Hi XMPH,
You are an absolute asset to this forum and I thank you for the time you take, the links to the other posts were most informative and I'm bubbling
I'd like to reply on all of your points right now for the benfit of whomever else is getting a benefit, but unfortunately right now after just moving house I find myself behind the 8-ball for some overdue work elsewhere, which I must attend to first. But, I shall contact you by PM after this post (if I can, not sure if I've sufficient posts for that functionality...pretty please Mr/Mrs Moderator?) and I also undertake to revert to on your points in the forum.
I think that in loose terms/few words - your mitigation process involves some additional form of order addition at a level determined by other inputs? I like that concept and it indeed fits into my system, in fact I can have the next leg of my grid start from the additional mitigation entry if the order itself does not end up being required to mitigate anything. So, in practice just before my grid comes to a close (at a "critical" level) it will install a mitigation order in case it does notnclose at that critical level. Actually there's room for more than one additional order in my system that can be used in the mitigation process AND new legs can be run of these without chance of a double up on a martingale *
* which I think is potentially unique to my system, although by having additional layers in play the chance of encountering a martingale increase also - BUT at the same time the ROI potential is increased relative to increase in the number of layers. No double up possibility on the Martingale means the drawdown is the same no matter how if there are 1, 2 or 3 layers in my system. Presently it only runs one layer by the way, for simplicity at this stage of development.
Briefly I can touch on my theory of taking a smaller loss in the martingale sequence. For example in the blessing, as thats some common ground for us -albeit my knowlegde is limited on the blessing).......it would be like the Blessing, on says its 3rd or 4 the addition on retrace (bringing the TP closer by cost averaging) I would be suggesting a stop loss on that trade, x pips away. So if it gets hit and the market keeps moving adversely against the position, at least you arent dragging down so much weight. You could then buy in same amount (or more, again with a SL) and get another shot at cost averaging out. All the while you don't carry so much weight on the way south...comprehende?
Buit you saw what is the SL gets hit and it rises?
My answer would be to bung in a stop order where the old entry was (thats was stopped) again with the same SL. You could even allow for X pips drop below the SL first before a stop order was placed at the previous stop loss level, and have that order with with x pips SL. Variations of this available in the functionality options of the EA.
Essentially the theory is taking a smaller loss, and using a hard stop rather than holding on to everything always.
Like your mitigation theory, there would be advantages in apply some external factor in the placement of the SL - could be X pips rule to keep it mechanical 100% win math/fib based even, or else dynamic via the application of some indicator based input.
Summary
It seems there are two possible avenues for my further consideration (in my system at least and I hope one more for you) being:
1) the addition of orders in the mitigation process (aside form the overall reduction in net volume of hedge, with some possibility to change the net long short bias) AND
2) the taking of a smaller loss (versus a complete loser) in a sequence of cost averaging entries.
I could get lost in those two for weeks (at least)....hehe. Thanks again XMPH.
Just to clarify in a previous post I did say it goes great until it blows up, well thats true. I think the challenge is to find some martingale mitigation process that deals with it efficiently enough that the system can be run with some form of equity hard stop and still return a smooth equity curve longer term. The Blessing 50% takes are a bit harsh, but it works fantastically in between times..sounds like you have its measure though - do ur test survive with 50% open DD.........or do they take 50% realized hits.
My system, so far for whats it worth, seems to be best absolutely cranked into oblivion, 50-150% months until it blows. Generally speaking martingales are relatively uncommon and testiung at least reflects that even correlated pairs dont often marty at the same time so it also lends itself to be ing cranked on multiple currency pairs simulatenously without the same risk as trend following marty system. So far any attempts at marty mitigation have been unsuccessful (although Ive not yet employed 1+2 above), and the system runs quite a tight grid gap (15-45 pips is max range) so there's not much room to play in (although just enough for 1+2). So far I have not toasted any demo account with it running right, and the fact it often runs a higher used margin figure than open position p/l leads to me believe that the backtests fail more easily than a live account with 500:1 leverage. I think the backtester is the same as the demo - only 100:1? 100: so far has been ok, but with a 20% open position I noted a 20% used margin figure also - 40% drawdown really, where as with 500:1 the used margin would be reduced by 80%, thus a 5% used margin figure for same volume (25% DD total). Testing with broker offering under 100:1 shows used margin extremely high, easily maxing it out and its only been luck the market hasnt move the wrong way or it be toast already.
Coincidentally, on the talk of accounts with high margin (500:1) - Alpari UK are offering 100% deposit bonus for new deposits till end of January - its just to trade with not to withdraw but it meansyou only need to deposit half the amount you'd otherwise be trading with. Just make sure you're flat before 28th January!
Now with a martingale/account blower EA that offer makes alot of sense, risk half for same potential ROI. On the upside, when ur trading at 100% monthly ROI potential, an account twice the size only needs to survive for two weeks to get ur principle out which is big part of how I plan to play the EA - weekly withdrawals which is easy at Alpari UK.
Don't read me wrong here either, Ive steady rock solid trader in my portfolio, this EA is all about maximum return for 100% risk. If I can get it to run with less than 100% risk profitably via some form of marty mitigation then I'd be all the happier. In the interim I plan to only place into the account the total amount I am prepared to risk, only part of my pot so to speak and gear it accordingly - which seems to be at about 100% monthly mark. Traded more conservatively the marty quickly seems to catch it anyhow, actually I'm almost tending to the more aggressive end of the spectrum.
I'll keep you posted anyhow and revert to you on all your points.
Cheers, Adam
You are an absolute asset to this forum and I thank you for the time you take, the links to the other posts were most informative and I'm bubbling
I'd like to reply on all of your points right now for the benfit of whomever else is getting a benefit, but unfortunately right now after just moving house I find myself behind the 8-ball for some overdue work elsewhere, which I must attend to first. But, I shall contact you by PM after this post (if I can, not sure if I've sufficient posts for that functionality...pretty please Mr/Mrs Moderator?) and I also undertake to revert to on your points in the forum.
I think that in loose terms/few words - your mitigation process involves some additional form of order addition at a level determined by other inputs? I like that concept and it indeed fits into my system, in fact I can have the next leg of my grid start from the additional mitigation entry if the order itself does not end up being required to mitigate anything. So, in practice just before my grid comes to a close (at a "critical" level) it will install a mitigation order in case it does notnclose at that critical level. Actually there's room for more than one additional order in my system that can be used in the mitigation process AND new legs can be run of these without chance of a double up on a martingale *
* which I think is potentially unique to my system, although by having additional layers in play the chance of encountering a martingale increase also - BUT at the same time the ROI potential is increased relative to increase in the number of layers. No double up possibility on the Martingale means the drawdown is the same no matter how if there are 1, 2 or 3 layers in my system. Presently it only runs one layer by the way, for simplicity at this stage of development.
Briefly I can touch on my theory of taking a smaller loss in the martingale sequence. For example in the blessing, as thats some common ground for us -albeit my knowlegde is limited on the blessing).......it would be like the Blessing, on says its 3rd or 4 the addition on retrace (bringing the TP closer by cost averaging) I would be suggesting a stop loss on that trade, x pips away. So if it gets hit and the market keeps moving adversely against the position, at least you arent dragging down so much weight. You could then buy in same amount (or more, again with a SL) and get another shot at cost averaging out. All the while you don't carry so much weight on the way south...comprehende?
Buit you saw what is the SL gets hit and it rises?
My answer would be to bung in a stop order where the old entry was (thats was stopped) again with the same SL. You could even allow for X pips drop below the SL first before a stop order was placed at the previous stop loss level, and have that order with with x pips SL. Variations of this available in the functionality options of the EA.
Essentially the theory is taking a smaller loss, and using a hard stop rather than holding on to everything always.
Like your mitigation theory, there would be advantages in apply some external factor in the placement of the SL - could be X pips rule to keep it mechanical 100% win math/fib based even, or else dynamic via the application of some indicator based input.
Summary
It seems there are two possible avenues for my further consideration (in my system at least and I hope one more for you) being:
1) the addition of orders in the mitigation process (aside form the overall reduction in net volume of hedge, with some possibility to change the net long short bias) AND
2) the taking of a smaller loss (versus a complete loser) in a sequence of cost averaging entries.
I could get lost in those two for weeks (at least)....hehe. Thanks again XMPH.
Just to clarify in a previous post I did say it goes great until it blows up, well thats true. I think the challenge is to find some martingale mitigation process that deals with it efficiently enough that the system can be run with some form of equity hard stop and still return a smooth equity curve longer term. The Blessing 50% takes are a bit harsh, but it works fantastically in between times..sounds like you have its measure though - do ur test survive with 50% open DD.........or do they take 50% realized hits.
My system, so far for whats it worth, seems to be best absolutely cranked into oblivion, 50-150% months until it blows. Generally speaking martingales are relatively uncommon and testiung at least reflects that even correlated pairs dont often marty at the same time so it also lends itself to be ing cranked on multiple currency pairs simulatenously without the same risk as trend following marty system. So far any attempts at marty mitigation have been unsuccessful (although Ive not yet employed 1+2 above), and the system runs quite a tight grid gap (15-45 pips is max range) so there's not much room to play in (although just enough for 1+2). So far I have not toasted any demo account with it running right, and the fact it often runs a higher used margin figure than open position p/l leads to me believe that the backtests fail more easily than a live account with 500:1 leverage. I think the backtester is the same as the demo - only 100:1? 100: so far has been ok, but with a 20% open position I noted a 20% used margin figure also - 40% drawdown really, where as with 500:1 the used margin would be reduced by 80%, thus a 5% used margin figure for same volume (25% DD total). Testing with broker offering under 100:1 shows used margin extremely high, easily maxing it out and its only been luck the market hasnt move the wrong way or it be toast already.
Coincidentally, on the talk of accounts with high margin (500:1) - Alpari UK are offering 100% deposit bonus for new deposits till end of January - its just to trade with not to withdraw but it meansyou only need to deposit half the amount you'd otherwise be trading with. Just make sure you're flat before 28th January!
Now with a martingale/account blower EA that offer makes alot of sense, risk half for same potential ROI. On the upside, when ur trading at 100% monthly ROI potential, an account twice the size only needs to survive for two weeks to get ur principle out which is big part of how I plan to play the EA - weekly withdrawals which is easy at Alpari UK.
Don't read me wrong here either, Ive steady rock solid trader in my portfolio, this EA is all about maximum return for 100% risk. If I can get it to run with less than 100% risk profitably via some form of marty mitigation then I'd be all the happier. In the interim I plan to only place into the account the total amount I am prepared to risk, only part of my pot so to speak and gear it accordingly - which seems to be at about 100% monthly mark. Traded more conservatively the marty quickly seems to catch it anyhow, actually I'm almost tending to the more aggressive end of the spectrum.
I'll keep you posted anyhow and revert to you on all your points.
Cheers, Adam
