MGH System (Martingale Grid & Hedging) | Page 27 | 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)

  • #521
  • Aug 29, 2014 1:40pm Aug 29, 2014 1:40pm
Quoting Kfx
{quote} Checking your chart, you have some mistake ... You open 2 sells in the same level (1.3180) instead open a new one (the third) @1.3190. So Hedge x2 is worng too.
I think with his mod that he's talking about he would have multiple orders at the same level. He took 1st sell then price went down all the way to 1.3160 (assuming price hit that) then retraced 10 pips which initiated his 2nd sell. So now's he's back in standard grid methodology so when price continues against another 10 pips he opens 3rd sell. It just happened to line up with 1st.


EDIT: Sorry...wrong numbers
  • #522
  • Aug 29, 2014 1:46pm Aug 29, 2014 1:46pm
Quoting spyderman
Just an update on my pairs going into the weekend. {image} {image} So Paracelsus...if I'm reading you right, you're saying (taking my EurUsd for example) I wouldn't close each of those last 3 short entries but would now have one sitting at about 150 pips profit (50 pip grid). Then if price retraced 50 hit trade 2 with standard TP for both?
Yes, correct. Taking profits at each 50 pips grid steps and reentering with the same lots in the same direction does not sacrifice too much on spreads and commissions, so for the sake of psychological benefits probably I would rather cash at each level.
  • #523
  • Aug 29, 2014 2:00pm Aug 29, 2014 2:00pm
Quoting spyderman
{quote} I think with his mod that he's talking about he would have multiple orders at the same level. He took 1st sell then price went down all the way to 1.3160 (assuming price hit that) then retraced 10 pips which initiated his 2nd sell. So now's he's back in standard grid methodology so when price continues against another 10 pips he opens 3rd sell. It just happened to line up with 1st. EDIT: Sorry...wrong numbers
Thanks for the clarification, Spyderman.

Just to go over both approaches again:

According to original strategy:
We would have cashed 2 x 10 pips with the Level1 sell trade opened at 1.3180 and at 1.3170.
Then entered Level1 the 3rd time at 1.31600 which had moved eventually against, and adding Level2 at 1.31700 then Level3 at 1.31800.
Final TP at 1.3160.
Total profit: 50 pips.

According to the "ride the wave" approach:
We did not cash on first Level1 trade until both Level2 and Level3 trades reached TP.
Final TP at 1.3160.
Total profit: 50 pips (but saving 2 x commisions+spread).

So the bottom line is that not closing Level1 positions at each grid step DOES NOT change the overall outcome.
  • #524
  • Aug 29, 2014 2:13pm Aug 29, 2014 2:13pm
Quoting Paracelsus
{quote} Thanks for the clarification, Spyderman. Just to go over both approaches again: According to original strategy: We would have cashed 2 x 10 pips with the Level1 sell trade opened at 1.3180 and at 1.3170. Then entered Level1 the 3rd time at 1.31600 which had moved eventually against, and adding Level2 at 1.31700 then Level3 at 1.31800. Final TP at 1.3160. Total profit: 50 pips. According to the "ride the wave" approach: We did not cash on first Level1 trade until both Level2 and Level3 trades reached TP. Final TP at 1.3160. Total profit:...
According with your modification, your TP for Hedge x1 is @1.3190, so Level 2 + Level 3 = 50 Pips, and you let the level 1 run.

So, if the price retraces you are not saving commisions or spread because your Level 1 is lossing pips ???
  • #525
  • Aug 29, 2014 2:17pm Aug 29, 2014 2:17pm
Quoting Kfx
{quote} Yes, according you modification, your TP for is @1.3160, so Level 2 + Level 3 = 50 Pips, and you let the level 1 one run. So, if the price retraces you are not saving commisions or spread because your Level 1 is lossing pips ???
EDIT: Yes, if price retraces there is a chance of losing pips by "pushing the envelop" and aiming for higher profit.

On the other hand, not considering the higher TP idea, the fact that the strategy DOES NOT CASH IN at each grid level when price moves straight up or down should not reduce the profit, but would save on spreads and commissions (and with very fast moving prices, on slippages).

So the bottom line is letting Level1 running until the first 10 pips grid retracement when Level2 is added and at this moment TP is set at the highest or lowest touched grid level.
  • #526
  • Aug 29, 2014 2:27pm Aug 29, 2014 2:27pm
Quoting Paracelsus
{quote} No, not really. The modified approach just keeps Level1 waiting for the opportunity to close at the same TP level without taking small profit bites (as the original version). The outcome is still 50 pips for both scenarios when price eventually reaches 1.3160 TP level.
You said before, you just close Level 1 if price retraces 10 pips.

So if we close level 2 and level 3 in TP we win 50 pips and when the price retrace from there we win 0 pips from level 1.

If we do not let the level 1 run and close all in TP we win 60.

So finally we are lossing 10 potential pips.
  • #527
  • Aug 29, 2014 2:45pm Aug 29, 2014 2:45pm
Quoting Kfx
{quote} You said before, you just close Level 1 if price retraces 10 pips. So if we close level 2 and level 3 in TP we win 50 pips and when the price retrace from there we win 0 pips from level 1. If we do not let the level 1 run and close all in TP we win 60. So finally we are lossing 10 potential pips.
@Kfx

Sorry, it must be a misunderstanding. I don't recall mentioning "close Level 1 if price retraces 10 pips". Level1 positions should close according to your original strategy. (Level2 are added when when price retraces 10 pips from highest/lowest grid touch.)
  • #528
  • Aug 29, 2014 11:07pm Aug 29, 2014 11:07pm
Quoting GoldenEA
Attached is a simple EA I wrote. The initial entry rule i use is Daily close. if daily close is higher EA opens buy else opens sell. inside grid is not implemented yet. {file} {file} {file}
here is the update version. You can set your own Grid Size--> OrderGap. Default is 50 pips.
Attached File(s)
File Type: mq4 MGHEAv2.0.mq4   16 KB | 689 downloads
  • #529
  • Aug 30, 2014 3:06am Aug 30, 2014 3:06am
Quoting GoldenEA
{quote} here is the update version. You can set your own Grid Size--> OrderGap. Default is 50 pips. {file}
Thank you, GoldenEA!

But I have a little problem: the file cannot be opened in MT4 build 670. (I would have liked to test it.)
Can you help me?
  • #530
  • Edited 1:33pm Aug 30, 2014 10:14am | Edited 1:33pm
An interesting visual backtest experiment was done with the following slight modifications from August 1st through 8th:

- Extended TP after L2 entries (by 10 pips, i.e. one grid level)
- Entering and re-entering L1 positions in trend direction
- Letting L1 positions ride with a strong market move, i.e. without closing and opening them (to save on spreads and commissions; no effect on final outcome)

FINDINGS:

  1. The backtest was started on a Friday (8/1/14), which day has immediately triggered a Hedge4 batch, so it was a good "stress test" for the strategy.
  2. Eventually, by the following Friday close (8/8/14), the strategy has grossed about 456 pips (not considering commissions), i.e. 76 pips per day on average. Not bad.
  3. Another good news is that the maximum Equity loss was only about -216 pips (thanks to hedging positions).
  4. The required max. Hedge level was Hedge16 (it was also the first "Inside Hedge").
  5. If starting the strategy with 1 microlot (0.01 lot), then the max. position size in play would have been 0.84 lots before closing the basket.

CONCLUSIONS:

  1. The floating Equity loss was minimal, on the other hand the utilized leverage was pretty high.
  2. To be able to follow through with max. 0.84 lots in play, the strategy would have required at least a 400 USD account (with 1:400 leverage).
  3. The 456 pips gain with 0.01 lot size would have profited 45.60 USD, i.e. approx. 11.4% gross profit on a 400 USD account within one week.


Attached Image (click to enlarge)
Click to Enlarge Name: 0801_0804_modified.jpg Size: 1.1 MB


Attached Image (click to enlarge)
Click to Enlarge Name: 0805_0806__modified.jpg Size: 1.2 MB


Attached Image (click to enlarge)
Click to Enlarge Name: 0807_0808_modified.jpg Size: 1.2 MB
  • #531
  • Aug 30, 2014 12:56pm Aug 30, 2014 12:56pm
Quoting Paracelsus
{quote} @Kfx Sorry, it must be a misunderstanding. I don't recall mentioning "close Level 1 if price retraces 10 pips". Level1 positions should close according to your original strategy. (Level2 are added when when price retraces 10 pips from highest/lowest grid touch.)
Ok, I will re-read your posts and try to understand the "Letting L1 position" concept.

I must sound pretty stupid not understanding this modification on my own system.
  • #532
  • Aug 30, 2014 12:57pm Aug 30, 2014 12:57pm
Quoting Paracelsus
An interesting visual backtest experiment was done with the following slight modifications from August 1st through 8th: - Extended TP after L2 entries (by 10 pips, i.e. one grid level) - Reentering L1 positions in trend direction - Letting L1 positions ride without closing and opening them (to save on spreads and commissions; no effect on final outcome) FINDINGS: The backtest was started on a Friday (8/1/14), which day has immediately triggered a Hedge4 batch, so it was a good "stress test" for the strategy. Eventually, by the following Friday close...
Great job.

As I said before I'll try to understand before ask you.
  • #533
  • Aug 30, 2014 12:59pm Aug 30, 2014 12:59pm
Quoting GoldenEA
{quote} here is the update version. You can set your own Grid Size--> OrderGap. Default is 50 pips. {file}
Very nice.

Thanks for the programming support.
  • #534
  • Aug 30, 2014 1:04pm Aug 30, 2014 1:04pm
@Paracelsus and @GoldenEA ... If you do not mind and give me your thumbs up, I would like to attach the system modification and the EA in the first post.

Paracelsus, please tell me what are the posts number talking about you modification I must choose.

Thanks.
  • #535
  • Aug 30, 2014 1:31pm Aug 30, 2014 1:31pm
Quoting Kfx
@Paracelsus and @GoldenEA ... If you do not mind and give me your thumbs up, I would like to attach the system modification and the EA in the first post. Paracelsus, please tell me what are the posts number talking about you modification I must choose. Thanks.
@Kfx

Yes, that is fine with me.

Nevertheless, I need to emphasize that all the mentioned "modifications" are based on my own theories and limited visual backtests.

  1. The description of the "trend direction first entry/basket re-entry" and the "extended TP" were mentioned in post #367.
  2. The idea about letting L1 positions run - without closing and reopening them - during a strong market move was mentioned in post #492; the visual demonstration of it was shown in post #512.

  • #536
  • Aug 30, 2014 2:42pm Aug 30, 2014 2:42pm
Quoting Kfx
@Paracelsus and @GoldenEA ... If you do not mind and give me your thumbs up, I would like to attach the system modification and the EA in the first post. Paracelsus, please tell me what are the posts number talking about you modification I must choose. Thanks.
no problem.
  • #537
  • Aug 30, 2014 4:08pm Aug 30, 2014 4:08pm
Quoting Paracelsus
{quote} @Kfx Yes, that is fine with me. Nevertheless, I need to emphasize that all the mentioned "modifications" are based on my own theories and limited visual backtests. The description of the "trend direction first entry/basket re-entry" and the "extended TP" were mentioned in post #367. The idea about letting L1 positions run - without closing and reopening them - during a strong market move was mentioned in post #492; the visual demonstration of it was shown in post #512.
Quoting GoldenEA
{quote} no problem.
Done.

Thanks again.
  • #538
  • Aug 30, 2014 4:24pm Aug 30, 2014 4:24pm
Quoting GoldenEA
{quote} here is the update version. You can set your own Grid Size--> OrderGap. Default is 50 pips. {file}
Can anybody else test this EA with MT4 build 670?
  • #539
  • Aug 30, 2014 4:57pm Aug 30, 2014 4:57pm
Quoting moncsicsi78
{quote} Can anybody else test this EA with MT4 build 670?
The EA works good for me with build 670, but I get some errors in the journal backtest. (redundant modification, OrderModify error 1 ... )
  • #540
  • Aug 31, 2014 5:27am Aug 31, 2014 5:27am
An update on continuation of the visual backtest for August with the previously mentioned slight modifications (trend direction first entry/re-entry and extended TP).

I have also included a 200 EMA on the charts, confirming that the first trade on 8/11/14 (Monday) was a "justified" BUY (as price was above EMA).

The week of August 11-15 brought sideway movements on EUR/USD with minor fluctuations, so the strategy could not profit from it; it just carried over the H1 and H2 positions from Monday through Friday. Totally "normal" and expected during a sideway moving week.

Attached Image (click to enlarge)
Click to Enlarge Name: 0811_0812_modified.jpg Size: 1.2 MB

Attached Image (click to enlarge)
Click to Enlarge Name: 0813_0814_modified.jpg Size: 1.2 MB

Attached Image (click to enlarge)
Click to Enlarge Name: 0815_modified.jpg Size: 1.1 MB
1 trader viewing now