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my ultimate alternative method

  • #21
  • Aug 20, 2010 3:59pm Aug 20, 2010 3:59pm
I don't think that historically and from many years ago, there has ever been a 20 or 30 reverses in a row. If this is still possible as in winning the lottery ticket, I agree with Zebulon that a strategy that cashes in part of the the monthly gain to start off a new series of entries each month should be interesting. A maximum number of reverses in a row should be set so there can be a losing month, but very rarely.

I am asking again, if someone can program such a Martingale with the choice of initial lot (doubling after each loss) and the choice of range (profit and stop levels), we could analyse thouroughly the strategy with backtesting.

Like I said in a previous post, I demoed a similar approach with a 25 pips range. I started with a 100000$ account and I am up to over 117000$ after 6 months of trading the system starting with 1 lot on both EURUSD and GBPUSD. With real money, I would start with 0.1 lot.
  • #22
  • Aug 20, 2010 4:42pm Aug 20, 2010 4:42pm
Quoting chamane
I don't think that historically and from many years ago, there has ever been a 20 or 30 reverses in a row. If this is still possible as in winning the lottery ticket, I agree with Zebulon that a strategy that cashes in part of the the monthly gain to start off a new series of entries each month should be interesting. A maximum number of reverses in a row should be set so there can be a losing month, but very rarely.

I am asking again, if someone can program such a Martingale with the choice of initial lot (doubling after each loss) and the choice...
Chamane, thanks for sharing your experience. I have a couple questions for you, if that's okay.

What is your max loss (in terms of a sequence of losses) you will accept? I'm just curious because unless I'm doing my math wrong you would lose all of your winnings with just one 8 time loser. (25 x $10 per pip, 250* 2^7(128))
Having six months of gains wiped out by one 8 time loser (highly probable if you do this very long) would be really scary to me. That is the problem with martingale systems with a 50% (or less) win rate.

Even if you are cashing in after each month.. you still won't have cashed in even your starting amount by the time statistics say you will have a major loser. Like I said you will need to be able to handle a big enough string of losses that it is statistically unlikely to happen in the amount of time you plan on trading (10 years, or whatever that may be for you) and then just hope you're not that unlucky. Because the market isn't totally random it could be much more likely than you think to have a big string of losers, depending on the way you do your trades (whether it is always in the same direction, or alternating like Zebulon).

I'm really interested in martingale strategies, but not when the R:R is 1.. it is just to hard to overcome the giant eventual losses. I'm sorry to be the bringer of bad news.

If you know of something that is really likely to eventually happen with a bigger R:R we can work on a profitable Martingale system.

Good luck and I hope this helps.

Cory
  • #23
  • Aug 20, 2010 5:22pm Aug 20, 2010 5:22pm
Quoting Cbh123
Chamane, thanks for sharing your experience....
cbh123,

I am evaluating the strategy on a demo basis not on a planning basis. The only proof I can give you is the following picture of my demo account balance. I can confirm that I used the two shown currency pairs during approximately 6 months, mostly during London/New-York sessions. I looked visually from many months back on many other currency pairs and I never found more than 8 reverses in a row. What I want to point out is that with an EA, it would be far more easy to make a judgement on the strategy. I am not sure that a 20 or 25 pip range is the best and like I said, I would trade rather from 0.1 lot instead of 1 lot. But I am sure the strategy is profitable somehow.

Chamane

http://i37.tinypic.com/kdriwz.jpg
  • #24
  • Aug 20, 2010 9:35pm Aug 20, 2010 9:35pm
Quoting chamane
cbh123,

I am evaluating the strategy on a demo basis not on a planning basis. The only proof I can give you is the following picture of my demo account balance. I can confirm that I used the two shown currency pairs during approximately 6 months, mostly during London/New-York sessions. I looked visually from many months back on many other currency pairs and I never found more than 8 reverses in a row. What I want to point out is that with an EA, it would be far more easy to make a judgement on the strategy. I am not sure that a 20 or 25 pip range...
Hey Chamane, I believe that it has worked so far, but what I'm saying is you still haven't even made enough to cover one 8-time loser, so how can we know if it's profitable? I realize that big losers might be uncommon, but they are still possible, and that's why this type of strategy is really scary. You never know when they will hit, and the markets aren't totally random so you could have one on both pairs at the same time if market volatility changes or the market can't decide which way to go.

How are you sure the strategy is profitable? It's hard to be sure when your risk to reward ratio is so tiny (well, not per try, but per trade, since a loser could be a huge setback, and you only make a tiny amount with each winner).

I'm just saying doing a martingale doesn't necessarily turn a less than 50% 1:1 strategy into a profitable one. If you do the math you'll realize one loser at whatever probability you use (even 50%) will take out all of the winners you statistically will have before that loser.
  • #25
  • Aug 21, 2010 3:07am Aug 21, 2010 3:07am
I'm making some manual backtest for the 2010 using a 50 pips range.
After 5 losses in a row you take the loss and start again. It works very good. Very few 5 losses in a row and the loss is less than the average monthly income.


2010
January +1450 pips
February +1650 pips
June +2500 pips
July +1700 pips
August -650 (for the moment)

I'll continue backtesting this strategy for the whole 2009 and 2010
  • #26
  • Aug 21, 2010 3:32am Aug 21, 2010 3:32am
Are you testing only certain times of the day or 24/5? If it is 24/5 we would definitely need an EA to take care of our trades for us.

Also, you said after 5 losses we would start again. Does this mean that you were using martingale for these 5 losses? Thanks.

Quoting aokmanga
I'm making some manual backtest for the 2010 using a 50 pips range.
After 5 losses in a row you take the loss and start again. It works very good. Very few 5 losses in a row and the loss is less than the average monthly income.


2010
January +1450 pips
February +1650 pips
June +2500 pips
July +1700 pips
August -650 (for the moment)

I'll continue backtesting this strategy for the whole 2009 and 2010
{Promotion Removed}
  • #27
  • Aug 21, 2010 8:35am Aug 21, 2010 8:35am
Quoting aokmanga
I'm making some manual backtest for the 2010 using a 50 pips range.
After 5 losses in a row you take the loss and start again. It works very good. Very few 5 losses in a row and the loss is less than the average monthly income.


2010
January +1450 pips
February +1650 pips
June +2500 pips
July +1700 pips
August -650 (for the moment)

I'll continue backtesting this strategy for the whole 2009 and 2010
Thanks for testing this Aokmanga! I'm glad you have a specific tolerance for losses. How many pips are you counting for a loser? I'm assuming its (50+100+200+400+800)=1550? Because if you are doubling up each time you are effectively losing that much if it goes fives times. Anyway if you are, it's cool that it shows a positive return. August has been a bad month for most strategies so I wouldn't worry too much about that.

Good luck and thanks for sharing!

Cory
  • #28
  • Aug 21, 2010 9:24am Aug 21, 2010 9:24am
Trying to understand this...

So if price goes up 20 pips, you draw a green candle, but then, when do you bet, do you place a new trade at a set time, like every 10 minutes? Or do you just place one trade, and then wait for the market to go up or down 20 pips to place another trade?

Also, keep in mind that with the spread, your SL/TP is not 50/50%.

if, for example you have a 2 pip spread, you are really gaining only 18 pips on a win, and losing 22 pips on a loss. This is simple to fix, however.
  • #29
  • Aug 21, 2010 9:35am Aug 21, 2010 9:35am
LOL， great way to wipe-out an account.

why a trader tries so hard to study/research how long it can survive in the market, instead of just finding a profitable method?

these 2 goals are different,

one day you don't realise it,

one day you still will wipe-out your account.

sincere wisdom sounds harsh, don't take it hard way.
  • #30
  • Aug 21, 2010 2:38pm Aug 21, 2010 2:38pm
Quoting Cbh123
Thanks for testing this Aokmanga! I'm glad you have a specific tolerance for losses. How many pips are you counting for a loser? I'm assuming its (50+100+200+400+800)=1550? Because if you are doubling up each time you are effectively losing that much if it goes fives times. Anyway if you are, it's cool that it shows a positive return. August has been a bad month for most strategies so I wouldn't worry too much about that.

Good luck and thanks for sharing!

Cory
Yes. A big loser is -1550 pips. August is still not finished... I think it can finish with a little gain or a little loss.
I finished the backtest for 2010 and is 24/5. It's not a problem for the night because setting two limit orders on each side you have a tolerance of around 150 pips on everyside and here in italy during the night there aren't big moves

2010

January +1450 pips
February +1650 pips
March +100 pips (with 1 big loss)
April +1050 pips
May +1250 pips (with 2 big losses!!!! INCREDIBLE!!! )
June +2500 pips
July +1700 pips
August -650 (for the moment)

I've accounted also a loss and a win due to a gap bigger than 50 pips during 2010.
For the moment is very good this strategy. I use martingale for 5 times in a row and than start again. I don't use the pattern +-+++++ but i trade always +-+-+-+-+-+-+-

Now I finish the backtest for 2008 and 2009 and than if the things are good i start a live trial from september.
If anyone has some questions no problem
  • #31
  • Aug 21, 2010 11:13pm Aug 21, 2010 11:13pm
Great job Aokmanga. Please let us know as soon as you get the results for 08 and 09. Making an EA for this should be easy since the rules are very clear.

Quoting aokmanga
Yes. A big loser is -1550 pips. August is still not finished... I think it can finish with a little gain or a little loss.
I finished the backtest for 2010 and is 24/5. It's not a problem for the night because setting two limit orders on each side you have a tolerance of around 150 pips on everyside and here in italy during the night there aren't big moves

2010

January +1450 pips
February +1650 pips
March +100 pips (with 1 big loss)
April +1050 pips
May +1250 pips (with 2 big losses!!!! INCREDIBLE!!! )
June +2500 pips
July +1700 pips
August...
{Promotion Removed}
  • #32
  • Aug 21, 2010 11:39pm Aug 21, 2010 11:39pm
Quoting antonioforex
Great job Aokmanga. Please let us know as soon as you get the results for 08 and 09. Making an EA for this should be easy since the rules are very clear.
Why would you ever trust your money to a robot? I just can't believe people are so obsessed with EAs. I would never trust my money to a robot no matter how well programmed, it just seems foolish. To each his own I guess, but I would strongly caution new traders to learn to trade for yourself before using EAs.

But I agree that Aokmanga did a great job and I'm looking forward to more of his results
  • #33
  • Aug 22, 2010 12:13am Aug 22, 2010 12:13am
Because a robot if designed properly is better, less emotional and more efficient than a person would ever be. Robot is given specific instructions which he will follow to a T. And can do it 24/5 which we absolutely cannot. There are very profitable EA's out there and I mean in the long run as well. I've tried 100s of different EA's until I found one that had to be tweaked a little and produces great returns every and each month on a live account. Of course not every system can be automated.

Either way, to each his own. Let's keep this thread on topic.

Quoting Cbh123
Why would you ever trust your money to a robot? I just can't believe people are so obsessed with EAs. I would never trust my money to a robot no matter how well programmed, it just seems foolish. To each his own I guess, but I would strongly caution new traders to learn to trade for yourself before using EAs.

But I agree that Aokmanga did a great job and I'm looking forward to more of his results
{Promotion Removed}
  • #34
  • Aug 22, 2010 1:00am Aug 22, 2010 1:00am
According to my numbers this will not work in the long run if we apply a martingale calculation to our MM which is 1:1 RR.

I attached a 20pip chart below which shows the last 6 trading days. You can see that on August 13th there was a bad range. If we followed it for all 7 consecutive losses our drawdown would be $2400 before we won and walked away with a measly $20 profit.

Even if a max of 5 losses and reset method was applied as suggested by a member earlier, we would have lost $620 and would have to restart our lot sequence. It would take us 31 straight wins to recover our losses.

Please take a look at the chart and the lot calculation.

http://img69.imageshack.us/img69/998/range.png

http://img824.imageshack.us/img824/6908/lotsd.png
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  • #35
  • Aug 22, 2010 7:05am Aug 22, 2010 7:05am
Quoting aokmanga
Yes. A big loser is -1550 pips. August is still not finished... I think it can finish with a little gain or a little loss.
I finished the backtest for 2010 and is 24/5. It's not a problem for the night because setting two limit orders on each side you have a tolerance of around 150 pips on everyside and here in italy during the night there aren't big moves

2010

January +1450 pips
February +1650 pips
March +100 pips (with 1 big loss)
April +1050 pips
May +1250 pips (with 2 big losses!!!! INCREDIBLE!!! )
June +2500 pips
July +1700 pips
August...
Hi Aokmanga,
tell me please do you start every month with + or you just go from the start of the year non stop in same patern+-+-+-?
  • #36
  • Aug 22, 2010 8:38am Aug 22, 2010 8:38am
Hi Zebulon,

I've checked the charts some months back and trading this way seems to make you gain some pips. However, the weakest link of this strategy is the martingale system in reversing trends or indecisive times. As antonioforex mentioned, placing huge amount of money for just 20 bucks is not reasonable IMHO. I think, sooner or later it's inevitable to blow up the account by this way.

Maybe an indicator can be used to determine the trend (like supertrend) and trade is taken in trend's direction (i.e. always +++ for uptrends and --- for downtrends), and then, you may use martingale to cover your losses. By this way, you may lessen the possible reversing patterns GRG GRG and so on.

Anyway, if I come up with new ideas, I'll let you know. Keep up the good work...
  • #37
  • Aug 22, 2010 9:04am Aug 22, 2010 9:04am
while 2009 was great with this strategy 2008 and 2009 was very very bad... I tried also a sort of hedging, for example:

GGRRGGRRGG
+-+-+-+-+-+
-+-+-+-+-+-

But it can improve a little the results and nothing else, still losing. I tried also reducing the number of losses acceptable but it seems not a good strategy to go live for the long term trading.

The best results can be achieved with the above hedging strategy and stop after 3 losses.

Soon I will share my own position trading strategy for relaxed good income
30-40% yearly on average
  • #38
  • Edited 11:26am Aug 22, 2010 10:09am | Edited 11:26am
I have deleted my post becose it is almost a holy grail strategy. It can be tooo exsiting and make someone`s blood presure too high. So I have choosen to delete it. I am serious.
  • #39
  • Edited 10:36am Aug 22, 2010 10:26am | Edited 10:36am
[quote=antonioforex;3966477]According to my numbers this will not work in the long run if we apply a martingale calculation to our MM which is 1:1 RR.

I attached a 20pip chart below which shows the last 6 trading days. You can see that on August 13th there was a bad range. If we followed it for all 7 consecutive losses our drawdown would be $2400 before we won and walked away with a measly $20 profit.


Hello AntonioForex,

I think I got a solution you could consider. Instead of using the above series try this one: 0.1, 0.2, 0.2, 0.3, 0.5, 0.8, 1.2, 1.8, 2.7. 4.0, 6.0, 8.8, 10.0.
Here is the secret in using the above series. If you have any two consecutive wins in the series then you stop and start again. Also if you have any two alternative wins then stop and start again. Example, if you win the first bet, and loose the second bet, and win the third bet, then stop and start the series again. As another example, if you win the first and second then stop and start again.

Let me know what you think.
  • #40
  • Aug 22, 2010 10:54am Aug 22, 2010 10:54am
is there a way to have a renko chart on metatrader not only for the last days?
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