C-Trader (Watch out Freedom Rocks) - page 35
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Well this does indeed sound better. Perhaps you can make a specific, step by step plan for setting up the trade. Pairs, lots per pair, etc. I think from your post here you've described how to manage the trade, but help us know how to enter it.
The key as we found out is to NOT stick to a certain basket and direction no matter what is happening. When we were looking to get long the carry trade, we were basically better come hell or high water, that we would stick in the direction of our trades no matter what. When the carry trade unwound faster than our hedges in place to offset them, we all saw even C-Trader could not withstand the assault even in safe mode.
Enter in the dynamic basket.
Same concept, using martingale - double up in the direction of the pair. So you still look at the basket as one trade and the equity of the basket as such, but when you are down 1% - you look at each individual pair and double up in the direction they are going.
For example
Let say you are long .10 lots USDCAD and Long .10 lots USDCHF and Long .10 lots EURUSD and long .10 lots AUDUSD as your basket for an example.
You drop 1% from market action and USDCAD is higher (winning), USDCHF is higher (winning), EURUSD is lower (losing) and AUDUSD is lower (losing)..... so what do you do?
You buy .20 lots of USDCAD, you buy .20 lots of USDCHF, you sell .30 lots of EURUSD (to get net short .20 lots of EURUSD) and you sell .30 lots of AUDUSD (to get net short AUDUSD)
You have now just changed the dynamic of your basket. From 4 longs in the first example, to two longs and 2 shorts. You are heading in the direction of the move. This WILL protect against an unending move in the wrong direction.
You will lose is you happen to have all your pairs bouncing in a range at the same time. If you pairs are mixed enough - this should not be an issue.
Back during the collapse, with martingale, instead of adding in the deep drop over and over, you will instead join the trend with larger lots.
This will protect your account, and allow you to rake in the pips......
Let's get this going again!
We need a programmer to write an EA that you can put on a bunch of pairs. It will look at global open P/L of all pairs. If the account gets to -$1000 for example, it will look at the pair for which chart its one (each chart gets its own EA) and will see if the last trade is + or -. If positive, it will martingale in the direction of the last trade. If negative it will martingale plus add the offset position in the other direction......
Thoughts and feedback?
I think this was the missing piece.
VTAMI think thats the thing - it doesn't matter how you set is up - because it will always be in flux.
Flip a coin on each pair - if its heads - go long - tails - go short.
When the equity of the account drops 1% - take a look at each pair. If it is winning - add to it. If it is losing - flip it around.
You will never get crushed in an unwind.
It will still blow up if you happen to catch 10 pairs flipping in the wrong direction each time.
It's a dynamically changing basket always in the direction of the most recent move of each pair.
It's money in theory....... now we need to just test er out.
OK, which pairs to trade, and what amount of lots on each?
I think thats the thing - it doesn't matter how you set is up - because it will always be in flux.
Flip a coin on each pair - if its heads - go long - tails - go short.
When the equity of the account drops 1% - take a look at each pair. If it is winning - add to it. If it is losing - flip it around.
You will never get crushed in an unwind.
It will still blow up if you happen to catch 10 pairs flipping in the wrong direction each time.
It's a dynamically changing basket always in the direction of the most recent move of each pair.
It's money in theory....... now we need to just test er out.
No idea - but I would venture to guess that you do the same as the document in link one says to start with. Only with testing will we know.
I plan to use 10 pairs on $100k account starting at .10 lots each pair.
I think My target will be $500 per unit.
So at .10 lots - $500 target
.20 lots I will want $1000
.40 lots on I will want $2000
etc etc. Ill see how that flies and change it as I get more info.
I'm pumped. I know C-Trader was foundationally decent and could only break with a massive unwind, which of course we got. This is more likely to withstand anything that gets thrown at it.
To further re-iterate the new method, we must look at why the original could not withstand an unwind.
With the old method, you could blow an account out with just one pair going against you, if the other pairs were not offsetting enough. So for a gross example, let's say you have 5 pairs trading. 4 of them are range bound and 1 it blowing up.
When the combined account drops 1% - you would have doubled up on all pairs. The one pair that is blowing up is the one that is going to blow the account up if the other 4 pairs are sitting around and doing nothing. We were only safe if we had the other pairs moving a combined amount that would protect the one that is going against us big. Even though we had many pairs, we are basically just martingaling into a disaster and hoping that the pair that is blowing up in one direction turns around, or pray that the rest of the group gets moving.
With the new method, this will not be a problem. If the 4 are not moving - then we are not getting hurt or being helped by those. The one pair that is moving big in one direction, we will jump on that bandwagon and ride it to profit, instead of hoping it stops bleeding.
You know, this is sounding really good now. I'm going to demo with you. 2 questions:
1--What 10 pairs are you using?
2--What do you mean by $500.00 target? Is that when you will exit all trades and start again? Or is that when you will examine each pair, etc.?
No idea - but I would venture to guess that you do the same as the document in link one says to start with. Only with testing will we know.
I plan to use 10 pairs on $100k account starting at .10 lots each pair.
I think My target will be $500 per unit.
So at .10 lots - $500 target
.20 lots I will want $1000
.40 lots on I will want $2000
etc etc. Ill see how that flies and change it as I get more info.
I'm pumped. I know C-Trader was foundationally decent and could only break with a massive unwind, which of course we got. This is more likely to withstand anything that gets thrown at it.I think that is where I will start over. I will go in the direction of the winning trades and opposite the losing when I close out.
Which pairs are you going to use? It almost seems like it doesn't matter. Just pick 10, flip a coin to enter, and readjust when reaching your profit goal or when dropping 1% and make the change.
I think that is where I will start over. I will go in the direction of the winning trades and opposite the losing when I close out.
That's correct - it does not matter. That is the beauty. The dynamic of the basket will be in constant flux. I'm gonna pick ten total and just go long all of them and then adjust later. Also gonna use the original basket and adjust. I would recommend you do the coin flip and we can see if its robust or not. It should work in each and every situation.
I think as you get your brain wrapped around this - you too will get pumped at the possibilities.
We're back baby!
Alright, here is my plan:
I am starting with a 10K demo account. I am starting with these currencies:
EUR/USD
GBP/USD
USD/JPY
USD/CHF
USD/CAD
AUS/USD
GBP/JPY
EUR/GBP
GBP/CHF
EUR JPY
I am using .01 lots on each one, and flipping a coin for entry.
When the account gets down 1%, so $100.00 I will exit every pair that is losing and re-enter that pair in the opposite direction, still with .01 lot size.
I don't know about taking profit. I will probably just let it run.
What do you think? Have I missed anything?
That's correct - it does not matter. That is the beauty. The dynamic of the basket will be in constant flux. I'm gonna pick ten total and just go long all of them and then adjust later. Also gonna use the original basket and adjust. I would recommend you do the coin flip and we can see if its robust or not. It should work in each and every situation.
I think as you get your brain wrapped around this - you too will get pumped at the possibilities.
We're back baby!