Hey everyone! Sorry I’ve been away a bit.
@bunchofkeys, I do a triple martingale so that the position can actually be negative in pips but still make a profit. For instance, the first position goes south and is down 40 pips. The triple that opens may only need 10 pips in order to make more than the loss of the first position, thus a TP is hit on the position as a whole but the pip could is actually negative.
So a few updates on this thread:
I can’t say on babypips where I grabbed the EA nor can I say what the EA is called since it is a only available for purchase.
Another reader of this post (I won’t say who unless he’she wants to mention it) has taken the premise of the original EA and has replicated it along with some additional pieces that help safeguard the account balance. It doesn’t help with the draw down aspect but it does have a few checks in place to ensure there is enough margin in the account before it allows a trade to take place.
A bit of a summary.
I have been running a couple of EAs for just over a year now. My experiences have been up and down…plus there has been a bit of a learning curve. My honest findings are as follows.
The EAs work in the sense that it does work while you sleep. It does churn and it does not allow for human intervention (i.e. it doesn’t let emotion or the result of the last trade influence the next trade). It simple does what you or the coder tells it to do and it acts on those directions. Period. This type of system does have its drawbacks…mainly in the form of draw down. It does seem like, as your account grows, so to do the negative open positions. Looking at my charts and knowing when I raised lot sizes and TP targets, I see a direct correlation between those times and a larger jump in negative positions. The only real positions that remain open are, in fact, negative ones because when the position goes positive it almost immediately takes profit. Over time I see that difference (open negative positions vs. profit) shrink and it does eventually get back in the black. Many have asked "what if a position goes negative and remains open and “locked up?”. Well, that is an issue and one that I have grappled with a bit. Do I put in a SL? Do I close positions out after a certain time period? If running a 1M chart and a position has been down for a week…maybe that is ample time to determine if I should get out. I don’t 100% have the answer to that question…and I think it may boil down to each persons pain threshold. As I heard in one of the many webinars regarding a system like this, I have been “letting them ride”. Do they come back? Yeah mostly. Can they be helped along? Yeah, I think maybe that is the only way to truly get out of some of the bad trades. Lately I’ve been using missed pivots in order to determine the likelihood of the overall daily and weekly direction and, on reversal pattern confirmation (assuming the direction is the same as the open position I have with the EA) I load up a bit manually in order to “martingale” the overall position yet again. In fact, I have a USDJPY short trade that has been open for a long long time. I recently took on a larger short manually and I am actually pretty close to getting out of that trade.
Long story short (too late): The EA system I have been using has been growing the account quite well…but I would consider it to be a virtual growth since the open positions continue to follow the profit in the opposite direction. The set and forget system I was kind of hoping for …well this isn’t it. I think you have to manually help some trades along. Perhaps we are on the cusp of figuring out how to keep draw down / open positions to a minimum… I will continue to work on this. I think it is 90% there.
To all the naysayers, I appreciate your comments. It has really helped me to focus in on where this system may be lacking. If you don’t try you’ll never know… I’ll continue to tweak this.