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

  • #281
  • Sep 6, 2007 1:59am Sep 6, 2007 1:59am
Quoting timmy
Hi Joe,
Just a comment on your belief surrounding this system.

I agree that the owner usually has the upper hand when it comes to the knowledge of there own system. However in this case Dans knowledge is not so much in his EA and his progression model - as in his skill at entering the market at a reasonable position to obtain enough volatility to ensure he gets a good level close out in profit on his progression. The EA merely gives him "room" to be wrong. He uses it as a tool not a system in itself!!!

So if you are suggesting to just trade with his progression don't think that you are acting in a safe manner - unless you get some teaching from Dan as to exactly how he enters the market.

Otherwise I would suggest you work out your own progression based on the associated risk that is relavant to YOUR entry technique.

Beginners beware with Martingale (Joe I am not suggesting you are a beginner). This is a first rate tool, but without understanding how to apply it - could be very dangerous to your bank balance.

See Dans private forum for more indepth mathematical analysis of the risks

Tim
Tim, I agree that just trading the progression is a risky proposition indeed, (see my GBP/JPY example below) but the entry method is very plainly given in the previous posts of setting up resistance and support levels and buying and selling accordingly. That followed by the suggested SL and TP levels Dan has tested and has proven over time to be the optimal settings makes this a pretty solid trading technique.

To follow what someone has already tested through a great deal of time and money deserves to be heeded. A lot of folks want to put their 'spin' on something that is already working very well.

Yes, this system lends itself to flexibility, and we are all able to change it accordingly.

My point is that for me, I will follow what has been laid out by the originator for the time being. As I get more familiar with the nuances of the strategy, maybe then I will venture out into the unknown realms.

Following blindly indeed soes not work, for example, I opened a GBP/JPY trade last night thinking that a 400:1 ratio would cover any contengencies, but much to my surprise when I looked at it this morning, the profit had vanished and my trading account had been reduced to a steaming pile of dog doo!

Fortunately, it is only a demo account! So the point being, a good entry at the proper time of day will make this strategy work, but it seems that poor timing is a bit risky. The good part about this system is that one doesn't have to be right about the direction of the first trade. It seems that often times it works out anyway.

Best of luck, and may the Forex be with you all!

Joe M.
"When it's Springtime in Alaska, it's 40 Below!"
  • #282
  • Sep 6, 2007 5:43am Sep 6, 2007 5:43am
hi,

I am very much interesting in this strategies and had alter some lots for consevative approach, in this we required very less capital and it has low drawdown as compare to original one, I agreed that it has less profit also but its not required huge capital and huge drawdown












FXTradepro Manager Calculator








Standard or Universal Account








Standard & Mini Lots Permitted





Required Margin







Stop Loss

TakeProfit


Per 1.0 Lots



Edit GOLD VALUES only !



10

40


$250













Sequence

Lot Size







Of

1.0 = $10 Pip

Profit

DrawDown

Account Size



Trades

0.1 = $1 Pip

Information



1.00

=





Initial Entry = MLOT1

0.1


$40.00

-$10.00

100:1 Leverage = $1000



2nd Entry = MLOT2

0.1


$30.00

-$20.00

200:1 Leverage = $500



3rd Entry = MLOT3

0.2


$60.00

-$40.00

400:1 Leverage = $250



4th Entry = MLOT4

0.2


$40.00

-$60.00

Per 1.0 Lots



5th Entry = MLOT5

0.3


$60.00

-$90.00

Enter Your Available



6th Entry = MLOT6

0.3


$30.00

-$120.00

Leverage In the



7th Entry = MLOT7

0.4


$40.00

-$160.00

”Required Margin”



8th Entry = MLOT8

0.5


$40.00

-$210.00

Field Above



9th Entry = MLOT9

0.6


$30.00

-$270.00




10th Entry = MLOT10

0.8


$50.00

-$350.00

$550.00



11th Entry = MLOT11

1


$50.00

-$450.00

$700.00



12th Entry = MLOT12

1.2


$30.00

-$570.00

$870.00



13th Entry = MLOT13

1.5


$30.00

-$720.00

$1,095.00



14th Entry = MLOT14

1.9


$40.00

-$910.00

$1,385.00



15th Entry = MLOT15

2.4


$50.00

-$1,150.00

$1,750.00



16th Entry = MLOT16

3


$50.00

-$1,450.00

$2,200.00



17th Entry = MLOT17

3.7


$30.00

-$1,820.00

$2,745.00



18th Entry = MLOT18

4.7


$60.00

-$2,290.00

$3,465.00



19th Entry = MLOT19

5.8


$30.00

-$2,870.00

$4,320.00



20th Entry = MLOT20

7.3


$50.00

-$3,600.00

$5,425.00



21th Entry = MLOT21

9.1


$40.00

-$4,510.00

$6,785.00



22th Entry = MLOT22

11.4


$50.00

-$5,650.00

$8,500.00



23th Entry = MLOT23

14.2


$30.00

-$7,070.00

$10,620.00



24th Entry = MLOT24

17.8


$50.00

-$8,850.00

$13,300.00































  • #283
  • Sep 6, 2007 10:45am Sep 6, 2007 10:45am
Quoting timmy
HI tiago,

I have calculated your progression models risk (based on a random entry) as 1 failure per 5364 trades of the system (EA). (Based on the Euro/USD since it has the smallest spread). I took the liberty of extending your sequnce out to the 19th prog level - beyond this the numbers go crazy.

This is a very good risk compared to Dans original progression sequence of 1:159 (assuming a random entry). But of course Dan's skill lies in the way he enters the market initially and so it is not random.

However, although your progression runs less risk it also produces far less average profit. $221 per trade on average compared to Dans $632 (again assuming Dans entry to be random to achieve the average across his progression).

The other point I will make about your progression is that (paradoxically) if you attempt to enter the market with a system that is reasonably accurate at picking the direction, and much more importantly for a Marty progression sequence - the increased market volatility, then you will do much worse than the average of $221. You will only achieve this average on using a random entry.

The reason for this is the fact that your first ~10 levels of the progression produce very poor profits compared to Dans.

At the end of the day - the progression you propose will do nicely over the long term as it will drift to the average profit when given enough trades. So your real ROI on random entry will be a very reasonable 227% (assuming one trade per day 220 day per year traded).

And your failure chance trading this often will be 1 "blowout" per 24.4 years. I am sure that there will be many people who could live with that.

However I think there are much better progression sequences IMO. See Dans private forum for some further ideas.

Tim
hey tim,

ive been trading forex for 8 years and i consider myself a professional full-time trader, i have come up with a beautiful martingale system that actually does great in all market conditions...the reason for this is i have a custom indicator that is so beautifully accurate and i use it on a 1 minute timeframe, the results of this indicator are literally incredible and it doesnt repaint...using this indicator one could easily determine market direction for each independent sequence, i use this indicator right now with my grid and its producing a phenominal amount of money on my live trading accounts....the only thing is i dont know how to code, hopefully in dan's private forum there is someone that knows how to code and we can produce something special, let me know......tiago
  • #284
  • Sep 6, 2007 11:01am Sep 6, 2007 11:01am
Quoting tiago
hey tim,

ive been trading forex for 8 years and i consider myself a professional full-time trader, i have come up with a beautiful martingale system that actually does great in all market conditions...the reason for this is i have a custom indicator that is so beautifully accurate and i use it on a 1 minute timeframe, the results of this indicator are literally incredible and it doesnt repaint...using this indicator one could easily determine market direction for each independent sequence, i use this indicator right now with my grid and its producing a phenominal amount of money on my live trading accounts....the only thing is i dont know how to code, hopefully in dan's private forum there is someone that knows how to code and we can produce something special, let me know......tiago
tiago.....Why not share the Indicator. I would love to see what you have.

Regards,

Dan
  • #285
  • Edited 8:44pm Sep 6, 2007 8:25pm | Edited 8:44pm
Quoting FXTradepro
Hi all.........Yesterday, this thread had a 5 Star Rating (ever since the Thread began) and today it's gone! I wonder what happened. Does anyone know how that works?

Dan
I went back and looked through the thread log and there is not anything unusual.

I remember this happened about a year ago to another thread. Never figured out what caused it...

I recast my 5 star rating and the system accepted it. That means somehow it lost the totals...

So could eveyone who voted, please just revote? Not sure what else to do...
That seemed to work on the other thread.
  • #286
  • Sep 6, 2007 8:36pm Sep 6, 2007 8:36pm
Any suggestions on hedge trades to offset the loss on each progression?

Thanks,

Walt
  • #287
  • Sep 6, 2007 8:51pm Sep 6, 2007 8:51pm
Quoting jones247
Any suggestions on hedge trades to offset the loss on each progression?

Thanks,

Walt
How would a hedge trade offest the loss? Or do you mean taking out a position in a basket of curencies? If you mean just buying and selling the same currency, you are just prolonging the pain. and eating up margin and paying for your broker's kid's college fund.
  • #288
  • Sep 6, 2007 9:14pm Sep 6, 2007 9:14pm
Quoting smjones
How would a hedge trade offest the loss? Or do you mean taking out a position in a basket of curencies? If you mean just buying and selling the same currency, you are just prolonging the pain. and eating up margin and paying for your broker's kid's college fund.
The hedge idea is to take advantage of the retracements that occur with the FXTradepro semi-martingale S&R strategy. Simply scalping 5 - 10 pips during each progression. For example, if the FXTradepro initial entry is long, we understand that the SL = 10 & TP = 40, based on Dan's posts. Often times the trades will S&R through 7 -10 progressions or more. My idea is to take the opposite position of each progression. Therefore, if the progression loses 10 pips, then the hedged trade will gain 10 pips. I would set the hedged trade as follows: SL - 20 & TP - 10 or SL - 25 & TP - 15... always in the opposite position to the the FXTradepro marty position.

Your thoughts...

Thanks,

Walt
  • #289
  • Sep 6, 2007 9:16pm Sep 6, 2007 9:16pm
I'm trying to mitigate the devasting impact of a massive blowout drawdown if a trade goes beyond 24 progressions...

I'm open to any better suggestions...

Thanks,
Walt
  • #290
  • Sep 6, 2007 10:33pm Sep 6, 2007 10:33pm
Quoting jones247
I'm trying to mitigate the devasting impact of a massive blowout drawdown if a trade goes beyond 24 progressions...

I'm open to any better suggestions...

Thanks,
Walt
jones,

one way to successfully do it is to have a great indicator on the shortest time frame possible with high inputs in order to capture huge moves very quickly......you can also use this concept for a grid strategy successfully by placing only longs when the indicator is UP and switching to only SHORTS when the indicator is down.......think about it...
  • #291
  • Sep 6, 2007 11:39pm Sep 6, 2007 11:39pm
I trade exactly using Don method on GU, UJ and EJ pair

Just find the best time to enter.
Start on 4 Sept until 6 Sept
Close Profit $101,1
I'm using IBFX strandart_mini_micro account

The result so far so good.
Thanks don for sharing this method.

PS: I rate again the 5 star
Attached File(s)
File Type: zip fxtradepro_01.zip   3 KB | 1,065 downloads
  • #292
  • Sep 7, 2007 12:12am Sep 7, 2007 12:12am
Quoting duyduy
I trade exactly using Don method on GU, UJ and EJ pair

Just find the best time to enter.
Start on 4 Sept until 6 Sept
Close Profit $101,1
I'm using IBFX strandart_mini_micro account

The result so far so good.
Thanks don for sharing this method.

PS: I rate again the 5 star
Thanks duyduy..........I am glad you joined us.

Dan
  • #293
  • Sep 7, 2007 2:49am Sep 7, 2007 2:49am
Quoting jones247
The hedge idea is to take advantage of the retracements that occur with the FXTradepro semi-martingale S&R strategy. Simply scalping 5 - 10 pips during each progression. For example, if the FXTradepro initial entry is long, we understand that the SL = 10 & TP = 40, based on Dan's posts. Often times the trades will S&R through 7 -10 progressions or more. My idea is to take the opposite position of each progression. Therefore, if the progression loses 10 pips, then the hedged trade will gain 10 pips. I would set the hedged trade as follows: SL - 20 & TP - 10 or SL - 25 & TP - 15... always in the opposite position to the the FXTradepro marty position.

Your thoughts...

Thanks,

Walt
I just don't see it. That is still trading on hope. eventually you will have to close out one side or the other and the the big loss is still there, plus all the extra broker costs. What if the market does not ocsillate as you are hoping for with the hedge? Further, why trade this approach in the first place if you filter out the only way it can be profitable and that is by having a move in the market at the correct time and in the correct direction.
  • #294
  • Sep 7, 2007 7:11am Sep 7, 2007 7:11am
Quoting smjones
I just don't see it. That is still trading on hope. eventually you will have to close out one side or the other and the the big loss is still there, plus all the extra broker costs. What if the market does not ocsillate as you are hoping for with the hedge? Further, why trade this approach in the first place if you filter out the only way it can be profitable and that is by having a move in the market at the correct time and in the correct direction.

I agree with Scott on this point........

Dan
  • #295
  • Sep 7, 2007 8:10am Sep 7, 2007 8:10am
Quoting jones247
I'm trying to mitigate the devasting impact of a massive blowout drawdown if a trade goes beyond 24 progressions...

I'm open to any better suggestions...

Thanks,
Walt
Hi Walt,
I think the only logical way to mitigate the impact of the blowout is this:

Assuming that you enter the market at a certain time when volatility is high, take your setup and slip it into 5 positions. So for example if your progression called for a base capital requirement of $30,000, then you would split this into 5 trades the same progression sequence - but scaled down - with $6,000 base capital each.

Now you then set the price entry to spread the entries say ~10 pips apart, ranging from the first entry point for the first progression.

This will mean that you will effectively have a very high likelihood of only one in 5 of the progressions blowing out (if any at all), and there is virtually no chance the broker can play with the numbers to catch your worst case scenario...especially with 5 seperate progression sequences operating at once at different price points.

(I guess you'd have to run 5 platforms and point them all at your same live account so you can run 5 EA's ...but if you want the safty - it would be well worth it.)

Tim
  • #296
  • Sep 9, 2007 8:59am Sep 9, 2007 8:59am
So how did everybody do last week trying out the Strategy? Let's keep the discussion going folks....

Dan
  • #297
  • Sep 9, 2007 11:31am Sep 9, 2007 11:31am
Would like to post my results from trading last week. It was my first week using the strategy, I was very happy to see it work so well.

In addition to GBPUSD, I tried a couple of different pairs, namely the EURJPY and the GBPJPY. While the volatility is excellent, I found that the times of lower volatility and smaller swings were devastating to an underfunded account. So I did a bit more research with the spreadsheet program, re-allocated the lot sizes to reflect the leverage and account size and voilà! The blowouts have not returned.

On my account where I'm running GBPUSD IBFX STD MINI Setup, did quite well, even through the non-farm announcement on Friday. So even with IBEX widening the spread, as is their habit during non-farm announcement, FXTradePro Manager is working to perfection.

At this rate, I will be comfortable enough to trade with my live account in a week or so.

Hope this helps the group.

Thanks again, Dan for sharing this with us.

Joe M.
"When it's Springtime in Alaska, it's 40 Below!"
  • #298
  • Sep 9, 2007 12:47pm Sep 9, 2007 12:47pm
Hello Joe M.......I am glad you are enjoying the Strategy. Always trade carefully to try and stay away from those quiet ranging periods.

Dan
  • #299
  • Sep 10, 2007 10:43am Sep 10, 2007 10:43am
Hello Everyone...........Just closed a profitable Sequence on GBPUSD that I set to open SHORT at 2.0314 last night at 10 PM EST. The Sequence closed at the 7th Entry at around 11 AM today for $150. profit.

Here is the Chart.....

http://aycu10.webshots.com/image/256...8746412_rs.jpg

Good Trading to All !!!

Dan
  • #300
  • Sep 10, 2007 7:51pm Sep 10, 2007 7:51pm
As of this moment, the FXTradepro Manager EA has been downloaded 391 times, yet only a handful of Traders have commented on its use.

Come on folks....Let's hear what you have been doing with this tool.

Thanks all,

Dan
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