Quote:
Originally Posted by nirvaman
no matter how much you win with this EA you will loss it. the only way it works forever if you have a big account. that way you will have enough money to defend yourself from market goign against your position for long time.
the base of the philosofy of this systems is that market will not be forever against you. and thats the reason it keeps buying with higher lots sizes when you are losing . and thats true. the problem is that we are poor mortals have not enogh money to resist .
and when you try to put any kind of stoploss of managing the risk in any way, the philosofy of the system stops to work. when you cut your loses with this system you start to convert many winners in loses, and the graphic show no more wining
after testing this system I realized the matematic behind the phrase of my natal country that says "plata llama a plata" and it translates "money calls money"
at the end you need an indicator or a system that gets 70% winners against 30% losers more or less and with little drawdown to win this game.
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I certainly understand the philosophy, and the good and bads. The thing is how do we go forward with it. Part of the reason why I'm still bugging around is, I strongly believe there is a balancing point. I know there is no way that I can get a 100% success trades, therefore where is the stop loss(in equity) should be place to balance it out comes in my mind. What is the high probability that will maintain the gain instead of lose it all? I bet 70% winning aint enough to sustain the loss, if we have MaxTrades > 2 with multiplier of 2. Because that will comes to 80% drawdown. Your call whether to stop trading with it. I found myself cant give up this for so long is just simply I believe there is a balancing point. A certain limit of cost averaging that will improve the profitability; knowing when to cut off all the losses in order to stay alive in the market. I've made much money, and I certainly lose a substantial of it during trending market. A large account will do no good if we do not admit the loss. Even if you have 100k starting with 0.01lot, you'll still end up with margin call. Try to scroll back your chart starting from July, 2006. Can you imagine if 10point3 put a sell order there, what will be your 100k balance today? Even I give you 10 billion to trade with it, it will still blow the account. All I concern is, how to build the small account up, and get away from the blow up with a small amount of loss. I need to find the balancing point. I've loss 30 bucks since I started to use it live. But hey, I'm on my way back to breakeven now. There is a way, but I still not manage to find the best route to get there. I wont stop you from "stopping", but I'm still hold on to it before it lose me another 200 bucks.
Regards
David
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"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis." - Jesse Lauriston Livermore
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