Reverse Scalping

Filed Under (Journal) by Casey on 16-07-2009

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Arghh… it has been a difficult week. Volatility in the market is really messing my robots up. I do not think it is only Cyborg, NN Master, Boomerang, Blaster…. any EA that trades EURUSD would probably have gotten canned as well…   $hit! This is taking me back 2 months from my objective.

I thought I made some stride last month… Sighh….. Slapped silly by the market…

Anyway… sorry for ranting. I just had too… This is really killing me to no end. But that is not the reason for this posts.

Last night as I was browsing through the forums just to see what was happening. I stumble upon this thread with regards to the topic ‘Why do Traders Lose?

I was losing badly in the markets and I wanted to find out if I was doing anything wrong… I was seeking solace, and started reading this thread with interests. Here is what I wanted to highlight….

“Let your profits run and cut your losses short”

“The first loss is always the smallest”

“Plan your trade and trade your plan”

“Pigs get fat, hogs get slaughtered”

“The trend is your friend”

So I read through all the blah blah… And I came accross this particular comment which got my brain working. This member mentioned…

If you’re the 90% of the bunch which always loses his trades …… reverse your buy and sell buttons ….. click buy when u want to sell and click sell when u want to buy …. you will double your account by the time you get broke ….. haha

Now… since most or rather some of my scalping EA are trading at a lost for me, I though, what if I can reverse this effect.

When the EA wants to enter a buy, I change it into a sell… the initial stop loss would be the new take profit level, and the initial take profit would be the stop loss. Vice versa…

So this would mean I am making this

reversescalper

And reverse it into this….

reversescalper01

Hmmm… probably that is not what I intend to mean it… What I am trying to imply is that my gross loss would be my gross profit and my gross profit would be my gross loss which would change my net lose into my net profit no?

Reverse scalping would totally fit into the few advice given above.

“Let your profits run and cut your losses short” – In this case, that is what we are doing… we let our ‘reverse stop lost’ be our running profit and our ‘reverse take profit’ be our losses cut short….

“The first loss is always the smallest” – That is what reverse scalping is going to be…

“Plan your trade and trade your plan” – I am going to be trading EA so this part is sorted out

“Pigs get fat, hogs get slaughtered” – Now… with a money losing scalping EA, I am the hog, but if I reverse the scalping buy and sell method, wouldn’t I be reversing this and be the PIG?? ($hit… that really does not sound right but you know what i mean)

“The trend is your friend” – With bigger stop losses or rather a reverse of the stop lose I would have a larger take profit level, wich would mean that I am trading the trend, period.

Batman-5--5-caveI went like ‘EUREKA!!!’ I found the formula in all this scalping BS!!! So I went into my bat cave and started working on this idea.

Firstly, not all scalping EA are profitable… and not all scalping EA are NOT profitable. So I had to look for a NOT profitable EA. I first took a look at EuroBlaster their earliest version….. Looks $hitty right?? So la di da… I looked at the codes and made some adjustments to it… I only changed the buy order to a sell order and sell order to a buy order.

That is all nothing more nothing less…

Secondly… I rename this EA to ‘Reverse-Blaster’ and put this on Demo side by side Euro Blaster V2 and let it ripped…

I still do not have any interesting results yet… but will follow up with this idea in the near future.

My initial thoughts were that I would be taking a lot of small losses… say 10 small losses and one big kanuna profit… which should out weight the losses. I mean in EuroBlaster… the take profit is 10pips while the stop losses is 350pips…

Now you do the upside down math… screw backtesting… it’s the live result that matters now… actually if the backtesting results is $hite the more I need to reverse the trades….

So… there you have it… a wonderful idea that could prove profitable…. But one thing I have not taken into consideration. Trailing stops and modified stop losses.. I know that EB v2 has the ability to modify stop losses… but not too sure about V1. Let’s take this one step at a time…

But the only way to know if this would work would be to test this out….

I am so excited with this idea….

Now… I think I will go back to my bat cave and have a closer look at some of the scalping EA that are making losses for me for particular currency pair and see if I can also reverse this….

reversescapler04

This is really putting the work “Reverse” literally into Reverse Engineering…. Muahahahaha!!!

If this idea works out the way I imagine it to be… My site will not longer be ‘Searching for the best Forex EA around’ It will be known as ‘Searching for the worst Forex EA and reverse it around’.

Another quote from the forum I would like to share “I would rather make money than be right.” I would rather make money than search for the right EA…. :)

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