interresting, very…
but a litle martingal isn’ t it ?
Because at the end of the day, the real point to not loose would be to buy/sell in the same time, and to close progressivly the wins… the problem will appear in the sideway situation and when a trade have to be considered as returned again us.
In the case all these new regulations over here made this kind of system almost impossible. Maybe because these ponte undestood that this was the real way to make some wins.
Sorry to dig this thread again. This just got my attention…
First post in Babypips. I trade forex 5 years ago and lost $4K and promised never to trade forex again. I use this method before and all my loss is due to margin call. Before, I bet 20% of my account per trade with no SL and just wait the trend to go in my favor. BTW, I grew up in 3rd world country and been a gambler since 10 years old and I know what it feels to loose money.
This year, I’ve got $500 which I’m not afraid to loose. I start forex again, using the same method but reduce my bet to .5-2% of my account with no SL with profit target of 2.5% per day. This allows me to hold for a swing of 1000 pips. Most of my bet is based on the news and not on technical, although I understand how they derived mathematically all these formulas they used in forex, but I think simple is good. For 6 weeks, no loose with average of 3.0% and reach my account to $2400, but suddenly GBP drops likes crazy that I manually close my position and lost 39%. Overall, I still have $1400 to play with. If I didn’t close it, I get break-even. Which means, this method without S/L is still valid.
Now, I experiment new methods. Two accounts, bet on opposite side. Where ever it goes, I earns profits. This still require some risk management but before you throw off your criticism, give me 5 months to experiment and I post the results. Maybe that time, I’ll be a millionaire…
Well, since you brought up the subject, it is just short of two years now, over 3000 trades, I lost track of exactly how many, with no losses. The prices of my currencies are at the extremes right now yet my draw-down is still under 60% of my balance. To swing traders, this is alarming but to mathematical traders, who do not use stop-losses, we are grinning ear to ear. The price will be returning to normal anytime now and we will make good money off of all that ugly draw-down. Mathematical trading is not perfect yet, there may be a way to hedge the account from outside the forex market, our research is still ongoing in that area, but the trading system is solid.
Let me offer one suggestion though, try your ideas out on a demo account. It still is saddening when one of your ideas crashes and burns but it doesn’t hurt like losing real money does. RoboMiner, GT-Shadow, Prospector and probably a few others, have an endless trial period. Hope more programs start using the unlimited demo use strategy.
Feel free to share your results with the rest of us, I for one am interested.
Do you guys add to your losing positions or just let it go the wrong way with no SL and then hope and pray and wait for it to go back and exceed your original entry price?
I use the cooltrade robotic trader that adds to my losing positions (after my add-to-rules pass) so I can take profits many times over and over again, without requiring it to go all the way back to my first entry price. It is not dollar-cost averaging like some people think, because it treats lot purchased completely separate from the other lots.
I agree with removing the stop loss. I think if they changed the name to Lock In Loss, more people would quit using it.
I also agree with your idea of running multiple accounts and going long and short at the same time, but it will only be valid if you adding to your positions, otherwise it will just be a wash (what one makes the other will lose).
Keith
Intrististing thread running here. I myself have been demo trading on something very unusual and different, I have opened a demo account 1 Mar 2010 on oanda and so far I am up 0.6%. not much but scince its demo lets see where it will take me
I have opened a $ 1000 account and opened 1 unit long on every pip the market moves with a t/p of 35 and s/l 1500.
as I said earlier lets see what happens:D
any feedback would be appreciated
Well… this really doesn’t make sense but you’ll probably make million$.
No, wait… maybe you’ll lose millions! I’m confused ! No, really I’m not.
"I have opened a $ 1000 account and opened 1 unit long on every pip the market moves with a t/p of 35 and s/l 1500. "
What happens when the price goes down? Would not those buys have a negative effect on your account? Unless you knew that you had enough in your balance to cover a worst case draw-down. That is what mathematical trading does, so that would be an assumption that I would naturally jump to, but is it true?
If the market happens to move 1500 to my S/L I would only be in a DD of about 15 to 20% of my equity according to my exel spreed sheet. I would also consider averaging in at times if I happen to have too many open long positions.
If you are trading .01 lots for about 10 cents per pip, 1500 pips would be 15% would be 15% of your account. Although if it hit your S/L it wouldn’t be in drawdown, you would have lost 15% of your account.
Granted, a 1500 pip move doesn’t happen everyday. However, you state that you buy 1 lot for each pip movement up. In this scenario you could feasibly have 30 open trades. At that point it would take only about a 300 pip move against your positions and your entire account is toast.
Anyway, if you buy at the right time the odds might be in your favor. I just wouldn’t want to be buying at the end of the trend.
opened 1 unit long on every pip the market moves with a t/p of 35 and s/l 1500
I must be reading this wrong, because if you opened a trade every pip, in ten pips, you would have 10 trades. When the price moves 1500 against, at 10 cents per pip, you would have a 1500 pip draw-down plus a 1499 pip draw-down plus a 1498 pip … and so on for all ten trades, added up that comes to a draw-down of 14,955 pips. At 10 cents per pip, you would have margined, because of the leverage requirement.
Did I misunderstand something?
yes, 1 unit per trade, only done in oanda platform:) 100 pip move would only 1c
Hey, it’s been 5 months. So are you a millinaire yet?
Sorry, it has taken me so long to get back here but I have been busy. I have finished my book on Mathematical trading. I will give it free to anyone who ask for it. There is a complete detailed description on the no loss system, how it works, how the insurance protects the account instead of using the stop-loss. Everything that you would want to know about before considering this type of trading system. The problem is that there is a trade off between safety and profits. With a strong safety setting you will only get a fraction above 1% per month. Send me a request for the book and I’ll send you the down-load link.
Interesting premise. Kind of reminds me of the Steinitz HAS MTF EA, or most any no loss system. As with these systems the problems occur when the market makes a big turn and the system doesnt detect it in advance.
As long as you are aligned with all the trends on every time frame then minor fluxuations and drawdowns are relatively easy to absorb, but when the primary trend turns and takes you with it, it could be many thousands of pips and months or years of waiting before things even begin to turn back again. If your going to go this route make sure you have a good interest carry to hold you over.
If you can cut a loss short, what is the reason to hold on for thousands of pips? Beside of a favourable carry trade. But even then the interest change could turn that into a nightmare.
As long as you are no central bank which can print their own money or there are taxpayers to get the money from, I do not see any good reason for such a system.
You can always set an sl and if that is hit you may use a stop order and if the price comes back you will be in the game again without having to ride the nightmare collercoaster into huge losses.That charges just the spread and commissions and thats it.
My experience so far is this: If you really want to do it, you will one day get big eyes how far price can ride into the loss what you did never dreamed of. If it gets really slick, your currency of favor melts down like ice in the sun or defaults at all.
Anyways, good luck who wants to do it. The risk:chance ratio in this case is account:unknown. 
Of course, it was just an interesting thread, not a real consideration, after all time is money too, and sitting on ones losers waiting eternaly is not the best practice. But there is some thing to the idea that many forex traders do cut their losses too quickly. How many times have you taken a loss, just to see price rebound in the next session or next day?
Personaly I dont like stops. I use them, but I much prefer to buy or sell closer to the price swings. When I make a mistake, either on the entry, or by holding too long, I will usually look to exit on the first bounce back near to where I failed. Of course if that doesnt go to plan there is always a stop loss, especially on short term trades in the Forex market.
Really, the entire subject is covered extensively in the book that you could have free except the people that run this board don’t allow me to tell you how to get it. Sorry. But there is a lot more science and simple math that goes into Mathematical trading than a bunch of guess work.
One pip on the aud/nzd cost or profits, $.07 per each .01 lots traded. From the center of the grid, centered between the historical limits, to the historical limits is 1400 pips. That means that .07 X 1400 = $98 or that if you had $100 plus $5.00 to cover the margin and the price never went beyond the historical limits, You could open a trade for .01 lots sells above center or buys below center and you would never margin. Lets also say that we will close each trade for a profit of 50 pips. This will give you a profit of $.07 X 50 or $3.50.
1400 / 50 = 28 ranges. If we open the trade when the price is at the far end of the range away from center and close 50 pips closer to center, we could have 28 ranges of 50 pips each. There would be one trade for .01 lots for each of the 28 ranges. It is just as easy to calculate the total draw down that would occur if the price of the aud/nzd went from center to the historical limits. (Remember that we calculated the center to the extreme at less than $100 for each .01 pips and each range closer to center would be cost $3.50 less than the one before it. I won’t bore you with how this is all calculated but it works like this. (28 X 29 / 2) X $3.50 = $1421 Plus the cost of the margin at 200:1 is $5.00 for each .01 lot traded. 28 ranges X $5 is $140
$1421 + $140 = $1561 Therefore, if you keep $1600 in the account and the price never goes beyond the historical limits you will never margin and each time the price travels through a range, you will make a profit of $3.50. Simple math, no opinion of any kind.
The same kind of logical reasoning is used to select which pair we trade, Which broker we use etc. There is some loss do to swap but profits are a lot more. You can hold the trade open longer than 50 pips if the trade is very old and the swap is large. (Note; swap for 1 year equals about 200 pips) The only danger is when the price goes beyond the historical limit. (The currency pair was chosen to minimize this effect.)
A max of 28 trades of .01 lots =.28 lots at .07 = $1.96 0r 2 bucks per pip beyond the historical limit. If you believe that the price would not likely go beyond 1000 pips over the historical limit and you put $2 X 1000 or an extra $2000 in the account as insurance then you have a pretty well protected program, If not actually the Holy Grail.
That is to say, the price of the aud/nzd could go anywhere between .9428 and 1.4230 with a balance of $3600 and your account would be perfectly safe. What’s more there are ways to generate profits from the insurance but that isn’t quite so automated so that the robot does all the thinking. This system has generated between 1 and 2.4 percent profit per month for the last 3 years without one single loss. (3000+ trades) It won’t work in the USA. FireStorm, the generator that I use to trade the insurance, (Profits of which is not included above as it averages about 6% per month) can give you a higher insurance level and extra profits.
No opinion, just math. We have already moved trading into the science world, let’s see what we can do next. If a computer can beat a grandmaster in chess, trading is child’s play. And that is the one and only opinion in this entire discourse.
Holy grail? Okay. Letz assume that is an average 2 percent per month or 24 per year and your numbers are crunched right. I am too lazy right now to check that.
If you would have bought au 3 years ago you got exactly that roi. Without any risk of losing your whole account. Without any number crunching, expenses for computers, energy, virtual servers, work, whatever …
Plus one thing is very likely: The price ranges of the future will be different than in the past. I do address the daily/weekly here, not intraday. Not only could there be a breakout out of range. It could be that there is less volatility with a flat market. Expect the unexpected.
To just compare that to my system with stop loss what makes at worst case 100% per year and if I increase risk a little bit it will make ten times more, whats the big deal not to use sl?
I can also avoid turnpikes and drive via freeway, but if the freeway is twice as long I will pay more for gas than what I save toll and it takes twice the time.
I am sorry, the subject that I was responding to was the never lose a trade. There are other more profitable systems. There is also a mathematical program that has exactly the same number of wins as losses but makes 5-8% per month. But that didn’t fit the category either.
No problem mate, I just think aloud. If trading without sl would kill all other systems, that would be nice. It seems it isn’t, though.
Trading with leverage needs a tight risk protection and if you want not trade by sl you need a very low leverage or better no leverage. Or sooner or later a margin call jumps out of the box. Anyways, then you are playing without the biggest advantage you can have right now: Trading with (theoretical) free borrowed money.