Hedges and Martingales an explosive combination.

Hi traders, i´m an EA systems developer and been trading and developing mql4 since last year. My first EA was a hedged martingale system that seems to do very well, but... unfortunately not forever.
It was good to me to test and understand how a system work, and after that... i´ll never use martingales in my systems.

People believe that can recover losses using martingale, but what you simply do is limit your profits and rise your risk to the moon!! until your account explodes.

Hedged grid system with martin is a waste of time, is a system that goes wrong by nature, let me explain why:

- If you use hedges effectively, forget about sl´s and tp´s, you´re based on the ranging price action of the chart.
- Your risk is based on the price move, so you need space for the price to run the grid.
- When using martingale you shorten your space by increasing your lot.
- Think about the graphic chart, if you double the lot, the chart shortens until you can´t see anymore.. just vanishes so your account.

Just a simple math explains : (ticks to run) = lotsize / (price range), the ticks won´t change so your price range goes to zero leading your lotsize to infinite...

Thanks..

Luiz Godoy

There are some other movey managements, that can work well with grid sistem.
Martingale is most simple to understand, but most dangerous for account.

Hedge (also known as Lock) can help to reduce exposure,
but at same time it increase open position voluve (margin requirement, paid swap)

Martingale is made for gamblers, and best left for gamblers

Yes, but i´ve been checking most successful systems are using grid. I believe there´s a calculated risk in using a hedged grid, you just have to be patient and a very well controlled money management.

A quick tips is to not let it expand forever, and don't be naive and just accept a loss from time to time.

I don't use sl's and tp's, I check periodically (daily, weekly, monthly), If profit exceeds largest negative order, I close it. I also use a lower leverage, so I can run a very wide grid, broker also allows real time leverage change, so I can reduce it further if I need to.

I don't martingale (perse'), I increase lot size based on balance targets, and margin level has to be at a certain point before an increase.

I use hedging to cover a larger area (effectively running a grid on top of a grid), the idea is that profit from a buy and sell, same pair, would potentially give back double profit crossing the same area, it's a little trickier, as margin requirements become theoretical (a hedge of same size could be 50% of required margin, be 30% of required margin, cancel margin requirement entirely, etc. depending on the pair).

I have tried and failed many times, but seem to keep coming back to this method, getting more successful with each attempt as I alter:

a. Leverage (lower and lower every blown account)
b. Changed from instant execution to market execution.
c. Either increase capital, or go from standard account to cent account.
d. Changed from US$ account to local currency (helps to know what account and trades are worth)... I used to easily lose the value of a flat screen TV in one order without even realizing it (US$ 1000 - no big deal... till I see the value in my currency.)... in my local currency it's one glance to see if I'm over trading - no conversion needed, I know immediately what it's worth. (US$ 1000 is a boat load of cash in my currency).
e. Close out old negative trades far away from delta, those attracting negative swap first, lower than daily, weekly or monthly profit. (a close still gives an overall profit - even if it's just AC$ 0.01, AC$= account currency. It's a leveraged product, you want trades to create profit, not trades to make up losses).

When I'm a Millionaire, I'll let you know, till then it's still a work in progress. :-D

Sure, the hedge is a fixed risk that well positioned will always profit, just have to be patient because you can´t close the trades until it reaches the minimum profit of all open orders. I´m develping and testing a new EA soon that will keep lower and higher prices of the grid fixed without tp´s, and open a new grid with calculated risk. Any suggestion will be welcome.

'because you can´t close the trades until it reaches the minimum profit of all open orders.'

Not really, you could go deeper for your closing criteria:

1. Balance profit overall is positive -> close all trades and start over. (statistically a MC* will occur eventually as it's profit or bust)
2. Balance of one pair exceeds another pair -> close all orders from both pairs for overall profit.
3. Balance of one order exceeds another (either from same pair or different pair) -> close both orders for overall profit.
4. Balance of largest order in profit exceeds largest order in loss -> close both largest profit and largest loss order.

I use all of the above criteria as manual intervention (EA does not perform these tasks).

* MC - Margin Call

Good, but i think it can be programmed on a EA, since i can get all these parameters and compare the conditions to close trades. I can develop this item by item.

Why can´t the EA perform these tasks ? We can discuss this ideas and i can test what is possible to program .

I´m beginning a project under this link of github, by the name of 'TheGridInside'..

https://github.com/ExpertsFactory/experts


Thanks

degodoy posted:
  Good, but i think it can be programmed on a EA, since i can get all these parameters and compare the conditions to close trades. I can develop this item by item.

Why can´t the EA perform these tasks ? We can discuss this ideas and i can test what is possible to program .

I´m beginning a project under this link of github, by the name of 'TheGridInside'..

https://github.com/ExpertsFactory/experts


Thanks

I simply haven't coded it into my EA yet. I only have a closing condition if a pair reaches a certain profit, close all orders in the pair. And if one order (any order) reaches a certain profit, at new bar, then close it. I work a full time job (that consists of an amount of coding), so either I have a lack of time, or a lack of motivation to sit at home and code after a full day at work. I'll just have to set aside a time frame every day or on the weekends and do it.

I'll check out your project before the weekend.

That´s what i do the whole day... 'code and trade', now it´s my full time job.

I trade by hedge manually. It works for me.

Good luck. What broker do you use?

I´m testing Tickmill now. But i plan to use 2 more brokers, ICMarkets and FxPro.

fkkabri posted:
I trade by hedge manually. It works for me.

Can you elaborate?