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FXTradepro: Strategy using a “Semi-Martingale” Position Sizing

  • #41
  • Aug 18, 2007 10:05am Aug 18, 2007 10:05am
Quoting smjones
Thank you so much for being up front with me...

This will be fine... and have a great weekend

Regards,

Thank you Scott..........And a GREAT Weekend to you too.

Dan
  • #42
  • Edited 10:51am Aug 18, 2007 10:17am | Edited 10:51am
Good Lord I've posted nearly this exact same strategy twice on this forum:

http://www.forexfactory.com/showthre...395#post178395

http://www.forexfactory.com/showthread.php?t=31337

This thread has a five star rating, but when I originally posted this Merlin moved it to the "Beginner Q & A" thread.

Burgerking made nearly the exact same EA, and it's posted on that thread.
  • #43
  • Aug 18, 2007 10:30am Aug 18, 2007 10:30am
Quoting tdion
Good Lord I've posted nearly this exact same strategy twice on this forum:

http://www.forexfactory.com/showpost...5&postcount=19

http://www.forexfactory.com/showthread.php?t=31337

This thread has a five star rating, but when I originally posted this Merlin moved it to the "Beginner Q & A" thread.

Burgerking made nearly the exact same EA, and it's posted on that thread.
tdion,

Welcome.....It is said that great minds think alike and neither you or I are the first to come up with this basic concept. As I stated in my first Post... "The basic premise of the Strategy is not entirely new, nor do I claim that it is 100% original, however, I have “made it my own” and found a way to trade it profitably".....

I hope you will contribute something useful here.

Dan
  • #44
  • Aug 18, 2007 10:41am Aug 18, 2007 10:41am
I just find it amusing that it is suddenly en vogue. Your presentation was more professional than mine, which probably made a better sell.

Well Burgerking claims to make up to 1% a day trading GBP/USD w/ the semi-Martingale EA he made (called the BurgerHedge EA if I remember correctly.) Although highly improbable, I have found occasions where meltdown could have occured.

The purpose of the Blackbeard's Grid was to push the TP out VERY far.... so that the lot size remains extremely small on the recoups, thus keeping drawdowns very low.
  • #45
  • Aug 18, 2007 11:16am Aug 18, 2007 11:16am
Very interesting thread . Fxtradepro made it very easy to understand the concept of this system. good job and thanks for sharing your hard work. I will certainly try your ea and post my result next week.
  • #46
  • Aug 18, 2007 11:59am Aug 18, 2007 11:59am
Quoting gambler997
Very interesting thread . Fxtradepro made it very easy to understand the concept of this system. good job and thanks for sharing your hard work. I will certainly try your ea and post my result next week.
gambler997 and everyone,

Please remember that the EA is only a MANAGER of the Sequence Of Trades. You must look for a pair that you believe will hit 40 Pips in your selected direction or 50 Pips in the OPPOSITE direction while attempting to avoid a tight 10 Pip range.

DO NOT ENTER RANDOMLY !

I hope that I have been clear on this point.

Dan
  • #47
  • Aug 18, 2007 12:05pm Aug 18, 2007 12:05pm
Quoting FXTradepro
gambler997 and everyone,

Please remember that the EA is only a MANAGER of the Sequence Of Trades. You must look for a pair that you believe will hit 40 Pips in your selected direction or 50 Pips in the OPPOSITE direction while attempting to avoid a tight 10 Pip range.

DO NOT ENTER RANDOMLY !

I hope that I have been clear on this point.

Dan
Yes I know this is why it's so interesting.
  • #48
  • Edited 6:24pm Aug 18, 2007 12:07pm | Edited 6:24pm
Quoting tdion
I just find it amusing that it is suddenly en vogue. Your presentation was more professional than mine, which probably made a better sell.

Well Burgerking claims to make up to 1% a day trading GBP/USD w/ the semi-Martingale EA he made (called the BurgerHedge EA if I remember correctly.) Although highly improbable, I have found occasions where meltdown could have occured.

The purpose of the Blackbeard's Grid was to push the TP out VERY far.... so that the lot size remains extremely small on the recoups, thus keeping drawdowns very low.
tdion,

I am not sure that we can consider this "Style" of Trading "en vogue" just yet. By my count there are really only about 8 - 10 Members that appear to want to try the Strategy.

Also, in my testing and Live Trading of the Strategy I found that generally speaking the larger TP of 40 has worked as well for me or better than a smaller TP setting of 25. It's true that a 25 Pip TP will get hit sooner, however, I have found that most of the trades that hit the 25 Pip Target eventually went on to 40 Pips or more. The larger TP value also created a better Return for the same relative DrawDown with a 10 Pip Stop.

Thanks for your comments...

Dan
  • #49
  • Aug 18, 2007 12:08pm Aug 18, 2007 12:08pm
Quoting gambler997
Yes I know this is why it's so interesting.

Thanks gambler997..........I am glad this point was clear to you.

Dan
  • #50
  • Aug 18, 2007 12:46pm Aug 18, 2007 12:46pm
this auto system is breaking the first rule to automated trading system:

#1 Absolute Capital Preservation.

#2 should be profitability.

like someone mentioned, you might think, hey i will never get 13 reds in a row, the likelihood of that is low. believe me, it WILL happen, and your account will be wiped clean.

its not hard to achieve something like high 90%+ success rate, its capital preservation that is important. so far, i've never seen a 90%+ system that was able to keep money protected reasonably. all my past system revolved around that high success rate, yet i couldn't fix that one possible but very rare trade that would kill my account.

anyways, good stuff.
{Promotion Removed}
  • #51
  • Aug 18, 2007 12:53pm Aug 18, 2007 12:53pm
What is the difference in just closing out your position and reversing??? You are just locking in loses when you buy after a sell... it does nothing but help you pretend you did not just assume a loss..

I did not read through the whole strategy so I apologize if I am missing a critical point here, but if the strategy is the same thing I came across a while ago (which I am almost sure it is just from the illustrations) then it is a death sentence for any trader who tries to do this in the long run
  • #52
  • Aug 18, 2007 2:32pm Aug 18, 2007 2:32pm
I think the Semi-Martingale strategy is great. However, theoretically I suppose one could have 25 consecutive trades go against him/her. I think a way to protect capital preservation & offset the risk of 25 bad trades is to do what I would call a "leap frog" trend martingale. For example, instead of selling each trade at the 10 Pip stop-loss, let it ride through the next corrresponding retracement. At which point, the corresponding trade, which would be only two trades away, would be twice the original trade. Also, at that point you would sell the original position. This liquidates your initial trade at no profit-no loss, but frees up your capital & in effect transfers the profit potential to the next corresponding trade, which is only two trades away. I am new to the forex market; however, I'm quite familar to the options market and I am trying to learn this arena quickly. However, a major criteria for me to trade in the forex market is to enure that I can make a profit while hedging my position. I don't think a better method (safer & more profitable) than what I'm trying to lay-out exists. I have not tried this method, the "leap frog" trending martingale. However, perhaps it can take the Semi-Martingale strategy to the next level. Please let me know if I'm off target...

Thanks,
Walt
  • #53
  • Aug 18, 2007 5:57pm Aug 18, 2007 5:57pm
Quoting jjk2
this auto system is breaking the first rule to automated trading system:

#1 Absolute Capital Preservation.

#2 should be profitability.

like someone mentioned, you might think, hey i will never get 13 reds in a row, the likelihood of that is low. believe me, it WILL happen, and your account will be wiped clean.

its not hard to achieve something like high 90%+ success rate, its capital preservation that is important. so far, i've never seen a 90%+ system that was able to keep money protected reasonably. all my past system revolved around that high success rate, yet i couldn't fix that one possible but very rare trade that would kill my account.

anyways, good stuff.
Hello jjk2......The Strategy is NOT an "automated trading system".
  • #54
  • Aug 18, 2007 5:59pm Aug 18, 2007 5:59pm
Quoting superdezign
What is the difference in just closing out your position and reversing??? You are just locking in loses when you buy after a sell... it does nothing but help you pretend you did not just assume a loss..

I did not read through the whole strategy so I apologize if I am missing a critical point here, but if the strategy is the same thing I came across a while ago (which I am almost sure it is just from the illustrations) then it is a death sentence for any trader who tries to do this in the long run

Hello superdezign.................Perhaps you should read the entire Thread before commenting. We do close our previous position when we reverse direction and we do realize the loss. The aggregate losses are overtaken when we eventually hit our target.

Dan
  • #55
  • Aug 18, 2007 6:09pm Aug 18, 2007 6:09pm
Quoting jones247
I think the Semi-Martingale strategy is great. However, theoretically I suppose one could have 25 consecutive trades go against him/her. I think a way to protect capital preservation & offset the risk of 25 bad trades is to do what I would call a "leap frog" trend martingale. For example, instead of selling each trade at the 10 Pip stop-loss, let it ride through the next corrresponding retracement. At which point, the corresponding trade, which would be only two trades away, would be twice the original trade. Also, at that point you would sell the original position. This liquidates your initial trade at no profit-no loss, but frees up your capital & in effect transfers the profit potential to the next corresponding trade, which is only two trades away. I am new to the forex market; however, I'm quite familar to the options market and I am trying to learn this arena quickly. However, a major criteria for me to trade in the forex market is to enure that I can make a profit while hedging my position. I don't think a better method (safer & more profitable) than what I'm trying to lay-out exists. I have not tried this method, the "leap frog" trending martingale. However, perhaps it can take the Semi-Martingale strategy to the next level. Please let me know if I'm off target...

Thanks,
Walt

Hi Walt,

Thanks for your comments. I agree that it is possible that one could lose 25 times in a row and perhaps that will eventually happen to me. So far it has not. In my opinion, Trading is about PROBABILITIES and what I attempt to do is work that belief in my favor. I am not saying that your idea does not have merit, because it may very well be a good idea. I try to keep things as simple as possible with my Trading so that I can focus on making good choices. Remember that I always have the ability to STOP a Sequence Of Trades and assume a loss at any stage in the progression. I do not say that anyone should Trade this blindly. One must understand the System and work the Market as such.

Dan
  • #56
  • Aug 18, 2007 6:39pm Aug 18, 2007 6:39pm
FXTradepro,

Other than the EURUSD, do you know of any other pair that works well with this strategy. I believe a volatile pair, such as GBPJPY would work well with a TP of 80 and a SL of 30.
  • #57
  • Aug 18, 2007 6:53pm Aug 18, 2007 6:53pm
Quoting jones247
FXTradepro,

Other than the EURUSD, do you know of any other pair that works well with this strategy. I believe a volatile pair, such as GBPJPY would work well with a TP of 80 and a SL of 30.

Hello jones247,

A TP of 80 and a SL of 30 would require a different Lot Size Sequence than I am Trading. An 80/20 set-up would use the same Lot Sizing that I use at 40/10, however, you would need a Larger Account to handle the Margin to a 24 Entry Sequence. I do not Trade GBPJPY but I am sure that there are many different combinations of Pairs and Settings that would be effective. I monitor the following 7 Pairs and always use the 40/10 set-up; The pairs are EURUSD, USDJPY, GBPUSD, USDCHF, USDCAD, AUDUSD, NZDUSD. Also, for your information, a larger SL will also require a Larger Account to sustain a Sequence to a high number of Entries.

Dan
  • #58
  • Aug 18, 2007 7:20pm Aug 18, 2007 7:20pm
Man, this thread is getting longer quicker than I had thought. A very good presentation of your system fxtraderpro.

The main thing i can deduce from your posts is that patience is key. As with any other method of trading, where patience is impt, and one has to let the trade come to them, rather than chasing one, the same principles apply to this. What I like about it is that you do not need to be correct in your initial entry, as you have stated. As far as results go, just breaking even in one's first year of trading would be a huge achievement.

There are several places I think this strategy could work, eg major market open times, pivot levels. Pairs like eur/usd, gbp/usd are pretty good at respecting pivots, in normal market conditions.

Though i am a happy scalper atm, diversification is good, so I look forward to applying your strategy next week.

Regards,
K.
  • #59
  • Aug 18, 2007 7:30pm Aug 18, 2007 7:30pm
I don't know what happened to my post... Did I do something wrong???
  • #60
  • Aug 18, 2007 7:48pm Aug 18, 2007 7:48pm
Quoting kermut
Man, this thread is getting longer quicker than I had thought. A very good presentation of your system fxtraderpro.

The main thing i can deduce from your posts is that patience is key. As with any other method of trading, where patience is impt, and one has to let the trade come to them, rather than chasing one, the same principles apply to this. What I like about it is that you do not need to be correct in your initial entry, as you have stated. As far as results go, just breaking even in one's first year of trading would be a huge achievement.

There are several places I think this strategy could work, eg major market open times, pivot levels. Pairs like eur/usd, gbp/usd are pretty good at respecting pivots, in normal market conditions.

Though i am a happy scalper atm, diversification is good, so I look forward to applying your strategy next week.

Regards,
K.
Hello kermut and thanks for dropping in. Your comments are correct and appreciated. Patience in selecting the Initial Entry is important. I have had good success with both EURUSD and GBPUSD.

Dan
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