LOCK THE MARTINGALE**

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giulio de meo
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Hello Guys, I thought about a new type of tecnic in order to survive big drawdowns.

The tecnic consist to lock the martingale. This means that when 30% of drawdown happens, the adviser Will open the totality of lots of martingale, but in reverse position. That means if for example i have 8 martingale positions on buy and the total of this positions = 4 lots , and 30% DD of the account occurs, the ea Will open a sell position until the overall is in breakeven and then close everything. This Will permit to lock the martingale.

Vote if you like the ide. Thank you.

PS: this strategy is also called hedging.

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i_solaris

Can't find out the profit. When I open the hedge positions - it means I fix the loss. If market goes back - first positions go in plus, but hedge positions do losses. May be an example will clear a bit?

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giulio de meo

The ea need to monitor the hedge position opened, if market go other way, the ea need to close the hedge position, and then you Will get profit with the first positions.

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paolo aguti

If I have understood, loss "freezes" at specific DD value with an opposite position with identical lot size, so do nothing until sooner or later price reversal occurs and lock position is closed at some point. So, about "lock" closure my questions are:

a. once price comes back to main trend, the "lock" position is closed at BE or with small loss, is it right?

b. counter trend continues and so single lock position increases profit: do you mediate lock profit with at least first opposite position, just to decrease average price distance, or with some other logic?

c. Swap: depending on broker, it could penalize the lock process.

Thank you.

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giulio de meo

Yes exactly if price reverse lock position will be closed at breakeven. And yes swap charges plays big role that’s why max 30% DD or setter number of martingale orders ,cause when you open lock position free margin will jump.

Second question I didn’t understood.

thank you 

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paolo aguti

The second question is about trying to take advantage of lock position when it accumulates big profit: do you leave it open till BE or close it when its profit is at least equal to first opposite deal loss, and so closing them together? For example, consider 0.01+0.02+0.03 BUY, but DD reaches 20% and so lock position of 0.06 SELL is activated. Then, price continues down momentum and SELL reaches the same profit value (in absolute value) of the first 0.01 BUY deal loss: do you close them all, with zero loss, remaining with 0.02+0.03 BUY orders, or it makes no sense? Thank you

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giulio de meo

Actually I don’t really know how it would work, i would do it Like this : lock the position until price reverse in right direction , in this case close locked position and get profit with older martingale positions.


‘Maybe the ea could also notificate by email when 30% DD is reached( which is critical already I think)

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giulio de meo

Actually I don’t know if locked position can ever equal or go in profit in rapport of the initial positions because of swap charges etc..

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Andrey Khatimlianskyi
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Andrey Khatimlianskyi
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Guys!

Please, don't be fooled with LOCK (it is not hedge)!

If you can open this big position, for example after big move (which leads to big DD of main EA positions), and close it with profit, you just DON'T NEED "main positions"! Open this "big position" and close it with profit!

If you know that price will go down 5 points, you must immediately close all opened buys and open sell with TP = 5 points (or with TS)! But you don't know :)

So, only advantage you have with locked loss orders (compared to closed loss orders) — is beautiful balance line in your account report. Profit will be worse (because of swaps)!

You can also have this lock just to forgot about losses and continue work with main algorithm (so, the margin will be released and next martingale deal can be opened), but your profit will not incraese — if the main series close with profit, the lock order will be lossing and a vice versa.

So, I don't see any sense to add this feature to the EA, sorry.