Critique my Holy Grail idea
?
Signal for Entry/Exit:
I'm going to use either my modded Aroon indicator (set to 200) or a sma cross of 50 and 500.
Money Management:
Martingale. Yes, martingale, you heard it. I know it doesn't work and never will work, therefore I would like to watch my (2nd) account crash and burn 
How do I plan on pulling it off? Simple. Huge bankroll compared to starting unit size.
Example: 2,000 USD Bankroll.
Starting Position size: 0.01 (.01/per pip)
Sequence of trades (USD$/per pip):
$0.01 (.000125% of acct)
$0.01
$0.02
$0.04
$0.08
$0.16
$0.32
$0.64
$1.28
$2.56
$5.12
I plan to start at .01 and if I win, next trade is same base size. Only if I lose do I "Double Down" on the next trading signal (no stops, only reversing trades the other way in direction of signal).
My thesis is that it doesn't matter how good your edge is, as long as you can hit ATLEAST 1 winner for every 10 trades. My signals typically hit that and usually MUCH better, in fact the hit rate is close to 50/50. But worst case scenario I would need to lose about 14 trades in a row to be blown out. Which is not likely because my signals don't even give 14 trades in 1 day.
I think this will work with out any problems, except that the gains will be very small and very steady. Other than that, it's a big drain on the body and mind to be trading 12 hrs a day.
So, give me your take on this What will your TP & SL will be?
...
please attach your chart to make it clear
he doesn't have a chart...he needs a system that statistically wins around say 1/7 of the total loss of his past 6 trades...and has no more than say 6 consecutive losses....
I'm not using a stop loss, only Stop And Reverse (SAR) when signals reverse direction (long, short, long, and flat only during 2pm-12am CST).
The take profit part is still pretty discretionary (loosely defined). I'm going to let most of my winners run to 50-100 points. Profit taking sooner than 50-100 pips only when in a heavy losing streak.
Ex: (losing 10 pips for 5 trades)
long .01 =-.10
short .01 =.10
long .02 = -.20
short .04 = -.40
long .08 = -.80
*short .16 = +1.60 Breakeven (10 pip profit) or
*+3.20 (20 pip gain)
Anything over the average loss becomes profit. Obviously I'm going to always opt for the profit rather than breakeven, even if it's a small profit.
please attach your chart to make it clear he doesn't have a chart...he needs a system that statistically wins around say 1/7 of the total loss of his past 6 trades...and has no more than say 6 consecutive losses....
Why do you say no more than 6 consecutive losses? I've calculated that I should be able to handle up to 10 fairly comfortably, but the win rate is much much better than 10% from what I've seen.
I can post a chart for you to see, I did manually test it over last week, but I've had the idea for this money management style for quite some time.
SMA 50 crossing SMA 500
Histogram at bottom is just a visual representation of the cross.
Green=50 above 500
Red=50 below 500
broker is thinkorswim, fyi
...
Why do you say no more than 6 consecutive losses? I've calculated that I should be able to handle up to 10 fairly comfortably, but the win rate is much much better than 10% from what I've seen.
I can post a chart for you to see, I did manually test it over last week, but I've had the idea for this money management style for quite some time.just to be on the safe side...took it out of my head...if I have 6 consecutive losses...I would got to my log cabin deep in the woods for 2-3 weeks...10 consecutive losses would move me into a special room with soft walls....
just to be on the safe side...took it out of my head...if I have 6 consecutive losses...I would got to my log cabin deep in the woods for 2-3 weeks...10 consecutive losses would move me into a special room with soft walls....
hahaha, yes I would be on edge after 10 losses, but it is not likely to lose 10 in a row with my setup (or any decent setup for that matter).
But remember, the starting position size is the smallest size possible, .000125% (of my 2k acct) which is unheard of as far as I know for trading. Then doubling up for 10 trades ends up being 12.8% on the 10th trade (unlikely to occur).
So I won't be needing the padded room just yet 
...
hahaha, yes I would be on edge after 10 losses, but it is not likely to lose 10 in a row with my setup (or any decent setup for that matter).
But remember, the starting position size is the smallest size possible, .000125% (of my 2k acct) which is unheard of as far as I know for trading. Then doubling up for 10 trades ends up being 12.8% on the 10th trade (unlikely to occur).
So I won't be needing the padded room just yet I noticed long time ago...that if I place first a small loser...the remaining of the day I kind a know where market is going...unfortunately...can't hedge anylonger....
Anyone else care to comment on my idea?
Questions? Comments? Criticism? Anger? Advice?
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Signal for Entry/Exit:
I'm going to use either my modded Aroon indicator (set to 200) or a sma cross of 50 and 500.
Money Management:
Martingale. Yes, martingale, you heard it. I know it doesn't work and never will work, therefore I would like to watch my (2nd) account crash and burn
How do I plan on pulling it off? Simple. Huge bankroll compared to starting unit size.
Example: 2,000 USD Bankroll.
Starting Position size: 0.01 (.01/per pip)
Sequence of trades (USD$/per pip):
$0.01 (.000125% of acct)
$0.01
$0.02
$0.04
$0.08
$0.16
$0.32
$0.64
$1.28
$2.56
$5.12
I plan to start at .01 and if I win, next trade is same base size. Only if I lose do I "Double Down" on the next trading signal (no stops, only reversing trades the other way in direction of signal).
My thesis is that it doesn't matter how good your edge is, as long as you can hit ATLEAST 1 winner for every 10 trades. My signals typically hit that and usually MUCH better, in fact the hit rate is close to 50/50. But worst case scenario I would need to lose about 14 trades in a row to be blown out. Which is not likely because my signals don't even give 14 trades in 1 day.
I think this will work with out any problems, except that the gains will be very small and very steady. Other than that, it's a big drain on the body and mind to be trading 12 hrs a day.
So, give me your take on this