Disliked{quote} On the first try the answer is no. You just top up the Trading account from the Principal account so the risk stays the same. If you already have the first or second level up and you lose then the answer is yes. You drop the risk back to the previous level.Ignored
- #25
- Sep 14, 2015 7:28am Sep 14, 2015 7:28am
- Joined Aug 2011 | Status: Trader | 4,956 Posts
I think I have good news for you!! I did a monte carlo simulation, using 10,000 iterations, repeated the test 3 times. Here are the results Mean Variance Lower CL Upper CL Valid iterations Time taken 4.668 30878 -420 280 10000 23 sec (Test 1) Mean Variance Lower CL Upper CL Valid iterations Time taken 2.544 31697 -430 270 10000 23 sec (Test 2) Mean Variance Lower CL Upper CL Valid iterations Time taken 6.275 29416 -420 270 10000 23 sec (Test 3) I used 0.67 losses 0.33 wins (dice method, no knowledge edge). As you can see you still have a positive...
I think this is what I have being pointing at but unable to communicate very well. I sorta think things through in my head as I'm watching my trades and as I thought about this system pieces kept snapping into place with a bit of a wow factor. It's a very simple method but Ima bit like a Treant from the Lord of Rings who uses too many words to explain a simple thing and lose people along the way
Thanks again for this, it gives me a little more confidence that I'm on the right path
As the lights go by so too do the shadows move
{quote} Wow thank you very much for this. I think this is what I have being pointing at but unable to communicate very well. I sorta think things through in my head as I'm watching my trades and as I thought about this system pieces kept snapping into place with a bit of a wow factor. It's a very simple method but Ima bit like a Treant from the Lord of Rings who uses too many words to explain a simple thing and lose people along the way
You are very welcome. It is your idea, so I should thank you for bringing it out.
- #29
- Sep 14, 2015 7:41am Sep 14, 2015 7:41am
- Joined Aug 2011 | Status: Trader | 4,956 Posts
As the lights go by so too do the shadows move
- #30
- Sep 14, 2015 7:46am Sep 14, 2015 7:46am
- Joined Aug 2011 | Status: Trader | 4,956 Posts
One more thing I should point out that I always started with $10 for a new series. I think you increase the risk after increasing your capital. I didn't apply that. FYI
As the lights go by so too do the shadows move
{quote} You're welcome. As for the questions, no problem at all. Yest you start with $10, as you know Matts system says "you don't quit until you are +3 wins". So by the time you reach +3 wins, your risk becomes minimum $40 (this means you reached it very quickly), maximum $160, meaning you have struggled a while reaching the +3 wins threshold. As for the -$420,000, yes you are absolutely right, it is a drawdown. But this figure is for 10,000 series. Which is roughly 120,000 trades on average.
- #34
- Sep 14, 2015 8:36am Sep 14, 2015 8:36am
- Joined Aug 2011 | Status: Trader | 4,956 Posts
{quote} Good to see the numbers added up. Frankly I would have still backed his reasoning if your results were -ive, just look at the concept! I've been thinking on how to work out a similar method so I kind of really get the reasoning behind it, balancing minimizing risk while maximizing reward is pretty much the biggest hassle for any serious trader past the 'practice' stage. When I have the time, I will be coding this MM into an EA, if and when I do, I will be sure to let you know guys know.
On top of the way I trade 2:1 if someone wanted to use this system for lower risk it would also be possible. It could say use a 2-3% risk from the Principal account and even 1:1 trades in the Trading account with as many trades as wanted to get to next level. Using the same theory of when the Trading account doubles increasing the risk then you would have a few trades to cushion the fall and keep the current R:R until having to drop a level. I just use 2:1 because that's what I'm used to and I think many professional traders would be looking for that ratio too.
Keep us informed if you choose to make an EA, would be great.
Cheers,
Matt.
As the lights go by so too do the shadows move
- #36
- Sep 14, 2015 9:25am Sep 14, 2015 9:25am
- Joined Aug 2011 | Status: Trader | 4,956 Posts
As the lights go by so too do the shadows move
- #37
- Sep 14, 2015 10:07am Sep 14, 2015 10:07am
- Joined Aug 2011 | Status: Trader | 4,956 Posts
Just thought I'd share a typical 2:1 trade. This is one I am in atm with a risk reward of roughly 45:90 pips. It may or may not complete but if it has another break downside I may be looking at moving the stop to break even (I have quite a few break even trades when trading 2:1). {image}
moment... Anyhows can't beat self up over these things and was just (another) reinforcement to check the time/news releases.
As the lights go by so too do the shadows move
- #39
- Sep 14, 2015 2:29pm Sep 14, 2015 2:29pm
- Joined Aug 2011 | Status: Trader | 4,956 Posts
Hi Matt. Why did you decide to go with 2 accounts in the first place? Your method seems equally achievable using only one account. Was it clarity? Additional control? Ease of implementation? Thanks Marijan
You are quite right, this is totally achievable with just one account. It has a bit of a history to why I use two. I used to do the Rag to Riches MM system (mentioned in opening) and I used to fund an account from another account in my attempts. I have used both accounts for testing for quite a few years. This is how I sort of came about this system. I often got a few levels up in the R2R 2:1 R:R system that continually doubles the account while risking half of it. A couple of times I got to level 6 which is over 3k but then dwindling the account back down to a couple of hundred. I then got thinking about how I could save and add capital using this system. So I started withdrawing from the R2R account and saving it in the other account for future attempts.
So to answer, I suppose I just got used to using two accounts and found that it benefits me greatly for a number of reasons. Having a clear line of risk that can be seen in the trading account creates discipline for me. I also know where I am at all times without having to check my history (or my spread sheet) to know where my cut off for a particular trade is at (I am forgetful at times
). The transferring of capital after a successful trade also feels like I am banking my efforts and gives me a sense of accomplishment.So again, like you said it is totally achievable using one account. I just think it improves my trading emotionally when I can take money off the table and into the "bank".
Cheers,
Matt.
As the lights go by so too do the shadows move
- #40
- Sep 15, 2015 1:51am Sep 15, 2015 1:51am
- Joined Aug 2011 | Status: Trader | 4,956 Posts
I have being thinking for a while of starting another account with this system. 60-100 pips can take quite a few hours to complete and while I'm waiting I often notice other potential trades (that I often take with my main acc.) on other pairs. I am thinking in due time if this system continues to work, of using another account that feeds from/to the same Principle account. Will be some time before that happens however as it is important to do the ground work first.
Currently short on UJ and close to trade TP. It will be the 3rd net trade of the series and if it completes I will be able to top up my Principle acc. again. Currently at tough support but a nice comment from Kuroda sped things along a bit.
Currently short on UJ and close to trade TP. It will be the 3rd net trade of the series and if it completes I will be able to top up my Principle acc. again. Currently at tough support but a nice comment from Kuroda sped things along a bit
.
As the lights go by so too do the shadows move