English is my second language so bear with me if I get long-winded.
I want to add something Steve has in every threads first post
"Trading this robot without understanding its underlying trading strategies guarantees traders will lose their money."
Thanks for all those that contributed so far-- by putting this strategy on the forum you forced me to exercise the brain cells. Thinking is hard--I have limited capacity and energy for it.
The original strategy/idea is underpinned by the fact that I can never judge with any certainty which way price will go. To me the market is like the weather--a weatherman will forecast what the weather is going to look like tomorrow with far more accuracy than me but there are so many factors that he has to assess that it can never be an exact science--only a fairly well-educated guess. The only way I can be 100% correct is to say "tomorrow there will be weather". So come rain, sunshine, wind etc. I will always be correct with that statement. (Bear with me)
It's the same with market price. I have no certainty where it will go--just that it will go up, down or sideways and will definitely do all 3 continuously. My aim is to be correct with my trade no matter what direction it goes. Price action is 100% in charge--nothing else. I can only react to it as intelligently as possible while reducing the risk as much as possible.
There are 2 strategies now. All numbers (pips) mentioned below depend on the currency pair and your profit target and are adjustable on the EA. Yes--even though I have given all the generic settings I use, you have to find what works for you by testing/demoing as much as possible. Your trading "sweet spot" is your responsibility. (Ok-Enough lecturing already)
To recap.
The first strategy is the original Fx Pooler. EA
This is a retracement strategy. A sell/buy limit is set above the 23h00 candle 1 hr. before the Asian session. For e.g. 30 pips away from 23h00 candle (open). Tp is 60% of 30 pips = 18 pips. Price fills the pending trade, retraces 12 pips and takes profit (18 pips). If price does not retrace another trade is opened a further 30 pips away at a higher lot size and TP now moves so that the sum of the 2 trades = your profit target (18 pips). So all trades have the same TP. There are no stop losses. The weakness with this system is that you can open up to 10 levels/trades if price takes off without retracing enough and every trade opens with a higher lot size so as to ensure TP keeps moving to stay near to price. This causes serious drawdown while chasing your original profit target of 18 pips. This is why pending trades are closed before European session opens to avoid volatility.
The solution is to have some hedging to counteract the draw down when price trends. I also looked for something to solve the problem that most grid EA's have with whip sawing when price breaks the top, turns and breaks the bottom of the grid and then hits both Stop Losses.
Here is what I think will work. Strategy 2 (which is laid on top of Strategy 1). I'll describe what happens with a short trade--obviously vice-versa when price goes long.
With every Buy Limit trade (at 30 pips) you also open a Sell Stop at .01 lots. Place Stop Loss at the TP of BL trade (18pips). If price fills first level and retraces then you break even. If price doesn't retrace and fills level 2 (30 pips lower) then another BL at .02 lots opens (as per strategy 1--Fx Pooler) and another (2nd) Sell Stop at .01 (do not increase lot sizes with Sell Orders). Move sell trade stop loss with Buy trade TP. Then simultaneously trail Sell trades with Chandelier exit set at 2 ATR. Move the sell trade stop loss to whatever is nearer price between the buy TP or trailing chandelier stop.
See example from opening of New York session yesterday. Now volatility isn't a problem anymore--it's an advantage. What I described above reduces draw down by half and increases profitability by 600%.
I've attached the EurUsd charts as the trades progressed. I've also attached a spread sheet which contains these trades. Everything I described above happened with this trade. I had to manually put the Sell Stops in as the EA only opens Buy Limits (as per Fx Pooler EA).
I decreased the draw down by 54% and increased the profit from 18 pips to 55.4 pips.
1st chart. Black line is pivot line (PL). BL and SS trades set 30 pips below the PL. Remember with each trade there's a buy and sell going on even if only the "sell" text shows at left of screen. Price filled 3 levels--I manually moved SL to TP of Strategy 1. The chandelier trailing exit (red line) just happened to be on the same spot. There are 3 sells trades and 3 buy trades open
2nd chart. Price hits the chandelier and the 3 sells close.
3rd chart. A short while later 3 buys hit TP see account history below chart.
If I am correct you can never have a loss with this strategy--only break even or profit. Sounds impossible !! I hate making such bold statements because I sound like a snake-oil salesman
If someone can adjust this EA to do the above I'll really appreciate it. I haven't tested the modified version yet as it's still a work in progress--so all trades above still with Fx Pooler v 2.1
