Perhaps a system like this might be a waste of time for many. It would be nice if one never had to bother with it. I use it for the psycholigical aspect, since this has always been my weakness. Even reasonable losses on account balance have always been daunting to me. This way, I keep focused on the profit of each pair rather than what the account balance is doing. Kind of gives me a little faith.esquire wrote:I did some more calculations and thought experiments, and the conclusion about all lot size ideas is pretty simple:
It works as long as your system is any good
If your system makes profit, and you add a recovery system like this, you will make more money (assumed that you won't trade extremly big lot sizes). It's simply because you trade bigger lot sizes, multiplied with an average win = more money.
It's rather rediculous to put efford into developing things like this. This is assuming you should look at trades as a bundle but you shouldn't (well maybe for psychology but not for the math side). All trades are indepentent and that's the way they should be threated. You should only increase the lot size if you reduce the risk or - for whatever reason - believe there is a bigger probability of winning.
This has worked very well for me.
Not quite sure what you mean by "bundle". The way I use this for manual trading, each pair and each trade is traded individually. I keep track on a spreadsheet of all the pairs I trade. Each trading session I sit down for, I print out the spreadsheet to remind me of which pairs are in the system, and for what step in the system is done next. I often have some pairs that aren't in the sytem very often. Another pair may get a lot of signals in any given week, and my go through the system in a few days with only a few trades on it. Another pair might not have a signal for a long time, and it my be weeks before enough signals go through to finish that pair.
I also try to let profits run for max pips. But I keep stops pretty hard. The only time I close all open trades is when the floating profit is too good to be true, and I close before I can fcuk it up. Does'nt happen to me very often.
This is really a matter of record keeping. I am currently trading the marauder system over on activeboard, and have expanded my spreadsheet to about 20 or so pairs. This may prove too daunting and I might have to pare it down.
As for with an EA, I envision a simple linear approach with the EA attached to individual pairs via magic # , and the recovery being used as needed with each pair. The EA should only concern itself with recovering the individual pair to which it is attached.
I suggest TRYING IT manually with your favorite system. Pick a pair, trade it for pennies, and keep track with pencil a paper. You may find it is a pretty stress free addition to your system. Then again, you may find it unnecessary.
Yours, Shake
