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i did your strategy manual,i think its good but i want to know for how long have you been doing that strategy,i just want to know will it survive the trending and ranging market ?
and what was the biggest float loss you had and the biggest no of lots.
thanks
best regards
This idea would thrive in a trending market, but you will get absolutely killed when it's ranging (70-80% of the time), as it will open a massive amount of orders (often 100+ easily), all the time drawdown increasing, and all for the same 20 pips - I know, I've tried! And whereas you may not suffer margin worries, the account d/d is still considerable, so there's no way you could do this with $1000 imo.
But your broker will be thrilled with all the commission he'll get...
....but if you use a broker with zero margin the drawdown is much smaller. Have you tried this with a zero margin broker and it still fails in real life?
....but if you use a broker with zero margin the drawdown is much smaller. Have you tried this with a zero margin broker and it still fails in real life?
The drawdown has nothing to do with margin, it is a result of having so many orders open. In the same way you are waiting for the average pips to move +20, if the market is ranging, more and more orders will be opened, with all that broker commission causing your pips total to go more and more negative, meaning price will have to move even further in a 'favourable' direction to recoup this, plus your 20 pips profit - which is why I believe brokers would love strategies like this. 100 0.1 lot open orders with 2-pip spread will net the broker a cool $200 while you collect a measly $20 at the line...
A graphic representation of what to expect. Note that even though the market trended beautifully for a period, drawdown due to many previously opened orders meant that it 'just' managed to close in profit before hitting the present area of consolidation. btw, ignore the 'Margin Used' - a bug I've just noticed and am too lazy to fix. Also note the present drawdown and the number of open orders, over just a few hours...
Higher leverage is not meant to be an increase for you for a stop loss. Who would ever use a margin call as a stop loss strategy anyways?
Leverage is merely your buffer zone and not an indication for heavier exposure. A method or an EA should not measure its robustness by how much leverage it has access too...omelette is correct...it has nothing to do with how good a method or an EA is...
ES
Quote:
Originally Posted by Toccata
....but if you use a broker with zero margin the drawdown is much smaller. Have you tried this with a zero margin broker and it still fails in real life?
I have been trying it today on Euro - what a horrible way to trade - just get whipsawed into a deeper and deeper drawdown. I guess it will eventually come out but, as you say, the real profiteer is the broker. Oh well, onwards and upwards. At least it saves me the bother of coding up an EA.
The drawdown has nothing to do with margin, it is a result of having so many orders open. In the same way you are waiting for the average pips to move +20, if the market is ranging, more and more orders will be opened, with all that broker commission causing your pips total to go more and more negative, meaning price will have to move even further in a 'favourable' direction to recoup this, plus your 20 pips profit - which is why I believe brokers would love strategies like this. 100 0.1 lot open orders with 2-pip spread will net the broker a cool $200 while you collect a measly $20 at the line...
How if we close the all the open order which have the same price but different position (Buy price = 1.520 close by Sell = 1.520) we can save the margin temporarily.
And about the broker, right now there's a lot of free commision broker, we only pay for the spread. We run this strategy on spread tight broker.
What you think ?
How if we close the all the open order which have the same price but different position (Buy price = 1.520 close by Sell = 1.520) we can save the margin temporarily.
And about the broker, right now there's a lot of free commision broker, we only pay for the spread. We run this strategy on spread tight broker.
What you think ?
Again, margin is not the issue - each open position is effectively hedged when the market is ranging (close to an equal number of Buy & Sell orders will be open). When the markets begin to trend strongly, the ratio of Buy/Sell open orders will then change and margin may then need to be figured into the overall drawdown. The crux of the problem is that the more orders are opened, the more broker-commission related drawdown there is, and the more the market will have to trend 'favourably' to offset this drawdown + your 20 pips profit - examine the above pic. again, the market had to trend by almost 100 points to close in profit, and most of this was just to recover from the drawdown caused by the sheer number of previously opened orders.
So closing orders that the broker will already have collected commission on is a non-starter - as it the whole idea imo.....
PS. - Just re-read you comment on commission/spread. Same difference - no matter what you call it, you are paying the broker whenever you open a market order...
Again, margin is not the issue - each open position is effectively hedged when the market is ranging (close to an equal number of Buy & Sell orders will be open). When the markets begin to trend strongly, the ratio of Buy/Sell open orders will then change and margin may then need to be figured into the overall drawdown. The crux of the problem is that the more orders are opened, the more broker-commission related drawdown there is, and the more the market will have to trend 'favourably' to offset this drawdown + your 20 pips profit - examine the above pic. again, the market had to trend by almost 100 points to close in profit, and most of this was just to recover from the drawdown caused by the sheer number of previously opened orders.
So closing orders that the broker will already have collected commission on is a non-starter - as it the whole idea imo.....
PS. - Just re-read you comment on commission/spread. Same difference - no matter what you call it, you are paying the broker whenever you open a market order...
Ok I get it. Thanks
hmmm.. how about if we use larger buystop and sell stop (50 or dynamic, to minimize open order) but tight TP and SL (10 or dynamic) but more opened order, we increase TP and SL to compensate the spread ?
For me, I don't care how much the broker get commission or spread from my trade, as long as I get my profit and it's worthed (not too risky).
TS where are you ? do you have the modified system ?
Linear Mode
