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

  • #81
  • Aug 19, 2007 2:58pm Aug 19, 2007 2:58pm
Quoting FXTradepro
zamanib,

I am not sure I understand your question, however, I THINK the infomation that you are looking for is in the TABLES I presented earlier. Sorry if there is a language barrier, but I really don't know what you are asking me.

Dan
Here is how the Trade worked out PROFITABLY starting the Sequence Of Trades with 0.1 Standard Lot which equals 10,000 Units (1 Mini Lot):

THIS WHAT I MEAN

#1 - Initial Entry - SELL 0.1 Lot: SL hit -10 Pips @ $1. per Pip = -$10.
#2 - 2nd Entry - BUY 0.1 Lot: SL hit - 10 Pips @ $1. per Pip = -$10.
#3 - 3rd Entry - SELL 0.2 Lots: SL hit - 10 Pips @ $2. per Pip = -$20.
#4 - 4th Entry - BUY 0.3 Lot: SL hit - 10 Pips @ $3. per Pip = -$30.
#5 - 5th Entry - SELL 0.4 Lots: TP hit +40 Pips @ $4. per Pip = +$160.

TOTAL = $160 - $70 in aggregate losses = $90 PROFIT for the Sequence
# 6 what will be your profit here it target hit at # 6 entry
#7 '' " # 7 entry
8, 9, 10 , 11, 12 , 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24 what will be your profit/loss for each of these entry (if target hit either one)

can you make a chart please.
Becasue the chart you give not reflect your example.

entry:
1 -$10---or 40+
2. -$10--or 40+
3.-$20---or 80+
4.- $ 30 ---or 120

if you continue u will see that if you your target hit at 10entry = 9lots*40=360 - lot1---lot 8 = 10+10+20+30+40+50+60+70+80=370

360-370 = -10 so form the 10 sequence or entry or trade you will be at lost.
Please let me know if I did the math correct
PROFITABLE TRADERS ARE NOT LUCKY BUT ARE WELL PREPARED
  • #82
  • Edited 8:45pm Aug 19, 2007 3:23pm | Edited 8:45pm
Hello again zamamib,

I don't think you are calculating this correctly....Please see the TABLE below:

This is a Standard Account with 400:1 Leverage and Mini Lot Trading Permitted.

http://aycu12.webshots.com/image/243...6647255_rs.jpg

If you read this TABLE from LEFT TO RIGHT you will see exactly what the calculations are for a 10 Pip SL and a 40 Pip TP.

At the 6th entry if the TP is hit then the NET Profit after the AGGREGATE Losses of the first 5 Trades in the Sequence is +$130.00. If the SL was hit at the 6th Entry then the Aggregate Losses (or the DrawDown if you will) is -$170.00.

Let's say for example that this trade keeps losing until the 12th Entry. That would mean that after the 11th Entry hits the SL then the AGGREGATE Losses to that point would be -$980.00, however, when the TP hits at the 12th Entry the GAINS would overtake the previous Loss by +$460.00

I hope this explains things more clearly to you.

Dan
  • #83
  • Aug 19, 2007 7:36pm Aug 19, 2007 7:36pm
Hello Dan,

When I attached the EA on a chart, there are errors "Error opening SELL order: 4109" & "Error opening BUY order: 4109". These errors continually appears in the "Experts" tab. Is there a bug in the EA?

Here's what I did. I attached the EA on a chart but uncheck "Allow live trading" because I'm not ready for an entry yet. EA just sits there waiting. However, it keeps generate these errors.

Another thing I notice is that the comment printed on the upper left corner saying that "FXTradepro Manger is Trading", but this is misleading because EA is not really trading. The "Allow live trading" is unchecked so how can it be trading?

Please explain. Thanks.
  • #84
  • Aug 19, 2007 7:46pm Aug 19, 2007 7:46pm
Quoting EATrader
Hello Dan,

When I attached the EA on a chart, there are errors "Error opening SELL order: 4109" & "Error opening BUY order: 4109". These errors continually appears in the "Experts" tab. Is there a bug in the EA?

Here's what I did. I attached the EA on a chart but uncheck "Allow live trading" because I'm not ready for an entry yet. EA just sits there waiting. However, it keeps generate these errors.

Another thing I notice is that the comment printed on the upper left corner saying that "FXTradepro Manger is Trading", but this is misleading because EA is not really trading. The "Allow live trading" is unchecked so how can it be trading?

Please explain. Thanks.

EATrader.....The Expert works fine on my Platforms and the Platforms of several of my Friends. Why would you uncheck "Allow Live Trading"? DO NOT uncheck allow LIVE Trading. Set it up just as I have detailed in previous Posts. Also, DO not attach to a Chart until you have set one of the Entry Option Parameters, such as Timed Entry or Price Entry....If both of these are set to False the EA will open a Trade after the first tick when applied to your Chart.

Try it again....

Thanks,

Dan
  • #85
  • Aug 19, 2007 7:58pm Aug 19, 2007 7:58pm
Hi Dan,

The reason I uncheck "Allow Live Trading" because I'm not ready to enter the market yet but want EA to be ready on the chart.

So when I have an entry or ready to enter the market, then only at that point that I would attach EA on the chart for immediate opening?

And after that trade is finished, then I would remove EA from chart and then when I have another entry, I'd attach EA on the chart again? Is this how it should work?

Thanks.

Quoting FXTradepro
EATrader.....The Expert works fine on my Platforms and the Platforms of several of my Friends. Why would you uncheck "Allow Live Trading"? DO NOT uncheck allow LIVE Trading. Set it up just as I have detailed in previous Posts. Also, DO not attach to a Chart until you have set one of the Entry Option Parameters, such as Timed Entry or Price Entry....If both of these are set to False the EA will open a Trade after the first tick when applied to your Chart.

Try it again....

Thanks,

Dan
  • #86
  • Aug 19, 2007 8:03pm Aug 19, 2007 8:03pm
Quoting EATrader
Hi Dan,

The reason I uncheck "Allow Live Trading" because I'm not ready to enter the market yet but want EA to be ready on the chart.
DO NOT DO IT THIS WAY.

So when I have an entry or ready to enter the market, then only at that point that I would attach EA on the chart for immediate opening?
YES, or if you are using a Timed Entry or a Price Entry you can attach to your Chart in advance.

And after that trade is finished, then I would remove EA from chart, and then when I have another entry, I'd attach EA on the chart again? Is this how I should do?
When the Trade is finished the EA will stop Trading and go to a Hibernate Mode (assuming that the Hibernate Setting is left as TRUE). I then remove it from the Chart and wait for my next opportunity. When you want to start the EA again you then re-attach to your chart.

Thanks.

I hope this helps....

Dan
  • #87
  • Aug 19, 2007 8:33pm Aug 19, 2007 8:33pm
Got it! Thank you.

Quoting FXTradepro
I hope this helps....

Dan
  • #88
  • Aug 19, 2007 8:35pm Aug 19, 2007 8:35pm
Quoting EATrader
Got it! Thank you.
EXCELLENT !!!
  • #89
  • Edited 1:33am Aug 20, 2007 1:32am | Edited 1:33am
I just finished reading this and i think that your presentation is very well thought out.

I am trading a similar strategy live for the past 2 weeks after demo for a few months. I only trade e/u with this strategy with stop 20 and tp 20. Direction is determined by open of new day.I have determined the MM a bit differently and have yet to trade more than 5 lots.

Congrats on your work so far.
  • #90
  • Aug 20, 2007 2:55am Aug 20, 2007 2:55am
I opened a new thread for jones247 for his interesting idea on minimizing risk, because it deserves a more in depth discussion than it can receive in this thread.

It is located here...

http://www.forexfactory.com/showthread.php?t=43344

Thanks,
  • #91
  • Aug 20, 2007 4:15am Aug 20, 2007 4:15am
Quoting gambler997
I won't reinvest profit in this system because, One day your initial deposit will be probably all lost but the odds are so small. You will probably make a lot more money before . You must have some experience to trade system like that. avoiding big news and only trading during volatile hour and I think you will have some serious success with this system. I trade forex for more than 4 years and I tried and created a lot of systems but this one is by far the most logical. Most trader have good strategy but poor money management, if so this ea is for you.
sorry for my bad english but my first language is french.
Gambler,
Whilst I agree with your comments on the whole, I am always interested in the general comments that come out whenever a Martingale type trading sequence is proposed.

Really your comment about the account blowing up using this method of risk management in a strategy plan - can be applied to any trading system. If, for example, I have a trading system that runs a 60% winning ratio, I still run the risk of blowing up the account just as easily - if my Risk Management approach is poor, e.g. I trade 10% of my account on each trade. Now the chance of making 10 failures in a row (and thus going a long way towards blowing up this account) is 0.4^10 = 0.01 or 1%....probably no less a risk than Dan actually operates with.

Dans entry criteria is the key to his success, coupled with the risk management system he is employing - and which he has been good enough to share with us - but also his MONEY MANAGEMENT, which he has based off the broker leverage as a starting point (in other words even if your broker offers you 400:1 you may choose to work off a safer level of risk and trade under say 100:1 or 50:1 equivalent leverage - and thus run a lower net drawdown at any given point on the martingale sequence).

I guess my point is that a martingale risk management approach is:
(a) only part of the system...don't loose sight of this,
(b) is smart - because it lifts the trader out of many of the pyschological trading traps (by creating a defined risk management plan....that can be managed simply by choosing what level of money management you wish to employ),
(c) creates a focus on the risk aspects of a trading plan - which is always healthy - since it forces the trader to PLAN there money management carefully.

All too often people ring the alarm bells on a Martingale (or even the anti-martingale) risk management methodology - because they forget it is only one component of the trading plan....and not the trading plan itself.

The cool thing about the very fact that it does cause people to rush to write up a post attacking this approach (I am not saying you are attacking this method Gambler) - is the very reason why it is, IMO, a smart approach...BECAUSE it focuses us onto the real risk of trading when often we develop a trading approach and really don't truely focus on the risks involved.

So a martingale sequence always manages to bring us back to a risk focus, but the smart trader uses it to his(her) advantage, and is not afraid of the consequences of the risk taken (when properly deployed).

Tim
  • #92
  • Aug 20, 2007 7:29am Aug 20, 2007 7:29am
Quoting timmy
Gambler,
Whilst I agree with your comments on the whole, I am always interested in the general comments that come out whenever a Martingale type trading sequence is proposed.

Really your comment about the account blowing up using this method of risk management in a strategy plan - can be applied to any trading system. If, for example, I have a trading system that runs a 60% winning ratio, I still run the risk of blowing up the account just as easily - if my Risk Management approach is poor, e.g. I trade 10% of my account on each trade. Now the chance of making 10 failures in a row (and thus going a long way towards blowing up this account) is 0.4^10 = 0.01 or 1%....probably no less a risk than Dan actually operates with.

Dans entry criteria is the key to his success, coupled with the risk management system he is employing - and which he has been good enough to share with us - but also his MONEY MANAGEMENT, which he has based off the broker leverage as a starting point (in other words even if your broker offers you 400:1 you may choose to work off a safer level of risk and trade under say 100:1 or 50:1 equivalent leverage - and thus run a lower net drawdown at any given point on the martingale sequence).

I guess my point is that a martingale risk management approach is:
(a) only part of the system...don't loose sight of this,
(b) is smart - because it lifts the trader out of many of the pyschological trading traps (by creating a defined risk management plan....that can be managed simply by choosing what level of money management you wish to employ),
(c) creates a focus on the risk aspects of a trading plan - which is always healthy - since it forces the trader to PLAN there money management carefully.

All too often people ring the alarm bells on a Martingale (or even the anti-martingale) risk management methodology - because they forget it is only one component of the trading plan....and not the trading plan itself.

The cool thing about the very fact that it does cause people to rush to write up a post attacking this approach (I am not saying you are attacking this method Gambler) - is the very reason why it is, IMO, a smart approach...BECAUSE it focuses us onto the real risk of trading when often we develop a trading approach and really don't truely focus on the risks involved.

So a martingale sequence always manages to bring us back to a risk focus, but the smart trader uses it to his(her) advantage, and is not afraid of the consequences of the risk taken (when properly deployed).

Tim
Nice post Tim.....Very well said.

Thanks,

Dan
  • #93
  • Aug 20, 2007 7:41am Aug 20, 2007 7:41am
Quoting FXTradepro
Nice post Tim.....Very well said.

Thanks,

Dan
Without any offence, just ASKING, what is the PROBABILITY of such a sequence that zeros your account with this kind of money managment approach?

(ps: As a side note I do know what I am talking about, check my profile)
My models are similar that is i take less care about the importance of the entry and more about the exit, position management, static and dynamic risk control (in short money management)
.
  • #94
  • Aug 20, 2007 8:06am Aug 20, 2007 8:06am
Quoting bullrock
Without any offence, just ASKING, what is the PROBABILITY of such a sequence that zeros your account with this kind of money managment approach?

(ps: As a side note I do know what I am talking about, check my profile)
My models are similar that is i take less care about the importance of the entry and more about the exit, position management, static and dynamic risk control (in short money management)

Hello bullrock,

I am not sure how we would calculate the Probability that you ask about, however, I can say this - Having traded the Strategy for more than a year, just about every day, while being selective about when I enter the Market, I have yet to blow up an Account. Also, note that if that did occur the Account would not go to Zero, however, a very large loss would occur.

Dan
  • #95
  • Aug 20, 2007 8:19am Aug 20, 2007 8:19am
Quoting FXTradepro
Hello bullrock,

I am not sure how we would calculate the Probability that you ask about, however, I can say this - Having traded the Strategy for more than a year, just about every day, while being selective about when I enter the Market, I have yet to blow up an Account. Also, note that if that did occur the Account would not go to Zero, however, a very large loss would occur.

Dan
Thank you for your proper answer... When I meant to zero I am refering to the situation what you have described. When an investor sees such that "a very large loss" occured almost certainly the account will be zero due to a complete withdrawal and closure. Your system is interesting but for example it is inappropriate to my personality or style for the reason you have described. I am a person who like steady returns with low drwadowns and controlled risk without the risk of having a large loss. I am always looking for more smaller gains with very small losses. Also for example myself when I have a loss I reduce the risk on the next trade. But that's ME and I am happy with that. The method you described is good for YOU as it should otherwise you wouldn't have traded it for a year, would you?

Have a pipstatic day.
.
  • #96
  • Aug 20, 2007 8:33am Aug 20, 2007 8:33am
Quoting athalon7
I like this type of trading and have studied this and "grid" trading much in the past. My theory is the same: very difficult to "predict" markets, so you should trade in a "reactionary" approach.


Also (this would need another thread) I am trdaing GBP/JPY as follows I buy every 5 pips. tp is@25 pips. no SL at all. Use the interest rate to close trades. Money management is very important.. I have been trading since 16 months now with a 1-2% return a month... Interested I will let you know more. I do this on a small research account. So far doing well... I survived the recent sell off as well.
.
  • #97
  • Edited 1:02pm Aug 20, 2007 8:38am | Edited 1:02pm
Just to give everyone an idea of how I trade this - following are 2 Trades that I took overnight. These were placed on 2 separate Accounts as I only trade 1 Sequence per Account at any given time.


AUDUSD - at around 11 PM EST last night I set the EA to enter using the PRICE ENTRY option, setting the price parameter to .8000 to start a Sequence Of Trades with a SELL Entry - This looked to me like a Resistance area and also is a Round Number at which significant price action generally occurs.

The EA opened the SELL Entry once .8000 was reached at 3:35 AM EST and the Initial Entry was filled.

The Sequence closed in Profit on the 2nd Entry at 3:49 AM

Initial Entry - .10 Lots - Stopped at a 10 Pip Loss = -$10.
2nd Entry - .10 Lots - TP hit at +40 Pips Gain = +$40.
NET GAIN = +$30.


http://aycu24.webshots.com/image/263...2842376_rs.jpg



USDJPY - Also at around 11 PM EST last night I set the EA to enter using the PRICE ENTRY option, setting the price parameter to 115.00 to start a Sequence Of Trades with a SELL Entry - This also looked to me like a Resistance area and also is a Round Number at which significant price action generally occurs.

The EA opened the SELL Entry once 115.00 was reached at 3:28 AM EST and the Initial Entry was filled.

The Sequence closed in Profit on the 4th Entry at 4:08 AM.

Initial Entry - .10 Lots - Stopped at a 10 Pip Loss = -$8.69
2nd Entry - .10 Lots - TP hit at a 10 Pip Loss = -$8.70
3rd Entry - .20 Lots - TP hit at a 10 Pip Loss = -$17.39
4th Entry - .30 Lots - TP hit at +40 Pips Gain = +$103.96
NET GAIN = +$69.18


http://aycu38.webshots.com/image/252...2781653_rs.jpg


I hope this is helpful to those who are interested.

Dan


BY THE WAY - You will notice that on BOTH Trades above, I was NOT CORRECT on my directional Choice. What was important to me was that the likelihood of price either retracing significantly or breaking through the Resistance at the Round Numbers was very high.
  • #98
  • Aug 20, 2007 8:41am Aug 20, 2007 8:41am
Quoting bullrock


Also (this would need another thread) I am trdaing GBP/JPY as follows I buy every 5 pips. tp is@25 pips. no SL at all. Use the interest rate to close trades. Money management is very important.. I have been trading since 16 months now with a 1-2% return a month... Interested I will let you know more. I do this on a small research account. So far doing well... I survived the recent sell off as well.

Sounds to me like you are doing One Directional Grid Trading - Not my cup of tea but I appreciate your offer to share. Also glad to hear that you are doing well. Good Trading!

Dan
  • #99
  • Aug 20, 2007 8:43am Aug 20, 2007 8:43am
Quoting FXTradepro
Hello bullrock,

I am not sure how we would calculate the Probability that you ask about, however, I can say this - Having traded the Strategy for more than a year, just about every day, while being selective about when I enter the Market, I have yet to blow up an Account. Also, note that if that did occur the Account would not go to Zero, however, a very large loss would occur.

Dan
Hi Dan

Wow It's very interesting you trade this system for more than a year. A long time ago i tried to develope a martingale system but I was not enough smart to create a system like that. What I like with this system Is I enter a trade and lets the ea make all the hard work.
thanks you
Have a good Day all

Ps: I have already win on usd/Jpy l
  • #100
  • Aug 20, 2007 8:46am Aug 20, 2007 8:46am
Quoting FXTradepro
Sounds to me like you are doing One Directional Grid Trading - Not my cup of tea but I appreciate your offer to share. Also glad to hear that you are doing well. Good Trading!

Dan
Thankfully that is just one of my experimental stuffs. 1 of my many models. But interesting. Your method caught my attention because I am always looking for money management techniques and the S/R type of trading and BO is behind my success. The other real accounts I have. I am happy that you are successfull as well. Just be cautious...
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