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Hedging system using 5 ema

  • #21
  • Feb 24, 2017 3:30pm Feb 24, 2017 3:30pm
Quoting hibra68
{quote} Hi sorry for late answer. I did not use real data on sheet. So my math might be off. In any case I changed the system. Not saying the above does not work. Here is the new system. No 5 ema's no indicators(The 5 ema system might be better I dunno at this point this is why I need a coder) Here is the new system. On an up candle(there could be a minimum on the the size of the candles up or down) buy .01 lot and sell .02 lots. We are again using 15 min candle( we could try this on 5 min or 30 min candle later). When the 15 min candle closes check...
Hi hibra68

I am not sure I understand this very clear. But my understanding is you will lose a lot more than just 20 percent. Please explain if I am not getting this right.

For the first candle trade you will lose 100 candles x 20 pips average per candle = 2000 pips
For the second candle trade you will lose 99 x 20 pips average candle size = 1980 pips
for the third candle trade you will lose 98 x 20 pips average candle size = 1960 pips.......
and so on for your 100 trades per candle...

This will not be just 20% loss, but much much more than 100% loss...I am just lazy to do the exact math.

Did I get this right or am I missing something?
  • #22
  • Feb 24, 2017 3:33pm Feb 24, 2017 3:33pm
Quoting okrim
{quote} 22 trades, every time you increase of one microlot: 1+2+3+4+... do this for 22 times and tell me which number you get. Syl
okrim,

You are very right about increasing 1 microlot each time for 22 times will get you you that total lot size invested.
I am just not clear if that is what the original poster is suggesting though.
  • #23
  • Feb 24, 2017 3:36pm Feb 24, 2017 3:36pm
Do you have trading result with this system? I'd like to know more about it.
Risk comes from not knowing what you're doing.
  • #24
  • Feb 24, 2017 3:59pm Feb 24, 2017 3:59pm
Quoting dragonexpert
Do you have trading result with this system? I'd like to know more about it.
I do not have trading results in live trades.

I do not have an EA for this so I don't have backtest results for long term.

But I manually traded this on forex tester meaning I would manually place buy and sell trades bar by bar, I was able to do this for only 2 day period since there were a lot of 15 min candles in those 2 days and my equity was 1135 dollars I started with 1000 dollars.
  • #25
  • Feb 24, 2017 4:03pm Feb 24, 2017 4:03pm
Quoting yalgaar
{quote} Hi hibra68 I am not sure I understand this very clear. But my understanding is you will lose a lot more than just 20 percent. Please explain if I am not getting this right. For the first candle trade you will lose 100 candles x 20 pips average per candle = 2000 pips For the second candle trade you will lose 99 x 20 pips average candle size = 1980 pips for the third candle trade you will lose 98 x 20 pips average candle size = 1960 pips....... and so on for your 100 trades per candle... This will not be just 20% loss, but much much more than...
I dunno maybe I'm doing this wrong but It worked on forex tester.

So here is how it works,

When the price trends goes one direction you would lose $2 dollars per bar so after 100 bars it makes 200 dollars simple math.
And mind you the average range per bar is actually 15 pips this is calculated for 100bars, if I calculated it for 18400 bars which is close to 6 months the range of each 15 min bar goes down to 11 pips. I used 20 pips this more. And don't forget this is the range of the bar from low to high, usually if the market is going up you would only need to look at open to close which will bring the range of movement per bar to around 8 pips. So this is pretty much the worst case scenario a move of 2000 pips in 1 day.
  • #26
  • Feb 24, 2017 4:12pm Feb 24, 2017 4:12pm
Quoting yalgaar
{quote} Hi hibra68 I am not sure I understand this very clear. But my understanding is you will lose a lot more than just 20 percent. Please explain if I am not getting this right. For the first candle trade you will lose 100 candles x 20 pips average per candle = 2000 pips For the second candle trade you will lose 99 x 20 pips average candle size = 1980 pips for the third candle trade you will lose 98 x 20 pips average candle size = 1960 pips....... and so on for your 100 trades per candle... This will not be just 20% loss, but much much more than...
Yalgaar we are not trading every other candle we are trading every candle.

For each candle If its an up candle we buy only .01 lot and we sell .02 lots so if it goes up again we gain lets say 20 pips and lose 40 pips net loss of 20 pips per .01 lot.
which is equal to 1000 units x .0020 pips = roughly $2 per barx100 bars= $200 dollars which is equal to 2000 pip move.
  • #27
  • Feb 24, 2017 4:14pm Feb 24, 2017 4:14pm
Quoting dragonexpert
Do you have trading result with this system? I'd like to know more about it.
This is why I need a coder so I can test out different lot size and different approach for best result.

I am 100 percent this works but I dunno if any broker will allow me to kick their ass day in and day out.
  • #28
  • Feb 24, 2017 4:25pm Feb 24, 2017 4:25pm
Quoting hibra68
{quote} Yalgaar we are not trading every other candle we are trading every candle. For each candle If its an up candle we buy only .01 lot and we sell .02 lots so if it goes up again we gain lets say 20 pips and lose 40 pips net loss of 20 pips per .01 lot. which is equal to 1000 units x .0020 pips = roughly $2 per barx100 bars= $200 dollars which is equal to 2000 pip move.
Profit or loss is only realized if you close your position. It would be helpful if you can provide details on when you would close your position. In my message I assumed you would not close your position. In that case after 3 candles of 20 pips each, you would have lost 60 pips on the first candle, 40 pips on the 2nd candle, and 20 pips on the 3rd candle...and so on....by the time you are on the 100th candle...you would have lost a lot more than 2000 pips is what I am saying...you would have lost a lot more than 10000 pips actually!
  • #29
  • Feb 24, 2017 5:51pm Feb 24, 2017 5:51pm
Quoting yalgaar
{quote} Profit or loss is only realized if you close your position. It would be helpful if you can provide details on when you would close your position. In my message I assumed you would not close your position. In that case after 3 candles of 20 pips each, you would have lost 60 pips on the first candle, 40 pips on the 2nd candle, and 20 pips on the 3rd candle...and so on....by the time you are on the 100th candle...you would have lost a lot more than 2000 pips is what I am saying...you would have lost a lot more than 10000 pips actually!
I dunno maybe I cant explain it correctly. The 100 candles that i'm talking about is just an example a worst case scenario. But even there you are hedging so even though the market goes against you 2000 pips you only lose 200 dollars or 20 percent of your account. But this only happens when there is a crash in market.

Usually the market comes back to the original starting point after moving say 500 pips and this is when you close everything with profit.
  • #30
  • Feb 25, 2017 3:25am Feb 25, 2017 3:25am
I think question from yalgaar is important. When are positions being closed? As the market goes against me and trends say downward, I will be accumulating a net of buy position which we hope will be profitable eventually. But when do we close the sell positions? In the first ema5 system these were closed when profit was reached as ema5 closed the other side. But here I don't see where the positions are closed. System looks interesting though. Would really like a clearer explanation so I can test.
  • #31
  • Feb 25, 2017 9:25am Feb 25, 2017 9:25am
Quoting shev72
I think question from yalgaar is important. When are positions being closed? As the market goes against me and trends say downward, I will be accumulating a net of buy position which we hope will be profitable eventually. But when do we close the sell positions? In the first ema5 system these were closed when profit was reached as ema5 closed the other side. But here I don't see where the positions are closed. System looks interesting though. Would really like a clearer explanation so I can test.
I believe the positions are supposed to be closed once you have a net profit across all your orders.
  • #32
  • Feb 25, 2017 10:04am Feb 25, 2017 10:04am
Quoting Sis.yphus
{quote} I believe the positions are supposed to be closed once you have a net profit across all your orders.
That is what I am guessing as well but wanted to be sure.

hibra68- Can you please provide some clarity?
  • #33
  • Feb 25, 2017 1:00pm Feb 25, 2017 1:00pm
Quoting yalgaar
{quote} That is what I am guessing as well but wanted to be sure. hibra68- Can you please provide some clarity?
Its just an Idea that popped up in my head but since I don't have a way to test it for a long period of time it's hard to come up with a solution to the problem of long term trends. This is exactly why I needed an ea so we can test this.

I was looking at remons Accumulative Profits grid. http://www.forexfactory.com/showthread.php?t=583322

He has a couple different ways to get out of the trades.

But he uses set amount of pips to take trades as in grid system I am trying to use candles as a way to determine when to take trades.

For any strategy to be profitable it has to be tested against a few years of data.

Also I am adding a new rule since you asked when do we close the positions.

The edge here is that when we check profits every other candle and close the profits we are putting on the side some profits.

Once we find a way to recover account in trends we would be able to keep those profits that have accumulated.

So one more idea is to find 1. best ranging pairs 2. best time to trade those pairs. 3. when not to trade them.

That begs the question is it better to trade during Asian, London or new York or just stay out of certain trading hours.


Once a 15 min candle closes we check to see if there are any profits on the table (the minimum profit per position should be at least $1. This could be adjusted later) and close all the profits that meet the criteria than continue trading as usual.

However we should set a threshold percentage of loss and than start using an account recovery EA where it will stop trading and try to recover account.

Another way to recover account. Since this is profitable in a range (Not in a tight range. In a tight range we neither make money or lose but we lose spread or

commission) we could determine if there is a strong trend (if the account starts losing say more than 5 percent equity this could be an indication of a strong trend.

LOL I think I just came up with a trend finder) than we could just add positions towards the trend (ex. long trend only add to long positions) the amount of lots has to

be determined because when a strong trend starts this is also a sign to get out of all positions in the way of offsetting the positions against the trend (ex. the trend is

up and we have total of 10 sell's and 3 buys we have to offset the sells by adding x amount of buys since we think the market will go up. This way we can recover the

losses from the sells and close in profit or breakeven.
  • #34
  • Mar 9, 2017 10:08am Mar 9, 2017 10:08am
Interesting idea, i was doing something similar manually, and still am.
Regarding the direction of the trade most effective filter so far is to trade in direction of M, W, D,H4, H1,M30, M15,M5,M1. My combination is M, D1, H4 , and every ea use places orderes in direction of these 3 TF.
Your idea is interesting and i hope that some coder who has a free time on his hand can code it.
Help to be helped.
  • #35
  • Mar 9, 2017 10:19am Mar 9, 2017 10:19am
Quoting Lazar83
Interesting idea, i was doing something similar manually, and still am. Regarding the direction of the trade most effective filter so far is to trade in direction of M, W, D,H4, H1,M30, M15,M5,M1. My combination is M, D1, H4 , and every ea use places orderes in direction of these 3 TF. Your idea is interesting and i hope that some coder who has a free time on his hand can code it.
Can you provide more details on what you are doing? Also your reasoning to ignore Weekly timeframe in deciding the trend?
  • #36
  • Mar 9, 2017 10:31am Mar 9, 2017 10:31am
To every system i use i add filter rulles:
Trade only in direction of the Trends on TF , M, D1, H4 or some other combination.
Lets say signal is generated by indicator for buy, the ea will check if M is up, D is up, H4 is UP...then ea will execute the order, in that way i eliminate bad counter trades. Some times when trend is changing lets say once or twice a month you have to dodge the bullet.
Help to be helped.
  • #37
  • Mar 9, 2017 7:46pm Mar 9, 2017 7:46pm
Quoting hibra68
Here is the same chart where I tried to explain entry and exit. Here is a rundown of positions closed. Buys 1*21pips, 2*16 pips, 3*18 pips, 4*0 pips(this was actually 4* 1.7 pips but with spread its probably a loss of about -3pips), 2*19 pips. Sells 6*20, 5*17, 4*10,3*0(again about -30 After taking out the spreads I calculated about 270 pips ( this is multiplied by 1 micro lot = 30 dollars roughly maybe more cause its Gbp/jpy. And the open balance is. Buys 5* -4, sells 1*-22 roughly -5 dollars. So if I close the remaining trades I would be up 25...
"now close all buy positions except for the top buy..."
What's the criteria to closed all buy position? Is it every time we buy 5 lots?
  • #38
  • Mar 9, 2017 9:35pm Mar 9, 2017 9:35pm
I've been away from home last week, I didn't see the latest posts. But jnfer I think it is a losing idea in the long run because I have not figured out a way to recover losing trades.
Maybe there is away to enter positions in a different way.

Like buy 2 sell 1 , buy 3 sell 2, buy 4 sell 3, buy 5 sell 5, buy 6 sell 7 and son on.
instead of buy 2 sell 1 , buy 3 sell 2, buy 4 sell 3, buy 5 sell 4, buy 6 sell 5....
  • #39
  • Last Post: Feb 14, 2020 6:36am Feb 14, 2020 6:36am
Quoting hibra68
I've been away from home last week, I didn't see the latest posts. But jnfer I think it is a losing idea in the long run because I have not figured out a way to recover losing trades. Maybe there is away to enter positions in a different way. Like buy 2 sell 1 , buy 3 sell 2, buy 4 sell 3, buy 5 sell 5, buy 6 sell 7 and son on. instead of buy 2 sell 1 , buy 3 sell 2, buy 4 sell 3, buy 5 sell 4, buy 6 sell 5....
Very interesting... I presume you abandoned your research into this system. Any recent updates about it?
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