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Automatic Loss Recovery System (ALR) - read this first
https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=3682		 Page 18 of 40
Author:  abbey [ Fri Jul 04, 2014 2:10 pm ]
Post subject:  Automatic Loss Recovery System (ALR)
OK, I'm not a Math guy, but I thought every mathematical event was independent such as in a coin toss.

The odds are what they are, not improving to 57 percent. Please explain the math. I know that the ALR is not a martindale but it operates in the same way. ALR just moderates the downside of the progression.

How does the ALR overcome the cost of trading? I do want to understand the ALR strategy. Like I said my friend bought it, I have not. Has anyone else that is reading this thread bought ALR?

Thanks,
Abbey
Author:  Dewey McG [ Fri Jul 04, 2014 2:22 pm ]
Post subject:  Automatic Loss Recovery System (ALR)
abbey » Fri Jul 04, 2014 10:10 am wrote: OK, I'm not a Math guy, but I thought every mathematical event was independent such as in a coin toss.

The odds are what they are, not improving to 57 percent. Please explain the math. I know that the ALR is not a martindale but it operates in the same way. ALR just moderates the downside of the progression.
If after the last trade we were looking at the same number of pips in either direction, then the odds would be 50% for the last trade like your coin toss. However, on the example I gave using an ALR zone of 50 pips and at TP of 150 pips we need 150 pips to “win” and -200 pips to “lose” so it is weighted slightly in favor of hitting TP. This would be the same as long as your TP is 3 times your ALR zone.
abbey » Fri Jul 04, 2014 10:10 am wrote:
How does the ALR overcome the cost of trading?
Look at the first tab (formulas) of the ALR Calculator. You can enter in the spread and a small profit amount to cover the costs of trading
abbey » Fri Jul 04, 2014 10:10 am wrote:
I do want to understand the ALR strategy. Like I said my friend bought it, I have not. Has anyone else that is reading this thread bought ALR?

Thanks,
Abbey
Try watching the videos to get a better understanding
Author:  garyfritz [ Fri Jul 04, 2014 8:17 pm ]
Post subject:  Automatic Loss Recovery System (ALR)
[quote="[url=http://www.stevehopwo
abbey » Thu Jul 03, 2014 11:12 am wrote: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?
That's been my contention all along -- same in the LONG run, though in the short run you might have a long series of wins, or you might hit a monster loss. But in the long run the ALR just delays the losses.

But I'm not 100% sure I'm right on that.
Dewey McG » Fri Jul 04, 2014 7:48 am wrote:com/phpBB3/viewtopic.php?p=95511#p95511]Dewey McG » Fri Jul 04, 2014 7:48 am[/url]"]One error that a few people are making is what happens after the last turn. We do NOT close all trades at the last turn. at this point we wait. One of 2 things will happen. If the original trade was a buy then either it will go up 150 pips (or whatever the TP amount is) and we make a small profit or we go down 200 pips from the original price, which is the TP for the sell trades (150 pips plus 50 pips ALR zone). ... So the last trade has a 57.14% chance of success not 25%. This only applies to the last turn.
Hm. Very interesting point. That would indeed change the last-turn probabilities, and it's the last-turn losses that really kill things, the way I was looking at it.
Author:  Dewey McG [ Fri Jul 04, 2014 9:29 pm ]
Post subject:  Automatic Loss Recovery System (ALR)
garyfritz » Fri Jul 04, 2014 4:17 pm wrote:[quote="[url=http://www.stevehopwo
abbey » Thu Jul 03, 2014 11:12 am wrote: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?
That's been my contention all along -- same in the LONG run, though in the short run you might have a long series of wins, or you might hit a monster loss. But in the long run the ALR just delays the losses.

But I'm not 100% sure I'm right on that.
Dewey McG » Fri Jul 04, 2014 7:48 am wrote:com/phpBB3/viewtopic.php?p=95511#p95511]Dewey McG » Fri Jul 04, 2014 7:48 am[/url]"]One error that a few people are making is what happens after the last turn. We do NOT close all trades at the last turn. at this point we wait. One of 2 things will happen. If the original trade was a buy then either it will go up 150 pips (or whatever the TP amount is) and we make a small profit or we go down 200 pips from the original price, which is the TP for the sell trades (150 pips plus 50 pips ALR zone). ... So the last trade has a 57.14% chance of success not 25%. This only applies to the last turn.
Hm. Very interesting point. That would indeed change the last-turn probabilities, and it's the last-turn losses that really kill things, the way I was looking at it.
To your first point-You may well be right about whether this is viable in the long term or not, but I think we can all agree it is well worth testing

To the second I realized the last trade changes things for the better when calculating probabilities. I also realized another point that should have hit me before: when I calculated first trade win rates I based that on my own trading which I figured would be easy since I have been able to maintain 85% at a good profit factor, but the reality is in order to do that, I have to allow for a stop loss which is bigger than my TP. I rarely hit it but if I use ALR instead then many of my trades would have gone into ALR mode rather than hit TP, so the win rate would be less and I cannot say what it would have been without having an EA to test.

I did get an EA to run some tests with. It has some bugs so it is not ready to share yet, but I can share some interesting but also annoying observations:

I can play with the settings on any pair so that there are no stop losses at all on my back tests. Oh the wonders of 20/20 hindsight! However, in the real world we don't know what the best settings going forward will be and they won't always be the same as they were in the past. Here is what I am thinking we are going to need--either a) a way of determining tp/alr zone based on ATR of each pair and/or b) do some walk forward analysis with any EA's so we aren't curve fitting. That is extremely time consuming in Empty4. It is much faster with Zorro, but the coding part is well beyond my skill level.
Author:  abbey [ Sat Jul 05, 2014 7:12 pm ]
Post subject:  Automatic Loss Recovery System (ALR)
If a trader has a sound strategy, it could be high win rate but large stop loss or lower win rate and smaller stop loss with with a higher rate of loss. Either way the math equals out the same. Or a martingake. How can the ALR make a mathematical difference? There are other progressions and none of them work. What does work is the ratio between wins and loss's. If a trader wins 75% of the time it is of no help if the 25% losses are greater than the amount won.

Is not ALR a shell game or simple delay of a final outcome? If the ALR really works why doe Dustin and his crew only give incomplete answers. Their response is mostly "it depends on the trader". If ALR works then it is worth far more than $2,000 and if it does not it is worth far less.

I would appreciate any comments on ALR. It is interesting that there is almost no current discussion of ALR on the web.

Thanks,
Abbey
Author:  wealthmaster [ Sat Jul 05, 2014 9:20 pm ]
Post subject:  Automatic Loss Recovery System (ALR)
abbey » Sat Jul 05, 2014 7:12 pm wrote:If a trader has a sound strategy, it could be high win rate but large stop loss or lower win rate and smaller stop loss with with a higher rate of loss. Either way the math equals out the same. Or a martingake. How can the ALR make a mathematical difference? There are other progressions and none of them work. What does work is the ratio between wins and loss's. If a trader wins 75% of the time it is of no help if the 25% losses are greater than the amount won.

Is not ALR a shell game or simple delay of a final outcome? If the ALR really works why doe Dustin and his crew only give incomplete answers. Their response is mostly "it depends on the trader". If ALR works then it is worth far more than $2,000 and if it does not it is worth far less.

I would appreciate any comments on ALR. It is interesting that there is almost no current discussion of ALR on the web.

Thanks,
Abbey

Abbey.. In my humble opinion most people loose in this market either of two reasons:
(i) May be they are new and don't know anything.
(II) second group of people knows alot and kind of confuse people and they doubt everything.


Kindly go through the spreadsheets, it is not about delaying losses. It is about how to manage a losing trade in a certain mathematical way that almost always recovers from a loss.

Is not ALR a shell game or simple delay of a final outcome? If the ALR really works why doe Dustin and his crew only give incomplete answers. Their response is mostly "it depends on the trader". If ALR works then it is worth far more than $2,000 and if it does not it is worth far less.

You know most of the working system are available on the forum for free? What Dustin did is, he packaged this mathematical concept into working EA. It is not about money..

I am making the exact copy of Dustin's EA. Would you buy from me for 97 USD?? lol.... Is this how you decide the quality of a product?
Author:  abbey [ Sat Jul 05, 2014 10:50 pm ]
Post subject:  Automatic Loss Recovery System (ALR)
"Kindly go through the spreadsheets, it is not about delaying losses. It is about how to manage a losing trade in a certain mathematical way that almost always recovers from a loss."

Yes of course your terms are far more percise than mine. Yes, I agree about the concept of management of a losing trade. You said that "almost always recovers from a loss". That is my point. Isn't the math still the same?

Ouch!!!! My questions were meant to seek understanding.

Thanks for the feedback,

Abbey
Author:  Dewey McG [ Sun Jul 06, 2014 12:16 am ]
Post subject:  Automatic Loss Recovery System (ALR)
abbey » Sat Jul 05, 2014 6:50 pm wrote:"Kindly go through the spreadsheets, it is not about delaying losses. It is about how to manage a losing trade in a certain mathematical way that almost always recovers from a loss."

Yes of course your terms are far more percise than mine. Yes, I agree about the concept of management of a losing trade. You said that "almost always recovers from a loss". That is my point. Isn't the math still the same?

Ouch!!!! My questions were meant to seek understanding.

Thanks for the feedback,

Abbey
Many of us are working hard to see if this is viable. There have been a lot of calculations involved to try to figure the probabilities. If you disagree with any of the formulas because of any errors in the logic you may have found, feel free to chime in as we do make mistakes. However please don’t just issue blanket assessments of other people’s work without having any understanding of what we are doing.

The best way to get more understanding would be to watch the videos, read the thread and play with the tools provided so it becomes clearer what we are trying to do. You will probably find most, if not all of your questions have been answered. Once you have done that we will be happy to answer specifics.
Author:  Dewey McG [ Tue Jul 08, 2014 12:48 am ]
Post subject:  Automatic Loss Recovery System (ALR)
Ok folks here is a toy to play with:

Both Madpipa and Spider have been working hard to make an EA with ALR. Spider’s version will be a shell so you can easily add other strategies to test. Madpipa’s is out first because I am still waiting to hear back from Spider before posting his:

DO NOT USE THIS ON A LIVE ACCOUNT

Right now we are all still testing to see if ALR is really viable. I have run some tests but will be very busy over the next few days so please back test it, play with it, stress it and see what works and doesn’t. Experiment on different pairs, times, tp/alr settings, number of turns etc. Try it on high volatility pairs and lower ones and share results. Let us know if you find any bugs. All I ask is you show respect for the people who put a lot of time into this so we could test this out.
Author:  AnotherBrian [ Tue Jul 08, 2014 1:32 am ]
Post subject:  Automatic Loss Recovery System (ALR)
I'm thinking I'll run it on a few pairs with horrible swaps as part of a stress test. I know that's not particular to ALR but it would be something to consider if using this as part of a medium to long term system. It would amplify the swaps I think, because swaps are not paid on our favour it. The negative swap is always a bigger number than the positive swap.
This is less an ALR thing than a trading system thing, right?
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