Slicing it Both Ways

Filed Under (EA System) by Casey on 06-07-2010

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Forex Martingale Showcase III – The New Megan EA

Now this is an interesting EA which I stumble upon. Initially I thought it just another Martingale EA, but I soon discover it was not your ordinary Martingale EA.

Why? Because this particular EA slice it both ways.

Most of the normal Martingale EA run on a basis of having a drawdown, while taking a fix small profit. And that is what I consider to be an ordinary Martingale EA. But what is not so ordinary about this Martingale EA is that it also does take the other way, which I will define this as the opposite of drawdown. This EA also have a ‘draw-up’

While drawdown means a -ve equity balance, a draw-up would mean a +ve equity balance. Hmmm…. somehow or rather I have never heard of a term which describe a +ve equity balance.

Anyway… apart from this EA, there is another commercial martingale EA that works on this principle which I will write about it in the next showcase.

Ok back to this new Megan EA.

I actually stumble upon this principle by accident. Since I have my new VPS and new DEMO account lining up on my demo page… I though ‘What the heck?! Let’s try this on demo’ And I was amaze by what I saw…

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Notice how USDCAD… stacks up in a martingale manner yielding me a +ve equity balance.

Hah… caught your attention now didn’t I?!

Now… let me burst your bubble. Cause this particular EA is not all that perfect…and after a few days of taking this screenshot…

This happened!

This is how it happened… As I mentioned it slice both ways. So when the market moved the other way… BAM!!!

All it needed was 60 pips running the other way… while my initial trades took about 100 over pips… it just needed a mere 60 pips on that one trade with the biggest lot to kill it.

Now if you were to look at it from the other point where if I were to have a drawdown… all it needed was a 60 pips to move the other way to make me come out of my drawdown. But that means I need a huge capital to withstand a 20k drawdown…

In my mind I can only think that I found a broad sword of Martingale that cut both ways rather than a samurai sword which only cuts one way…

Interesting huh… Yes… interesting indeed. So interesting that I had to try a few extremes… Busted a few demo (two to be exact) to realize how this EA actually works.

This particular demo was tested on other currency pair… and I must say the other extreme was witnessed…

Ok… I have to admit I was actually over trading this account.  0.1 lot on a 2000 demo with a martingale strategy was not all that wise…

Now on the backtesting bit…  apparently it only takes into account drawdowns and somehow or rather it does not exhibit the sort of behavior as per my demo. Now I can’t in heaven’s name find where I saved the backtesting results for this EA… But you know how it goes… a few spikes here and there and then boom… one big drop.

I have yet to take the time to really study the codes. I looked at the codes but have not actually studied it. My question here was… why did it went bust when market moves the other direction? Can’t this EA take profit when it realize that the market changes?

The answer I guess can be found if I study the codes no? But as lazy and as ever time permits it is something that will be interesting to dive deeper into it.

Probably it will be a basis on my next new project. Which should be in line with my 2010 resolution. To build my own EA. :)

I am going to use this as my ‘chassis’  and see if I can refine and improved it.

Until then… this EA can only be displayed in demo. Until I can see a way to ‘swing it’ properly

Note: You will notice that I have 3 account… publish… a-Quila EA, a-Quila EA II and a-Quila EA III. All with different start time… III being earlier than II. Well that was because I was testing and setting it on myfxbook on different time. But II is the most conservative approach… 0.01 lot on a 2000 demo account.

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