Forex EA 201 – Martingale

Filed Under (Journal) by Casey on 26-06-2011

I thought of dedicating another post to my interest in Martingale to streamline my thoughts and principle.

Hell! I have prove the critics right all this while when I busted both my accounts or probably busted all my accounts when I toy with Martingale. Yes, toying with martingale  in any form is dangerous.

Make no mistake, I am not here to prove the critics wrong. I am not here to prove anyone wrong. Neither am I proving anyone or even myself right. I am just here to have some fun with Martingale on Forex.

All forex trader will say that Martingale in forex is BS… Even some EA users thinks Martingale EA are BS.

However, some EA traders things that scalping EA are at times acceptable. To those who ever have this notion are hypocrites. What so acceptable about large stop losses with small take profits.  As it is, scalping EA with large stop losses goes against every trading mantra that ever exist. The logic is that… take as many small profits as you can against one big stop losses.

That in a way is how Martingale works… but the only differences is that the stop losses are much much bigger. So that makes it unacceptable. Risk is an objective perception isn’t it?

Anyway…  let’s get a few things straight here.

Martingale strategy will not make one rich in forex.

Every trader will echo this statement. No one will be stupid enough to risk a huge amount of money on Martingale. Then again, there are a lot of stupid people in the world that does stupid things. Then again, no one has every said has ever come forth to say that Martingale strategy works.

Martingale is 100% risk. All one needs is a black swan.

One of the reasons why trader stays away from this strategy is because they don’t know when the black swan will come. If it does… one can say bye bye to their account. No matter how nice and linear the curve is at first… it just needs a spanner to wreck havoc onto ones account.

Martingale is just for fun, period!

Given that the downside is 100% risk and the upside are just small profits then what else could it be when one trade Martingale strategy? Of course it is for fun. In life everyone wants to beat the odds. Haven’t you bought a lottery before? While the example are two different thing, the point is the same. Everyone wants to try to beat the odds especially me.

I have always said that there is a possibility that if used correctly, this type of strategy can be profitable in the long run. Don’t mean to be disillusion here. But I feel like Galileo and want to go against the ‘church’ of trading when it comes to trading with Martingale.

So… I have make a couple of losses. It hurts… it’s painful but in a sadistic manner, I feel that it is fun. Like a stunt man whose stunt went wrong, hurt himself then heal himself and then get back into the game.

It’s like a drug… I just can’t get this off my mind.

So in order for me to have fun but also to try and make money out of it… I of course have to split my style into two account. One is for fun and absolutely have nothing to do with trading while the other accounts will be for serious trading.

My FXOpen was my fun account…. while my other Alpari and GoMarket will be for some ‘Don’t screw around’ account. So far Lovely Megan has been holding on very strong. Almost two years now and it seems to be holding up. It has not made me rich yet, but it has not yet to make me poor. YET… to make me poor.

Pipstrider and FX-Pitbull where to only other two Martingale EA that I toyed with and both were a failure. And why is that?

Because I never followed my lesson. And one of the easiest lesson which I never applied was to backtest those motherfu(king EA…

That was the differences between Lovely Megan and Lovely Cheryl.

Following this… I shall once again… backtest all Martingale EA because this strategy has worked with Cyborg… why can’t this work with other EA. All I need to do is work a bit harder with backtesting.

Martingale… here I come again…

This goes against every trading Mantra in the book… and this is what I call ‘Rebel without a Cause!’

 

 

Forex EA 101 – The Start

Filed Under (Journal) by Casey on 24-06-2011

Hey Forex… Miss me?

I have been healing a bit after the past month since I got clobbering from you. I took some time out from both trading forex ea and blogging to review and reflect. I have also been dabbling with manual trading and it was fun. However, my daily commitment does not allow me the liberty to trade manually. Over the past few weeks while healing I have been doing a lot of reading and relearning the ins and outs of trading in general.

In my last post, I mention that automatic trading and manual trading are two different breed of style. One applies logic into the market while the other apply judgement.

Today I do not want to debate about both these styles. I want to concentrate of automatic trading or forex ea because that is what I still believe that there could be a balance to meet between logic and judgement without having to sacrifice my lifestyle.

So I started reviewing my own strategy as to how I should go about looking starting to get my self back on track with forex ea and see if my personal history or experiences can teach me any lesson.

Lesson 1 – Don’t overload

I realize now that there is no point dumping gazillion EA that ‘looks good’ on my account. Whether demo or live. It’s just too difficult to handle. I think 5 different types of EA should be the maximum that I should use either in different account or within the same account

Lesson 2 – Look at what Brit has to say.

Brit from http://eareview.net/ knows what he is talking about. Read what he has to say. His post is very detail and technical. This is so far the only blog that I have come across that breaks it down to you.

If he is talking about one particular EA, then it’s probably worth checking it out. He has done most of the work… and this type of review takes time and effort. For him to waste his time reviewing on ‘stupid’ EA is just stupid. And I do not think he is.

So if he is looking at it. I should also spend my time looking at it.

Lesson 3 – Be cynical and verify every information.

A lot of forums and review page have one thing in common. Too much information. I should not take these information at face value. All information needs to be verified especially when big numbers are thrown at you.

Most review sites will show you big percentage profits… big figures here and there. So on and so forth.

If it is not verified by myfxbook… Forget it.

Lesson 4 – Consider only Live account

There are many EA developer that will not put their money where their mouth is. If they don’t put it live… Screw it.

And to add a more stringent criteria. If the EA is not live on either Alpari, IBFX, GoMarket or big reputable broker… Screw it too.

Lesson 5 – Do ones own backtesting

Sure…. Brit has done all the nice simulation and 99% backtesting. If I were to take into consideration lesson 3, then I myself needs to verify his information. After all, he is affiliate with all of the EA he review. I mean I don’t fault him for doing that. I would too…

I just want to satisfy my confidences.

Lesson 6 – Remember lesson 1 to 5

One thing about being human is that we at times get carried away with excitement. Reviewing my post I realize how I can at times be so caught up with the moment that I forget what I have learned.

So having to reset my whole forex ea search I believe this 6 new lessons will be good enough go get myself back on track with this next half of 2011.

I’m coming home
I’m coming home
Tell Forex that I’m coming home
Let the rain wash away all the pain of yesterday
I know my kingdom awaits and they’ve forgiven my mistakes
I’m coming home, I’m coming home
Tell Forex that I’m coming home

Hard Reset

Filed Under (Journal) by Casey on 15-06-2011

Forex EA is a great technology and about one or two years ago, there was a debate going on as to whether to trade automatically or to trade manually.

And there was a equal point to both side divide.

I have never join the debate. I just love forex ea because I am just plain lazy… with the capital L. I love forex and I love technology. And as they say you can never be lazy with love.

Ok… there is no ‘they’. I believe that one can never be lazy with love.

And yes… forex ea has made me lazy. Has made me take for granted what forex ea is actually all about. Forex trading is a journey and a tough one where it pits you mental strength and ones resolve to succeed in the forex market.

I thought forex ea is the key to all of this… Very naive and very ignorant indeed.

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Silent of the Lost Lamb

Filed Under (Journal) by Casey on 03-06-2011

Good day all…

Things has not been looking that great for me these past few months. Initially in March… It was a normal pinch. Then in April the breakup and finally in May… The healing process.

My rabbit year does not seem to be hopping for me eh?

Well… this is the cycle I guess. At the beginning of May, I was kind of lost. Never have I felt so lost when it comes to forex trading before. Lost as in not sure what next.

Month after month I have been trying to make auto trading work. But it seems that month after month… the cycle returns.

I think this is a cycle every forex trader goes through. Or for that matter every market trader.

When things are looking good, we get elated. Then when things are looking back, we get stumped. In between there will be a period of celebration and a period of hurt.

Well, if not every trader then it is me who seems to be experiencing this cycle.

Last month was the hurting period. And probably this month is the healing period. Hopefully next month is the ‘screw you forex here I come again’ period…

Blogging is probably the best way to get me on track again.