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Sustainable Martingale EA and Strategy

  • #21
  • Feb 15, 2022 1:40am Feb 15, 2022 1:40am
Hey RiskFighter,

no worries, I am happy to answer.

Personally I think that systems using static values for operations like setting targets, entries or exits wont be profitable in the long run. You definetely have to adapt considering differences in volatility in some way.

I am not using pure technical grids ignoring basic price action. So a comparison with your mentioned zone recovery approach might be misleading. But implementing an instrument that takes volatility into account is a step into the right direction generally speaking.

Evaluating config values depends on too much variables to make recommendations here. You have to do some number crunching on your own until it fits your personal risk appetite. Just avoid looking for the jack of all trades setup, it does not exist since you always can get on the the wrong side.
Try to get to something that gives you peace of mind when operating and always do extensive backtesting using variable spreads and slippage simulation. The money you spend here is way less than the amount you might lose due to crappy testing.
  • #22
  • Feb 15, 2022 1:57am Feb 15, 2022 1:57am
Quoting Drolph
Hey RiskFighter, no worries, I am happy to answer. Personally I think that systems using static values for operations like setting targets, entries or exits wont be profitable in the long run. You definetely have to adapt considering differences in volatility in some way. I am not using pure technical grids ignoring basic price action. So a comparison with your mentioned zone recovery approach might be misleading. But implementing an instrument that takes volatility into account is a step into the right direction generally speaking. Evaluating config...
Drolph, at which point do you decide to stop averaging and take the losses?
  • #23
  • Feb 15, 2022 3:08am Feb 15, 2022 3:08am
Quoting carddard
{quote} Drolph, at which point do you decide to stop averaging and take the losses?
That question relies on too many assumptions for a simple answer. Giving you a specifc percentage value would assume a given risk/reward. So if someone else with the exact same system would tolerate only half the risk with the corresponding half the reward the given value would suggest a "better" or "worse" situation although it is only caused by risk appetite, not the system.

Until now I did not exceed the given threshold for my risk appetite. But I am having a complex system trying to adapt to the current market instead of just blindly put grid trades until the account is gone. I know this sounds cryptic, but going into detail here would reveal too much of my logic.
  • #24
  • Feb 15, 2022 3:10am Feb 15, 2022 3:10am
Quoting RiskFighter
{quote} Hello Drolph I will not ask you to reveal your secrets, so just say no if I am getting to close. I have found the Zone Recovery system and made the robot. I am taking the trades manually using some confluence indicators. Then the robot is handling the rest, taking new trades etc. Now such a system can be used on all kinds of instruments. Some instruments will provide faster results than others, but it is possible. The problem is the differens in volatility. The Zone needs to match volatility. I think it is necessary to fit the zone on basis...
My advice on this is to use as tight a zone as possible. I have experimented with using dynamic zones but found that there was advantage over a fixed zone statistically speaking. The end game is still to close out the ZR cycle as quick as possible. So I found that the best way to do so is to time this at the most volatile hours.

With that said, it's not a strategy that I'm comfortable with using with investors' funds, but for your own hobby trading it can be thrilling.
  • #25
  • Feb 15, 2022 3:12am Feb 15, 2022 3:12am
Quoting Drolph
{quote} That question relies on too many assumptions for a simple answer. Giving you a specifc percentage value would assume a given risk/reward. So if someone else with the exact same system would tolerate only half the risk with the corresponding half the reward the given value would suggest a "better" or "worse" situation although it is only caused by risk appetite, not the system. Until now I did not exceed the given threshold for my risk appetite. But I am having a complex system trying to adapt to the current market instead of just blindly...
Thanks Drolph. Appreciate your response. I get that your grid entries may not be fixed, and that's fine. What I was trying to understand is that for your own trading purposes, do you set a hard stop at say 50% equity? And regardless of how the trades go, for as long as you hit 50% floating losses, you close out your trades?
  • #26
  • Feb 15, 2022 3:47am Feb 15, 2022 3:47am
@Drolph
Thank you very much. It was more than expected. Believe me - I have been crunching figures all night . Have a nice spreadsheet now.

I think that it is best if there are some bars inside the zone. If there were only room for - say 1 bar, then it is not possible to controle what happens. 2 bars, then 2 negative bars easily hit the zone wall. But in case of 4 bars there is a bigger chance that 1 or 2 negative bars does not hit the zone wall.

So I will watch for a set up as I always do in my strategy and then find a timeframe where the ATR fits at least 4 times into the size of the zone I use.

I find back testing hard to do. I have backtested using MT4 backtest system for many years but have stopped because I all ways can't help using the optimizing which gives possible enormous wins using odd parameters. My best backtest revealed a win of 17.000.000$ within a year stating with 10.000$ The robot should then only trade between 1 and 4 am every Wednesday. The 10.000 other trades in the tests gives a different result. And I have so many examples like this, that I have stopped machine back testing. At least for now. I wasted too much time. So it will be some paper back test and some forward test. Then trading very small amount of money.

@Carddard
Yes to a tight and fixed zone and using the most volatile hours. I will add this strategy to my pool of strategies.

I have decided that I will go to executing trade #6. Then the risk is far to high and it will cost to high a number of winnings to recover for a loss. Up to trade #6 it is possible to recover for the loss. With the figures i choose it will require 4-5 winning trades, then I am even.
MetaTrader 4 - so many advantages.
  • #27
  • Feb 15, 2022 3:48am Feb 15, 2022 3:48am
Quoting carddard
{quote} Thanks Drolph. Appreciate your response. I get that your grid entries may not be fixed, and that's fine. What I was trying to understand is that for your own trading purposes, do you set a hard stop at say 50% equity? And regardless of how the trades go, for as long as you hit 50% floating losses, you close out your trades?
I was trying to explain exactly that in my last response.
  • #28
  • Edited 5:15am Feb 15, 2022 4:01am | Edited 5:15am
Quoting Drolph
{quote} I was trying to explain exactly that in my last response.
Thank you. I feel that I am on the right track. I will demo trade now. Thanks again.

Regarding the loss. It is vital to understand (of cause you guys does), that we are not loosing every lot we bought. The loss is at the last trade only because we have averaged along the way. If my trade #6 fails, then my loss will be the pips in the TP + the pips in the zone.

In this video Orchard talks about a technique where we can exit some trades early as the case goes on. This should provide a smaller invest. I had programmed too much at my robot at the time I heard that, so it will not be for now. But later on it could be interesting to tjek that out. Zone Recovery Part 1 - YouTube
MetaTrader 4 - so many advantages.
  • #29
  • Feb 15, 2022 1:26pm Feb 15, 2022 1:26pm
I just stumled over a video with somebody that made an EA using Renko to the Martingale strategy. Have any of you tried that. Renko take away some spikes and that could prevent some of the zone wall hits.
MetaTrader 4 - so many advantages.
  • #30
  • Feb 15, 2022 4:12pm Feb 15, 2022 4:12pm
Quoting RiskFighter
I just stumled over a video with somebody that made an EA using Renko to the Martingale strategy. Have any of you tried that. Renko take away some spikes and that could prevent some of the zone wall hits.
Well - The Martingale have to be precise. So it has to work on the actual bar - cannot wait for the bar close. Hence Renko does not work on this strategy. On Renko you are working on the closed bars.
MetaTrader 4 - so many advantages.
  • #31
  • Feb 15, 2022 9:03pm Feb 15, 2022 9:03pm
renko repaints any strategy based on renko is risk.
  • #32
  • Feb 15, 2022 10:06pm Feb 15, 2022 10:06pm
Quoting Treptrader
{quote} i disagree. i have made a EA that is a low risk and highly profitable martingale
can you share us results ?
  • #33
  • Feb 16, 2022 3:34am Feb 16, 2022 3:34am
Quoting FinPhysics
renko repaints any strategy based on renko is risk.
fully agreed on your comment.
  • #34
  • Feb 16, 2022 4:27am Feb 16, 2022 4:27am
Quoting carddard
{quote} My advice on this is to use as tight a zone as possible. I have experimented with using dynamic zones but found that there was advantage over a fixed zone statistically speaking. The end game is still to close out the ZR cycle as quick as possible. So I found that the best way to do so is to time this at the most volatile hours. With that said, it's not a strategy that I'm comfortable with using with investors' funds, but for your own hobby trading it can be thrilling.
I use a zone/TP relationshif of 1:3. The fixed zone is 20 pips. That makes the TP 60 pips. But for some instruments 60 pips is to much and others could take a bigger TP. So I think that we need to make the zone dynamic according to ATR.

But ATR is a other story. If you trade from the beginning of the volatile hours, then ATR are meassuring the hours where the market is in rest. Another approach of the ATR could be to count the same period in the days before. I will make such an indicator some day when I get the time.
MetaTrader 4 - so many advantages.
  • #35
  • Feb 16, 2022 5:52am Feb 16, 2022 5:52am
Quoting RiskFighter
{quote} I use a zone/TP relationshif of 1:3. The fixed zone is 20 pips. That makes the TP 60 pips. But for some instruments 60 pips is to much and others could take a bigger TP. So I think that we need to make the zone dynamic according to ATR. But ATR is a other story. If you trade from the beginning of the volatile hours, then ATR are meassuring the hours where the market is in rest. Another approach of the ATR could be to count the same period in the days before. I will make such an indicator some day when I get the time.
One solution to the varying degrees of TPs is a group trailing stop. Use dollar value as your parameter and once that parameter has been reached, move your group trailing stop along, like you would in a traditional single-trade trailing stop. With this method you dont have to worry about having a fixed TP
  • #36
  • Feb 16, 2022 6:31am Feb 16, 2022 6:31am
Quoting carddard
{quote} One solution to the varying degrees of TPs is a group trailing stop. Use dollar value as your parameter and once that parameter has been reached, move your group trailing stop along, like you would in a traditional single-trade trailing stop. With this method you dont have to worry about having a fixed TP
Jep, that is a fine suggestion.

However one of the advantages of Martingale is, that you are independent of temporary drawdowns and this is no longer the case with a trailing stop. But I know there are strategies with this approach.
MetaTrader 4 - so many advantages.
  • #37
  • Feb 16, 2022 6:38am Feb 16, 2022 6:38am
Quoting RiskFighter
{quote} Jep, that is a fine suggestion. However one of the advantages of Martingale is, that you are independent of temporary drawdowns and this is no longer the case with a trailing stop. But I know there are strategies with this approach.
The DDs will always be there. What I described was for a ZR system, and the group trailing stop does not apply to individual trades, but a basket of trades. Hard to explain as I'm typing on phone. May share details when I find time
  • #38
  • Feb 16, 2022 6:57am Feb 16, 2022 6:57am
Quoting carddard
{quote} The DDs will always be there. What I described was for a ZR system, and the group trailing stop does not apply to individual trades, but a basket of trades. Hard to explain as I'm typing on phone. May share details when I find time
No problem. I do understand what you are writing. I am using group stops in another strategy where I trade baskets.
MetaTrader 4 - so many advantages.
  • #39
  • Feb 16, 2022 7:00am Feb 16, 2022 7:00am
Quoting RiskFighter
{quote} No problem. I do understand what you are writing. I am using group stops in another strategy where I trade baskets.
I am not trailing however. My latest EA exit all trades at x% profit compared to the Account Equity. And then call it a day. Taking a small percent every day is quite easy and it sums up over time.
MetaTrader 4 - so many advantages.
  • #40
  • Feb 16, 2022 7:16am Feb 16, 2022 7:16am
Quoting RiskFighter
{quote} I am not trailing however. My latest EA exit all trades at x% profit compared to the Account Equity. And then call it a day. Taking a small percent every day is quite easy and it sums up over time.
Then you're alr halfway there. Let's say you use x% profit as your threshold. Once that threshold is met, start trailing at that level. No harm doing since since you are guaranteerd that x% and if price continues moving in your favour, u get x% and then some
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