Hedge saved you, who will save Hedge ? - page 22

New comment
 
Icham Aidibe:

Note to the modo : Oh come on it's a serious topic ! 

As mother nature prefers it : profit/loss targets increased as there's hedge orders added.


This works sometimes, but i guess the only issue is the constant movement of TP level. It is understandable that because the lot size is bigger to move TP hirer because of the "momentum" of the new lot size. However sometimes, it good to get to breakeven so all trades can close, and restart the cycle. For example, after increase TP 4 Times, no longer increase TP, but close at Breakeven. 

 

I think if price doesnt hit any tp it should increase the recovery zone size to avoid range market.

 
Daniel Burac:

I think if price doesnt hit any tp it should increase the recovery zone size to avoid range market.

Yep, this is correct. I have a version that does this. For example, the first 4 movements might be 100 pips apart, but then as it keeps moving, it may go to 200 pips apart. Get hirer, ok, 400 pips apart. It takes out a lot of noise in the market so fewer trades are triggered.

The downside, as you move the recovery zone further apart, the lots themselves take bigger losses. 

.08 on EURUSD

100 pip range loss = $80

200 pips range loss = $160

400 pips range loss = $320


I will say though that the GOOD does outweigh the bad moving the recovery zone. The key is not to have the normal trade pattern of 1,2,4,8,16,32,64 if you are moving the recovery zone (unless you plan to use $50,000 for such small overall profit). 

 

Forum on trading, automated trading systems and testing trading strategies

What's your opinion on optimization? I need some advice.

Icham Aidibe, 2018.06.17 01:56

Hedging is the name of the principle and it could apply in many manners. "These strategies" I'm referring to consist in increasing the lot size to recover a lost position. It's a bit caricatural.

I think it's much more relevant used as a protection with the same lot size, increasing only when it's unmistakable. I prefer it so, it's more mature.



 
Icham Aidibe:

Yep, this is kind of where I ended up. If it does increase, make it very minimal.  As I said before, even pattern 1,2,3,4,5,6 works to some degree. Also, even consider repeating pattern lots. 1,2,3,4,5,5,6,6.  I think of it as weight distribution of which sides needs to be "heaviest". Perhaps i should share signal at some point. The only issue with this strategy is that trades can be held for up to 3 months, and I know this will piss off subscribers. But the drawdown is low so that it can scale up nicely if the patience is there. People on this site tend to want quick money. 

 
Joel Simmons:

Yep, this is kind of where I ended up. If it does increase, make it very minimal.  As I said before, even pattern 1,2,3,4,5,6 works to some degree. Also, even consider repeating pattern lots. 1,2,3,4,5,5,6,6.  I think of it as weight distribution of which sides needs to be "heaviest". Perhaps i should share signal at some point. The only issue with this strategy is that trades can be held for up to 3 months, and I know this will piss off subscribers. But the drawdown is low so that it can scale up nicely if the patience is there. People on this site tend to want quick money. 

yup so definitively against the lot*3 at each order... well I was just thinking about the thing - I guess it's just another suggestion in the ocean of martingales/hedge EAs/strategies :) 

 
Icham Aidibe:

yup so definitively against the lot*3 at each order... well I was just thinking about the thing - I guess it's just another suggestion in the ocean of martingales/hedge EAs/strategies :) 

LOL, right, Great strategy if you manage millions of dollars for investors or join a prop trading company. But if you start will less then 20,000  then it may not be worth the risk. 

 
In my quest of "THE" order/money management system which could be self sufficent & profitable, I got disappointed more than once.
My last try (YASS) was based on the surefire strategy, results & profits were absolutely spectaculars but it was definitively instable once forwarded. 
Much time has passed, and it's by scribbling there & there, that I've found something interesting. 
And because i've this deep need to prove myself it is possible, i've kept the concept : "strictly random entries + lot/order management + profitable anywhere anytime".
So this one has finally been made of hedging with a grid - pure mathematics & logic for orders prices, lot management etc ...
Here's results for few pairs (same settings), deposit 1000$, leverage 1/30, period : 9 months (last year) : 


It's not as profitable as YASS (above in the thread) used to during testing, but on the other hand, it's stable with default settings on much more pairs (9/11) & in the long run for each of those pairs. It supports multicurrencies, so here a screenshot for EURUSD - GBPUSD - USDJPY altogether during 4 years (historical data >=90%), same deposit, same leverage : 


For more exotics pairs like turkish lira, rubble, yuan, mexican pesos, south african rand etc... (huge spec difference) it just requires an adjustment.

Happy ending with hedging & cie. 

 
Icham Aidibe:
In my quest of "THE" order/money management system which could be self sufficent & profitable, I got disappointed more than once.
My last try (YASS) was based on the surefire strategy, results & profits were absolutely spectaculars but it was definitively instable once forwarded. 
Much time has passed, and it's by scribbling there & there, that I've found something interesting. 
And because i've this deep need to prove myself it is possible, i've kept the concept : "strictly random entries + lot/order management + profitable anywhere anytime".
So this one has finally been made of hedging with a grid - pure mathematics & logic for orders prices, lot management etc ...
Here's results for few pairs (same settings), deposit 1000$, leverage 1/30, period : 9 months (last year) : 


It's not as profitable as YASS (above in the thread) used to during testing, but on the other hand, it's stable with default settings on much more pairs (9/11) & in the long run for each of those pairs. It supports multicurrencies, so here a screenshot for EURUSD - GBPUSD - USDJPY altogether during 4 years (historical data >=90%), same deposit, same leverage : 


For more exotics pairs like turkish lira, rubble, yuan, mexican pesos, south african rand etc... (huge spec difference) it just requires an adjustment.

Happy ending with hedging & cie. 

HMMM, 

I guess you where were I left off as well. I am still wondering if a grid will work as well for recovery, and have played around with a few ideas in the past..........but i am not very mathematical (as most programmers are). I know for sure a mathmatical person who understands this riddle could figure this out......only a matter of time.  It does seem your kind of going the same direction i was going though......... as well as the same results (decreasing the drawdown also decreased the profit). In backtesting, i also have many situations where similarly priced pairs react the same on using the same set file. However i do my testing typically starting from 2003, and it seems like each pair has a situation in it existence where it will trade too often (except for maybe a few). I dont take the few pairs that never show this behavior into account because the potential is always still there. 


Anyhoow, enough ranting. What software are you using to combine the backtesting outputs? I would love to give it a try.


What i found is that expanding the entries (which lowers the drawdown) also keeps the trade "cycle"' open longer. So the issue I've ran across is what happens if 2 or 3 pairs go into drawdown at the same time? So even though the worst drawdown may be....20% of $1000 for example............then the potential is really 60% if you add 3 pairs. Of course they may all do their drawdowns at different times which it would make it %20, but in the worst situation, they would all drawdown at the exact same time. So your starting balance is really $1000 per Pair Added. 


Would you happen to have created a quick file i could test? You could send me a limited exe or just PM me and i could help you speed the time frame up on what barriers you may run into. It seems you have the technical and mathematical skill that i do not have.  This could be a win win for us both.

 
Hedge is just a martingale with 1:1 rate.
I have programmed many kind of hedges and in the end I arrived to the conclusion that if ur base rate of succeful operations is below 50% even also 49% no any kind of hedges will be also successful in the long term, because it is just like as you delay all to a more rare event where you bid with all your tradesize possibility.
The same of doing a big big operation at beginning of your trades in the end. 
Hedges, Martingales, Grids are all ways to postpone to more rare events the decision if your EA will be profitable or not. So just if this event is very rare also the strategy can be profitable and it depends just from the base successful rate, not enough 50%. If you are not sure of this the only way to be in some way safe is to start with very low amounts that means be less profitable in the time.
The ONLY real way to be very profitable in EAs is to have a strategy that basically and costantly has a successfull rate of at least 60-70% of operations (with 1:1 distance SL/TP). If u have that in the hands then u can also decide if apply an hedge or not to that strategy...but at that point the hedge will be useless because u can work with bigger tradesizes with simple SL.
(Another problem is also that well working hedges are very difficult to be programmed, hours and hours to study any case, go up, go down, go up after being down etc. and getting crazy with magic numbers)
1...1516171819202122232425
New comment
Reason: