Forex Casino

Filed Under (EA System) by Casey on 24-06-2010

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Forex Martingale Showcase II – King Martin Scalper

Now here is an idea which I believe never occurred to anyone. Ok… maybe it has but I don’t think it was never really realized until I stumble upon it.

It’s call the King Scalper but I renamed it King Martin Scalper. For the reason that this particular ‘scalper’ application is very very different from your normal EA. It not only scalp like 15 pips per trade, but it utilizes martingale.

This strategy is so simple that I just went like ‘Wow!!’

This is how this EA works. It ‘bet’ on one currency pair and if it losses it double up the lot. Plan and simple martingale. It’s a ‘scalper’ because it only takes 15 pips. However, this is not your ordinary scalper because the stop loss is also 15 pips. The idea is that… see if I win the first trade.

So if on the first ‘bet’, the trade losses. It takes on another ‘bet’ doubling the size. etc etc. When it hits it’s profit target. It starts all over again. And at every successful Martingale round, I win 15 pips.

Is this forex casino or what… :) (I am going to trademark this name)

What strategy it applies to enter the market. I do not know. But what this EA attracted me was… it reminded me of my casino days utilizing martingale betting strategy.

In casino, there is a maximum betting limit to ensure gambles do not loss their shirt on the table. Or rather they do not want them to use any martingale strategy what so ever.

In forex… well…. the ‘bet’ can go as high as your margin or your money can take you. Or depending on what is the maximum lot size that the broker will allow you to place.

Looking at the way the EA reacts, it enters the market very randomly. There is no indication as to how it enter. Again, I don’t really know exactly. Taking a quick look at the codes, I suspect it uses a breakout entry where it looks at the high and low and the pip differences. Subsequently it ‘gambles’ with the market using a martingale betting strategy.

How does it perform?

Well… I backtesting this EA and below are the results.

GBPUSD 15M – 2006-2010 (June)

However… 2005 yielded me this result
GBPUSD 15M – 2005

You see… like any martingale in practice. The drawdown is crazy. For this case… the number of lots allowed is well… probably not realistic. I started the backtesting at 0.1 lot at 100,000 dollar.

So let’s see how many martingale levels can this take

0.1, 0.2, 0.4, 0.8, 1.6, 3.2, 6.4, 12.8, 25.6, 51.2, 102.4, 204.8 at that point the backtesting produce an error.

So in practice I must like get 12 losses in a row to get fu(ked. It’s highly unlikely to hit 12 losses in a row… but it’s possible. I have seen it before with Roulette.

Like any Martingale EA…. only time will tell.

However, the above backtesting was from FXOpen, while my demo account is Alpari… So probably there might be some inconsistent in terms of information and comparison. But…. what the hell…

My demo account looks so far so good. I am not sure what is the maximum lot I can use using a micro lot. But again… time will tell.

I believe this type of EA will not make you rich… but I guess it will provide some pocket money…

One interesting feature to this EA is that there is a setting which allow for basket profits, which means if I were to apply the strategy accross say 4 currency pair. All the trades will close all together with a nice profit in hand.

In my demo account. I am only trading with one currency pair. But it seems that it would be interesting to see how well it is going to react with this basket profit setting…

I guess I will fool around with this feature after the month is up… :)

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