This should be placed as a paragraph in any forums RULES text (with a required checkbox), so that any wishful beginner, would step into Forex strategy forums, with a better mindset and expectation.
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 $1000 per Pair Added.
Would you happen to have created a quick file i could test? You could send me a limited exe or just PM me and i could help you speed the time frame up on what barriers you may run into. It seems you have the technical and mathematical skill that i do not have. This could be a win win for us both.
I'm using MT5, unlike MT4 with MT5 can use many pairs in the same tester run - on the other hand, you only have brokers' historical datas with its own spec, directly downloaded. But beware, a broker which just changed its offer from account of spread 50 to spread 10, will deliver older-to-the-offer datas with a spread 50 ..
... so finally it's not really relevant to use it.
About the margin, this one sticks to a limited risk whatever the number of symbol used, if the margin is exceeded it'll treat it as a normal deal, I've found that by accepting losses & renouncing to bigger profits it was possible to gain in stability.
The starting balance is 1000$ for the 3 pairs.
Finally I could eventually capture a video of the order processing you could watch at.
17 consecutives losses :-] To make it short, I don't care losing 17 times 0.01 lot (0.17 lot) if I'm prepared for.
I'm sure anyone can do it, if he knows how to approach the problem the right way - since I opened the thread, I've myself took almost a year and in the meantime I cursed hedging & this kind of strategies more than once .... out of darkness comes the light ! ;)
I was "playing" with hedging to explore possibilities : it's very tempting, since it allows purely & simply to recover from a bad position taken.
The risk of these strategies is well-known : lot management. Comes ALWAYS a point, where the margin is stressed, the logical solution being to accept & cut losses, often with bigger losses than normal if you retried many times.
Is there any way to get out of a failed hedge ? Have you ever seen such a method that could limit damages made by a failed hedged deal ? Overbidding ad vitam aeternam is definitively not the solution.
do not hedging with less than $10000 or 10000 cents =$100 in cent account.
this way you can protect your account
your question is not true when you did not show your exact strategy because we have a lot of hedging strategies and which one ha its own risk.
Yea a video capture would be awesome. Or even a backtesting report showing the trades. In either situation, let me know which trades are just your normal trading pattern, and where does your recovery mechanism begin. I have 2 more ideas on how make mine better, but i have to type it up to explain it better.
That's exactly what I don't like about hedges and averaging systems. Once trades start to stack up, we either accept the risk and wait for it to recover (eventually reaching a margin call) or we cut losses once drawdown reachs a certain number (like 10% in your example).
What we must do is not allow the EA to reach such point. I already managed to do it using the independent trades closings, as I explained before (I am working on increasing the profit with minimal risk). I don't know what strategy you are using, but once we manage to find a way to overcome this problem, there's a good chance our EA will be (very) profitable.
There is only one way to be profitable with all your so call profitable EAs.
The key is to accept a small lost when you know the trend may carries on almost forever.
E.g You start with $ 1000.00 after 3 month you have gain $ 1000.00 profit. The total balance is now $ 2000.00
Now an event occur and you know that the trend might carries on almost for ever against you, why not accept to loos $ 200 which you have made let say in the last 2.5 weeks?
and start again making money, surly your account will not die after loosing $ 200.00
Within the next 5 month you could be far above the current profit.
NB: Progress is better than perfection, always remember that in the world of Forex.
FINALLY ! One year has passed since I released my first prototype of hedging system. It was promising, but unfortunately limited to metaquotes
servers with old spreads (1). Everywhere else it has been a total fiasco.
And few days ago, I started working on a class that seeks to lighten margin by managing partial closings ... it's something relatively
advanced ... and now, once implemented, I got my old EA to handle many instruments with "common" spreads (test since 2012.01.01 = 8 yrs)
I'm just starting a test on the whole market watch to fully explore it - unsure but I'm optimistic.