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  • Post #581
  • Quote
  • Edited at 7:43pm Aug 13, 2008 6:54pm | Edited at 7:43pm
Quoting PistolDave
Thanks nanningbob. Your answers helped me a lot.

I don't mean to bombard you with lots of questions, but I believe you have an awesome system here and I want to test it with you. Understanding comes first.

I hope everyone appreciates how much trial and error you have saved them. You have given us a jump start into a profitable system.

I realize that the last 4 or 5 days have been extraordinary in the size of the moves in the USD pairs, so these results will not occur very often. But it shows us what your system can do under these unusual conditions, so it is a good test.

Attached is my results so far.

I also want to point out that there is not any large floating loss waiting to be closed like most systems like this.

And also note the 75/25 profit/loss ratio and max drawdown of only 2.6%.

I have not had anything go against me more than 4 levels so far at any time that I have been able to watch it in action. So the risk has been very low.

Again, I'm aware that this is unusual and can't be expected all the time but it sure is a great start!

Here's the strategy I have tried so far:

I am not closing all the trades every day like you are. I am looking at the daily trend on a pair first and if it is up for instance, then I look at the 4H trend. If the 4H is moving up too then I will leave the EA trading live on that pair. I will watch it and when the 4H shows clear signs of going against the daily I will stop the EA and close all open positions on that pair and wait until the two time frames start to move in the same direction again.

I'm aware that the last few days have seen several pairs in strong directional moves so that may be skewing the results a lot. Still everything looks good. No surprises. Just excellent results!

Please comment on that strategy I mentioned if you have tried it.

I also think your method of starting your trades before the start of the Asian session and checking for profits at intervals during the day, then ending the day flat is good too. It reduces risk, and you have already shown that is the main issue we have to deal with.

Actually I have never liked the idea of just turning on an EA and letting it trade for me, but this one is much more "hands on" than the others I have tried and it seems more appealing as a real way to make money from the markets.

Please take a look at the account view here in the zip file:

(The screenshots of the account details are just the bottom part of the page but they show all the information you need to see. ie; Starting account balance, Closed P/L, Floating P/L, and all the drawdown, P/L ratios, etc. on the second screenshot.)

PD
Sounds like an excellent strategy to me. As long as you are monitoring your trades and keeping them out of trouble this will do well. Some days are more exciting than others. Because of my job, I cannot monitor trades all the time so shutting down my trades everyday is my best answer to certain problems. I live in China so I go to bed about 11 am EST and that leaves me wide open during the USA afternoon session. Many times it is quiet but I have gotten burned when I wake up and find out my profitable day has turned into a nightmare. So closing down is my best option. I have some demo accounts that are heading for trouble now because I have kept them running but the ones I have shut down have their profits in the bank and ready for another trading day. All I am concerned about is that every day I pocket the profit and keep that line moving up. I used to love trading the 4H chart and it is very good at watching the weekly trend. So if you feel you are in the trend for the week you can ride it. Good luck.
The hardest part of this system is when you have those losing days. You keep saying to yourself, this is going to turn around and sometimes it does but there are days it doesnt and it is the gut check of taking that loss. That will be the test of your trading discipline, taking the losing day. I am getting better at it but sometimes my ego wont let me do it.
Sheesh the Eur/gbp moved 138 pips yesterday. Where did that come from?? GBP/CHF and GBP/JPY both moved over 400 pips yesterday. It went with the trend so the EA picked it up and pocketed profits all day. Those show up as really good days. If they had gone against the trend and had not retraced during their run we would be looking at how to get out of these potential death trades. Just pointing out how this works.
This program has two very good money management programs in it. One you can set at a certain figure and if that figure is hit it closes all trades and no longer trades. For instance you have 3700 in your account and you have had a good week. You want to keep trading but you dont want to lose your winnings either. So you set the figure at 3500 or 3400. If your entire balance hits that point it closes all trades and stops trading. The other one, you can set the account at a certain percentage, lets say 10%. If it goes 370 dollars against you it will close all trades but begin trading again. This allows you to protect your profits or account for the week against sudden unexpected moves. There is also a total take profit, if all the trades = say 50 dollars it will close all trades and pocket the profit. I dont know if it will continue trading though, never tested that one. This EA is probably the best one I have ever seen written.
I feel the same way. I like the hands on approach. The biggest problem in trading forex is getting the good entrance. I let the EA handle that. If level one was not good, on to level 2, if that was not good level 3 and so on until I get it right. I dont have to handle that part or agonize over my decisions. Also the TP is handled by the EA so I just watch. But the most critical decision is in your hands. When am I in trouble? When do I stop for the day? This allows you to still use your personal trading skills and keeps you in the game. My wife or children call and I can go see them and keep my personal life intact. I can leave my computer for hours and not have to worry about missing a profit or getting hit with that 30-40 pip stop loss. Price goes against me 200 pips, so what, 98% of the time a retrace will save me. Brokers and banks can spike all they want and knock everyone else out of the game. They just added to my profit If they cheat on me a couple of pips at TP time I still get my profit depending on the program I use. No more hitting my stop loss and then going into profit. I love this.
Hi nanningbob,

I am confused after reading PD's questions and your answers. I must be misunderstanding something, Please help... I am testing 50/40 1.8 EA.

1. The EA creates a buy or a sell order almost immediately after I drag the EA to Daily chart. It seems to me that the EA always creates a buy order when I see a green (up trending) candle bar on Daily chart and a sell order when I see a red (down trend) bar. Is this correct?

I thought the EA creates an order when (immediately after or should I say at that moment) Moving Average crosses on Daily chart. No?

Or does the EA always create a buy order whenever there is a green bar on Daily chart because the green bar means that upward MA cross already happened some time ago?

Or something else?

2. For example, the EA creates a buy order. The price goes up and up and the EA takes profit every 50 pips up move. Then it changes direction and the price goes down. I thought the EA creates a new buy order with x1.8 more lots every 40 pips down move. Am I right?

If I am right I have a problem. Because the EA on my demo MT4 does not create any new order. Yes, the EA on my MT4 takes profit every 50 pips but does not create any new order even though the price goes down and down..

I see only original buy order and it shows -450 pips. Nothing else. I don't change any settings except lot size. I changed it to 0.1 because my MT4 demo does not accept micro lot. There is no Martingale effect at all. Or Am I missing something?

3. So the price went down to -450 pips and I see downward MA cross and Red bar on Daily chart now. I thought the EA creates a sell order automatically when downward MA cross happens. But I don't see any new Sell order ether. I assume I have to drag the EA to the chart to create a sell order????

Maybe these things are obvious to other people but I am confused. Sounds like other students are doing great. Please help me teacher!

Thanks in advance.
  • Post #587
  • Quote
  • Edited at 1:21am Aug 14, 2008 12:43am | Edited at 1:21am
Thanks Nanningbob,

I have run this on demo and really like it.

However, as my live account is not with a mt4 broker, I am wondering if you could give me some suggestions on manual trading this, as I think I would learn the intricacies of the method prior to finding a mt4 broker when I am ready to change accounts.

Thanks

TP
Hi dowog,

try look into journal tab when you see the problem..

it may be due to EA trigger a buy/sell but the account not enough money
since you change the lot size.

Remember, this is martiagle method, it will increase lot size quick and you must have sufficient money.

Just my prediction...

Hi Nanning Bob, seems you make it great since last time.
How is your actual live micro account, what is %increase till today?
Quoting dowog
Hi nanningbob,

I am confused after reading PD's questions and your answers. I must be misunderstanding something, Please help... I am testing 50/40 1.8 EA.

1. The EA creates a buy or a sell order almost immediately after I drag the EA to Daily chart. It seems to me that the EA always creates a buy order when I see a green (up trending) candle bar on Daily chart and a sell order when I see a red (down trend) bar. Is this correct?

Technically yes because on a one day chart the line is going to be either above or below the MA line. The only time it will not enter is during the pip spread on either side of the line, so you will get an immediate entrance when you turn the EA on. If you dont think it is a good entrance I wouldnt turn the EA on.

I thought the EA creates an order when (immediately after or should I say at that moment) Moving Average crosses on Daily chart. No?

NO, it creates an order anytime it is below (sell) or above (buy) This is not a trading only at the cross. It trades when ever it is above or below. I have tried following a trend and entering on a 1H or 4H cross. I think it would be a safer EA but you dont get as many trades. Penny trading involves lots of trades to make a profit. You may want to test a theory like this to see if you could play with bigger lots and be safe but I have done very little testing in this area.

Or does the EA always create a buy order whenever there is a green bar on Daily chart because the green bar means that upward MA cross already happened some time ago?

It does not specifically trade green or red bar but it would seem that way since we are folllowing a trend and the MA changes very quickly with a trend change. It is a 1MA median shift 1, so if price changes quickly the trend changes quickly too.

Or something else?

2. For example, the EA creates a buy order. The price goes up and up and the EA takes profit every 50 pips up move. Then it changes direction and the price goes down. I thought the EA creates a new buy order with x1.8 more lots every 40 pips down move. Am I right?

Yes, but the first time there is a retrace and takes profit and price is now below the MA line it will enter sells. We want to change directions quickly since we are using a 1 day chart. It is designed that way. When there are price turnarounds in a trend and the trend reverses instead of just retracing it has a time of consolidation. Almost all the time you will get your retrace for profit and then be entered into the new trend direction. This is how it is suppose to work.

If I am right I have a problem. Because the EA on my demo MT4 does not create any new order. Yes, the EA on my MT4 takes profit every 50 pips but does not create any new order even though the price goes down and down..

I see only original buy order and it shows -450 pips. Nothing else. I don't change any settings except lot size. I changed it to 0.1 because my MT4 demo does not accept micro lot. There is no Martingale effect at all. Or Am I missing something?

I dont know, when I set my ea for .10 I use 0.10, I think once when I tested it if I dont have that zero there before the point it didnt work right. Try entering 0.10 and see if that solves the problem. The other problem maybe it wont do the multiplication. .1 x 1.5 or 1.8 is still .1 so it wont reenter or do the math. The soft ware on your brokers side may not handle hundreths so it wont register. I used to use many different companies MT4s to demo but my results would be different so I finally stuck with IBFX because that was the company I was trading with. Each brokers MT4 has slight variations for instance Crown Forex you have to get special permission to use an EA with them. I know there were companies my EA didnt work very well with. It wouldnt get the entrances right and sometime some of them would disappear after a spike. So I quit testing with other companies demos. Most of them though it worked fine.

3. So the price went down to -450 pips and I see downward MA cross and Red bar on Daily chart now. I thought the EA creates a sell order automatically when downward MA cross happens. But I don't see any new Sell order ether. I assume I have to drag the EA to the chart to create a sell order????

If you are in a buy it wont enter a sell until the buy is done. So the buy must be closed. You are in a death trade and needed to get out at some point. To get an EA to do both buys and sells at the same time you have to have different magic numbers so the software can track both trades. I have played with that too.

Maybe these things are obvious to other people but I am confused. Sounds like other students are doing great. Please help me teacher!

It takes time and I dont mind answering questions. Try the modifications and see if that doesnt work. If not download an IBFX demo and see if you have the same problems.

Thanks in advance.
answers in red above
Quoting TripMagnet
Thanks Nanningbob,

I have run this on demo and really like it.

However, as my live account is not with a mt4 broker, I am wondering if you could give me some suggestions on manual trading this, as I think I would learn the intricacies of the method prior to finding a mt4 broker when I am ready to change accounts.

Thanks

TP
I tried manually trading this off a 4H chart but got whiplashed badly the last 10 days. I am going to try this on a 1 day chart in the future and see what happens. Professional traders use a system similar to this and it is called phasing in your trade. It is only used on long term trades. You could use a daily or weekly chart and when price hits a support or resistance you enter 1 lot. if it breaks to the next support or resistance then enter 3lots, 5 lots and so on until price reverses into your favor. You could make your decisions off of support and resistance lines and trend line breaks. The guys who trade like this know their fundamentals pretty well and probably follow the COT charts. Entrances are not an exact science even for professionals so they phase in their trade. They like to trade 100 or 1000 lots but dont enter them all at once. They phase them in as the trade goes in their favor. You may try posting two or three sto lines on a 1 day chart and enter with a MA cross at over bought and over sold on the sto and see how that that works. I put a chart to show you what I mean, The sto lines are on the bottom so when the blue line crosses the yellow you have a trend change and probably pick up some pips and do some long term trading. I have not tried this but it gives you an idea of a starting place.
Attached Image (click to enlarge)
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Quoting MrForex123
Hi dowog,

try look into journal tab when you see the problem..

it may be due to EA trigger a buy/sell but the account not enough money
since you change the lot size.

Remember, this is martiagle method, it will increase lot size quick and you must have sufficient money.

Just my prediction...

Hi Nanning Bob, seems you make it great since last time.
How is your actual live micro account, what is %increase till today?
I have tried three times to trade a micro account and 250 dollars and it just wasnt enough money to trade with this method. I am trying to recuperate from getting slammed last thursday and friday. I am using the 50/40 on it now and made 20 dollars the last 3 days, so we will see what happens. The problem with 250 bucks is when I get 6,7,8 levels deep it is using most of my margin and I have no wiggle room. If I take the loss I dont have enough to keep trading, If I keep the trade I can get my account cleaned out. So my testing shows I need 3000 to trade at 200:1 ratio or 1000 at 400:1. I am going with the 3000. I plan on transferring that amount this week end and hope to start trading live next week. I successfully demo traded live that amount for more than 5 months so I feel I am ready to take the risk. I will keep you guys posted whether good or bad. Ive talked the talked now I must walk the walk.

I really thought I had this thing licked with micro accounts by following a 4H chart but I was wrong, I do not see any way of trading this with less than a 1000 dollars successfully. I cant get a demo with only 1000 in it but I have successfully traded 3000 on a demo so that is what I am going to do.
hi nanningbob,

Do your broker offer 500:1 leverage?
if USD50 equivalent to 5000 cents
if USD3000 equivalent to 300,000 cents

I think that is more than enough for you.

If you do back test, most of the days are winning days depends on target profit. If target profit USD10/day most of days are winning days.
BUT market is always find ways to beat martingale...
Can death trade wipe out the all account while we're not enough accumulate the profit days yet?
  • Post #593
  • Quote
  • Edited at 7:04am Aug 14, 2008 6:39am | Edited at 7:04am
Quoting MrForex123
hi nanningbob,

Do your broker offer 500:1 leverage?
if USD50 equivalent to 5000 cents
if USD3000 equivalent to 300,000 cents

I think that is more than enough for you.

If you do back test, most of the days are winning days depends on target profit. If target profit USD10/day most of days are winning days.
BUT market is always find ways to beat martingale...
Can death trade wipe out the all account while we're not enough accumulate the profit days yet?
I just found out that IBFX offers 400:1, dont know if that is good news or not but they dont advertise loudly but it is available. I will demo test it too see if I like it but I know it is very dangerous to trade that high of leverage.

If you close your trades everyday you wont face the death trade or get your account wiped out. Unless you trade too high of a level. Pennies work great but most people dont understand exponential math. I have studied death trades and account wipe outs. They only happen if you hold onto a bad trade. If you get out they dont happen. That is the key to martingale trading. Beat the death trade and you win. The hardest part of trading is taking a loss but managing losses is the key to success in any trading system. The vast majority of true experienced traders will tell you that managing your account is the most important part of trading.
Here are the results of live demo testing my 50/40 for the last seven days. I am running it on all 19 currencies that IBFX offers and am trading at only .02 for a first level trade. I think the results are impressive especially its ability to survive 400 pip runs on several occasions by several currencies.
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Quoting nanningbob
Here are the results of live demo testing my 50/40 for the last seven days. I am running it on all 19 currencies that IBFX offers and am trading at only .02 for a first level trade. I think the results are impressive especially its ability to survive 400 pip runs on several occasions by several currencies.
That looks excellent, considering how rough it has been over the last few trading days.

I had a little drawdown yesterday and today but just a minor setback I think.

I'm still up about 25% for the week.

Just breaking even would be great for a day like today.

I'm looking at trying a demo and setting a profit target at a certain percentage gain for the day and then closing out.

I'll keep you posted on the results.
When I first started coding EAs (admittedly not that long ago!) I did a couple of Martingales, then realised and read about the risks so moved off in other directions. Just coming back to it now out of interest it seems there must be a way of making it work, maybe not to get the massive profits you "may" get if you don't get the death trade, but to make a fair return. It's easy enough for people to say "it's no better then plain betting" or that any other "real" strategy is better, but the reality is there are few enough EAs out there that really work. Trading strategies yes, but comparing a trading strategy to an EA is comparing apples and oranges. What I'm driving at is here's an auto trader that is guaranteed to make money in most market conditions (how many EAs can you say this for?) but has a fatal flaw if not handled right. I don't think it should just be written off once the word Martingale is mentioned.


Maybe this has been mentioned before, but why not use a stop loss to minimise the damage a death trade does to your account? For example-
You've got €1000 in an account, you're trading pennies and decide €250 is the max you're willing to risk. I haven't done the math on this, but just calculate the number of levels you can afford to get to within that €250, suppose it is level 4 and when your EA makes the 4th trade a stop loss is set to keep you inside the €250. You might program the EA to stay out of trading for a day or two days now, or even stop trading altogether until re-initialised.
Now if you do get a death trade you're only down to €750 and can work back up again. OK so you might get 4 death trades in a row with no profit, but from the statistics I see earlier this seems quite unlikely indeed. More likely your €1000 will turn to €1750, then you lose €250, you work from €1500 to €2500, lose another €250 etc.
Not as good as watching for the deathtrade and getting out manuall, but fully automated and eliminates the risk of the market making a BIG shift while you're not looking and blowing your account. It simply wouldn't be possible to lose an account this way.

Let me know what you think, if I can get some feedback I'll code some of this up over the weekend and see about running a long backtest on it.
Quoting nanningbob
Here are the results of live demo testing my 50/40 for the last seven days. I am running it on all 19 currencies that IBFX offers and am trading at only .02 for a first level trade. I think the results are impressive especially its ability to survive 400 pip runs on several occasions by several currencies.
Super!

Here is a screen shot of my closed trades running the tp100+40 1.5x EA starting at 8/12/08 at 0500 until now, 8/14/08, 21:40... The demo is running on FXDD and I am using .1 lot size. All the EA settings are the default ones.
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Quoting nanningbob
Here are the results of live demo testing my 50/40 for the last seven days. I am running it on all 19 currencies that IBFX offers and am trading at only .02 for a first level trade. I think the results are impressive especially its ability to survive 400 pip runs on several occasions by several currencies.
Bob,

I am having trouble seeing how to display a line chart of the acct balance as you are posting here.... Can you help?
  • Post #599
  • Quote
  • Edited at 7:55pm Aug 14, 2008 7:10pm | Edited at 7:55pm
Quoting Zenith63
When I first started coding EAs (admittedly not that long ago!) I did a couple of Martingales, then realised and read about the risks so moved off in other directions. Just coming back to it now out of interest it seems there must be a way of making it work, maybe not to get the massive profits you "may" get if you don't get the death trade, but to make a fair return. It's easy enough for people to say "it's no better then plain betting" or that any other "real" strategy is better, but the reality is there are few enough EAs out there that really work. Trading strategies yes, but comparing a trading strategy to an EA is comparing apples and oranges. What I'm driving at is here's an auto trader that is guaranteed to make money in most market conditions (how many EAs can you say this for?) but has a fatal flaw if not handled right. I don't think it should just be written off once the word Martingale is mentioned.


Maybe this has been mentioned before, but why not use a stop loss to minimise the damage a death trade does to your account? For example-
You've got €1000 in an account, you're trading pennies and decide €250 is the max you're willing to risk. I haven't done the math on this, but just calculate the number of levels you can afford to get to within that €250, suppose it is level 4 and when your EA makes the 4th trade a stop loss is set to keep you inside the €250. You might program the EA to stay out of trading for a day or two days now, or even stop trading altogether until re-initialised.
Now if you do get a death trade you're only down to €750 and can work back up again. OK so you might get 4 death trades in a row with no profit, but from the statistics I see earlier this seems quite unlikely indeed. More likely your €1000 will turn to €1750, then you lose €250, you work from €1500 to €2500, lose another €250 etc.
Not as good as watching for the deathtrade and getting out manuall, but fully automated and eliminates the risk of the market making a BIG shift while you're not looking and blowing your account. It simply wouldn't be possible to lose an account this way.

Let me know what you think, if I can get some feedback I'll code some of this up over the weekend and see about running a long backtest on it.
You can do that but you will always be taking the maximum loss whenever you have a bad trade. This cuts into your profits. I prefer to handle any losses by using a retrace and minimizing my loss. I dont know of any way to program that. That is a trading skill, but to have some form of account protection is never a bad idea.

Martingale is a betting philosophy. Modified martingale or phasing in a trade is a trading strategy. Phasing is a strategy of many professional traders and I have mixed it with a martingale system. Traders who do 1000 lots do not put a trade in with all 1000 at one time. They break up their entrances into several trades. When you see monster moves like you did this past week where the eur/usd and gbp/usd moved 1000s of pips. Thats these guys entering their big orders. They knew a market correction was coming and when it did, BAM. There are four things essential to understanding this.

1. Exponential Math- why do pennies really work and dollars do not, and anything over .10 a trade is probably fatal.

2. What is a death trade and how do I handle it and why you dont need to fear it if you know what it is. Except for the GBP/JPY and GBP/CHF death trades take more than one day to happen so I do have plenty of opportunity to get out. Losing trades actually take days to develop.

3. What is the maximum move a currency will do in one day. Design the EA to handle that kind of move and design a take profit to fit it. In other words my trading strategy is simply this. I believe that any currency that moves 400 pips will have a 50 to 100 pip retracement during that move in any one day. To not do that is a very rare event. I am putting the odds in my favor.

4. Take your profits. Dont let your account keep getting bigger and bigger. When you make money take a check and secure your profit. Once you take out your original capital you can never lose. I have made money this year because I have taken my money out when I make profit. I have blown some accounts but they were the free money ones. (they were also part of my testing, I did expect to lose at some point) Believe me this will really help you psychology wise and disproves the naysayers.

4B. Take your profits every day and you cant lose them. Dont let greed kill your profitabililty. The purpose of trading is not seeing how many pips do I get but Did I make a profit? DO NOT EVER GET THE MINDSET, IF ONLY I HAD STAYED IN I WOULD HAVE MADE __________________ Some of you are showing good profit for the week. There is no rule that says you have to trade on Fridays. TAKE THE CHECK AND START AGAIN MONDAY.

In closing: In my system you can actually lose 200 pips on your first entrance but gain the winning 50 or 100 at the end. The actual total trade actually loses pips but makes money. It is a different mindset than the typical trader. That is why most traders will reject this philosophy, you are losing pips but making money, that is hard for some people to fathom.
Quoting jnevins
Bob,

I am having trouble seeing how to display a line chart of the acct balance as you are posting here.... Can you help?
Go to the account history tab. Put your arrow anywhere on the results chart and right click. You will see several choices, click on custom period and choose what time period of results you wish to see. Then right click again and choose Save as Detailed Results. Choose a folder you wish to save the information to, I use desktop, and save. It will create two pieces of information. One is a graph chart and the other is every trade you made with percentages etc. This helps analyze your trading, what you doing right and what you are doing wrong.
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