Hedging drawdown equity - do you have any ideas?

New comment
 

Hello

I have problem to solve

I need to hedging drawdown equity

I have perfect strategy to grow balance which is repetable like an image below

but sometimes entries make too huge drawdowns equity (red arrows)

How to solve it, do you have any ideas about advanced hedging?

(red line I marked drawdown line which I would like to achieve)

ok

 

The solution is quite easy — stop hedging on the same symbol — it offers no benefit and only has higher trade costs.

Grids and Martingale are going to blow your account sooner or later.

Don't believe the "fairy tales". Doing the maths shows you that.

 

The biggest issue with these, and I am a grid lover, so dont think that I am a grid sceptic, I AM NOT; is that these bactests on both mt4/5 do not show the equity between the times when a trade is opened or closed. So, the image you showed above only shows the equity when trades are opened and closed, with very few exceptions. This means that your image will be VERY different to real trading. You might try opening pending orders on a price distancing grid to improve the backtest image that will show the equity more often, however the details you have provided are miniscule and not enough details for me to make much suggestions, but here goes one for you...

Use averaging trail stop so that when dd is above x, then a closing strategy kicks in and averages out the open prices with added profit -- until dd returns to acceptable level.

 

For large drawdowns with martingale, you can either:

  1. position close (accept the loss)
  2. hedging with an equal lots in the opposite direction
  3. stop and reverse strategy
Martingale is risky, you have to be prepared to accept large losses, hoping to recover those losses on the long run :(. 
 
Revo Trades #:

The biggest issue with these, and I am a grid lover, so dont think that I am a grid sceptic, I AM NOT; is that these bactests on both mt4/5 do not show the equity between the times when a trade is opened or closed. So, the image you showed above only shows the equity when trades are opened and closed, with very few exceptions. This means that your image will be VERY different to real trading. You might try opening pending orders on a price distancing grid to improve the backtest image that will show the equity more often, however the details you have provided are miniscule and not enough details for me to make much suggestions, but here goes one for you...

Use averaging trail stop so that when dd is above x, then a closing strategy kicks in and averages out the open prices with added profit -- until dd returns to acceptable level.

Thank you very much for reply


I dont use grid and martingale

 
amrali #:

For large drawdowns with martingale, you can either:

  1. position close (accept the loss)
  2. hedging with an equal lots in the opposite direction
  3. stop and reverse strategy
Martingale is risky, you have to be prepared to accept large losses, hoping to recover those losses on the long run :(. 

I dont use martingale

 
that could be the swaps... you still have to pay for the overnigh costs...
 
Camilo Mora #:
that could be the swaps... you still have to pay for the overnigh costs...

no, transactions are always closed before 23

 
Michal Wieslaw Wnek #:

Thank you very much for reply


I dont use grid and martingale

either way, my suggestion could still work. However, without knowing your signal strategy, any suggestions we make can only be "stabs in the dark". Every closing strategy has to be suited for the trading strategy being used: 1 closing strategy will be a perfect match for 1 trading strategy but then the worst match for another trading strategy.

However, maybe you can analyse what caused the majority of these trades to fail, and then use either a filter to not open those trades, OR a filter can close those trades earlier; either at b.e OR with acceptable loss.

New comment