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Ok, after looking at all these martingale systems and trying almost all combinations and variations. I came to the conclusion that you can win using Martingale, but need to keep the following in mind...
1: Need deep pockets to withstand up to 10 normal lots in 1 direction. 10 lots means up to 200 pips move without a 20 pips retrace. I have not seen 1 yet but better safe than sorry, so good to prepare from the get go.
2: Trade in the direction of the major trend. So if Trend is up, then buys only, if the trend is down, then sells only. (Need to discuss this, I donot like indicators as they are useless but I think they might play a minor role here as a filter)
3: Trade in the positive swap direction. Believe it or not, this actually helps the end result of the closed positions, positive swap will help the end pips+profit is always positive and no end up in breakeven or worse loss.
4: Lots increment needs to be in such a manner then when the trades are closed you get double the pips if the trades would have been closed in the previous level. exception is the level1, I start with Level0, so level0 and level1 have the same lots.
So far, here is the lots increments I have been getting at...
level-----Lots
level0----1
level1----1
level2----2
level3----5
level4----12
level5----27
level6----60
using 0.01 as initial lots, you will get...
level-----Lots
level0----0.01
level1----0.01
level2----0.02
level3----0.05
level4----0.12
level5----0.27
level6----0.60
I will update these level requirement later, since I have not calculated the rest of the levels. But as you can see the incrementation is not as low as previous*2 or previous*2+1, but the end result is you get double the pips as levels rise. Here is the math for pips...
As you can see, even though you increase the lots, the reward doubles as well. In normal martingale, you double your bet but your reward is still same as winning the initial bet. Which sucks, if you have 10 normal lots open to make just 10 cents.
I have hired a very good programmer for this EA. And he will be done with it pretty soon. And once done I will post the ea here free of charge ofcourse.
Once I do post it, please donot modify it and repost in this thread, start a new thread for it, I donot want to see any mods of the EA unless I made the modifications or I authorized it. If I see a mod I did not authorize I will ask newdigital to move that post to a new thread or something.
All I need from you guys is feed back. Pros, Cons, anything, the idea is to get collective collaboaration on the EA. I can only see the EA from a certain angle, and can only think of a few cons or pros. But the more people look at it the more pros and cons will appear. I am still not sure to use a trend detection indicator or not? I am interested in long term trend not M5 or M15 trends, long term trends only.
Here is the filter:
If long term trend and the positive swap direction are in sync, then trade in that direction.
e.g. GBPJPY, seems like GBPJPY will be going up lets say, and obviously the GBPJPY Buys swap is in our favor then we keep on buying even if price keeps dropping, and when we get a 20 pips or user defined pips retrace we close all buys and take profit. If we buy and trade goes in our direction for x amount of pips then we TP and open a new trade and that trade is now Level0 and go from there, if level0 is in profit then open a new Buy and now that is Level0, and create buylimits below level0 with proper lots pet level and buystops above level0 with lots=initiallots variable.
This is exactly as the blessing system posted by rifo, great post by the way, worth a reading, only exception is that I use differend lots increments and also donot hedge, and only trade when positive swap and trend are in sync.
Sorry no EA to post yet, but as soon as it's done I will post it here. While we wait, all responses welcome, positive or negative. Thank you very much for reading and keep an eye out for the EA.
:: For those of you interested in some forward testing, I been running the Blessing system on 4 majors for over 10 days now. Remember, the blessing system does not have any trend or swap positive filters. And, also it hedges. So My EA will not have same kind of profit or same amount or # of trades but this forward testing account will give you an idea as what a martingale system is capable of. Initial Lots=0.01
please, specify: what the protection measure if price goes over level 6?
thank you fxbs for a great question. Unfortunately, with martingale systems, in order to recover, you need to increase your bet. With 20 pips step, you are looking at 100 pips move on a pair with no 20 pips retrace. USDJPY for example moves around 90-100 pips on average per day. So if you have enough margin to cover 10 levels, or 200 pips move in 1 direction and price retraces you are covered. And also if price moves to level 11 and you donot have enough margin then you wiped your account as well. Martingale is same as gambling, but I am hoping that with this swap direction and trend filter will protect us from a move that big. I did some research on USDJPY and I donot see a move that big this year or in 2006. I doont have enough M1 data to go back to 2005 or 2004. And margin requirement for USDJPY is much lower than EURUSD, so I favor USDJPY for this system more, and also the swap difference is alot as well. 5.25% to 0.5% on USDJPY as compared to 3.75% to 5.25% EURUSD.
If you can think of a better way to avoid this big of a move, please do let me know. This is the main reason for this post, to collaborate. Only thing I know of is throw more money at it. Or pick a currency that will never move 200 pips in 1 go, like EURGBP. I took the forward testing demo account and filtered by USDJPY and only took the BUY orders, and here is the result...
Ok, after looking at all these martingale systems and trying almost all combinations and variations. I came to the conclusion that you can win using Martingale, but need to keep the following in mind...
1: Need deep pockets to withstand up to 10 normal lots in 1 direction. 10 lots means up to 200 pips move without a 20 pips retrace. I have not seen 1 yet but better safe than sorry, so good to prepare from the get go.
2: Trade in the direction of the major trend. So if Trend is up, then buys only, if the trend is down, then sells only. (Need to discuss this, I donot like indicators as they are useless but I think they might play a minor role here as a filter)
3: Trade in the positive swap direction. Believe it or not, this actually helps the end result of the closed positions, positive swap will help the end pips+profit is always positive and no end up in breakeven or worse loss.
4: Lots increment needs to be in such a manner then when the trades are closed you get double the pips if the trades would have been closed in the previous level. exception is the level1, I start with Level0, so level0 and level1 have the same lots.
So far, here is the lots increments I have been getting at...
level-----Lots
level0----1
level1----1
level2----2
level3----5
level4----12
level5----27
level6----60
using 0.01 as initial lots, you will get...
level-----Lots
level0----0.01
level1----0.01
level2----0.02
level3----0.05
level4----0.12
level5----0.27
level6----0.60
I will update these level requirement later, since I have not calculated the rest of the levels. But as you can see the incrementation is not as low as previous*2 or previous*2+1, but the end result is you get double the pips as levels rise. Here is the math for pips...
As you can see, even though you increase the lots, the reward doubles as well. In normal martingale, you double your bet but your reward is still same as winning the initial bet. Which sucks, if you have 10 normal lots open to make just 10 cents.
I have hired a very good programmer for this EA. And he will be done with it pretty soon. And once done I will post the ea here free of charge ofcourse.
Once I do post it, please donot modify it and repost in this thread, start a new thread for it, I donot want to see any mods of the EA unless I made the modifications or I authorized it. If I see a mod I did not authorize I will ask newdigital to move that post to a new thread or something.
All I need from you guys is feed back. Pros, Cons, anything, the idea is to get collective collaboaration on the EA. I can only see the EA from a certain angle, and can only think of a few cons or pros. But the more people look at it the more pros and cons will appear. I am still not sure to use a trend detection indicator or not? I am interested in long term trend not M5 or M15 trends, long term trends only.
Here is the filter:
If long term trend and the positive swap direction are in sync, then trade in that direction.
e.g. GBPJPY, seems like GBPJPY will be going up lets say, and obviously the GBPJPY Buys swap is in our favor then we keep on buying even if price keeps dropping, and when we get a 20 pips or user defined pips retrace we close all buys and take profit. If we buy and trade goes in our direction for x amount of pips then we TP and open a new trade and that trade is now Level0 and go from there, if level0 is in profit then open a new Buy and now that is Level0, and create buylimits below level0 with proper lots pet level and buystops above level0 with lots=initiallots variable.
This is exactly as the blessing system posted by rifo, great post by the way, worth a reading, only exception is that I use differend lots increments and also donot hedge, and only trade when positive swap and trend are in sync.
Sorry no EA to post yet, but as soon as it's done I will post it here. While we wait, all responses welcome, positive or negative. Thank you very much for reading and keep an eye out for the EA.
:: For those of you interested in some forward testing, I been running the Blessing system on 4 majors for over 10 days now. Remember, the blessing system does not have any trend or swap positive filters. And, also it hedges. So My EA will not have same kind of profit or same amount or # of trades but this forward testing account will give you an idea as what a martingale system is capable of. Initial Lots=0.01
I like your Martingale idea. Another issue is the risk/reward ratio. The return is not enough compared to what you risk with this system imho. I think the increase in lotsize is a bit too aggressive. These even makes me nervous.
How many % increase of the account a year is your goal with this system?
Are we shooting for 1000% a year? or maybe even more?
I like your Martingale idea. Another issue is the risk/reward ratio. The return is not enough compared to what you risk with this system imho. I think the increase in lotsize is a bit too aggressive. These even makes me nervous.
How many % increase of the account a year is your goal with this system?
Are we shooting for 1000% a year? or maybe even more?
No, If I can get 75-80% a year consistantly, I would be happy. I am not focusing on forex to be my main source of income, but to complement my investment portfolio. I truely believe in "Slow and Steady wins the race".
Yes the lots increase is big, but the reward is doubled as well. The normal martingale system, as you double on every trade, your reward is still equal to your initial lot.
The problem I come across is finding a balance between margin required, negative float and the end profit. I am trying to balance all 3 out as much as possible. Balancing the 3 is the juggling act I am doing at this time.
If you can think of a better way to avoid this big of a move, please do let me know. This is the main reason for this post, to collaborate.
My EA is doing a good job by setting a tradelimit. 1 Trade allowed per 30 Minutes. During sudden evens like unpredictable news the markets go crazy and most (Martingale-)EAs will open alot of positions during seconds. To avoid this behavoir trading should generally avoided in highly volatile times. The easiest solution for me was the Time-Limit which works nice. Its only valid for 1 direction - that means if the trading-direction changes the limit will be reset as well.
Maybe you can have your programmer implement this idea?
thank you fxbs for a great question. Unfortunately, with martingale systems, in order to recover, you need to increase your bet. With 20 pips step, you are looking at 100 pips move on a pair with no 20 pips retrace. USDJPY for example moves around 90-100 pips on average per day. So if you have enough margin to cover 10 levels, or 200 pips move in 1 direction and price retraces you are covered. And also if price moves to level 11 and you donot have enough margin then you wiped your account as well. Martingale is same as gambling, but I am hoping that with this swap direction and trend filter will protect us from a move that big. I did some research on USDJPY and I donot see a move that big this year or in 2006. I doont have enough M1 data to go back to 2005 or 2004. And margin requirement for USDJPY is much lower than EURUSD, so I favor USDJPY for this system more, and also the swap difference is alot as well. 5.25% to 0.5% on USDJPY as compared to 3.75% to 5.25% EURUSD.
If you can think of a better way to avoid this big of a move, please do let me know. This is the main reason for this post, to collaborate. Only thing I know of is throw more money at it. Or pick a currency that will never move 200 pips in 1 go, like EURGBP. I took the forward testing demo account and filtered by USDJPY and only took the BUY orders, and here is the result...
Khan,
Hats off to your enthisiasm and planning efforts. Having experimented extensively with these types of systems, I only have one tip or word of advice for you. When you're planning your model around pip step intervals, don't lock yourself into considering things like ATR or the biggest expected daily move. The thing that clobbers the hell out of people using Martingale models is what I refer to as the "quiet drift" syndrome. In other words, you might have a period of ranging activity where successive lot layers slowly accumulate while you're knocking down nice blocks of profit, and then all the sudden you have a big news bar or trend shift. Your maxtrade setting might be something like 8 or 10, and by the time the big swing hits, you've already got 5 or 6 pending intervals committed. Next thing you know, you're 60 pips out beyond your last maxtrades interval, drawdown is building and you start getting jittery.
I suppose in a nutshell, the thing I'm saying is don't limit the scope of your thought to expected "daily" activity. The way these Martingale models will sneak up on you and bonk your margin is insideous.
Hats off to your enthisiasm and planning efforts. Having experimented extensively with these types of systems, I only have one tip or word of advice for you. When you're planning your model around pip step intervals, don't lock yourself into considering things like ATR or the biggest expected daily move. The thing that clobbers the hell out of people using Martingale models is what I refer to as the "quiet drift" syndrome. In other words, you might have a period of ranging activity where successive lot layers slowly accumulate while you're knocking down nice blocks of profit, and then all the sudden you have a big news bar or trend shift. Your maxtrade setting might be something like 8 or 10, and by the time the big swing hits, you've already got 5 or 6 pending intervals committed. Next thing you know, you're 60 pips out beyond your last maxtrades interval, drawdown is building and you start getting jittery.
I suppose in a nutshell, the thing I'm saying is don't limit the scope of your thought to expected "daily" activity. The way these Martingale models will sneak up on you and bonk your margin is insideous.
Hello, bluto! Can you give some hints about how you cope with the big news and trend shifts? Btw, have you decided what will you do with Master & Slave EA's?
Thanks!
Maringale rulez
Linear Mode
