The strategy "profitable pipser"
In our first summer issue, we are going to look at a trading strategy, the profitability of which is based on the secrets of money management. Let's say it will be one of the varieties of popular Expert Advisors "According to Martingale.". For those readers who are not familiar with this concept, I will say that the main purpose of such strategies is not to correctly assess the nature of the market and make a profit on the trend movements or pullbacks, etc., but to make money on mathematical calculations.
Замечу также, что результаты таких экспертов выглядят просто ошеломляющими. Однако нельзя поддаваться соблазнам — для действительно прибыльной работы с такими МТС нужен депозит, способный выдержать серьезные просадки, ведь фактически мы занимаемся тем, что We're taking a lossThe balance graphs are straightforward, and only profitable trades are closed (hence the straightforward balance graphs).
Узнать такие эксперты вы можете легко — по резким скачкам линии Equity (зеленая линия на результатах тестера). Именно эти просадки вы и будете наблюдать в своем терминале. Поэтому не обольщайтесь — обмануть рынок нельзя, можно просто обмануться!
To dispel all questions at once, we answer: we are considering this strategy to show our readers once again (!) how such "games with Martingale".
Author's Rules of Strategy
So, consider The "Profitable Pipser" strategy The participant of the forum avtokapric suggested it to us. I should say at once that it is very problematic to trade manually using this tactics, so his request for an Expert Advisor was reasonable. I have encountered a lot of similar Grails in my practice (as the author stated later). And there is no need to lie, I had once burned myself with some similar algorithm, so I decided to prove to the author and my readers that such a game is not worth the candle.
Rules for making transactions:
1. Entering the market, we open two counter orders at the current price with lot X.
2. N points up and down from the current price, open two more pairs of similar orders with lot X.
The author suggests placing 10 of these pending pairs at a time, but I think there is no need for that, because they will trigger sequentially.
4. As orders are executed, the number of orders should remain unchanged, that is, when one triggers, a new one appears immediately, so that the "pack" of orders remains always complete.
5. Level TakeProfit is naturally set at N points, that is, at the level of the nearest new order.
That's basically it. It is supposed to close trades only on profit, accumulative loss, on the other hand should be recouped by the resulting profits (trades are directed in different directions), as well as their exit to the pluses after the reversal of the trend.
For ease of implementation and comfort of estimation we will write the Expert Advisor in two versions - separately for buying and for selling. Testing will be conducted on the 1-minute chart - there is no sense in dealing with other timeframes, so the time interval will only be a monthly one due to the lack of adequate quotes histories at the brokerage companies.
I think I've told you everything, so let's move on to the most interesting part - the result.
Testing advisor
Let me remind you that we will have two Buy and Sell Expert Advisors. I did not change anything in the rules, so let's look at the results on the EURUSD 1-minute chart from 2010.05.01 to 2010.06.05. Figure 2 shows the results of the Sell Expert Advisor.
Well, the blue line results are pleasantly shocking, but the green line brings us back to reality. If anyone doesn't understand what they mean, I'll tell you. While you are earning an average of $200 every day (about 20 trades are made daily, let them be 10 pips), your account is growing minus from unclosed negative trades (the green line). Notice the minus is growing at a more active rate. The probability that your account will not end up in profit and will close on Margin Call is high - profits simply do not have time to overtake losses.
This picture you can see in Figure 3, which shows the same Expert Advisor, only working on a buy. This is exactly how 99% cases end up in Martingale.
As we can see, the result is quite predictable. The strong downtrend, only a month long, has given a good increase in "Sell" positions and minus for the "Buy" Expert Advisor. As a result of such trading, we have the result of minus $1000.
This time. optimization we will not carry out, as it is a mathematically calculated strategy. Changing the characteristic N or X will not give significant changes.
Conclusions
This strategy can only be recommended to people with nerves of steel and capital of an oligarch. Not every trader is able to withstand severe drawdowns in the market, even if the balance will grow. Note that the tester does not consider the DC commission for withholding of negative deals. Our conclusion - it is suitable for those who are professionally engaged in money management strategies. If you do not know how to do it correctly, look again at figure 3.
Download the Sell expert | Download Buy Expert | Discuss on forum