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No SL No Leverage Strategy - working so far

  • #101
  • Apr 4, 2012 6:32am Apr 4, 2012 6:32am
Quoting fxtr51
It is impossible to give general rules. Depends on the timeframe, on SR-levels, on Fib-levels etc.
Tkx a lot for your help. This is definitely worth a try, to replace my recovery method. I will start trying it on a demo a/c.
  • #102
  • Apr 4, 2012 7:00am Apr 4, 2012 7:00am
Quoting grechmar
Besides this, i trade the 15TF and sometimes the 1hrTF. I guess this works well with these too?
If you mastered the method timeframe doesn't matter. Of course I can unlock the M15 lock faster than somebody unlocks H4 lock.
Gentlemen always play by the rules. If they can't, they change the rules.
  • #103
  • Apr 4, 2012 7:14am Apr 4, 2012 7:14am
Quoting LazyPawn
It's really sad to see the same history repeating itself over and over again - accounts getting blown every time an inexperienced trader rediscovers martingale, grid trading, hedging and other similar techniques. But I don't know why I'm wasting my time instead of just letting them find the truth the hard way.
Well said. However, the vast majority of aspiring traders blow accounts and give up long before they ever find the truth. Martingales, grids and the like are particularly sadistic masters because their recovery mechanisms can keep a trader profitable for several months, giving a false sense of achievement, before the big sting inevitably occurs. I know a martingale-based EA that returned more than 4,200% profit over 14 months and 112 consecutive winning sequences of trades; and then suddenly and unexpectedly caused irretrievable drawdown in less than a single day. The real irony was that the EA also included the makings of a half-decent trading strategy, but the martingale did it in.

There's only one way to win at forex and that's to be net long when price is rising and net short when price is falling, frequently enough to overcome costs. That's such a simple and obviously bulletproof mathematical truth, yet folk will try to move heaven and earth to find a MM-based shortcut that somehow circumvents it, and despite the fact that the forex scrapheap is littered with all those before them who've tried to do likewise. "But if I just keep on trying to add 2+2 in enough different ways, and think far enough outside of the box, I'll eventually find a way of getting it to equal 5......."

Net long while price is rising and net short while it's falling. Hence an edge can only ever be derived from understanding and exploiting the hows and whys of price behavior.

Is this an arrogant post? Maybe. But negative? NO WAY. It's VERY possible to make handsome returns from forex. But like you say, there's no point in attempting to argue with those whose minds are stubbornly focused in completely the wrong direction.
  • #104
  • Apr 4, 2012 7:32am Apr 4, 2012 7:32am
3 Weeks is way too narrow a time view, to say that your system compensates for market fluctuation over time. Maybe your system works since you are in a uptrend for period of time.
So please in 10 years time come back and tell that the system works still or make a 1 year back test on your system just for fun.

Regards from Denmarkhttp://www.forexfactory.com/images/icons/icon12.gif
  • #105
  • Apr 4, 2012 7:37am Apr 4, 2012 7:37am
Quoting Favorite
esprit, as you can see, charvo posted his post before your post, that's why he's talking about 3 years. Otherwise he would say "10 years" or something like this.

Of course, 3-4 months demo is nothing, and 3 years live is nothing, and 6 years live is nothing, and if you come here in 25 years and say "I do it for 30 years" somebody would say that 30 years is nothing, let's see you in 50 years...
Quoting Irix
3 Weeks is way too narrow a time view, to say that your system compensates for market fluctuation over time. Maybe your system works since you are in a uptrend for period of time.
So please in 10 years time come back and tell that the system works still

Gentlemen always play by the rules. If they can't, they change the rules.
  • #106
  • Apr 4, 2012 7:40am Apr 4, 2012 7:40am
oh I see I need to read all the posts before posting
  • #107
  • Apr 4, 2012 8:08am Apr 4, 2012 8:08am
Quoting hanover
There's only one way to win at forex and that's to be net long when price is rising and net short when price is falling,
You obviously donīt understand locking-unlocking.
How come ?



Quote
Net long while price is rising and net short while it's falling.
Proven wrong.
A correct statement looks like this:
Net profit continually is the key to profitable trading.

Quote
Is this an arrogant post? Maybe.
No, but partially based on wrong assumptions.

Quote
But like you say, there's no point in attempting to argue with those whose minds are stubbornly focused in completely the wrong direction.
Unfortunately this is true, therefore they have to fabricate "arguments"
and ignore the facts.
Or making statements based on wrong assumptions.

Sorry, hanover, this is not negative nor arrogant.
No way.

And I take this chance to express my respect and appreciation for your tremendous work and expertise.

Nobody is perfect, we donīt need to adore humans, so please donīt feel offended by my posting.
  • #108
  • Edited 9:12am Apr 4, 2012 8:35am | Edited 9:12am
Quoting fxtr51
You obviously donīt understand locking-unlocking.
How come ?
Every time you’re ‘locked’, you have equally balanced long and short positions open. Correct?
In terms of P/L, how is that different from being out of the market altogether? (apart from the fact that the locked positions will incur negative aggregated swap, if open at 5pm New York time; while being out of the market doesn’t).

Now whenever you unlock, you leave yourself either net long or net short, yes? How is that different from my simply opening a long or short position, at the same price, at the same moment? Then if/when you choose to lock by opening an opposite position again, I simply close my position. Now we’re both net flat, and back to the starting point.

Exactly the same principle applies if you lock rather than close out a losing position. Both methods achieve exactly the same goal, i.e. return the account to a net flat situation.

The fact is that every hedged position can be replicated by an unhedged net position, at every point along the way. This is the crux of the matter, and I respectfully challenge anybody to create a hypothetical trading scenario that proves otherwise. Otherwise hedging (or locking/unlocking) is not really a strategy; it is merely an alternative (and, given my point about swap, a possibly slightly more expensive) way of handling the placement of orders.

I’m not doubting that you’re profitable. But your profit is due entirely to your timing as to exactly when you lock and unlock your positions. The more accurately you adjust your position these relative to price reversals, the more pips you’ll bank.

No matter how you stack it, profit is all about being net long when price is rising, and net short when it’s falling. Hedging is not in itself a strategy, but it might be the most convenient way of implementing a given strategy.

You make claims like "proven wrong" and "based on wrong assumptions", but then offer nothing in the way of explanation, making constructive discussion impossible. Thanks for your comment about appreciation and respect, but I'd prefer an explanation as to WHY I'm wrong, in this instance.
  • #109
  • Apr 4, 2012 9:11am Apr 4, 2012 9:11am
Quoting hanover
Every time you’re ‘locked’, you have equally balanced long and short positions open. Correct?
Yes.

Quote
In terms of P/L, how is that different from being out of the market altogether? (apart from the fact that the locked positions will incur negative aggregated swap, if open at 5pm New York time; while being out of the market doesn’t).
Ok.
You closed at SL with - 1 % .
I have a floating loss of - 1 % .

If we neglect the swap (because I will always earn more than paying in a cycle), our position is completely different
because a floating loss is not a realized loss.
You agree ?

Quote
Now whenever you unlock, you leave yourself either net long or net short, yes?
Yes.

Quote
How is that different from my simply opening a long or short position, at the same price, at the same moment?
Since I only unlock at a reasonable level where you would enter
the market too, we both would go Short (if my open order is Long).
That looks like there is no difference, but let us see if that
observation is correct or not.


Quote
Then if/when you choose to lock by opening an opposite position again, I simply close my position. Now we’re both net flat, and back to the starting point.
Locking again would be at the level of your SL.
Price would go against your position and you would have - 2 % loss.

At your SL my pending Long would trigger and I would be - 2 %
floating loss.

You have - 2 % realized loss.
I have a - 2 % floating loss.

You assume that a not realized loss is equal to a realized loss.
But it is not equal.

A realized loss is final.
A floating loss is only a possibility. It can become a profit,
a breakeven or a loss.

And you assume that I donīt enter Short where I unlock
and thus start a second cycle which is separate from the first.

But I will enter Short there.
Thus I will end up with 2 lock-cycles = 4 open positions
at the level where you accept your second loss.

My PL on cycle 1 is then - 2 %
My PL on cycle 2 is then - 1 %

You have a realized loss of 2 % and since I come out
at least at breakeven in the worst case,
my realized loss when both cycles end
will be 0 = zero = 0 % loss.

And that is the whole essence of lock-unlock.

Mathematically from my viewpoint a 0 % loss
is different from a 2 % loss.
Quote
Exactly the same principle applies if you lock rather than close out a losing position. Both methods achieve exactly the same goal, i.e. return the account to a net flat situation.
No.
I end at breakeven in the worst case while you end in realized loss.
That is not the same goal, it makes a big difference.

Quote
The fact is that every hedged position can be replicated by an unhedged net position, at every point along the way. I challenge anybody to prove otherwise.
I just did.

Quote
Therefore hedging is not really a strategy, it is merely an alternative (and, given my point about swap, a possibly slightly more expensive) way of handling the placement of orders.
Yes. It is an alternative ( and I have to earn the swap too, and it
is not a problem).

Quote
I’m not doubting that you’re profitable. But your profitability is entirely due to your timing as to exactly when you lock and unlock your positions. The more accurately you adjust your position these relative to price reversals, the more pips you’ll bank.
We both can only profit longterm if our timing for entries and exits
is good.
Lock-Unlock will yield more profits if we both take the same entries and
have the same SL-levels.

Quote
No matter how you stack it, profit is all about being net long when price is rising, and net short when it’s falling. Hedging is not in itself a strategy, but it might be the most convenient way of implementing a given strategy.
Ok, profit is all about coming out with more profits than losses on
a continuous basis.

I think we both can live with that.
  • #110
  • Apr 4, 2012 9:21am Apr 4, 2012 9:21am
Quoting hanover
I’m not doubting that you’re profitable. But your profit is due entirely to your timing as to exactly when you lock and unlock your positions. The more accurately you adjust your position these relative to price reversals, the more pips you’ll bank.
That's the whole point!!! Timing is the whole point! The Forex trading is all about timing! But nobody is perfect! If I made a mistake and entered at the wrong time - locking gives me an opportunity to fix this mistake with unlocking at the right time! If the stop-loss guy enters at the wrong time - that's it! He doesn't have the opportunity to fix it, he just loses his money!
Gentlemen always play by the rules. If they can't, they change the rules.
  • #111
  • Apr 4, 2012 9:25am Apr 4, 2012 9:25am
Quoting Favorite
That's the whole point!!! Timing is the whole point! The Forex trading is all about timing! But nobody is perfect! If I made a mistake and entered at the wrong time - locking gives me an opportunity to fix this mistake with unlocking at the right time! If the stop-loss guy enters at the wrong time - that's it! He doesn't have the opportunity to fix it, he just loses his money!
Exactly.

The locker will make much more profits than the loss-taker given that they trade the same setups with same entry, SL and TP levels.
  • #112
  • Apr 4, 2012 9:31am Apr 4, 2012 9:31am
Quoting fxtr51
The locker will make much more profits than the loss-taker given that they trade the same setups with same entry, SL and TP levels.
Yes, those "small" stop-losses, 1.5% here, 2% there - sum up to a very substantial amount! Plus the locker can get profit where the loss-taker just loses.
Gentlemen always play by the rules. If they can't, they change the rules.
  • #113
  • Edited 10:23am Apr 4, 2012 10:09am | Edited 10:23am
Quoting fxtr51

You have - 2 % realized loss.
I have a - 2 % floating loss.

You assume that a not realized loss is equal to a realized loss.
But it is not equal.
OK, many thanks for the explanation — now I see at least one important point where we differ.

I do not see how a floating loss differs from a realized loss. You can close a floating loss and immediately re-open the same size position. Of course it would be silly to do so, because you'd incur extra spread, but if it wasn't for this spread, your net position (P/L, dollar-wise) would be exactly the same. Hence there's no mathematical difference.

You say "A floating loss is only a possibility. It can become a profit, a breakeven or a loss". But everything else being equal, a floating loss has a 50/50 chance of getting smaller or bigger, because (to state the obvious) price can either move in your favor, or against you. Unless you're able to forecast which way (on balance of probability), then keeping the position floating has no benefit over closing it. And if my trading skills allow me to make that same forecast, I could simply open the same size position, and capture that same profit.

IMO the assumption that a floating loss is harmless until a trade is closed involves similar (and I believe erroneous) logic to saying that if I only ever close trades when they are in profit then I'm guaranteed a 100% win rate. I don't fully understand how your "cycles" work, but it sounds like you don't end a cycle until its component trades break even overall. But doesn't that mean that you now possibly have a floating loss elsewhere to contend with? How is that not effectively merely exchanging one loss for another? If that's the case, then I'm afraid I must remain skeptical.

The way your br0ker sees it, your actual account equity includes floating losses. Hence if you had $8000 balance in closed trades, and a $2000 floating loss, you have only $6000 available to you. It seems to me that you're counting on that $2000 returning to breakeven, but the reality is that anything could happen. And if you were to ever hit a margin call, your floating losses suddenly become very real.

The way I see it, whatever has happened up until this point in a trade (or group of open trades) is irrelevant, because you can't change the past. Regardless of whether you're net long or short, or whatever your P/L is, the market will do as it pleases henceforth. If the probabilities say it's more likely to rise, or fall, then your trading decision now should reflect that. And if you you can't determine this, and you decide to keep the trade(s) open, then you have a 50/50 chance of your overall bottom line (which is all that really matters) improving, or worsening.

If I'm missing something, I'm sorry, but it's 3:00am here in NZ and I'm tired. I don't fully understand how your "cycles" work. All I can say is that I've tested many, many, many MM systems and have found no advantage in any kind of hedging. There are only three possibilities — net long, net short or net flat — I can't see how any MM, or order placement system, can circumvent that.
  • #114
  • Apr 4, 2012 10:20am Apr 4, 2012 10:20am
Quoting Favorite
That's the whole point!!! Timing is the whole point! The Forex trading is all about timing! But nobody is perfect! If I made a mistake and entered at the wrong time - locking gives me an opportunity to fix this mistake with unlocking at the right time! If the stop-loss guy enters at the wrong time - that's it! He doesn't have the opportunity to fix it, he just loses his money!
Assuming that I understand the locking correctly, then I still have to disagree. The crux of the matter is whether a floating loss is the same as a realized loss. Your floating loss, or "opportunity to fix the mistake", has a 50/50 probability of going the other way — plunging you into even deeper loss. What do you do then? Apply another lock/unlock, and open up the same 50/50 probability of going even further into drawdown?

The way I see it, you're simply offsetting one loss with another, until you finally get the timing right. And getting the timing right is the same problem facing the trader who uses 'conventional' MM.

I have explained these reasons in greater detail in my reply to fxtr51.
  • #115
  • Apr 4, 2012 10:28am Apr 4, 2012 10:28am
Quoting hanover
The way your br0ker sees it, your actual account equity includes floating losses. Hence if you had $8000 balance in closed trades, and a $2000 floating loss, you have only $6000 available to you. It seems to me that you're counting on that $2000 returning to breakeven, but the reality is that anything could happen. And if you were to ever hit a margin call, your floating losses suddenly become very real.
hanover, are you under the impression that the lockers risk 10-20-25% per trade? It is not martingale, we lock the price with the same lot size we opened the original trade, and I can assure you that lockers usually risk the same (or even less) percentage the stop-loss guys risk.
Gentlemen always play by the rules. If they can't, they change the rules.
  • #116
  • Apr 4, 2012 10:32am Apr 4, 2012 10:32am
Quoting hanover
Assuming that I understand the locking correctly, then I still have to disagree. The crux of the matter is whether a floating loss is the same as a realized loss. Your floating loss, or "opportunity to fix the mistake", has a 50/50 probability of going the other way — plunging you into even deeper loss. What do you do then? Apply another lock/unlock, and open up the same 50/50 probability of going even further into drawdown?

The way I see it, you're simply offsetting one loss with another, until you finally get the timing right. And getting...
No, I see it exactly like fxtr51 sees it, and I don't think I will change my point of view and I don't think you will change your point of view.

hanover, go get some sleep, tomorrow will be another day! And tomorrow you will be able to argue with fxtr51 being in the better shape than right now, at 3:30 AM NZ-time!
Gentlemen always play by the rules. If they can't, they change the rules.
  • #117
  • Apr 4, 2012 11:55am Apr 4, 2012 11:55am
Quoting Favorite
No, I see it exactly like fxtr51 sees it, and I don't think I will change my point of view and I don't think you will change your point of view.

hanover, go get some sleep, tomorrow will be another day! And tomorrow you will be able to argue with fxtr51 being in the better shape than right now, at 3:30 AM NZ-time!
I would be interested in what makes you unlock, what are the system requirements. For example I could use my 10.0 theory as points to unlock, if you are familiar with it. Obviously you have a point you believe the market is changing direction. I understand the success of your system rides on the ability to know when to unlock and change directions. Just wondered what that was based on.
  • #118
  • Apr 4, 2012 1:34pm Apr 4, 2012 1:34pm
Quoting nanningbob
I would be interested in what makes you unlock, what are the system requirements. For example I could use my 10.0 theory as points to unlock, if you are familiar with it. Obviously you have a point you believe the market is changing direction. I understand the success of your system rides on the ability to know when to unlock and change directions. Just wondered what that was based on.
nanningbob, in my case we're talking about recovering 20-25 pips, 30 pips tops, and I trade mostly M1, M5 and M15, so I don't need a special theory about that and I don't need a huge turning point either. When I see a very good signal (I mean the system I trade' signal) in the direction I need - I unlock. It sounds very simple, but it works.
Gentlemen always play by the rules. If they can't, they change the rules.
  • #119
  • Apr 4, 2012 2:04pm Apr 4, 2012 2:04pm
Yes, Favorite wrapped it up.

The place to unlock is just a good signal from whatever system you use
which gives good entries with high probability,
exactly where a loss-taker would enter too.

Nothing special about it.

I will change to M15 for sure and M5 because I see the same patterns there.
Right now I donīt have the time, so I trade on H4 , that boring timeframe.

For 2 years I traded hedging, but with SL on both orders and doubling lot-sizes. Martingale.
Oh yes, I know a lot about that.
Made 3 - 10 % daily on my live-accounts with it.
Doubled my account a few times.

But guess what ?
One bad setup ... and there is no escape, it will happen ...
and price whipsawed on me .... bang, margin call.

I know all about hedging the wrong way and martingale and margin calls.
I paid a big price to learn the lessons.
Will never do it again.

Lock-Unlock is different.
No martingale.
2 or 3 wrong unlocks maximum, most of the time no lock at all because
TP is hit without triggering the pending order.

I could trade this easily with 3 or 5 % initial risk but I donīt
because 1 % is enough. Plenty of signals, plenty of profits for me
with 1 %.
  • #120
  • Apr 4, 2012 2:32pm Apr 4, 2012 2:32pm
This strategy will never work, I tested several EAs without SL, show only an illusion of profits, when the program is forced to stop due to lack of money or other reason, you may see an even bigger loss than gains over time.
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