kotsh » Today, 12:46 wrote:for testing purpose, we can just use a random entry criteria, there is no need to find profitable trading strategies and spending time to coding them.

the purpose of this thread is to collect ideas on how to come up with an ALR EA which then each one of us can apply to his own trading strategy and recover trades that went against us..

i think we are drifting away from this initial goal.. just a thought..

alfonsomg » Wed Jul 02, 2014 9:57 am wrote:

madpipa » Tue Jul 01, 2014 7:30 am wrote:The lot sizes would be:
1 = 0.10
2 = 0.14
3 = 0.09
4 = 0.12
5 = 0.16
6 = 0.21
7 = 0.28
8 = 0.37
9 = 0.49
10 = 0.66

So your net exposure is 0.38 lots.

I don't know if this sounds stupid (please forgive me if it was said before) but what if after you have several turns, with several trades in each direction, the next time you have a turn instead of opening a new trade and piling up in that direction you just close the corresponding amount of lots in the opposite direction?

Let's keep it simple imagining there are no spreads. In that case once we hit the SL point for another turn we would be closing some lots from the direction we are leaving so that the total lot size is balanced in favor of the new turn direction. Once we run out of lots to close after several turns we add new lots on each turn.

The key would be to play with the spread costs, but with the logic properly done we would keep the total accumulated lot size at a sensible level. At least your will be less likely to run out of funds to open a new trade.

I don't know, just brain storming.

wealthmaster wrote:

alfonsomg » Wed Jul 02, 2014 9:57 am wrote:

madpipa » Tue Jul 01, 2014 7:30 am wrote:The lot sizes would be:
1 = 0.10
2 = 0.14
3 = 0.09
4 = 0.12
5 = 0.16
6 = 0.21
7 = 0.28
8 = 0.37
9 = 0.49
10 = 0.66

So your net exposure is 0.38 lots.

I don't know if this sounds stupid (please forgive me if it was said before) but what if after you have several turns, with several trades in each direction, the next time you have a turn instead of opening a new trade and piling up in that direction you just close the corresponding amount of lots in the opposite direction?

Let's keep it simple imagining there are no spreads. In that case once we hit the SL point for another turn we would be closing some lots from the direction we are leaving so that the total lot size is balanced in favor of the new turn direction. Once we run out of lots to close after several turns we add new lots on each turn.

The key would be to play with the spread costs, but with the logic properly done we would keep the total accumulated lot size at a sensible level. At least your will be less likely to run out of funds to open a new trade.

I don't know, just brain storming.

Looks like a very good idea.. Can anybody come up with spreadsheet for that?

kotsh » Wed Jul 02, 2014 2:34 pm wrote:

wealthmaster wrote:

alfonsomg » Wed Jul 02, 2014 9:57 am wrote:

madpipa » Tue Jul 01, 2014 7:30 am wrote:The lot sizes would be:
1 = 0.10
2 = 0.14
3 = 0.09
4 = 0.12
5 = 0.16
6 = 0.21
7 = 0.28
8 = 0.37
9 = 0.49
10 = 0.66

So your net exposure is 0.38 lots.

I don't know if this sounds stupid (please forgive me if it was said before) but what if after you have several turns, with several trades in each direction, the next time you have a turn instead of opening a new trade and piling up in that direction you just close the corresponding amount of lots in the opposite direction?

Let's keep it simple imagining there are no spreads. In that case once we hit the SL point for another turn we would be closing some lots from the direction we are leaving so that the total lot size is balanced in favor of the new turn direction. Once we run out of lots to close after several turns we add new lots on each turn.

The key would be to play with the spread costs, but with the logic properly done we would keep the total accumulated lot size at a sensible level. At least your will be less likely to run out of funds to open a new trade.

I don't know, just brain storming.

Looks like a very good idea.. Can anybody come up with spreadsheet for that?

The idea sounds good, BUT if you missed one point. When the trades are within the ALR zone both, the trades in the original trade direction and her hedge trades are in negative, so by doing any partial closes you are actually taking a loss which is against the whole idea of ALR.

For exmaple you have your original position open @ 0.1 lot and 1 hedge trade @1.4 lot, after hedge is triggered the trade goes again in the original direction through the ALR zone and back to first original trade entry level. Now you want to close part of the hedge position so the position in the original trade is bigger, which means you will close for example 0.7 lots of the hedge trade. Now if price doesn't hit TP and goes back into ALR zone you would have to open a second hedge trade + the size of the trade you partially closed in order to hit BE when the price reaches TP against the original direction.

So in the end, it will just make it much more complicated.

Again, in my opinion, if you use proper TP targets on the original and on the hedge trade, (i.e. at support and resistance levels) then I cannot imagine that your trade is not recovered with maximum 3-4 turns.

kotsh » Wed Jul 02, 2014 8:34 am wrote:The idea sounds good, BUT if you missed one point. When the trades are within the ALR zone both, the trades in the original trade direction and her hedge trades are in negative, so by doing any partial closes you are actually taking a loss which is against the whole idea of ALR.

garyfritz wrote:

kotsh » Wed Jul 02, 2014 8:34 am wrote:The idea sounds good, BUT if you missed one point. When the trades are within the ALR zone both, the trades in the original trade direction and her hedge trades are in negative, so by doing any partial closes you are actually taking a loss which is against the whole idea of ALR.

D'oh!!

This comment made me realize -- I implemented my spreadsheet wrong. (You guys were supposed to check my work!! )

At each turn, I charged a loss against the ALR. Trade goes against you, take an SL loss. ALR reverses, take another SL loss, etc.

BUT as kotsh reminded me, you don't take the loss and close the trade. You keep each trade OPEN. So for example when your original trade goes against you and hits the ALR reversal, then that 1st turn ALR position goes against you and you open the 2nd turn, you don't have 2 SL's of loss (original trade and 1st turn). The 1st turn position is at the SL, BUT the original trade is back at breakeven! AND when you eventually hit the TP, you still have all those positions open.

So now I'm not sure I understand this beast at all. Please check my logic on this. Assuming 60 pip TP and 20 pip ALR reversal zone:

0. Original trade goes long at 100.00. Shooting for a TP at 100.60, ALR reversal at 99.80.
1. Market reverses, you enter #1 ALR position, a short at 99.80. Open equity is -20 pips.
2. Market reverses, you enter #2 ALR position, long at #0 entry. #0 and #2 are at BE, #1 is at -20 pips.
3. Market reverses, enter #3, short at 99.80. #0 and #2 are at -20, #1 and #3 are at BE.
4. Market continues down, hits #3's TP at 99.80 - 60 pips = 99.20. #1 and #3 are at +60, #0 and #2 are at -80. Position sizing determines your profit. If #1+#3 sizes are 80/60*(#0+#2 sizes) or greater, you make a profit.

Do I have that right now? If so, I'll come up with a corrected spreadsheet.

abbey » Thu Jul 03, 2014 6:12 pm wrote:Hi, new to this site. I have traded fx for years and currently trade emin Gold futures. My trader friend bought ALR against my advise. I think it is just a matter of math. There are some very thoughful post on this site. Too me ALR just delays the same outcome. Is it not all the same in the end? Would not the spread create a loss after the many turns? Thanks