The Forexville story

It was a dream like any other dream...
make a little extra cash trading after work for beer and pizza.

Well like 95% of us, I found a good broker based on reviews who was able to provide 1000:1 leverage and I put in a couple hundred bucks.
Lets see what happens, I can do this. Sure enough I lost 25% of my account within minutes of depositing and figuring out how to make a trade.
I must trade bigger I felt to "cover" my losses.

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Booom! "margin call". What is this? ...quick google search... OOOOh I see. ...hrmph.
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Read forums. Read scientific papers...got it. Head and shoulders. News. Ok. Lets go.
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$$$
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Booom. 'volatility'. Ah ok, that is supposed to happen.
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Back testing
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. Boom. Quit. Byeee.

After a couple of months have gone by and it was clear that there was no easy way to make money in this racket. I put in the work. I wrote an expert advisor. Not just any simple thing, a real juicy one. DLLs and all. Neural networks, machine learning, monte carlo, you name it, its in there. So now after minimal training, it showed some promise and a lot of danger. Backtests were good 30% per month with 30% drawdown over couple of months or so. Dangerous drawdown.

Put in $500 and let it run for 1 month straight. Well that was the goal anyway.
http://i58.tinypic.com/6fmkah.jpg



However as soon as the account went over 2K I was just happy to have recovered my losses and made a small profit. I was ecstatic. I withdrew my $500 and started a new account, the Forexville Automated. Man that felt sweet. And now here we are today.

http://i59.tinypic.com/2a9cec1.png


After getting the EA, was it all smooth sailing? Of course not. I was sensible to keep the balance always as small as possible making withdrawals regularly. After all this is a very high risk system. It is meant to grow capital quickly, or...torch capital even faster. It torched one $500 and one $800 account ever so tastily. I learned my lesson and given it a larger operating capital now that it trades 6 pairs as opposed to 1 (mind you the drawdown for 1 pair is 30%) , which is still very stressful.

This thread is not meant to be a brag or a boast, it is meant to be a motivator. I failed and failed couple of times in this business. I want the community to have my story as just another inspirational tidbit which is very much needed in this market. Feel free to post your own stories, results, brags and look for advice in this thread.
Make them pips

Hi Forexville,

It looks like I could have written your story and that you could have written mine.

I have also my journal where my failures have been recorded and where I hope to write also my successes.

Wish you all the best, I will follow.
BT

Nice!
I see you have a variety of risky strategies you tested over the years.
Ever code anything AI?

No, if you had some examples or places where to look for, I would be interested...

Hey Forexville,

nice to see you do well with your own EA!
I'm currently writing my own aswell. But since I only have some htlm5/css background I am finding myself struggle quite a bit. So my question for you is whats your coding background?

VisionN

Well I coded in everything from Asm to C++ to Matlab. Its really not a problem to pick up a different language anymore, best way is always to download source codes for existing software compile and tinker and understand how you can accomplish certain things. I think knowing matlab helped me tremendously with debugging learning algorithms as it has an amazing package these days. You can do everything from signal processing analysis to complex neural networks like recurrent nets and so on without much trouble.

Mind you in the end I wrote all my decision making code in C++. The nice thing about MT4 you can use outside DLLs with custom code. And then moreover the nice thing about using your own DLL as opposed to MT4 scripts you can backtest using your own engine, with multiple pairs simultaneously and so on. Great fun.

Your motivation should be to tinker and see if you can make a spark or just simply to tinker, and the results will befuddle you

http://i59.tinypic.com/33yktpe.png
OK here it is: the drawdown.
This is the least fun of trading. Watching all your posiitions somehow slip into the negative.....big negative!

What can you do? Recheck the market frequently so maybe things are turning around? Make big trades to counteract the current poor fortune?
It sucks. Over my last 2 months trading I have learned that whatever I tried to do during periods of hefty drawdown failed miserably, and market eventually came to the position my EA had predicted. Also, there have been times where the market did not come back and the EA blew up my account. Its happened. However, despite these happenings, it's still a winning system. Very winning. And I know even if it busts a 3K+ account, it can always make it back....fast.

Bottom line is, drawdown sucks. However, the more you do and think about the situation, the more likely you are to make it only worse.

How do you deal with drawdown?
Cheers

Dealing with drawdown, is the most difficult thing about ea's in my opinion, as you said you can blow accounts away in a matter of time after making thousands of profit.
For me is testing and analyzing is the most important part to keep the drawdown as low as possible.
For example an important number for me is the is the historical maximum drawdown. When you start trading with your EA, you should expect at least the maximum historical drawdown. Since It will come sooner or later... Personally my aim is to have a maximum drawdown of 15%. I must add here, that besides an EA that didn't take any trades I have never had this, not even close.

As I said I am still a beginner in creating these "robots" and I hope to learn a lot more. Saying that, my current aim may change once I get more experience.

VisionN

Fully agree, experienced and often derailed my EAs because of that.

Now I have accepted that high risk and account blowing is part of the game (at least mine) and I don't worry anymore because of that.

If I have enough time to withdraw something before the crash, good, if not, I just reset and start again.

Of course, the less the money you put to start, the less painful it is to lose it.

Well, just like that we are out of drawdown, making our pips. Good setup today on the AudUsd for a quick couple of hundred. Now waiting for the EUR and GBP to show us what they can do.

Rinse and Repeat!

Over the years I have been in market, I have blown a zillion in demo accounts and several thousand of my own live cash, all in trying to gain a little idea as to how to find continuous prosperity.

It's a struggle to Stay Awake for the entire trading week, have done it, almost fucking killed me!!

It's a struggle to try and sleep while you have something that can amount to blowing an entire account, with all gains, in a single session...have done this several times!!

But...have found a few folk to help me through some of this and have found my own level of Forex Zen.

Needing to win every trade, was the first, easiest hurdle.
Needing to not blow an account, was the last, hardest hurdle.

Now, I continue to build equity and spread the accounts with different logic to, with a little luck and a great understanding of market, continue to churn a continuous profit.

Above Speaking in the realms of automation...

I haven't blown up a manual trade account in almost 4 years, and even on those, were the gamblers and a couple thou down, no big deal. Learning to appreciate the market from an Account Management Standpoint, helped me to deal with shortening gains, appreciating profits, looking at market forward and backward.

EAs are a hobby of mine, that in a sense, do provide an extra outlet of income. My bread n butter, still the live gains, but it never hurts to have a little gravy to go along with the meal.

So...It's like this. My EA mentor, somebody who doesn't code but was the first person to double a $10k account, live, with real funds off of one of my EAs lent me a little wisdom.

25% gains, withdraw profits and let the initial capital run. Really, if you have started into this market, you have to appreciate the sense of impending doom, so as you have said, a steady withdrawl helps with the, If the proverbial shit hits the fan, you can still walk away with a couple bucks tucked safely in your back hipster!

From there, it's just a matter of growth.

You have no more of your own cash in market...you've made back your losses...the money you ride is FREE!!

Let the Fucker Run.

But...keep approaching your gains as if you had your nuts on the line. Take the same profits, let the gamble account ride and grow your wealth in traders.

I have run upto 12 of my own live EA accounts, plus 3 of manual trading. When the EAs grow to another account start, I cash in the chips, restart the loads and let em go.

Rinse and Repeat!!

How do you deal with the drawdown?

Well...if you can appreciate that even with skin in the game, you have nothing on the line, it gets a lot easier.
If you can continue to grow, even if you lose an account or 2, you really don't think about an account, much the same as you never think about losing a trade.

It's all a part of the game.

Spread your funds around to a few brokers.
Spread your trading to a few pairs.
Spread your logic to a few ideas.

Where one trade wins and another loses...where one account gains and another one loses...where one pair becomes a staple and another one the account leech...you will find balance.

When you get accustomed to this...you sleep a lot better, you still watch for prosperity but aren't reliant on every day/week...you continue to grow and never look back onto the pant shittingly periods of your early days.

Rinse and repeat...this is how you deal with a little DD.

Just my dos centavos.

Hey it looks like you have been doing for a while. Refreshing post! Thanks

The EA business is so volatile. Like I can't stand the idea of making 15% per year with a small account. Like to me that is not fun or worth my time. I need the high risk. It's just this kind of mindset I am after.

How goes the ongoing Forexville story ?

We took a small loss this week when the GBPUSD went on a rocket ride. Was very close to hitting our stops as it turns out. Currently -2K, but the account is still live and kicking. Will keep you posted on the recovery.

Starting with an under $400 account, we are sitting on $850 today, essentially doubling our account over the last 6 days. Looking for the EUR/USD to climb up so we can realize some profits there. The drawdowns have been sizeable, but nothing too serious.
I think as long as I am executing a high risk pure AI trading strategy I mustn't worry about drawdowns. I realize there is a risk of busting the account, but at the same time I know that over next 3 weeks I could be looking a 5 digit balance. As long as I don't interfere with the EA I give it the best odds of achieving such exponential growth. Now that I think of it, every time I had losses associated with this EA its been my wrongdoing, where I downsized "countertrades" which my algorithm uses to dampen the market swings. The reason I would remove such trades was to increase the availability of margin available for opening future positions.

However, this backfired as the margin would get terribly low as the market swayed, which is what pushed margin to the stopout territory. Its a real differential equation with a time dimension. Upon trying to find an "optimal" or "game-theory" optimal solution, I gave up looking for the solutions, and I went back to keeping it simple: if my strategy worked without me interfering before and if my strategy failed a couple times without me interfering, I will therefore never interfere to give it the maximal odds of working.


It is sort of similar to the Monty Hall paradox, but exactly opposite: we should never choose to change our door.