Image
  • #5,389
  • Jul 31, 2019 2:03am Jul 31, 2019 2:03am
Quoting robots4me
{quote} {quote} @Robot Trader -- no, it's not. Again, the rules: 1. Previous bar closes above the band. 2. Current bar opens above the band. 3. MinPercentAdrCup condition is met. Nothing about TP being used for trading decisions. {quote} Okay -- right now. GBPJPY-H4 -- tell me the best settings. Give me the rule that "automatically" computes the best settings -- for each pair and every time frame. Also, you can't use 'X' or 'N' -- that's not a rule. EDIT: Below is a straight line. The equation for a straight line is: y = mx + b Tell me what 'm'...
You cannot identify m & b by just 1 equation because you need another equation or assume m and find b (or vice versa)
  • #5,390
  • Jul 31, 2019 2:18am Jul 31, 2019 2:18am
Quoting Merka
{quote} You cannot identify m & b by just 1 equation because you need another equation or assume m and find b (or vice versa)
@Merka -- of course you can. To compute 'm' and 'b' all you need are two (x,y) coordinates. That line has an infinite number of (x,y) coordinates -- more than enough to compute 'm' and 'b'.

My point is that telling me the equation of a line is y = mx + b isn't good enough to describe that line. If you wanted someone to reproduce that line it is not good enough to tell them -- "Oh, just use y = mx + b". For someone to reproduce that line you would also need to tell them what 'm' and 'b' are.

You guys have nice ideas -- but they lack the details necessary to actually implement them. Plus, you have no evidence they would make an improvement. Plus, you can't even quantify how big an improvement they would make.

Actually, I don't mind going 'round and 'round over this. I think when you've been fiddling for so long you can't stop -- that's how I am. Fiddling isn't necessarily bad -- I mean, that's what @bishopdotun did a lot of before he proposed his strategy. I don't recall what post it was -- but it was like in 4 sentences he described the entire strategy in enough detail that I had the first version of the indicator a few hours later.

These money management schemes are currently just theories -- yes, they may be implemented in other EAs -- but I don't have access to that code to know what the actual settings are that are being used internally. And I don't want to have to be the one to figure those out.
  • #5,391
  • Jul 31, 2019 2:45am Jul 31, 2019 2:45am
Quoting robots4me
{quote} {quote} @Robot Trader -- no, it's not. Again, the rules: 1. Previous bar closes above the band. 2. Current bar opens above the band. 3. MinPercentAdrCup condition is met. Nothing about TP being used for trading decisions. {quote} Okay -- right now. GBPJPY-H4 -- tell me the best settings. Give me the rule that "automatically" computes the best settings -- for each pair and every time frame. Also, you can't use 'X' or 'N' -- that's not a rule. EDIT: Below is a straight line. The equation for a straight line is: y = mx + b Tell me what 'm'...
Hi R4M,

It is already explained in detail within this PDF and screenshots https://www.forexfactory.com/showthread.php?p=12380401#post12380401 this was the specification given to my coder.

In the attached screenshot I have shown PA as a Line Chart rather than Candles, so this Line Chart would just simply replace the PDL mentioned within my PDF document.

I have shown the parameter settings within my Correlation EA, so they can be coded without any issues and only trades are opened when required and lot sizes are adjusted based on the distance from the PDL to the target TP (the Mean).

Within your EA you have 2 Targets TP's, these would replace the Mean target referred to in my PDF, so like the Mean within my Correlation EA the TP target is always dynamic which is no different to your EA. If the hard coded Broker seen ADR % TP's were set to a value beyond the Midline/Opposite Band (say a value of 4) how would your EA close the trades, would they close when one of the 2 possible selected targets were reached, then if so the logic contained within my PDF is no different to how your EA works in respect of working out pip distances.

The main difference is how the trigger is pulled, with my Correlation EA the PDL must pass back through the StdDev in the direction of the Mean before a trade is triggered, with yours you just enter and enter time and time again just because PA past the outer band, but it can just keep on going and going and that should be of concern to everyone trading the Strategy and why Money Management is a must for any EA.

Regards

RT
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Some people say I'm lucky, but the more I practice the luckier I get
  • #5,392
  • Jul 31, 2019 2:51am Jul 31, 2019 2:51am
Quoting Robot Trader
{quote} Hi R4M, It is already explained in detail within this PDF and screenshots https://www.forexfactory.com/showthread.php?p=12380401#post12380401 this was the specification given to my coder. In the attached screenshot I have shown PA as a Line Chart rather than Candles, so this Line Chart would just simply replace the PDL mentioned within my PDF document. I have shown the parameter settings within my Correlation EA, so they can be coded without any issues and only trades are opened when required and lot sizes are adjusted based on...
@Robot Trader -- sorry, no its not. You allowed your programmer to come up with settings you have no clue about. I am not in the business of figuring out the best settings for some abstract scheme. Your programmer was happy to do it because he was paid by the hour.

Not only do I not want to be paid, I also don't want to be the guy to figure out the settings.

You mention StdDev -- okay, what StdDev do you use? You don't know.

@Robot Trader -- sorry, you keep describing an abstract scheme and don't realize it.

Please answer my question about the straight line -- what 'm' and 'b' should I use in order to generate a new straight line that closely matches that one?
  • #5,393
  • Jul 31, 2019 2:56am Jul 31, 2019 2:56am
Quoting robots4me
{quote} @Pip-Miner -- that's easy, I have a definitive answer: I don't know -- I'm not the MM. Are you questioning whether price returns to a "fair value" or equilibrium? @parisboy, oh @parisboy -- where are you? Please help...
I am here. What can I do for you ?
  • #5,394
  • Jul 31, 2019 3:05am Jul 31, 2019 3:05am
Quoting Robot Trader
{quote} Hi R4M, It is already explained in detail within this PDF and screenshots https://www.forexfactory.com/showthread.php?p=12380401#post12380401 this was the specification given to my coder. In the attached screenshot I have shown PA as a Line Chart rather than Candles, so this Line Chart would just simply replace the PDL mentioned within my PDF document. I have shown the parameter settings within my Correlation EA, so they can be coded without any issues and only trades are opened when required and lot sizes are adjusted based on...
Quote
why Money Management is a must for any EA
@Robot Trader -- and the evidence for this?

Let's suppose I did implement your money management scheme -- can you guarantee an improvement? Furthermore, can you quantify what that improvement would be?

What evidence do you have this wouldn't turn out to be a waste of time?

Money management schemes are often implemented to compensate for weaknesses in the strategy -- remember our friend @George. One of the reasons why people couldn't trade his methodology was because he used a money management scheme that he kept secret. The trading logic he espoused on the surface wasn't good enough to trade without an underlying money management scheme.

The BD strategy doesn't need additional money management. Would additional money management help? I don't know -- maybe 'yes', maybe 'no'. And my point is that you don't know either but you keep advocating for it.
  • #5,395
  • Edited 3:28am Jul 31, 2019 3:17am | Edited 3:28am
Quoting robots4me
{quote} @Viktory -- it's not that these are not good ideas but, rather, this is just hand waving. It's an abstraction -- i.e. a scheme -- for how money management could be better handled. You suggest using X% ADR -- okay, so what is X, or MinDistanceBetweenOrders , X max positions? Who's gonna figure those out? Or, we leave it to every user to figure out what values to use? Seriously -- create a thread with a trading system and tell people it works great as long as they figure out the right values to use. That's reminiscent of @George -- hand waving,...
@robots4me -- They are not just "ideas", but proven sound money-management techniques. Trust me, it wouldn’t hurt to have those settings for money-management automation. In fact, two fundamental variables for better controlling risk, according to the user tolerance/objectives: limiting the number of trades (MaxOpenTradesPerPair) and setting the minimum farther-distance between them (MinFartherDistanceBetweenTrades); two very important universal factors for proper automated money-management. Simple trading common sense, mate, really. And there's nothing special to "figure out", cause they are automatically adjust for balance between all pairs. My screenshots speak for themselves. Much better, simpler and more effective options to control risk through money-management, than the other "ConsecutiveCandles" and "Fractals".

Please, PLEASE read again my previous post :
https://www.forexfactory.com/showthread.php?p=12412507#post12412507
... considering the valid reasons why those settings would really improve your EA for everyone. Everything's cristal clear and self-explanatory: *MONEY MANAGEMENT / RISK CONTROL*.

Again: those settings are just for enhanced money management automation, nothing more and nothing else; so there's no need for further "optimizations", neither makes the EA any more complicated to setup and use.

EDIT: For any stronger "evidence", we could easily/quickly analyze it with the strategy tester (I can gladly offer myself for this). Just two additional options that are good to have. Much better common-sense options (not plain filters) and more aligned with the original strategy, allowing us to adjust it even better, than for example using ConsecutiveCandles and Fractals.

* And the "quality of life" improvements for the Dashboard and AllPairsEA, are also super convenient for everyone.

Quoting robots4me
We don't argue here -- we discuss with passion !!!!
That's what we are also doing here
  • #5,396
  • Jul 31, 2019 3:28am Jul 31, 2019 3:28am
Quoting robots4me
{quote} @Robot Trader -- sorry, no its not. You allowed your programmer to come up with settings you have no clue about. I am not in the business of figuring out the best settings for some abstract scheme. Your programmer was happy to do it because he was paid by the hour. Not only do I not want to be paid, I also don't want to be the guy to figure out the settings. You mention StdDev -- okay, what StdDev do you use? You don't know. @Robot Trader -- sorry, you keep describing an abstract scheme and don't realize it. Please answer my question about...
Hi R4M,

No I gave him the specification and he coded it, he didn't invent settings on my behalf.

Lets take the H4 chart that I have posted and to keep you happy we will pretend it is a D1 chart and all your settings are correctly entered so nothing ambiguous.

So from that chart why do you need to know m and b all that needs calculating is the distance from the current price to whichever TP target is selected in pips and if a 2nd trade trigger is OK to go, then the EA simply looks at the other trade (the first trade) to see if it is in profit of not, if it is in profit then no new trade is required, if it is losing then a new trade is opened at a lot size bigger enough to cover the lose of the first trade when they both return to the TP target. If the first 2 trades hit an SL and the trade setup is still valid, then when we have a 3rd trade, this 3rd trade the EA will look at the distance to the TP and open a lot size big enough to either just recover the loss or look to make a small profit, in my EA this is referred to as a Bonus amount.

If you need code I can ask my programmer to let me have the code related to just this part of my EA, I do have the code to the full EA but I do not know how to find the part relating to these parameters.

Regards

RT
Some people say I'm lucky, but the more I practice the luckier I get
  • #5,397
  • Jul 31, 2019 3:35am Jul 31, 2019 3:35am
Quoting Viktory
{quote} @robots4me -- They are not just "ideas", but proven sound money-management techniques. Trust me, it wouldn’t hurt to have those settings for money-management automation. In fact, two fundamental variables for better controlling risk, according to the user tolerance/objectives: limiting the number of trades (MaxOpenTradesPerPair) and setting the minimum farther-distance between them (MinFartherDistanceBetweenTrades); two very important universal factors for proper automated money-management. Simple trading common sense, mate, really. And...
Quote
They are not just "ideas", but proven sound money-management techniques.
@Viktory -- okay. I often choose words to skew the discussion in my favor. I agree, "ideas" was unfair and you are right for calling me out on it.

I still think you guys don't get it. So, let me switch gears and try a different tact.

I think we are all in agreement that the BD strategy performs well across different pairs and time frames. And people are trading it successfully -- mostly demo accounts but a few real accounts. So, I think it is fair to say it works.

Now -- some fellows come along and say let's make it better by adding more sophisticated money management. And we can even ignore the amount of time it would take me and the additional testing and bug fixing and all that would go along with that. Oh, and we can even ignore the additional complexity that would burden this beautifully simple strategy.

My two questions -- will you guarantee it will improve performance? And, if so, can you quantify the improvement? Will it be 200%? 50%? 1.73%

I'm trying to get the next release completed so I'll request we set this issue aside. I want to be open about everything, but I'm finding that I can't both keep a discussion going on the thread and also focus on coding.
  • #5,398
  • Edited 3:51am Jul 31, 2019 3:39am | Edited 3:51am
Quoting robots4me
{quote} @Pip-Miner -- that's easy, I have a definitive answer: I don't know -- I'm not the MM.
If anyone knows the answer he has the crystal ball, pay a visit to the nearest ferrari showroom.

Quoting robots4me
My two questions -- will you guarantee it will improve performance? And, if so, can you quantify the improvement? Will it be 200%? 50%? 1.73% I'm trying to get the next release completed so I'll request we set this issue aside. I want to be open about everything, but I'm finding that I can't both keep a discussion going on the thread and also focus on coding.
Simple two words answer you already know - trust me.

Quoting robots4me
And I'll be even more to the point -- it is not necessary for the BD strategy and we have evidence to prove it. You don't have evidence that it is required other than your belief that all strategies require it.
Excellent rebuttal.
  • #5,399
  • Jul 31, 2019 3:47am Jul 31, 2019 3:47am
Quoting Robot Trader
{quote} Hi R4M, No I gave him the specification and he coded it, he didn't invent settings on my behalf. Lets take the H4 chart that I have posted and to keep you happy we will pretend it is a D1 chart and all your settings are correctly entered so nothing ambiguous. So from that chart why do you need to know m and b all that needs calculating is the distance from the current price to whichever TP target is selected in pips and if a 2nd trade trigger is OK to go, then the EA simply looks at the other trade (the first trade) to see if it is in profit...
Quote
why do you need to know m and b

@Robot Trader -- in algebra the equation of a straight line and its 'm' and 'b' are the perfect model for understanding how indicators and EAs are coded.

In algebra the data are (x,y) pairs. In forex the data are (price, time) pairs. To fit the equation of a straight line to an actual line you need to know 'm' and 'b'. To fit moving averages, ATR, RSI, whatever, to price data you need the equivalent settings. In forex they aren't called 'm' and 'b', but they'll have names like ATRMultiplier, HalfLength, ATRPeriod.

You ask why we need 'm' and 'b' -- it's because without 'm' and 'b' you don't have a line. You have nothing but an equation that represents an abstraction. When you ask a question like that then it's clear we've reached a dead-end on this one. We're talking past one another and I don't see a way to bridge the gap. I understand you consider money management an important part of ALL strategies -- I don't. I'm not saying that some strategies or even most wouldn't benefit -- just that it is not an absolute requirement for every strategy. And I'll be even more to the point -- it is not necessary for the BD strategy and we have evidence to prove it. You don't have evidence that it is required other than your belief that all strategies require it.
  • #5,400
  • Jul 31, 2019 4:03am Jul 31, 2019 4:03am
Quoting robots4me
Some fellows come along and say let's make it better by adding more sophisticated money management. And we can even ignore the amount of time it would take me and the additional testing and bug fixing and all that would go along with that. Oh, and we can even ignore the additional complexity that would burden this beautifully simple strategy. My two questions -- will you guarantee it will improve performance? And, if so, can you quantify the improvement? Will it be 200%? 50%? 1.73%?
@robots4me -- I don't know if you are truly reading my posts, cause you seem abnegated towards something that is so logical. We're talking about some basic trading common-sense options, nothing really "sophisticated" to "figure out". I believe it wouldn't hurt, but just improve something great, even more.

No one can guarantee things in this business, albeit my screenshots (please take a look at them) clearly prove my arguments. And I'm not the only one thinking this way; we talk from valuable experience. Mate, I would happily code it if I could...

All I ask is enhanced money-management automation, nothing more and nothing less; so there's no need for further "optimizations", neither makes the EA any more complicated to setup and use. For any stronger "evidence", we could easily/quickly analyze it with the strategy tester (I can gladly offer myself for this). Think again: only two additional very useful options (not just plain filters), totally aligned with the original strategy, allowing us to better adjust the risk with complete money-management.

* And the "quality of life (UI)" improvements for the Dashboard and AllPairsEA, would also be super convenient for everyone, also for performance.
PLEASE CONSIDER MY SUGGESTIONS, maybe for later
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