Courtesy of Kevin, V 2j is in post 1. What astonished me is that he appears not to need a bath before doing useful thinking.
Hang on to your socks folks, 'cos this is going to blow them off. I am going to let him explain in his own words, so here is the pm he sent me. Take your time reading it:
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"Hi Steve,
What amazing results we had with HGB'nG this week.
There's no doubt that HGB'nG has the potential to be one of the most profitable EA's.
Still, after this week's events, I noticed a dangerous downside to the way we are running HGB'nG at the moment. I'll explain why, and trust me, I got a potential solution to it (already coded).
After Thursday's events, I was very euphoric as I saw that my balance was growing rapidly and my equity was following closely with low drawdown (< 10%). But on Friday, as my balance kept growing, my equity fell to a drawdown of 25%, eating on my all time HGB'nG's profits. I investigated why this was happening, and found out that most of that loss is caused by my 10 open GJ sell trades. As high semafor signals were appearing, my buy trades were being closed out, new sell stop trades were placed, some of them filled, then price headed north again, this cycle repeated, creating a ever growing drawdown.
This is not dramatic, as we are intelligent beings and so I started to think of a way to get out of that big drawdown. What I noticed is, that although semafor signals are very good areas to close our trades out, they almost never (in real-time, not in hindsight) act as good reversal signals. You already know it, but plotting the Quantum on a chart shows us that these signals keep appearing in a downtrend as well as in a uptrend :
uptrend.PNG
downtrend.PNG
So my rhetorical question is : Why the heck do we want to be sellers in an uptrend and buyers in a downtrend? If we know that high semafor signals are more an indication of an uptrend than a downtrend, then placing sell orders on that signals, is just going to act as a silent (but fast) death on our equity. If this GJ uptrend continues with the same momentum as has been since wednesday, then if nothing changes in the way I am trading HGB'nG, my real account will be wiped out by end of next week.
Now comes my suggestion.
Why don't we add an option, that when a high semafor signal appears, makes HGB'nG simply close out our buy trades that are in profit and sends a new grid of buy stop orders and a new grid of buy
limit orders? This would allow us to catch the retrace if there is one, profit from the uptrend, and if the retrace is deep enough and we catch enough buy limit orders, it possibly would close out our whole position when "HedgeProfitPips/Cash" is attained, ending the cycle.
If it still goes wrong, and the retrace is in reality a reversal (so the high semafor was really a 3 level high semafor which won't repaint), then we end up with a position that has to be closed out manually, but hopefully with a global profit. Looking back on many charts, real semafor signals are very rare compared to quantum signals. I strongly believe that this strategy would work better then adding to our losing position and accumulating drawdown, but whoever wants can turn the limit order option off. We can also later as we see how the EA performs on this, work out a good way to handle those buy orders that happen to open on the last semafor signal.
Steve, what do you think of this? As this text is getting pretty long, I'll write another PM with the changes I've made on the code.
Cheers,
Kevin"
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Stunning, or what? You will find the relevant inputs in the "3 semafor inputs" section:
- ReplaceWinnersByLimitGrid tells HGB to behave as described.
- DeleteAndReplaceLosersGrid tells HGB to behave as it did previously.
Default inputs are effectively my set file.
This does move us a step away from having the holy grail of an ea that can be left alone, but anyone here
seriously thinks that Kevin will not come up with ideas to improve the bot still more once the markets reopen and we start trading again.
Fantastic stuff Kevin. Absolutely brain-blowing.
I bloody hate weekends.
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Looks promising that we will get out of the DD
