MGH System (Martingale Grid & Hedging) | Page 25 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Simply "grid" system, no hedge, no martingale 9 replies

ECN && STP && Scalping && Hedging - Broker Review - Oct 2009 24 replies

Martingale, Reverse Martingale, Modified Martingale, Maths 1 reply

Simple grid manual system without martingale 8 replies

Grid, Burst Grid, Grid Risk and Grid Profit 1 reply

Attachments: MGH System (Martingale Grid & Hedging)
Exit Attachments

MGH System (Martingale Grid & Hedging)

  • #481
  • Aug 25, 2014 11:57am Aug 25, 2014 11:57am
Quoting Kfx
{quote} Sounds good. Do you have some example of the worst trade (SL reached) and how many pips you lost vs. how many pips you win? But in a "Hedge x8", you can have more than 500 pips DD ... If the TP is 60 we will need 8/9 win trades to cover 1 loss. Surely I'm wrong and maybe I have not understood your point. It would be great you post some chart.
@Kfx
You are absolutely correct. The main question is the statistical probability of getting a full SL (e.g. 1000 pips) in relation to the accumulated profits.

If this ratio were for example 1:20, it means that the strategy may safely encounter one full (i.e. 1000 pips) SL for 19 x 60 pips "profit units". I did not mention "60 pips target profit" intentionally in the previous sentence, as profits may also come from smaller 10 pips "profit bites", 30 pips "small baskets" and the usual 60 pips "large baskets" (according to my "modified version").

I am about to backtest the statistical probability of getting hit by 1000, 1500 and 2000 pips Stop Losses in relation to the accumulated profits during a certain time period. My HYPOTHESIS (which I want to confirm) is that the long term statistical chance of getting full SL-triggering "price patterns" is very low in relation to collecting adequate and profitable amount of 10, 30 and 60 pips profits.

By SL I don't mean risking the whole account: one full Stop Loss should not be more than 10% of the account, but preferably less.

Paracelsus
(alias FxMasterguru)
  • #482
  • Aug 25, 2014 12:23pm Aug 25, 2014 12:23pm
Quoting Kfx
Hey spyderman, you have a PM ... Anyway, later I'll post an entry criterion for the system, which I'm working.
Got the one this weekend, but didn't get one today???
  • #483
  • Aug 25, 2014 12:49pm Aug 25, 2014 12:49pm
Quoting Paracelsus
{quote} @Kfx You are absolutely correct. The main question is the statistical probability of getting a full SL (e.g. 1000 pips) in relation to the accumulated profits. If this ratio were for example 1:20, it means that the strategy may safely encounter one full (i.e. 1000 pips) SL for 19 x 60 pips "profit units". I did not mention "60 pips target profit" intentionally in the previous sentence, as profits may also come from smaller 10 pips "profit bites", 30 pips "small baskets" and the usual 60 pips "large baskets" (according to my "modified version")....
I agree with you.

Yes, It is all a about studying the system for several years, to have solid statistics on which base our SL's, TP's and other parameters.

We should also be in mind (as already mentioned some members before) the size of the grid based on an ATR, ADR or whatever indicator. I think that this could alleviate a extremely high DD, as such, in EU we can use a 10 pip grid now in 2014 where the breadth of the market is relatively low, but not in 2006 where was higher.
  • #484
  • Aug 25, 2014 12:54pm Aug 25, 2014 12:54pm
Quoting spyderman
{quote} Got the one this weekend, but didn't get one today???
Yes.

I mean the one I sended Aug 23. I thought that you had not received because I have not received any reply.
  • #485
  • Aug 25, 2014 1:03pm Aug 25, 2014 1:03pm
Quoting Kfx
{quote} Yes. I mean the one I sended Aug 23. I thought that you had not received because I have not received any reply.
Sorry about that. Thought I had responded. You've got one now...
  • #486
  • Aug 25, 2014 1:18pm Aug 25, 2014 1:18pm
Quoting Kfx
{quote} I agree with you. Yes, It is all a about studying the system for several years, to have solid statistics on which base our SL's, TP's and other parameters. We should also be in mind (as already mentioned some members before) the size of the grid based on an ATR, ADR or whatever indicator. I think that this could alleviate a extremely high DD, as such, in EU we can use a 10 pip grid now in 2014 where the breadth of the market is relatively low, but not in 2006 where was higher.
That is the plan, i.e. several years of backtests measuring profitablity with different ATR/ADR:Grid Size ratios.

Also, once these results are available for multiple pairs, for risk dispersion, profit maximization and taking advantage of the available leverage I would run the strategy on at least 10 pairs simultaneously, anticipating that the SL-triggering price pattern does not happen at once on multiple pairs.
  • #487
  • Aug 25, 2014 4:06pm Aug 25, 2014 4:06pm
Quoting Paracelsus
{quote} ... I would run the strategy on at least 10 pairs simultaneously, anticipating that the SL-triggering price pattern does not happen at once on multiple pairs.
I'm afraid it may be the opposite. Suppose on the ten pairs, you are mostly based on € and that terrible news happened, Ukraine, election of an anti-Europe party in a major country etc. All your Euro-correlated pairs will be concerned. Same scenario with a majority of pairs connected to the Dollar if you are mainly counter-trend and if all of a sudden it breaks the ceiling. Investing on 10 different simultaneously is a good idea but they must NOT be correlated to each other. And what about gas, gold, oil even HKG33 or JPN225 as an experiment? (I just did 25 pips in about 15 minutes on the French40 this morning)
  • #488
  • Aug 25, 2014 4:55pm Aug 25, 2014 4:55pm
Quoting Pips-Show
{quote} I'm afraid it may be the opposite. Suppose on the ten pairs, you are mostly based on € and that terrible news happened, Ukraine, election of an anti-Europe party in a major country etc. All your Euro-correlated pairs will be concerned. Same scenario with a majority of pairs connected to the Dollar if you are mainly counter-trend and if all of a sudden it breaks the ceiling. Investing on 10 different simultaneously is a good idea but they must NOT be correlated to each other. And what about gas, gold, oil even HKG33 or JPN225 as an experiment?...
I think we are on the same page. Of course, unrelated pairs, commodities and indicies should be the most optimal mix for the portfolio.

On the other hand, a "terrible news" for Euro (or for any other traded currency) would mean instant profit for this strategy (even if they were related), so I don't understand your concern with a sudden market move. There is nothing more favorable for this strategy than a sudden market move (with small retracements)...
  • #489
  • Aug 26, 2014 12:23am Aug 26, 2014 12:23am
Quoting Paracelsus
{quote} I think we are on the same page. Of course, unrelated pairs, commodities and indicies should be the most optimal mix for the portfolio. On the other hand, a "terrible news" for Euro (or for any other traded currency) would mean instant profit for this strategy (even if they were related), so I don't understand your concern with a sudden market move. There is nothing more favorable for this strategy than a sudden market move (with small retracements)...

I agree because you stand in the other direction, opening H2(...4...8...) after three failures. Inexorably you become on the right trend but do you keep on the same way or reverse after Take Profit? I'm a bit new to this strategy and from what I've seen; there is a reversal of direction at each new position. For instance, first trade you go counter-trend, (id est coming from above you go long etc.) am I wrong? Because assuming a free fall of euro or incredible soaring dollar, it would seem to be common sense to stay in the honey river. Just wondering...

But congratulations to you all, it appears you got "sumthin".
  • #490
  • Aug 26, 2014 8:13am Aug 26, 2014 8:13am
Quoting Pips-Show
{quote} I agree because you stand in the other direction, opening H2(...4...8...) after three failures. Inexorably you become on the right trend but do you keep on the same way or reverse after Take Profit? I'm a bit new to this strategy and from what I've seen; there is a reversal of direction at each new position. For instance, first trade you go counter-trend, (id est coming from above you go long etc.) am I wrong? Because assuming a free fall of euro or incredible soaring dollar, it would seem to be common sense to stay in the honey river....

I concur. Earlier in this thread (as "FxMasterGuru") I have proposed a "modified" version, which would take the next new position (after taking TP) in trend direction, so the strategy would clearly benefit from news related extreme market moves.
  • #491
  • Aug 26, 2014 8:32am Aug 26, 2014 8:32am
Hi all.

Working full time in Forex now, specifically triying to improve this strategy and creating others of this style, with dozens of new ideas and improvements discarded every day.

Nobody said that "Martin" was easy path to get the "Semi Holy Grail", but I keep trying.

I hope to have good news soon.
  • #492
  • Aug 26, 2014 3:09pm Aug 26, 2014 3:09pm
Quoting Kfx
Hi all. Working full time in Forex now, specifically triying to improve this strategy and creating others of this style, with dozens of new ideas and improvements discarded every day. Nobody said that "Martin" was easy path to get the "Semi Holy Grail", but I keep trying. I hope to have good news soon.
@Kfx
I think this one is very promising, so in your place I would concentrate on "perfecting" this one. At least that is what I am going to do using the mentioned "modified version" (trend direction reentries and keeping original TP).

Also, one more idea: Taking profits and reentering with the same lot size at each grid-step burns up lots of spreads and commissions, which add up. To avoid "feeding the beasts" (i.e. the brokers) excessively repeated reentries, I suggest NOT TO CLOSE the very first trades of each smaller batches, but letting them ride and adding the 2nd and 3rd steps after a 10 pips (grid size) retracement as usual.

It gives the same exact equity gain/loss at each level as the original strategy but without closing and opening trades at each level. Considering a 1.2 pips ECN expense at each grid step, it can mean 12 pips saving on a 100 pip move, which is about 12% cost saving. Not insignificant. Also, as "butterfly effect" happens also in trading, this small, but significant cost saving can mean the difference between being able close a "basket" before a major market turn and before a higher Hedge level would kick in.
  • #493
  • Aug 26, 2014 9:52pm Aug 26, 2014 9:52pm
check my explorer. one week demo, 4.6% return.
  • #494
  • Aug 27, 2014 12:01am Aug 27, 2014 12:01am
Quoting Paracelsus
{quote} I concur. Earlier in this thread (as "FxMasterGuru") I have proposed a "modified" version, which would take the next new position (after taking TP) in trend direction, so the strategy would clearly benefit from news related extreme market moves.
Ohhh, I like that modification.

You may want to consider a gap or other coding fix to accommodate spread between the TP and the next entry. Otherwise, it may hit the retracement grid level before the initial TP is hit and then bounce before TP is hit.

I notice that this has occurred with some of my manual directional grid set-up's where there is substantial whipsawing or where the spread is wider than usual. In fact, at the beginning of this week's Asian, EUR/NZD underwent a massive wicking event that was some 125 pips in depth. I had a directional grid set up on the short side. One TP was hit, but due to slippage and spread, not one, not two, but three sell grid levels were hit before price rapidly retraced back upward by some 100 pips without catching one of those grid levels' limits.

I imagine this type of wide wicking event is rare (and possibly a system problem in this instance), but I can imagine if you set up a grid, for example, for EUR/JPY where there is a grid level to sell at 137.00 with the TP being 136.90 and then a grid level to sell another position right at 136.90, the 136.90 bid price is going to cause your sell order to execute before the ask price matches your TP. If price does continue down that's great, but what if the ask only dips to 136.91 and then bounces back up. Well, you've just added to your position at 136.90 without hitting your TP.

I guess one way to solve this is to have the EA not enter another trade until the initial series' TP is hit, but I'm not sure how that would be coded. I guess you'd have to tell it not to enter a new position until (in the case of a sell) ask is < the TP.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #495
  • Aug 27, 2014 2:21am Aug 27, 2014 2:21am
Quoting GoldenEA
check my explorer. one week demo, 4.6% return.
Hi GoldenEA.
Do you use this version which shared earlier or it is a modified version?
Thanks
  • #496
  • Aug 27, 2014 3:46am Aug 27, 2014 3:46am
Quoting Kfx
Hi all. Working full time in Forex now, specifically triying to improve this strategy and creating others of this style, with dozens of new ideas and improvements discarded every day. Nobody said that &quot;Martin&quot; was easy path to get the &quot;Semi Holy Grail&quot;, but I keep trying. I hope to have good news soon.
Hi Kfx,Sorry to ask, but I havent seen in your OP what determinate the start of trading the grid....ie. just crossing any gridline?I did play around some in the past in Martingale and grid, and I found that the probability can dramatically raised if the grids starting point a higher probability chart entry.I prefer extremely overbought/oversold areas defined by RSI, on 1H/4H or even daily chart...if all the mentioned timeframes line up then it is Jackpot usually! Rinse and repeat.As someone mentioned above, there is always a chance with martingale for a huge drawdown, but normally the 2-10% a day profit potential makes up for that, even a very short run.Position sizing is a key though, as like your with lvl32 or what was, one already not only run into equity trouble, but also might find that there is no free margin left to open up all the required positions. Time in the trade also crucial, as a large news or weekend gap can result in a mess on the grid distance, and thus a mess of the system.But as one, your system has potentials, albeit a larger risk profile too.
there is always, always another trade!!
  • #497
  • Aug 27, 2014 8:06am Aug 27, 2014 8:06am
Quoting Kfx
Hi all. Working full time in Forex now, specifically triying to improve this strategy and creating others of this style, with dozens of new ideas and improvements discarded every day. Nobody said that "Martin" was easy path to get the "Semi Holy Grail", but I keep trying. I hope to have good news soon.
Hi Kfx：
Thanks for your hard work， I look forward to hearing your good news as soon as possible。

Also, please forgive my bad English。I very much hope that you can keep it simple and clear description of your improved version, as you did in the first post.

very thanks.
zzd
  • #498
  • Aug 27, 2014 9:46am Aug 27, 2014 9:46am
Quoting Paracelsus
{quote} I concur. Earlier in this thread (as "FxMasterGuru") I have proposed a "modified" version, which would take the next new position (after taking TP) in trend direction, so the strategy would clearly benefit from news related extreme market moves.
Or, FxMasterGuru, you can completly descripation for "modified" version? Like the first post that.

Thank you very much.

zzd
  • #499
  • Aug 27, 2014 12:03pm Aug 27, 2014 12:03pm
Quoting kaczucha11
{quote} Hi GoldenEA. Do you use this version which shared earlier or it is a modified version? Thanks
Same version, just using 50 pip gap. Intended to manual to open inside orders. So far not come that point yet. All managed by EA.
  • #500
  • Aug 27, 2014 12:11pm Aug 27, 2014 12:11pm
Guys and Gals,

I'm probably not going to make a lot of friends with this post, but I think it needs to be said.
Many on here keep asking for the this and that to be spelled out, or re-written or graphed out so that they can understand it.

This is a complex trading methodology. It's not something you can just breeze through and get the first time. Or it's certainly not something I would recommend for novice traders.

Having said that, everything you need to understand is already in the thread. Just keep going over it. Now, true, there may be modifications yet to come. And that's another reason it really isn't fair to ask Paracelus, Kfx, ATA & others to spend a great deal of time trying to dissect every nuance of a system that is still evolving and to re write the explanations and so forth.

I'm sure any of us who have a fairly good idea of what's being done would be more than happy to answer specific questions, but believe me, to go through and spell out every step again and again is very time consuming.

Trade well...
0 traders viewing now