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Just a screenshot of backtest results of the "reverse-method", which has largely been borne out by forward testing - 'largely' 'cos the version I forward-test has different 'greedier' settings! The PF is unspectacular, as is the equity curve - roughly 80% p.a. return though - but at least it points in the right direction What is interesting is the drawdown however, especially for a martingaler! Moreover, 'restrictions' imposed make it virtually impossible to blow a reasonably sized account!! ($10,000) btw, this covers from Sept '06 -> present - the only period that is worth a damn as far as backtesting results are concerned (imo), and it only seem to produce viable results with USDJPY...
Minime, excuse this brief interruption in thread-flow but I've had time on my hands (scary market today) - back to your original idea!
feel free to post the ideas, I am here to learn and if you have already tested the idea and it worked then great ... I will follow your steps.
a better approach than hedge is the virtual hedge using correlation trades but for that you need to consider the +ve sawp trades only " Like buy EURUSD and sell USDCHF only " inorder to close the trades when a small profit happen ...
this type of trade, has the same problem as the hedge as the trades could stay open for a while , but with this method of virtual hegde there is a better chance of closing the trades at profit.
Unfortunately, you are right omelette. I made a demo trade this evening the
described way.After the hedge opened I manually removed all TPs and SLs,
watchted the account figures and made my calculations ( which I should better have done before ), only to found out what you have said .
The good thing trading this way is, even if a margincall occurs you cant loose more than the frozen losses, no matter what the pair is doing.
The bad one ,of course nobody wants to wait for days or weeks for this happening. Untradeable .
due to the aleccoh story, have you already seen some of your money back?
I'm not updated on this. I think I have to go to the other thread for reading the latest posts.
this could work, but what if the price never comes back !!
so in this way you need to trade with +ve sawp only and I would suggest use correlation hedge instead of normal hedge, for example if you have a trade stuck on EURUSD use USDCHF as a corrlated hedge , since the rnage of the USDCHF is larger and can cover up the losses faster , sure you need to keep in mind that the pip value of the USDCHF is less, but this pair is more active than EURUSD , so I would suggest to try hedging using USDCHF
Quote:
Originally Posted by hbud
Hi mini, hi all
Besides some other stuff, I'm constantly working on 10points and 5th element EAs too.
For example one of the 10p3 with modified trailing stops gave me a meager 18%profit in eurusd for the last 2 months. But the expert survived the huge moves at least.
And what really worked out well for both of them is going with the trend only,
instead of countertrend trading or putting them blindly in the market.
But to the topic above,if we pick up omelettes proposal and instead of "virtual trading" the upper levels
(which is the same as -let losses run- as far as I understand it)
the EA could freeze them, by hedging the sum of all open lots in the opposite
direction. ( No real further martingale trades would be opened from now on )This requires not more lots than they would be needed for the next step of the original martingale. ( next martingale-step lotsize minus the initial lotsize we have started with : 0.1 + 0.2 + 0.4 + 0.8 = 1.5 = 1.6 - 0.1 )
By this the account equity dosn't move a single millimeter.
And when the sea calms down and our pair is going to move in our favorite direction, the EA closes the hedgetrade.
This should be repeated one level above if we are on the wrong side again.
I think the spread would probably eat up the profits and maybe we would get out with some (small) losses, but after that we still have an existing account.
What do you think?
Or do I have overlooked something?
.....
due to the aleccoh story, have you already seen some of your money back?
I'm not updated on this. I think I have to go to the other thread for reading the latest posts.
hbud
I successfully withdrew most of my deposit when it became clear that Aleccoh could no longer be trusted - eg. preach that scalping was "illegal" while simultaneously running a scalper EA on my Managed account (btw, it was this EA that hedged, but as I said, it still lost money...)
I lost the $500 I left in the account as 'play-money'...
PS. - Aleccohfx is bankrupt, with little chance of anyone seeing a return of their deposits (according to the Liquidator). Aleccoh stopped posting once this bankrupcy became known publically, even though AFX seems to have held this status for months...
Interesting. btw, I added that 'NextLevelSL_On' switch at the time, in the hope that it would give a rough indication that the filtering I was attempting was indeed providing an 'edge' of sorts - with it enabled, a blown account can't happen, but you can be 'nibbled' into bankruptcy!
The main problem with this is that while you can severely filter your trades, I could see no real 'edge' to doing so - instead of this filtering, try selecting the trades at random, opening a similar number for the period in question - you will get a similar result as probably 70-80% of all trades would have been profitable anyway, and within the max. levels set. (whereas probably 95% would 'eventually' have proved profitable after possibly severe drawdowns) Also, the PF is unacceptedly low, which is why I gave up on it...
One final point, though I do not know exactly how MT deals with timeframes during backtesting, I'm pretty sure that unless an EA specifically trades EOB, (10point3 doesn't) selecting higher timeframes for backtesting is less accurate as you are dealing with interpolated prices...
Martingale is against the adage of cutting losses and letting your winners run.
I agree , but if you have a good signal lets say for example RSI >80 or RSI <20 you would be tempted to capitalize on the move and not let go of the trade even if the market went againt you a little bit.
as an oversold could be more oversold , so it may take some pips before you get what you wanted, it all depend on the develper and how sure he is from his setup.
I am not in fav of martingles but I have a couple of good entries where I prefer to scale in or add more trades instead of having big SL, its just a matter of how bad you want to stay in that trade , some trades you want to let go and others you want to hold on to it
What is interesting is the drawdown however, especially for a martingaler! Moreover, 'restrictions' imposed make it virtually impossible to blow a reasonably sized account!! ($10,000) btw, this covers from Sept '06 -> present - the only period that is worth a damn as far as backtesting results are concerned (imo), and it only seem to produce viable results with USDJPY...
) - back to your original idea!
