Wu Wei Strategy - page 2
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I wouldn't call this strategy a "martingale type" because you're not adding to a losing position, you're taking trades in the opposite direction - in effect, scaling out of the original bad trade. If you're adding positions in the same direction as the trend continues in the opposite direction, then that would be martingale.
I was thinking about Wu Wei as an EA and I kept thinking the entry is the biggest problem. I came up with a martingale type entry that scales down. For example, if .1 lot is entered and the market goes the other way, then at a specific pip count of say 40 pips, .2 lots are enter in the opposite direction. If the market flips again, then at 30 pips, .4 lots are entered. The next position would be .8 at 20 pips, then 1.6 at 10 pips. After the third position of .4 pips is entered, the system would only be trying to break even. By reducing the pip movement for each opposing position, the pips needed to break even reduce as well. The idea after the third position is that the system now knows the market is not trending and will try to close all position.
You wrote that entry is biggest problem. So, how what method did you use for timing your 1st entry so well? As for other entries, try entries when no major news. Since you're trading longer term, trying to get volatility at the beginning doesn't matter.
Here are a couple of short term trades I made. The first one I made over $9,600. Yes, it took six months, but I never risked more than $294.
The second one didn't turn out as good. I entered two positions and got stopped out by some news. I only made about $560 bucks in a month.
I think that this system might work with a short term EA, but the hardest part will be identifying additional positions and TP.
Eagle,
I use technical and findamental analysis to enter a trade. I was refering to an EA entering the first trade. The first entry is the most difficult to time correctly with an EA.
The entry and I proposed is martingale, but with reducing a moderating risk component. Let me try and explain it again this way. I will use 1.000 as the center of the trades.
You enter a buy of .1 lots at 1.020, but it turns around on you. Then you enter a sell of .2 at 0.980, but that turns around as well. Then at say 1.010 you enter a buy of .4 and it turns again. Then at 0.990 you enter a sell of .8 lots and it turns again. Then you enter a buy of 1.6 lots at 1.005. Then a sell of 3.2 lots at .0995. Then a buy of 6.4 lots at 1.000. This means you need a continuously smaller breakout to get back in profit. When a breakout does occur, it might be pretty big.
I probably wouldn't use such an EA on anything more than .001 lots. This way you could have 12 positions before you hit 1 lot.
After x number of positions, the EA could be set to break even. X would be whatever the user is comfortable with.
sounds kinda risky to me.
Much less risky than a martingale that bids against the trend.
Could you post the indicators & template used for this strategy?Thanks!
after looking for some timed ... its better touse bb 30 bb 60 at 15 min tf with the price bounce at mid bb of 60 and lower bb of the 30 , yes it less trade but it less stress with super trand if cant see it cleared .
yeah, definitely much less riskier than a martingale.
it sounds too simple
I'm in on this new concept.. have you put together a spreadsheet showing how this would work.. it sounds too simple... but sometimes simple is brilliant!!
I don't use indicators, I use charts to view trend direction. I only use BB to help see opportunities for additional positions. But the fundamentals are much more important.
My manual system is low risk, low stress, and low return 95% of the time, with high payouts 5% of the time. This won't make you rich. It is a system designed to produce moderate amounts of money, but there is always the possibility that you won't have the big payouts in a year. It is good for the person who works another job and can't devote full time to trading like me.
it is old school trend follower, not martingale
it enter when the market bounce / pull back