Automatic Loss Recovery System (ALR) - read this first

Post by **Dewey McG** » Fri Jun 20, 2014 10:02 am

SpiderX » Thu Jun 19, 2014 10:44 pm wrote:
I could code a play EA to make sure the rules really work.
But the rules/logic/ calculations need to be clear first.
Maybe we could do a simple EA: Price above previous weekly close and above previous monthly close: Buy and vice-versa on Sell.
Tp: 150 ? SL: 50 ?

Cheers

You could do that but make it very simple to start. Just use 50/150 for now.

I want to work on formulas so you can generate all the new numbers you need when you change either the SL or TP or both. For now let's keep it at 3:1

Also--use Gary's numbers for now. They actually work a little better than mine in that the exposure is slightly less.

Post by **Dewey McG** » Fri Jun 20, 2014 10:23 pm

OK folks, this is starting to get exciting. Attached you will find an ALR calculator to play with. Just use the boxes in yellow and leave the rest alone for now.

Gary is better at EXCEL than me, so I wasn't sure how to alter his table so the columns would change if you changed PT and SL (it's actually not an SL--it is the point where you would turn on ALR)

Start by trying lower win rates. Even at a 25% win rate you have a positive expectancy. Now imagine using a strategy that in the past would win 70% of the time but the losses would wipe out your profits. With ALR you would make a healthy profit instead.

Before we ask any programmers to spend a lot of time with this as it may be rather complicated to code, can someone who is good at math check my numbers. I am fairly sure I got all the calculations right but a few sets of eyes doing a double check would be appreciated.

Once we all feel good about the numbers I will update post 1 and we will move forward.

Post by **Dewey McG** » Sat Jun 21, 2014 1:42 pm

I added another feature. Depending on the size of your account, you will want to adjust the lot sizes based on whatever risk you are willing to accept for the times you do hit them.

There are 2 more tabs. One is so you can do this for a maximum of 10 turns. The other is if you want to sue 15. The more turns you sue, the chances of ever hitting a SL become even less likely, but your win per series of trades goes down.

Edited--If you downloaded the ALR Calculator already please do so again. I did make one mistake--the results on the recovery trades are even better

Edited again with fix that Wealthmaster caught

Post by **Dewey McG** » Sat Jun 21, 2014 3:34 pm

Post 1 is updated

Post by **wealthmaster** » Sat Jun 21, 2014 5:49 pm

Dewey McG » Sat Jun 21, 2014 3:34 pm wrote:Post 1 is updated

your Sl value at the bottom in the red do not make sense to me.. What is this exactly?

Post by **Dewey McG** » Sat Jun 21, 2014 6:11 pm

wealthmaster » Sat Jun 21, 2014 1:49 pm wrote:
your Sl value at the bottom in the red do not make sense to me.. What is this exactly?

Did you mean where I have SL-10 and Sl-15? I just wanted to show again what the stop loss would be at 10 turns or at 15.

For instance, if you have tp at 150, SL at 50(really this is where the ALR turns on and not an SL), then you will see the SL at 10 turns if you do not add any more positions is -135.

Post by **wealthmaster** » Sat Jun 21, 2014 7:01 pm

Dewey McG » Sat Jun 21, 2014 6:11 pm wrote:
wealthmaster » Sat Jun 21, 2014 1:49 pm wrote:
your Sl value at the bottom in the red do not make sense to me.. What is this exactly?
Did you mean where I have SL-10 and Sl-15? I just wanted to show again what the stop loss would be at 10 turns or at 15.

For instance, if you have tp at 150, SL at 50(really this is where the ALR turns on and not an SL), then you will see the SL at 10 turns if you do not add any more positions is -135.

The accurate calculation would be if you don't add at 2nd turn

(0.30x10)*150-(0.41x10)*200 =-$370

You are not taking an account of pip value of the position. for example 0.30 is 3 mini lots and its pip value is 3.

Post by **wealthmaster** » Sat Jun 21, 2014 7:10 pm

Dewey McG » Sat Jun 21, 2014 6:11 pm wrote:
wealthmaster » Sat Jun 21, 2014 1:49 pm wrote:
your Sl value at the bottom in the red do not make sense to me.. What is this exactly?
Did you mean where I have SL-10 and Sl-15? I just wanted to show again what the stop loss would be at 10 turns or at 15.

For instance, if you have tp at 150, SL at 50(really this is where the ALR turns on and not an SL), then you will see the SL at 10 turns if you do not add any more positions is -135.

At the 10th turn you would be down $4000 instead of 400. your initial risk was $400.

Post by **Dewey McG** » Sat Jun 21, 2014 7:29 pm

wealthmaster » Sat Jun 21, 2014 3:01 pm wrote:
The accurate calculation would be if you don't add at 2nd turn

(0.30x10)*150-(0.41x10)*200 =-$370

You are not taking an account of pip value of the position. for example 0.30 is 3 mini lots and its pip value is 3.

Good catch. I am fixing it now. I am glad another set of eyes is double checking all the numbers

Post by **Dewey McG** » Sat Jun 21, 2014 7:50 pm

Update in post 1 with ALR fixed to show correct SL's.