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  • #1,401
  • Oct 17, 2008 10:07pm Oct 17, 2008 10:07pm
Quoting Toothman
Hey folks, tell me why this idea wouldn't work. Instead of trading multiple pairs and dragging down your margin, trade only one big mover such as the EUR/AUD or GBP/JPY. Set max. trades to 15 and let'er rip all week. Close on Friday as usual. Over the last two weeks the GBP/JPY would have made you close to $2000 and the EUR/AUD over $3000 trading pennies. Maximum drawdown would have been less than 20%. As currencies calm down add additional big movers.
Do the math, that will give you your answer.
  • #1,402
  • Oct 17, 2008 10:34pm Oct 17, 2008 10:34pm
I want it to be known that I post what I think works best with this philosophy, it doesn't mean it is the best way but I think it works. One of the best ways to learn my system however, is to experiment. Why do things work as they do? Sometimes you have to learn them by trial and error. That is how I came to my conclusions along with using mathematical formulas and my 7 year currency range.

Do 15 levels at 1.5x and see how much money you are spending per pip. What happens at 1.4x or 1.3x or 1.8x? That takes the backtester. What groups of currencies work together, which ones dont. WHY?

One of the best ways to test an idea is to pencil out the math on paper and see now it works. Then multiply times 100 or 200 and see how long it takes to wipe out your account. At what point are you comfortable with a loss and still be able to trade? How long will it take to recover a loss if you take one? My level was 8. Maybe you have 25,000 dollars and you think you can go 15. The EAs are posted, feel free to try out your ideas. That is how this system became successful. So I encourage you to learn and study.
  • #1,403
  • Oct 18, 2008 1:44am Oct 18, 2008 1:44am
Bob,

when you use 4 levels you are expecting for a 375 pips move (125x3) on the used pairs, when you use 5 levels, instead, the expected move is of 500 pips (125x4).

So, how you can correctly handle a, for instance, 500/550 pips move on a pair when the covered range by the EA is 375 pips only (using 4 levels)?

Apart this, I'm going to trade live, from next week, on my USD 15K IBfx mini acc, a modified version of your 100/40 EA (that I found overally more profitable than the 100/125 version, in every market condition), using 0.01 (nano) initial lots size, 90 pips take profit (to fastly close all the trades on a even smaller retracement than 100 pips), 40 step and 13 as max trades level (that correspond to 12x40=480 pips "allowed" range), 800 pips safety stop loss, all of this using ONLY 7 fixed pairs (your suggested eight minus the EURJPY, that I sincerly don't understand why you include it with the other ones, because I saw recently some "straight on" moves of 600-700 pips without retrace on this pair, so, this is an absolutely dangerous pair in my opinion). The EA will run without interruption or any manually intervention by my side on a VPS, I need of something of robust and reliable that works fully automatically, no intervention, no judgement about any "death trade" that will bring for sure, before or later, to a wrong decision to interrupt prematurely some trade that would have retraced soon; so, my opinion is that a winner EA have to "know" BEFORE how to handle EVERY market condition by itself; from this basical (for me) concept my decision to use 13 levels on seven "right" pairs only with 90 pips t/p.

I think the 100/125 work very well only in "turbolent" market condition, like those we saw recently, but when the market is quite, the profitability of this EA is very low compared with the 100/40 (according with my demo test and from some logical reasonement).

So, I needed to adapt something that worked well in quite market conditions (like the 100/40) and modify it with the "safety measures" I spoke about before (to prevent and correctly handle any big moves of 5-600 pips also).

Time will tell if I'm on the right way, I'll keep you updated about my live results here, starting next week.

Just my two cents.....

Good pips to all and TY Bob for your GREAT work with this EA!

Take


Quoting nanningbob
I want to thank Lincoln for asking a key question, it got me thinking and finally I said \"Why not?\" So Lincoln this is what happened. I thought the 100/40 is successful with a 3-400 pip range why not a 600 pip range EA. So I took the 100/125 and changed it to 4 levels and put in a 600 pip stop loss. (The stop loss operates from the EA I would like someone to design the stop loss to be posted at their trading company)

Now we trade both ways, use currencies that dont go over 600 pips in one day. (use the same currencies recommended in the original post of the 100/125) It takes profit as it goes one direction but the account increases debt until the market switches direction then WOW the profit overtakes the accumulated debt and you have profit. Without that 5th level you can add to the starting lot and make more money. You only have to worry about trades that go over 600 pips but we are stopping them at 600.

Those of you who have an account where .01 is ten cents you could try it with this and see how it works. I am posting two versions of this EA. One is set at .04 for those who can trade with pennies. This will give you a 4 cent trade, see red figures below. The other is the 1.4 (.01) it will trade .01 lots one penny on penny accounts .10 on dime accounts. Check your MT4 to make sure which one you are doing. I traded the 1.4 for one day and knocked down over 200 dollars on a 1200 account. That was real money not demo. Below are the figures, the red ones are the 4 levels for ver. 1.04 and the green ones are for the version 1.04 (.01)

.01 .02 .03 .04 .05 .10
.03 .06 .09 .12 .15 .30
.09 .18 .27 .36 .45 .90
.27 .54 .81 1.08 1.35 2.70
  • #1,404
  • Oct 18, 2008 2:45am Oct 18, 2008 2:45am
Quoting TakeItEasy
Bob,

when you use 4 levels you are expecting for a 375 pips move (125x3) on the used pairs, when you use 5 levels, instead, the expected move is of 500 pips (125x4).

So, how you can correctly handle a, for instance, 500/550 pips move on a pair when the covered range by the EA is 375 pips only (using 4 levels)?

Apart this, I'm going to trade live, from next week, on my USD 15K IBfx mini acc, a modified version of your 100/40 EA (that I found overally more profitable than the 100/125 version, in every market condition), using 0.01 (nano) initial lots size, 90 pips take profit (to fastly close all the trades on a even smaller retracement than 100 pips), 40 step and 13 as max trades level (that correspond to 12x40=480 pips \"allowed\" range), 800 pips safety stop loss, all of this using ONLY 7 fixed pairs (your suggested eight minus the EURJPY, that I sincerly don't understand why you include it with the other ones, because I saw recently some \"straight on\" moves of 600-700 pips without retrace on this pair, so, this is an absolutely dangerous pair in my opinion). The EA will run without interruption or any manually intervention by my side on a VPS, I need of something of robust and reliable that works fully automatically, no intervention, no judgement about any \"death trade\" that will bring for sure, before or later, to a wrong decision to interrupt prematurely some trade that would have retraced soon; so, my opinion is that a winner EA have to \"know\" BEFORE how to handle EVERY market condition by itself; from this basical (for me) concept my decision to use 13 levels on seven \"right\" pairs only with 90 pips t/p.

I think the 100/125 work very well only in \"turbolent\" market condition, like those we saw recently, but when the market is quite, the profitability of this EA is very low compared with the 100/40 (according with my demo test and from some logical reasonement).

So, I needed to adapt something that worked well in quite market conditions (like the 100/40) and modify it with the \"safety measures\" I spoke about before (to prevent and correctly handle any big moves of 5-600 pips also).

Time will tell if I'm on the right way, I'll keep you updated about my live results here, starting next week.

Just my two cents.....

Good pips to all and TY Bob for your GREAT work with this EA!

Take
Thank you, that is why I post public. You get so caught up in a thought pattern you miss the obvious. The 100/40 is a dependable EA and works great. Even in turbulent times if you drop the more volatile pairs it works. Trading both ways was the last nut I wanted to crack. Ok, I will adjust accordingly. The 100/125 was for the volatile markets and we may not be out of them yet. I am comparing results between the two and after a month it would be a better indicator of each EAs strength and weaknesses. The one thing if you have been around with me for a while is to find a way to trade my system on 500 dollars but so far no luck. It takes at least a 1000 at 400:1 I think but I keep pushing. Anyway thanks for pointing out my mistake and appreciate very much your input.

Bob
  • #1,405
  • Oct 18, 2008 4:56am Oct 18, 2008 4:56am
I was using a penny a pip on a $3000 account with my testing. At level 15, trading only EUR/AUD my worst drawdown this week was $407(about 13%) and last week $411.The total gain for the two weeks was $3294 .The last two weeks were probably the most volatile two weeks in history so I don't see a whole lot more than this to the downside. Not saying this is the way to trade this EA. Just throwing out some observations.
  • #1,406
  • Oct 18, 2008 5:48am Oct 18, 2008 5:48am
Hi Bob,
Here is a EA that combine both buy EA and sell EA of the 100x125. Not sure it is working properly but that gives an idea how sell and buy are managed when backtesting.
Attached File(s)
File Type: mq4 100x125 buysell ver. 1.4.mq4   35 KB | 446 downloads
  • #1,407
  • Oct 18, 2008 9:37am Oct 18, 2008 9:37am
Hey Bob,

I just had the Idea of trading both versions of 100/125 (600 and 800 range EA's) on the same account, on your recommended pairs. Both would start at 0.01. Do you think this a viable option or is it something of an overkill? I just thought one might EA might perform better during high volatility periods(800 range) such as now and then for the quieter markets(600 range) would pick up some good profits?
I'm sure I've probably missed something out in my thought process about this, so thats why I thought I'd run it by you and other people think?

For the 600 range EA, do you intend it to be run 24/7 just like 800 range?

Also for 800 range you mentioned closing down all trades in the middle of the week because the buy and sell where too far apart, is this critical or would the EA still be OK to close only once per week on a Friday before the weekend?

Look forward to hearing your thoughts

Thanks!
  • #1,408
  • Oct 18, 2008 10:22am Oct 18, 2008 10:22am
Quoting xirtam
Hey Bob,

I just had the Idea of trading both versions of 100/125 (600 and 800 range EA's) on the same account, on your recommended pairs. Both would start at 0.01. Do you think this a viable option or is it something of an overkill? I just thought one might EA might perform better during high volatility periods(800 range) such as now and then for the quieter markets(600 range) would pick up some good profits?
I'm sure I've probably missed something out in my thought process about this, so thats why I thought I'd run it by you and other people think?

For the 600 range EA, do you intend it to be run 24/7 just like 800 range?

Also for 800 range you mentioned closing down all trades in the middle of the week because the buy and sell where too far apart, is this critical or would the EA still be OK to close only once per week on a Friday before the weekend?

Look forward to hearing your thoughts

Thanks!
Let me finish getting my updated currency facts. That will let me know more.
  • #1,409
  • Oct 18, 2008 10:40am Oct 18, 2008 10:40am
I ran the numbers and I'm averaging $53.13 profit a day on my 2k account. This is within my 'plan' numbers. I can't wait for phase 2.
  • #1,410
  • Oct 18, 2008 4:59pm Oct 18, 2008 4:59pm
Here is a very clear cut way to avoid the death trade, to let you know in advance you could be in one and to get out before it adds up to serious money. Like anything else in Forex trading it wont be absolute but it has fit almost every death trade scenario I have seen. I have adjusted my PB Autopivots indicator to include warning lines so you know when you can be in one. The charts I attached are from the 4H chart so you see all the lines. I also included what they look like on a dark screen and light screen. I tried to choose colors that would work with both.

Simple rules:

1. Enter trades between the two white lines, the closer to the yellow pivot line the better.
2. As long as you are in between the 2 green dotted lines your trades are safe.
3. When you go outside the green lines and you get near the pink lines that is a very strong reversal area.
4. If you are going outside the green lines and your on the wrong side of the trade you may consider getting out early.
5. If you enter a trade outside the pink or near it and price reverses and goes past the yellow pivot or white lines you are now in a potential death trade
6. You can now exit the trade before the numbers get too big.
7. Any trade entered outside the pink lines or red dotted line, you will probably want to exit if it comes back inside the green line.

The pivot lines should reset around midnight USA time (5 GMT) but this program is not set to change at daylight savings time and back.
Pivot and support lines are based on yesterdays high and low

This should help recognize a potential death long before it becomes a serious problem. Also if you enter the market at JPY session like I do, you will see if you are entering at a bad time. Both of the bad trades I entered in the last two weeks were outside the pink lines. If I had had this indicator I could have avoided both of them.

These lines should work for both systems 100/40 and the 100/125

I hope this helps.

I have included the new indicator that goes into your indicator folder
  • #1,411
  • Edited 5:17pm Oct 18, 2008 5:02pm | Edited 5:17pm
Put the PB autopivots 4.0 in your indicators folder. Restart MT4, remove the previous indicator from your screen and add the new indicator. Save to templates and then make sure you add to all your currencies.

Good luck and happy pip hunting.

Notice the first black screen near the middle white dotted line. Price broke S2 and S3 (clear warning sign of trouble) last Friday and gapped over the weekend. Then price did a long run up to the pink line but retraced at the pivot a couple of times. If you dont get that retracement you are in trouble. If you delete out of the trade early because price went way out of range. You solve a potential problem. The distance from pink line to pink line is over 800 pips. (distance in lines will vary from currency to currency because the lines are based on the previous days high and low. The high and lows change every day so the lines will be different) You can see any trade entered near those pink lines could be trouble. You also can see any trade started between the white lines would be safe. Even though this is a 4H chart and shows a whole week, it gives a good example of what a potential death trade would look like on any given day. Also you can see the previous weeks spike, YIKES.

You can see in the second screen how price bounced off of the pink R2, hit the yellow pivot and retraced to the white for a nice profitable retrace and then continued on to S1 (green dotted line) bounced off again for a nice profit run.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: pb auto dark.gif Size: 17 KB
Click to Enlarge Name: pb auto light.gif Size: 17 KB
Attached File(s)
File Type: mq4 PB_autopivots ver. 4.0.mq4   21 KB | 446 downloads
  • #1,412
  • Oct 18, 2008 5:07pm Oct 18, 2008 5:07pm
Hello Nanningbob,

This will surely help people. Terrific work my friend. I appreciate your efforts.
Regards,
Jeff

Quoting nanningbob
Put the PB autopivots 4.0 in your indicators folder. Restart MT4, remove the previous indicator from your screen and add the new indicator. Save to templates and then make sure you add to all your currencies.

Good luck and happy pip hunting.
  • #1,413
  • Oct 18, 2008 5:42pm Oct 18, 2008 5:42pm
Quoting azjeff
Hello Nanningbob,

This will surely help people. Terrific work my friend. I appreciate your efforts.
Regards,
Jeff
Thanks Jeff. I am hoping this solves the EUR/AUD, GBP/JPY, GBP/CHF, EUR/JPY currency problems I have had with my system. These currencies are the most profitable but also the most likely to get you into a death trade. If we can avoid their extremes it would be great. Now if we can get someone to program a warning system that sends a warning, PRICE OUTSIDE GREEN LINE OR PRICE OUTSIDE PINK LINE we would not be tied to our computer. I used to have a warning system attached to a Sto indicator and it would play star trek wavs or Beach Boys music. Maybe when price goes to the pink line we could play Darth Vader music from Star Wars or something. That would be cool.
  • #1,414
  • Oct 18, 2008 6:09pm Oct 18, 2008 6:09pm
A questioned asked me?

Have you ever considered using MM option? Like starting with 0.1%? How do you think that would affect the risk vs using fixed lot?[/quote]

Never tried it. My steps and distances are all based on mathematical formulas based on currency ranges over the last 7 years, exponential mathematics and profit versus risk ratios. That may change my formulas to something else. So I dont know. You can demo test it and see what happens. The problem I see with it is it uses multiplication (% of your account) but martingale systems use exponential math. I dont know how those two would mix.
  • #1,415
  • Oct 18, 2008 6:18pm Oct 18, 2008 6:18pm
I see you're online. Thanks much for the additional indicators. Did you see my follow up post #1405? Not sure why you don't seem interested in this approach. Seems like it would limit drawdown, margin use and make good money when the market is volatile. It would be great to find an indicator that would show the maximum movement of a pair in one direction before a 100 pip retracement.
  • #1,416
  • Oct 18, 2008 7:35pm Oct 18, 2008 7:35pm
Quoting Toothman
I was using a penny a pip on a $3000 account with my testing. At level 15, trading only EUR/AUD my worst drawdown this week was $407(about 13%) and last week $411.The total gain for the two weeks was $3294 .The last two weeks were probably the most volatile two weeks in history so I don't see a whole lot more than this to the downside. Not saying this is the way to trade this EA. Just throwing out some observations.
Sorry I didnt answer but at level 15 I dont believe a 3000 account could handle that many levels. If you are using the 100/40 levels 13, 14, 15 would take profit, levels 1-12 would be negative trades. The total of the negative trades could be greater than the profit taken thus defeating its purpose. I just didnt want to do the math but 10 levels is probably the limit for a 1.5 multiplication. You probably would have to increase the multiplication of 1.5 to higher number to get a profit at the higher levels. This then increases the risk and changes the ratios. It would take a lot of work to figure it out, but you can do the math and see what happens. Level 1 is .01 15x40=-6.00
level 2 is .02 14x40 = 560 x2 = -11.20 and so one. Good luck
  • #1,417
  • Oct 18, 2008 9:19pm Oct 18, 2008 9:19pm
Pls note that I try with only GBPUSD.
results quite good for many months till it come to August08 market movement, death trade occurs and rip off all accounts

But my backtest done without manual intervention like Bob suggestion.
And in my thinking, best EA is if you dont interfere manually so much or dont interfere manually at all.

One thing that I dont really like about the martingale EA type is the profits accumulated is small yet when come to death trade, it eat the previous profit quite a lot and most case can rip all accounts too.

But I still fan of martingale. Let's see how my development EA with martingale with death trade avoidance can help.

BTW, thanks to BOB as this thread really one of the best martingale lessons and findings.
  • #1,418
  • Oct 18, 2008 10:24pm Oct 18, 2008 10:24pm
Quoting akukaya
Pls note that I try with only GBPUSD.
results quite good for many months till it come to August08 market movement, death trade occurs and rip off all accounts

But my backtest done without manual intervention like Bob suggestion.
And in my thinking, best EA is if you dont interfere manually so much or dont interfere manually at all.

One thing that I dont really like about the martingale EA type is the profits accumulated is small yet when come to death trade, it eat the previous profit quite a lot and most case can rip all accounts too.

But I still fan of martingale. Let's see how my development EA with martingale with death trade avoidance can help.

BTW, thanks to BOB as this thread really one of the best martingale lessons and findings.
Thank you for your polite comments. I am going to use some of your comments to teach some things. Hope you dont mind.

Again as I have shown and proven before back testing is faulty and not reliable. Test the EA live all week and then run it on a back test for the same week and you will get different results. This can be caused by several reasons:

1. gaps which show up in live testing but not back testing
2. spreads widen and narrow which is not picked up by back testing.
3. Live testing is pip by pip back testing is not. Even though the little box says it is pip by pip it does not back test pip by pip. The longer you back test the bigger the time frame it uses. If you dont believe set it for 1M and see how far it will back test the 1M chart. You will get two weeks maybe three. After that you have to use a bigger time frame. To go back years it only uses 4H, 1D or even 1W candles. This totally distorts your data and gives you inaccurate results. People have developed EAs and junked them because of back test results not realizing that in the real world their EA probably might work. Probably 99.9% of traders do not realize this.
4. Your definition of an EA is: "And in my thinking, best EA is if you dont interfere manually so much or dont interfere manually at all." I dont care what your definition of an EA is, the only definition of an EA that matters is: DOES IT MAKE A PROFIT???
5. My EA makes a profit if you use it properly
6. You cannot ever get rid of a death trade, so learn to deal with it and you become a successful trader. Every EA or typical live trader stops a death trade by using a stop loss. Our stop loss is to end the death trade when it goes outside the range of the EA. With my new indcator setup we may find we can stop it before then. Testing will tell. That is the only difference.
7. I have yet to see any system that does not have losing trades at some point. This one is no different. It is not having losing trades that makes a system good or bad, it is how you handle them that makes you a success or failue in forex trading. If you cant deal taking losses get out, this business is not for you.
8. "One thing that I dont really like about the martingale EA type is the profits accumulated is small yet when come to death trade, it eat the previous profit quite a lot and most case can rip all accounts too."
NO, profits are quite comfortable, its the greed that kills you, wanting the big profits that is what detroys martingale trading. However, this system is not a true martingale system.

The 100/40 is a modified martingale system that follows the daily trend using a multiple reentry system. Martingale system uses a mulitplication of 2 to make it work and continues until they run out of money or they get the retracement they want. This uses a 1.5 reentry multiplication 8 level system, that follows the daily trend. If we dont get our profit in 8 levels we get out. That is our stop loss. There is a trading skill and IT IS A SKILL to exit a losing trade. But at no time does it kill an account unless you are trading too large of lots or you are not paying attention.

Large traders who trade millions or billions of dollars actually use a similar system. They do not enter the market and put a 20-50 pip stop loss on their trades. They enter the market based on fundamentals and some indicators but not all at once. If the trade goes against them they reenter but they add more to their trade. If the trade goes for them they then add to the trade. We just take our profits and reenter because this is not a long term trading system but it is not a scalping system either.

The 100/125 is also a similiar system but it trades both a buy and sell at the same time. It is designed to trade within a range and is a range trading system. It was also designed to trade within the bigger moves of the market. It hedges itself and takes proft going one way to offset the drawdowns. It is not as profitable as the 100/40 so far but we are working at making it better.

Once again if you think this is just a martingale system, you are mistaken it is much more than that. It is a complex system with ratios, exponential math, currencies ranges, etc. but to simplify everthing for those that dont need to know all the technical stuff, use the EAs with the new indicator.

1. Turn it on when you are between the two white lines.
2. Be happy when it stays between the green lines, you are making money.
3. If you go outside the green lines and you are with the trend on the 100/40 do lots of smiling you are making money.
4. If you are going against the trend and go beyond the green lines, begin planning your exit.
5. If you go past the pink line. You face the death trade.
6. If you enter outside the green or pink lines and it reverses and goes past the yellow or white lines look for an exit.

Thats it folks, Nothing personal guy, you just gave me a comment I could teach from.
  • #1,419
  • Oct 19, 2008 12:00am Oct 19, 2008 12:00am
Quoting nanningbob
1. Turn it on when you are between the two white lines.
2. Be happy when it stays between the green lines, you are making money.
3. If you go outside the green lines and you are with the trend on the 100/40 do lots of smiling you are making money.
4. If you are going against the trend and go beyond the green lines, begin planning your exit.
5. If you go past the pink line. You face the death trade.
6. If you enter outside the green or pink lines and it reverses and goes past the yellow or white lines look for an exit.
I'm posting this on my monitor for my wife when I'm at work!
  • #1,420
  • Oct 19, 2008 1:16am Oct 19, 2008 1:16am
Thanks for the indicator bob. I started up a challenge based on my 'plan' and this EA, along with it's variants. I hope many of us join the challenge, even with demo accounts and then come back here to post more ideas to help refine bob's EA. The challenge can be found here.

As Nanningbob has said many times, it's not about making a LOT of money with your account, it's about making a little money with a lot of accounts
Don't get greedy!
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