SAR system based on QQE Adv and MACD Platinum

Hey guys, thanks for the input on the thread. I have no problems discussing martingale here. I know it will eventually blow your account if you are not smart about it. It has happened to me a few times. I guess the trick is to get to a stage where you could cover or withdraw your original account balance and then trade with profits only. Not a sound strategy as you just don't know when that losing sequence will begin. It may happen from the get go or it may take a year or two. Then there is always the option of either having hedge type trades in place that can be big enough to cover losses. For example I use another one of my EAs that does work of a martingale strategy when it reverses but I normally run a 2nd chart with the same pair using another EA that will cover my losses when the first EA goes into martingale mode. So there are ways around it. Just have to put a bit of thought into it. Once you start using hedges, you will have losses, but you shouldn't blow your account.

There was also a comment of whether it would be viable with regards to position size, whether it would be worth the effort. Good question and this is where you would use high leverage to your advantage, which would give you a much better chance of seeing out a losing sequence. Also the use of multiple pairs may assist where you churn out a profit on a day to day basis. The martingale EA I talked about above only turns a profit of $8-$10 on each sequence on the EUR using a 0.01 lot position size. Not much, but they can add up pretty quick on the big market moves.

So hanover, behrozfx and charvo, thanks for the comments guys. That's why it is a forum as we are here to discuss the points put forward, whether good or bad. Cheers. Jim

Now to the trade update.

EUR still short 1x at 1.3338
GBP now long 1x at 1.6068, so there was a profit of +46 on the previous short.
CHF still long 1x at 0.9164
AUD is still short 2x at 1.0530
E/JPY still short 1x at 119.11
EUR/AUD still short 1x at 1.2637

Closed results to date : +719

Thanks for the update Buff, all going well at this stage. Am looking forward to when the system is tested in regards to Fib sequence.

Great contributions from others too.

Kirk

Kirk, you ask and you shall receive, as the GBP has now gone short 1x (2nd trade in sequence) at 1.5979. There was a loss of -89 on the previous long, so now have a break even target of 1.5890. No other changes to the remaining open trades.

I have also received a private message requesting I post some screen shots of my set up and entries etc. I'll try and get to this in the next couple of days. Cheers. Jim

Trade update:

E/JPY is now long 1x at 117.92. There was a profit of +115 on the previous short with that sequence now being complete. No other changes to the other pairs for now. Cheers. Jim


Closed results to date : +834

Trade update:

EUR is now long 1x at 1.3306. There was a profit of +27 on the previous short.
E/AUD is now long 1x at 1.2613. There was a profit of +19 on the previous short.
All other pairs remain as is for now. Cheers. Jim

Closed results to date : +880

Trade update:

The AUD fell nicely and achieved the break even price for the sequence at 1.0508, so that sequence is now closed at this price for an overall break even result. Remember there were three trades in this sequence, with this final trade managing to clear the losses from the two previous trades. So now a new sequence begins at this same price, so short 1x at 1.0508. Even though there had been changes to colour of the dots on the MACD Platinum, the QQE had remained short during the entire last trade, so therefore the trade itself remained short for the duration. It had been going sideways for a while so a breakout one way or the other was due.

No other changes to the other pairs as yet. Cheers. Jim

Closed results to date : +880

Trade update:

Just had the Oanda 4hr charts tick over again at 11pm local, and there was some movement.

GBP is now long 2x at 1.6027. It never reached the break even target (not even close) and this is now the 3rd trade in the sequence. The previous losses were for -89 and -48, giving a total of -137. As this trade is for 2x lots, 137/2 = 69 (rounded up), therefore the break even target for this sequence is at 1.6096.

CHF is now short 1x at 0.9311. The previous long ended up with a profit of +142, with that sequence (1x trade) closing.

All other trades remain unchanged for now. Cheers. Jim.

Closed results to date : +1022

Thanks Buff, will be good too see how the system handles the current GBP sequence. Great work.

Kirk

Yes Kirk, the GBP is looking a little ugly. Another thing is that the CHF and EUR have both been heading up for the last few days. Something not right there and one of them will change direction soon as they are normally highly correlated in the opposite direction. Watch this space!

Trade update:

The CHF is now long 1x (2nd trade) at 0.9376. There was a loss of -65 on the previous short, so now have a break even target of 0.9441 on this sequence.

All other trades remain as is for now. Cheers. Jim

Trade update:

CHF is now short 2x at 0.9329. There was a loss of -47 on the previous long, and added to the loss on the first short trade, that is a total of -112. As this position is for 2x lots, divide this by 2, which now gives a break even target of 0.9273.

GBP is the problem child and is now short 3x at 1.5920. There was already losses of -137, and with the loss of -107 on the previous long, which was 2x lots, so therefore it was actually a loss of -214. Add the -214 + -137 = -351. New short is for 3x lots, so 351/3 = 117, which now gives a break even target of 1.5803. Clear as mud?

Other trades remain as is for now. This will probably be my last update for the night as it is just past 11pm local. I'll try and get some screen shots up over the weekend, especially the pairs that have been dragging the chain a bit. Cheers. Jim

Trade update:

EUR is now short 1x at 1.3303. There was a loss of -3 on the previous long. So I have to make this up first, therefore break even target for the sequence is 1.3300. Just a couple of observations here looking at the 4hr chart. Possible double top? Also divergence between price and all of my indicators? Also CHF is also short, and as previously stated, one of them is in the wrong direction and if I was going to have a stab in the dark, then I would be short EUR and long CHF. But this is only a theory as I tend to let price tell me which way I should be trading, and not guess market direction. FYI only.

EUR/AUD is now short 1x at 1.2675. There was a profit of +57 on the previous long, so that sequence is closed and I have started again. Remember I have taken -5 pips away to cover spread etc.

Now the weekend is upon us, hopefully Monday won't bring too big a gap in any of the pairs, unless it's to my advantage. So here is an overview of where I am currently at. Remember the Fib sequence is 1, 1, 2, 3, 5, 8, 13 etc.

EUR short 1x at 1.3303 with a target of 1.3300. This is the 2nd trade in the sequence.
GBP short 3x at 1.5920 with a target of 1.5803. This is the 4th trade in the sequence.
CHF short 2x at 0.9329 with a target of 0.9273. This is the 3rd trade in the sequence.
AUD short 1x at 1.0508. This is the 1st trade in the sequence.
E/JPY long 1x at 117.92. This is the 1st trade in the sequence.
E/AUD short 1x at 1.2675. This is the 1st trade in the sequence.

Start Date : Jan 10th 2013
Closed results to date : +1079

Enjoy the weekend all. Cheers. Jim

hi,
Below is my opinion.
This will work as long as you follow below rules

1. Trade only one major currency
2. Trade timeframe 1 hr or higher
3. Monthly profit expectation must be max 2% (anything more is a bonus for that month.)
4. Sequence starts at 0.05% risk (ie if your capital it £30000 then your first risk is £15. your capital must be such that even if it s 10pip or 100pip SL you must be able to take 0.05% risk against your capital. If your investment is £1000 and your SL requirement is 50 pip then you cant take 0.05% risk, hope you understand this)
5. Make decision using only one indicator.
6. Never manually interfere and trade always with a stop loss
7. Have a risk cap and reset back to 0.05% once you touch 1% (this is very very very important to allow you sleep at night!!!)

I know there are many intelligent people in FF who will not accept this.

But my only reply is I am happy with my 2% and I am doing it for few years now.

It is up to you to decide your route. Either you analyze all fundamentaleconomic data and make decision or make a naked decision.

But for a naked trading decision you need high investment and low starting risk just to make you satisfied with the monthly return 2% (it will take 3 years to double your account and i am almost there in 2 years)

Martingale (averaging) is a sure failure with any amount of investment.

Also note your SL is critical here. Dont use fixed SL technique. You need to work a little to find where to place SL.

I blown few accounts since 2005. But as soon as I limited my monthly returns and prepared to take loss when i am wrong things really took off.

Happy trading.

foArex,

I think I understand what you are saying. Not sure how it fits in with the method discussed in this thread. There is no mention of a stop loss in this method, but I do take your point on using smart money management. You are right, you have to control risk, no doubt about it. I guess everyone has their different ways of doing things, so whatever works for you is probably what you want to stick with. I still disagree with martingale being a surefire way to ruin as I am of the opinion there are ways to protect your account with hedging etc, just have to be smart about it. Thanks for the comments anyway as I appreciate all contributions. Cheers. Jim

appreciate your thinking outside the box........but smart hedging, never seen anything like that.
care to explain?

when you get your direction right the first time, your position must be quite small.
what is your trade size? 1:1 - 0.5:1

yonnie,

Thanks for the comments. Martingale and hedging have always been a tempting way for traders to see the market, but as we all know, pure martingale is not really viable as it will either blow your account or the position size compared to account size is so out of whack that it just wouldn't be worth the effort as you could probably just do better with bank interest. (4.5% approx here in Oz for fixed term). So how do you work around this problem. There is one theory that some will work on, even those that know eventually you will blow your account, but you don't know when this will happen. It could be tomorrow or it could be next year, so what the hell, take the risk now and hopefully I'll make enough that I can withdraw my initial deposit so I am now playing with free money. Can this be done? Sure it can, have a look at one of my old videos here But would I do it? I doubt it as the risk is just way too high.

If you want more info on how the above video and method all works, go to this page http://www.accurateforextrader.com/?page_id=125 as that will explain the concept so I don't have to go over it all again here. It is a little technical and requires some thinking.

My initial idea of hedging the sequence that was going against me was to build in a superhedge trading parameter into the EA itself. I actually did this with my JAGfx EA, but I find that it doesn't work that well. The JAGfx EA actually uses the same two indicators I have been discussing in this thread already, so that should make things easier to explain. My theory is that if the trend reverses and I still have an open sequence of trades going in the wrong direction, then the martingale method kicks in. If this was the case, then not only does the EA open a new sequence of trades in the new direction, but it also opens a larger position size trade in the new direction to compensate for the initial now wrong direction trades. When this larger position size trade and the wrong direction trades are at an overall break even position, then all of these trades are closed, just leaving the sequence of trades in the correct direction open. Clear as mud?

So basically if I was long, then the EA reversed and the long sequence was still open, then the EA would be short a sequence and also short a larger position size trade. When the large short and the sequence of longs are at break even overall, then they are all closed leaving the short sequence open to do its thing. The problem was that sometimes the market would reverse immediately, then I have the problem of the superhedge trade in a losing position. So this is where you would take a hit (just like in normal trading). The EA doesn't work as well as I would like, so how do I get around this?

The way I do this, is by running one of my martingale EAs (either FRED or JAGfx) on a chart, and have one of my other normal EAs (LACW or Mod MACD) with the same indicators running on a separate chart on the same pair. Usually run these position sizes at 10x my position size on the martingale EAs. ie 0.01 on FRED or JAGfx, then 0.1 on LACW or Mod MACD. As these are normally run on 4hr charts, I tend to keep a pretty good eye on them where I can manually manage the trades and close certain trades when and where I choose to, not allowing any martingale trades to get out of hand. I will take losses on occasions but hopefully should never blow an account unless I'm away from the computer for a long time or there is an internet problem (I do run a VPS).

It can get a little confusing at times as I currently run two pairs with a heap of EAs on each, including several martingale with different grid settings, so I have to keep an eye on the big picture and make sure my priority lies with trades in the direction of the main trend. There will be losses along the way, but that's just trading. I realise it may sound a little confusing to some, but it is all pretty simple when you get the hang of it, and it is probably a long winded explanation to yonnie's question. But I think that this is just one way of hedging and protecting a martingale strategy. At the end of the day, you are probably wondering why bother with the martingale part and just let the initial trade run, but I do like to take the small consistent profits along the way on a large trend. All those little $10 trades soon add up.

I hope all of the above makes some sort of sense. If not, feel free to pepper me with any questions. Also if anyone would like to play with any of my EAs, just contact me through my website and I'd be more than happy to send you them with the indicators and some basic instructions. Now to get onto some screen shots that relate to this thread. Cheers. Jim

Okay, here is my first screen shot. It is of the GBP as that is the current problem child. First up I would like to apologise for a mistake I have made in calling these trades. It appears on page 3 of this thread I called a wrong entry price on the GBP long. It should have been at 1.6087, not at at 1.6068 as stated as this was the closing price. Therefore that profit was only +27 and not +46 which puts the rest of my calculations a little out of whack. At the end of the day though, my short target is only 5 pips lower than previously stated. So not too much damage done other than my credibility.

The screen shot is a little ugly due to the magnification. The yellow vertical line is my start date where I just went short at market as the trend was down according to the indicators. The lime green horizontal line is my 1st break even target for my first long trade. As soon as that target is achieved, there is a new buy order for 1x lot opened at that price. That red horizontal line is just my current short entry price. Remember that the trade is taken on the open of the candle after the signal has been confirmed, so it is the open of the candle after the arrows. Obviously something I wasn't paying attention to!

sorry again about the mistake, and here is the modified trade summary to reflect my error. Hopefully there aren't any others, but if there are and you spot, please fell free to point them out. Cheers. Jim

EUR short 1x at 1.3303 with a target of 1.3300. This is the 2nd trade in the sequence.
GBP short 3x at 1.5920 with a target of 1.5798. This is the 4th trade in the sequence.
CHF short 2x at 0.9329 with a target of 0.9273. This is the 3rd trade in the sequence.
AUD short 1x at 1.0508. This is the 1st trade in the sequence.
E/JPY long 1x at 117.92. This is the 1st trade in the sequence.
E/AUD short 1x at 1.2675. This is the 1st trade in the sequence.

Start Date : Jan 10th 2013
Closed results to date : +1060

Trade update:

EUR/JPY is now short 1x at 119.54. There was a profit of +157 on the previous long. All 6x pairs now short. Something will change soon I'd imagine. Cheers. Jim

Start Date : Jan 10th 2013
Closed results to date : +1217

Jim,

A question re your GBP short trade. As I write this, price is currently at 1.5866, which means that you're currently 54 pips in profit, toward the 123 pip target that's required to bring the whole GBP trade sequence back to breakeven. Suppose you were to get a green arrow (buy signal) now, i.e. prior to your 123 pip target being reached.

Does that mean you would now close your short and enter a 3x long, and thus attempt to recover the remaining 123–54 = 69 pips on the long trade?
Or would you buy at the next Fibo progression step, i.e. 5x, and attempt to reach a smaller target (69x3/5 = 42 pips)?
Or, having had one winning trade, do you now realize the previous losses, and start a new sequence with a buy 1x?
Or possibly something else?

Thanks,
David

Good question David. When I manually backtested a few charts, I did go with your second option where I would just continue with the next position size in the sequence and deduct the profit from the overall target, so in theory it should not only be closer due to it being smaller, but also because it is a larger position size. I don't think I would take an overall loss, but you have got me thinking with regards to maintaining the same position size again as in your option one. I thought I was going to find out with the GBP on the last close, but it didn't quite happen. The AUD is looking a little messy though, and I am thinking that this is not a pair that suits this method, but I will give it some time to see how it pans out over a longer time period. Cheers. Jim

PS : I notice FF has now given the system a name. That was nice of them.....

Not much happening in the markets at the moment. At least the GBP is heading in the right direction, but 12x 4hr candles on the EUR all within a tight range. The market must be waiting on something and it is bound to pop one way or the other! Down would be nice, but I can work with either way. Cheers. Jim