Capitalizing on Failed Trades - Idea

Discussion in 'Money Managment Strategies' started by TheForexGuy, Mar 9, 2015.

  1. TheForexGuy

    TheForexGuy Forex Mentor

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    1 R is the total risk for the trade. 0.5 is 1/2. So if I risk $100, 0.5R is $50
     
  2. fxpower31

    fxpower31 Forum Newbie

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    My questions was about..example chart where you set " Sell Limit's" Stop loss.. that is on 1:1 Level? Its looking far like 1.5 level. Thats why 0.5 R is result..?
     
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  3. TheForexGuy

    TheForexGuy Forex Mentor

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    Yes, if you read the post very carefully you will see I was trying to mitigate the losses of one trade by hedging with another, which at one point there would be two trades open and one of them would have to hit a 1:1 target. But this is the part where I screwed up because I didn't factor in when one trade gains $ the other trade loses more.

    To fix this you would have to remove yourself from the initial position,but you would run the risk of that second move also becoming a failed break.

    I am going to re-visit this and draft up another idea.
     
  4. fxpower31

    fxpower31 Forum Newbie

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    Thanks TFG.. Revisiting is good idae..as you always make things simple.. Waiting..
     
  5. bladerunner

    bladerunner Forum Newbie

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    Hi TFG, 2 points: the momentum trade (aka turtle type strategy) or the anti-move with failure of this (turtle soup) could be played from either side. i.e you could be watching for the turtle move or the failure of that as a trigger. I guess you could go with the turtle move, then flip to the other if you are wrong, but you would have to be very nimble. Have you tried testing this strategy on a pair on forex tester to see what it is like? With the hedging, I prefer the good old doubling down, martingale type strategy as long as I think there is a good chance of mean reversion.
     
  6. David Alfonsi

    David Alfonsi Forum Newbie

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    Hi TFG - I wrote an EA some times ago that goes on just opening random positions and managing them through this method.. it is a Martingale system though. The idea was to demonstrate that hedging works asyntotically (i.e. you need a lot of money but at the end it works!) How can I put a link here to my code? is on the mql5 forum - hope this could be interesting. the difference with your approach her is that rather than reducing the lots it opens more, so more risky!
     
  7. vasude

    vasude TFG Forum Junkie

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    eurauddaily.png hi

    an buy hasnt triggered ,instead of it opened either side. did anyone catched the move?
     
    #47 vasude, Aug 4, 2015
    Last edited: Aug 4, 2015
  8. erebus

    erebus TFG Forum Legend

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  9. TheForexGuy

    TheForexGuy Forex Mentor

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    The idea I had here was to create a hedging model that would recover losing trades without any more initial risk. But the problem is I over looked part of the calculation and the term "there is no free lunch" smacked me in the face.

    No matter how you do it, if you decide to hedge a trade - you maximum risk usually ends up twice of what you're initial risk was on the trade.

    I haven't done any real market testing, I just wrote out all the math formulas on paper and played it out with paper I stuck on my bed room wall. Some of my visitors said I've turned into 'one of those mad people'.
     
  10. TheForexGuy

    TheForexGuy Forex Mentor

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    Dave thanks for sharing, you should be able to post a link using the toolbar above.

    I know martingale can work, that's how all the guys on zulutrade manage their subscribers money :) I always like to think worse case scenario, so any good martingale system would need very well planned system for a martingale trade stack that isn't working - I mean the question is how far wrong do you have to be, and how many trades do you keep stacking in the opposite direction before you cut them off.

    This about martingale on the oil markets, you would have been so screwed there if you were a bull.

    But yeah, link your system - my mind is always open for new ideas.
     
  11. erebus

    erebus TFG Forum Legend

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    Well, how sane are they if they visit you in your bedroom?

    I should have a meme for that :eek:
     
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  12. Dirk Groenewald

    Dirk Groenewald Forum Newbie

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    Dale, I do not think this is a good idea. I think it is a brilliant idea. You can risk for example $100 and loose $100, but you can make your loss -$50, break even or even make money on your loss. You should actually do all your trades on this method. In the long run you can just win.

    When will you add this into your Trade Management panel? It is easy with the panel as is, but you must still manually move your stop loss.
     
  13. TheForexGuy

    TheForexGuy Forex Mentor

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    Hi Dirk, You can already do this with the trade panel.

    You need to use the straddle trading options on the panel.

     

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