Hi,
I’m a new member in this forum.
I have found an interesting Youtube video called “VooVoo+3 GBPUSD 01/2014 - Winning Forex Bot VooVoo+3”.
This video is about an EA that uses hedging.
Hedging is a nice method but lately many countries prohibits using hedging.
But we can still use hedging at some dealers based on the countries that don’t disallow it.
Hedging here means that we have both Buy and Sell orders at the same time.
The EA on this video simply places a pair of Buy/Sell orders at a specified interval (in this case 70 pips).
Then it takes profits when Buy or Sell orders make 7.00 USD for 0.01 lots/order.
While it first makes profits, there remains the same or slightly larger (due to spread) amount of losses.
But finally it makes profits by closing all the outstanding orders when the total profit surpasses 7.00 USD.
These numbers of 70 pips and 7.00 USD are the key to this EA’s success.
These numbers are universal to the four major currency pairs.
If the interval is smaller, say, 10-30 pips, then there would be much larger drawdowns occurring, resulting in heavy losses.
If the interval is larger, say, over 150 pips, then it would be time-consuming to make even a small profit.
If the TP value is much smaller than of 7.00 USD (for 0.01 lots), then profits made would be smaller and less effective.
If the TP value is much larger, then it would be harder to achieve and less effective and causing larger drawdowns.
Therefore, this EA or its maker has an intelligence (but not AI) to make profits efficiently with limited drawdowns.
How would you think?
Thank you for reading my first post.