Magnetic Target Zone with Capped Martingale

Hello. I am a very small lot trader, trading with only a few hundred dollars. This few hundred dollars that I trade may be nothing when compared to very experienced and professional traders investment however this is a lot of money for me as per the valuation of my home currency. I only have a few years experience in trading and the knowledge that I have can be compared to the 'tip of an iceberg'. I have done only manual trading till now and have never trusted any EA. But recently I met an old friend of mine (CMFG) who gave me a great idea (my opinion of the idea being great). He introduced me to a system or better still showed me a system which behaved very much like a magnet. The trend/indicator and current price of all currency pairs have magnetic properties of opposite poles of a magnet They always attract each other. There are some requirements for this system to work properly but I cannot say for how long this system may work properly with success.

The system has the following characteristics :
1. It requires the ADR/ATR of the currencies to be traded for the last 1 or more years.
2. It has to be automatically executed as it is very strenuous to take manual trades based on this system.
3. It is based on 3 day Moving Average which I guess very few or maybe no traders use.
4. It consists of a Capped Martingale system to avoid or minimize risk of margin call.

I am looking for help from the experienced and helpful traders to help me in my search for developing and testing this system.
I will use this thread as my Trading Journal.
I request all to please share your knowledge and your kind actions will be sincerely appreciated.
Post 8 is important for updated strategy knowledge. Strategy updated on post #53 & #54 on 17th October,2014.

Here is the updated monetary result of all trades so far:
Details of each individual trade can be found in the posts below:
Profit = $214.60 (after deducting commissions and adding/deducting swap)
Loss = $712.95 (after adding commissions and adding/deducting swap)
Net Profit or Loss = -$498.35
Summary of Trade Sets : (Refer to Post 15)
1. Total no. of Trade Sets Profitable = 20/27 (74%).
2. Total no. of Trade Sets profitable in 1st Step =15/27 (56%) .
3. Total no. of Trade Sets profitable in 2nd Step = 5/27 (19%).
4. Total no. of Trade Sets profitable in 3rd Step = 0/27 .
5. Total no. of Loss Trade Sets = 7/27 (26%).

The first requirement is ADR/ATR.
I PM-ed two senior members of FF regarding this but I guess they receive so many PMs that it takes time for them to respond.
I am not much net savvy but this is what I have got :

Avg Day (200) EURUSD(66) , USDJPY(61) , USDCHF(53) , GBPUSD(82) , USDCAD(64), EURGBP(43) , EURJPY(89) , EURCHF(28) , AUDUSD(69) , GBPJPY(122) , CHFJPY(71) , GBPCHF(88)

I personally find the above data very unreliable and maybe outdated.
Request you to please post any information that you may have and want to share with regards to this ADR/ATR along with the source for verification.
Together we will try to build a profitable EA. May Lady Luck be with us in our search.

I have got multiple links for finding ADR/ATR.
For the time being I will be using the below mentioned calculator link:

http://www.investing.com/forex-tools...ity-calculator

Till someone provides a better link I will continue with this link.

I have plotted the 3 day EMA on all the currency pairs and am now waiting for opportunities
I will be manually executing and exiting trades till the time I get the Exact EA set up.
As I am not motivated to test on demo accounts , I will be doing this on a real account with a small balance along with multiple other strategies already providing profits.
Wish me luck and success.

The Capped Martingale system will consists of 3 steps of the trade.
The first trade in any particular pair will be taken with a lot of 1000 (0.01).
The second trade of each traded pair will be 3000 (0.03).
The third trade will be 12000 (0.12).
If it touches the SL of the third trade in any pair then the first and second trade will also be closed in that pair.

Today's Trade :
GBPJPY (A1) : buy 0.01 lot at 174.06. TP 174.40 . SL post 3rd Martingale.
Next Level buy 0.03 lot at 173.46(A2) if TP not hit on above trade (A1) and goes further down. TP at this level will be 173.80.(All GBPJPY trades closed)
Last Level buy 0.12 lot at 172.86 (A3) if TP not hit on the above trade (A2) and goes further down. TP at this level will be 173.46. (All GBPJPY trades closed)
If the pair continues falling then SL of all above trades (A1 , A2 , A3) will be 172.56.

The second trade GBPJPY (A2) got executed at 173.46 today a few hours after London Open.

GBPJPY second trade (A2) closed successfully at TP 173.80.
1st trade (A1) closed at a loss of $2.36.( Manually closed at 173.804 as SL could not be set at 173.80 once it went below 173.800)
Second trade (A2) closed at a profit of $9.44. So profit = 9.44 - 2.36 =$7.08.
Third trade (A3) cancelled.

Some observations here :
Till date I only traded with brokers who did not charge commissions. Here $4 per lot commission is charged.
Second, negative swap has to be considered.
Taking the above into consideration I will have to improvise on this method a little.

A little change to post 4 . ;
The Capped Martingale system will consists of 3 steps of the trade. The first trade in any particular pair will be taken with a lot of 1,000 (0.01). The second trade of each traded pair will be 4,000 (0.04). The third trade will be 20,000 (0.20). If it touches the SL of the third trade in any pair then the first and second trade will also be closed in that pair.

My opinion and assumption : This method will generally work but when there is any very, very high impact news or developments then the SL of the 3rd trade will be hit causing all the trades to be closed in loss. Hence during such events I will avoid trading. Planned news events can be avoided however unplanned news cannot be avoided and on those days losses has to be incurred. The overall performance of profit and loss has to be seen.

Today's Trade :
AUDJPY (A1) : buy 0.01 lot at 93.82. TP 94.20 . SL post 3rd Martingale.
Next Level buy 0.04 lot at 93.22(A2) if TP not hit on above trade (A1) and goes further down. TP at this level will be 93.60.All AUDJPY trades closed)
Last Level buy 0.20 lot at 92.62 (A3) if TP not hit on the above trade (A2) and goes further down. TP at this level will be 93.00. (All AUDJPY trades closed)
If the pair continues falling then SL of all above trades (A1 , A2 , A3) will be 92.32.

AUDJPY trade (A1) closed in profit within a few hours with a profit of $3.48 after deducting commission.
Trades A2 and A3 cancelled.

Today's Second Trade :
GBPJPY (A1) : buy 0.01 lot at 172.82. TP 173.20 . SL post 3rd Martingale.
Next Level buy 0.04 lot at 172.12 (A2) if TP not hit on above trade (A1) and goes further down. TP at this level will be 172.50.(All GBPJPY trades closed)
Last Level buy 0.20 lot at 171.42 (A3) if TP not hit on the above trade (A2) and goes further down. TP at this level will be 171.80. (All GBPJPY trades closed)
If the pair continues falling then SL of all above trades (A1 , A2 , A3) will be 171.12.

GBPJPY trade (A1) closed in profit within a few hours with a profit of $3.49 after deducting commission.
Trades A2 and A3 cancelled as A1 TP reached.
I Missed the GBPUSD , EURJPY and NZDJPY trades as I was not on on my system.
Need an EA so that I don't miss opportunities and don't have to look at each pair every few minutes.(very strenuous task manually ).

I was checking the system and and I was not satisfied with the risk/reward ratio. I know that there will be losses and this is what I have to control. I need to increase profits in terms of pips to make up for losses that will be incurred. Still working out a system for increasing the profits. Will think over this weekend to improve it.

Hi All , I have added a small poll to get the opinions of viewers on this system. Your opinions will be appreciated. Also kindly do comment on why you voted with each option.Thanks.
Currently my opinion is that it will work(My Vote is Yes). Maybe a few modifications and updates may be required which will come while moving along this path.
Adding the poll details here if in future I happen to Delete the poll.

Do you think that this system will work in the Long Run ?
1. Yes
2. No
3. Maybe
4. Don't Know

Learning and improvising is a 'Never Ending' Process. I thought of keeping track of the success/failure of this system updated in the First post. This will definitely go a long way in creating a profitable system. The statistics will be in terms of "Trade Sets". Each Trade Set may consists of 1 , 2 or 3 trades depending on the activation of trades as per Capped Martingale system. Example ; Post 7 is 1 trade set , post 9 is another trade set , post 11 is another trade set.
The summary will be as follows :
1. Total no. of Trade Sets Profitable / Total No. of Trade Sets executed ( % success of this system till date).
2. Total no. of Trade Sets profitable in 1st Step. ( % success of this step till date).
3. Total no. of Trade Sets profitable in 2nd Step ( % success of this step till date).
4. Total no. of Trade Sets profitable in 3rd Step ( % success of this step till date).
5. Total no. of Loss Trade Sets ( % failure of trade sets till date).

I will keep updating the 1st Post with whatever new ideas that I come across.
I am still working on improving the Risk/Reward ratio.

As per the market close on Friday, the price of AUDJPY is 93.45. If market opens with this price on Monday or lower I will take this trade :
AUDJPY (A1) : buy 0.01 lot at 93.45. TP 93.85 . SL post 3rd Martingale.
Next Level buy 0.04 lot at 92.75(A2) if TP not hit on above trade (A1) and goes further down. TP at this level will be 93.15.All AUDJPY trades closed)
Last Level buy 0.20 lot at 92.05 (A3) if TP not hit on the above trade (A2) and goes further down. TP at this level will be 93.00. (All AUDJPY trades closed)
If the pair continues falling then SL of all above trades (A1 , A2 , A3) will be 91.75.
I will have to stay awake till 2:30 am on Monday (IST). Hard Work.
If I buy it lower on Monday morning open I will adjust all trades according to the pips difference.

Maybe you could put some picks up of your trades with your martingale entries on? it would be easier to follow and input on.

Thanks for your advice. I do apologize for not putting up any pictures and I appreciate your feedback.
However the pictures will reveal the exact trade method , which I don't want to reveal at the moment.
Maybe later on, after about a hundred or more trades I will put up all the charts/pictures. ( provided it is a successful strategy).
Have a wonderful weekend.

I have thought about increasing the Risk/Reward ratio. The best that I could come up with was :
The 1st step of the trade set remains the same. There is no improvement in the Risk/Reward ratio.
Improvement in Risk/Reward ratio will be implemented in 2nd and 3rd step of the trade set. First I will implement a method whereby I close half the trade position in the current TP zone and remaining half at a little better profit zone. The SL of the 3rd step will also be reduced.
Lets see how this works out for me.
Wish me Luck and Best Wishes.

References to inspire new and unsuccessful traders / people .

http://en.wikipedia.org/wiki/List_of...annel_swimmers

if you read the above link contents you will learn that all success is built upon previous failures.
Many people who swam across the English Channel did it after failing multiple times.

Success is not 'Luck by Chance". It is made up of dream , will , dedication and determination.

A more insipring link is :

http://www.dailymail.co.uk/news/arti...-schedule.html

The person ( in the above link) did not have any legs and hands and yet he swam across the English Channel.
'Hats off to guys like these".

All we have to do in fx trading is generate profits. Much easier task as compared to the above.