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

Quoting joselb

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Thanks for this contribution FxTraderPro, I am testing your EA with good results with microlots in IBFX (10 positions opened until now= 100% gained) but I would like to ask you some questions:

- In IBFX the spread in GBP/JPY is 9 or 10 pips, so if I want to trade this pair I can't: as soon as it opens the position is closed.

- Can you tell me the calculations if I want to change the settings from the defaults SL 10 and TP 40 to this one: SL: 20 TP: 50. Or what do you think that would be the best TP and calculations with 20 SL?
I would thank you a lot if you can tell me these calculations in standard account, minilots and microlots. You can do it by PM if you want.

I also saw that it works with more than 1 pair at once.

Keep on this wonderful thread and congratulations

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Quoting FXTradepro

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Your Very Welcome Joselb......Regarding calculations for GBPJPY - I don't trade this pair BUT in order to us the EA with the Lot Sizing I use, you would need a TP of 80 with a 20 Pips SL. You can recalculate Lot Sizing yourself using any combination of settings by downloading and using the FXTradepro Manager Calculator found in Post #116.

Let me know if you have any further questions.

Dan

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Quoting FXTradepro

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Your Very Welcome Joselb......Regarding calculations for GBPJPY - I don't trade this pair BUT in order to us the EA with the Lot Sizing I use, you would need a TP of 80 with a 20 Pips SL. You can recalculate Lot Sizing yourself using any combination of settings by downloading and using the FXTradepro Manager Calculator found in Post #116.

Let me know if you have any further questions.

Dan

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Quoting joselb

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Great that you use openoffice too

Only one question: I change the leverage, SL and/or TP in this calculator but the lots are the same: 0,01... , must they be changed in some manner?. I thought that changing the SL or TP the lots would be different to gain in the next lot what you lost before in a bad trade.

Thanks again Dan.

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Quoting FXTradepro

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If you modify the SL and TP and Leverage settings you must then "play" with the Lot Size Calculations (in the gold fields) to figure out settings that are appropriate. Just give it a try and things should become clear to you.

Dan

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Quoting joselb

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Thanks for this contribution FxTraderPro, I am testing your EA with good results with microlots in IBFX (10 positions opened until now= 100% gained) but I would like to ask you some questions:

- In IBFX the spread in GBP/JPY is 9 or 10 pips, so if I want to trade this pair I can't: as soon as it opens the position is closed.

- Can you tell me the calculations if I want to change the settings from the defaults SL 10 and TP 40 to this one: SL: 20 TP: 50. Or what do you think that would be the best TP and calculations with 20 SL?
I would thank you a lot if you can tell me these calculations in standard account, minilots and microlots. You can do it by PM if you want.

I also saw that it works with more than 1 pair at once.

Keep on this wonderful thread and congratulations

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Quoting timmy

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Hi Joselb,
Just thought I'd stick my nose in on your discussion with Dan about what parameters to trade using GBP/JPY.

Here is a statistical analysis of your options based on what you guys are hatching for a progression plan:

[Note: these probabilities are based on a RANDOM entry pattern. Of course you are not going to entry randomly so you won't run this level of risk, and so if you run a smart entry method you will probably improve your chances of success - like Dan does for his progression. HOWEVER these probabilities are very useful to compare since if you trade using them with an identical entry method then the failure probabilites are definitely comparable.]

Dan suggested you look at using SL = 20, TP = 80, and (presumably) 24 progression levels, trading GBP/JPY (assuming a 9 pip spread). Your failure probability will be 1:35

Dans progression runs a (random) entry failure probability of 1:66 (assuming Dan runs it on Euro/USD). So effectively Dan backs his trading experience for his entry method and runs an "insurance policy" that gives him many more chances of being right - at the end of the day.

Hence compared to Dans progression you would be running nearly twice the risk if you traded both progressions with an identical entry method.

Just a note: A progression set up with a SL = 12, TP = 39, Prog levels = 21 (and a max lot usage out to ~45-50 lots), trading the Euro/USD with a 2 pip spread, will give you a failure probability of 1:98 and a profit per year of about 100% return depending on how you set out the lots to be traded on each progression. (Also assumes for comparative analysis that you would trade the EA once per day 250 days of the year).

So this is significantly less risky than Dans progression - assuming once again that you traded the progressions with an identical entry method (be it Dans or otherwise). But of course the above progression setup would produce much less profit over a year than Dans ... but I could live with 100% p.a. and a lot less risk (assuming I can come up with a good entry method).

Conclusion:

1/ Don't be fooled into thinking that just because GBP/JPY offers greater volatility, that it will more likely get to the TP, it won't. You will end up with comparitively more risk to achieve the same profit compared to trading Euro/USD. (Trading the Euro/USD just seems more risky sometimes because you are often sitting in a trade for a lot longer because it is slow to get to the TP....)
2/ Any pair with a spread over 2 starts gearing much higher risk (based on a random start point), relative to low spread pairs.
3/ The variation of Stop Loss has considerably more impact on your probability of failure compared to the variation of the TP. So the greater the SL the better (ie lower failure probability) ... but of course this comes at a price since the Tp and/or lots traded (which translates into the number of progression levels) will have to be altered ...which will impact on profit....
4/ Dans progression calculation spreadsheet is very good - since it forces you to carefully balance all the variables - and you can't "cheat". It will always produce a relative balance between profit and risk that you cannot escape.

So be careful about trading the higher volatile pairs. After all by their very nature this is why brokers give them such large spreads. I do not believe there is any advantage in trading them using this type of EA, only greater risk.

Tim

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Quoting joselb

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Thanks for your calculations and your effort timmy although I must tell you my opinion about it and it's that I think that it's almost impossible to predict with 100% accuracy this percentage, but you can be right in a good percentage.

I think that FxTradePro's calculations with SL 10 and TP 40 (and no more than 5 spread in the pairs to trade) are great and I am sure that he tested it during 1 year before sharing with all of us.

And I agree with you that gbp/jpy is not good because I am risking a lot with that 9 or 10 spread. In fact I decided not to trade this pair with this EA and moving instead to eur/jpy (4 pips spread and high movements).

I am testing now gbp/usd, usd/jpy and eur/jpy. I hate the slow movement of eur/usd and the few volatility in this pair but I agree with you that it's a more stable pair with only 2 pips spread

Thanks timmy.

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Quoting TickJob

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Hi FXTradepro,

Thanks for your excellent posts and technique.
I am searching and trying out some similar Martigale methods. My main focus is to reduce the number of progression and lot size. I like your progression most so far.

One of the ways, as some one here mentioned, is to trade only one direction, for example, ONLY BUY LONG, when price go down just cut loss and wait for buying long signal to appear and buy long again. In this case you can sustain longer price fluctuation with the same amount of fund.

See example below, it use FIB progress with basic lot size of 15000 units(Interactive Brokers).

I am using smartquant. May be I should try MT4 brokers to play micro lot for experiement. How can I get your EA source code so that I can modify to add new features to make it more robust?

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Quoting TickJob

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Hi FXTradepro,

Thanks for your excellent posts and technique.
I am searching and trying out some similar Martigale methods. My main focus is to reduce the number of progression and lot size. I like your progression most so far.

One of the ways, as some one here mentioned, is to trade only one direction, for example, ONLY BUY LONG, when price go down just cut loss and wait for buying long signal to appear and buy long again. In this case you can sustain longer price fluctuation with the same amount of fund.

See example below, it use FIB progress with basic lot size of 15000 units(Interactive Brokers).

I am using smartquant. May be I should try MT4 brokers to play micro lot for experiement.

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Quoting aelimian

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Did you use the progression you described on thread # 319?

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Quoting FXTradepro

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Hello TickJob.....Trading this in 1 direction is really a completely different concept to what I am doing. One of the main concepts presented here is that we assume that we cannot predict the Markets direction with any certainty (in the short term). Trading in 1 direction assumes the opposite......

Dan

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Quoting TickJob

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Actually with direction or no direction the concepts are still the same when come to this martigale thing because both are assuming that we are likely to be wrong in guessing, and so we need to so many progression. Hence, the key thing is to be able to sustain as long price fluctuation as possible

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Quoting FXTradepro

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Hello Everyone......It seems very quiet on this Thread the past few days, yet, almost 500 people have downloaded the Expert. Let's hear from some new people trying the Strategy......Or is everyone losing interest?

Dan

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Quoting jones247

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Hi Dan,

I don't think it's a matter of losing interest, but rather a issue of risk & reward. This is an excellent system with only two potential downsides. Most other systems have numerous downsides. The only two issues ("downsides") are: (1) if a breakout occurs within the first 7 progressions, there's not a lot of money to be made... as compared to other systems and strategies for a night's effort; (2) this system forces one to contemplate the probability of a drawndown of 50% of your capital reserves (i.e. Margin Requirement). Although the odds are that it will not happen with proper entry, and one could have 24 consecutive losses with other systems (which would create a similar cummulative drawdown impact), this system forces one to acknowledge this fact up front.

If there was a way to emphasize the ROI of this system and offset the drawdown impact through the progressions, I believe this would be the most popular and powerful thread on this site... IMHO...

Thanks,
Walt

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Quoting jimbo61

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Not losing interest...just being quite...
Had a winner on the GBP/USD last night. Started the EA up around 10 pm last night and it closed out at the 5th level ($90+), after the London market opened up. Did not really look too close at it before I left for work, but it just checked to se if it closed over night.

Pretty steady program that works out for me each day.

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