D Alembert System
Hi traders...Does anyone use the D Alembert System for money management....( Increase lot size when loosing ...decrease when you are winning...less risky than martingale)any thoughts if it could be implemented in the CP EA
Replies 52
How should it work with series of orders?
It is clear how to apply it to single trades, but we have series in the CP, means next order opens while previous is not closed. So, next lot will be always like "last lot + some amount". But we already have this mode.
We can also try to apply this new mode with "Apply martingale after loss", that affects lot of the new series. Is this exactly what you want?
We can try to implement it with partial close or use SL..because the main idea of this money management is to allow lots flexibility ( lots can go up and down) unlike Martingale which goes one way...with this our lot size determined by the outcome of the next trade
With the mode Apply martingale after loss... what happens when the next trade wins...will it be able to move x steps backwards instead of going back to the initial lotsize... assuming ini lot is 0.1 then we have 5 losses in between ...thus we will be betting 0.6 and if we win( but still in a loss or haven't achieved our Global Take target Profit) we need to move x steps backwards (for example to 0.3) rather than go back to 0.1 like martingale would (and if we archive our Global TTP we reset the lot sizes) ....it can work with series of trades if we use a SL
We can try to implement it with partial close or use SL..because the main idea of this money management is to allow lots flexibility ( lots can go up and down) unlike Martingale which goes one way...with this our lot size determined by the outcome of the next trade
With the mode Apply martingale after loss... what happens when the next trade wins...will it be able to move x steps backwards instead of going back to the initial lotsize... assuming ini lot is 0.1 then we have 5 losses in between ...thus we will be betting 0.6 and if we win( but still in a loss or haven't achieved our Global Take target Profit) we need to move x steps backwards (for example to 0.3) rather than go back to 0.1 like martingale would (and if we archive our Global TTP we reset the lot sizes) ....it can work with series of trades if we use a SL
It will be much harder to implement with "x steps back" rule. Not sure I'm ready for such an improvement now.
And you didn't answer what should we do with series of orders?
We can calculate lot for the 1st order of each series, but which lot size should we use for next orders?
Should we apply profit/loss of the whole series to the 1st lot calculation?
What should we do with partially closed series?
Too many questions ...
It will be much harder to implement with "x steps back" rule. Not sure I'm ready for such an improvement now.
And you didn't answer what should we do with series of orders?
We can calculate lot for the 1st order of each series, but which lot size should we use for next orders?
Should we apply profit/loss of the whole series to the 1st lot calculation?
What should we do with partially closed series?
Too many questions ...
Good evening sir....Okay let me explain....so for the whole series same rules apply as of single orders but just grouped.....for example if we have a series of 5 orders ....those orders are based on the calculation of the first lot...so which means they will all have the same ,lotsize with a set TP and SL.....If SL is hit we open a another series of orders 5 orders with an addition of 1 unit or x units to the lot size.... assuming this went on for 5 more blocks of orders and we get a win....then our next lot size for the series of orders we are moving back x steps....( With this progression we avoid carrying to many negative trades ...cutting them short...but also trying to recover from the previous losses with the next series of orders)
With the partial close parameters...was suggesting we could close some trades during price reversals before the SL is hit( this option is already available in CP EA)
Logic
If trade is result is a loss
(Increment lot size by x step/s)
If trade result win and Global Take Target Profit HASN'T been reached
(Decrement lotsize by x step/s )
If trade result win and Global Take Target Profit HAS been reached
(Close All Orders and reset lotsizes to initial )
Looking forward to the project when you are ready and free...and Thank You Sir
Good evening sir....Okay let me explain....so for the whole series same rules apply as of single orders but just grouped.....for example if we have a series of 5 orders ....those orders are based on the calculation of the first lot...so which means they will all have the same ,lotsize with a set TP and SL.....If SL is hit we open a another series of orders 5 orders with an addition of 1 unit or x units to the lot size.... assuming this went on for 5 more blocks of orders and we get a win....then our next lot size for the series of orders we are moving back x steps....( With this progression we avoid carrying to many negative trades ...cutting them short...but also trying to recover from the previous losses with the next series of orders)
With the partial close parameters...was suggesting we could close some trades during price reversals before the SL is hit( this option is already available in CP EA)
Logic
If trade is result is a loss
(Increment lot size by x step/s)
If trade result win and Global Take Target Profit HASN'T been reached
(Decrement lotsize by x step/s )
If trade result win and Global Take Target Profit HAS been reached
(Close All Orders and reset lotsizes to initial )
Looking forward to the project when you are ready and free...and Thank You Sir
Ok, now it is clearer.
Reseting on Global Target Profit makes sense.
How should we calculate number of steps to increase/decrease the lot size? What it the formula?
We can have any consequence of losses/profits, so formula should be based on profit size, not on number of stop losses or take profits.
Ok, now it is clearer.
Reseting on Global Target Profit makes sense.
How should we calculate number of steps to increase/decrease the lot size? What it the formula?
We can have any consequence of losses/profits, so formula should be based on profit size, not on number of stop losses or take profits.
Hi Sir.....we can calculate the number of steps based on the profit size ratio like you suggested.....for example if we have a ratio of 1 : 3....then we increase by 1 unit and decrease by 3 units respectively......(another example 2:6 ratio then we increase by 2 units and decrease by 6 units)
Or the increase/decrease of steps can be set as input parameters...users decides the number to increase or decrease
Hi Sir.....we can calculate the number of steps based on the profit size ratio like you suggested.....for example if we have a ratio of 1 : 3....then we increase by 1 unit and decrease by 3 units respectively......(another example 2:6 ratio then we increase by 2 units and decrease by 6 units)
Or the increase/decrease of steps can be set as input parameters...users decides the number to increase or decrease
Still not clear.
We have loss of $5. How should we change the lot?
We have loss of $500. How should we change the lot?
The same for profit.
Still not clear.
We have loss of $5. How should we change the lot?
We have loss of $500. How should we change the lot?
The same for profit.
Hi Sir Hope You doing Okay
The lotsizes are predetermined on by the profit ratio on the basis of wins and losses we get...
Assuming we use a profit ratio of 1:3 and starting lotsize of 0.1.Now if we have 5 consecutive losses we would have a total loss of -$15( 0.1 ; 0.2 ; 0.3 ; 0.4 ; 0.5) adding 1 unit after each loss
Now on the 6th trades we be betting 0.6 and assuming we win that one we would win 0.6* 3 thus $18 and subtracting our loss of $15...we remain with $3 actually profit.....Now if our Global Target Take Profit was reached we cancel all orders and reset lotsizes
Taking another example say we lost the first 10 trades using again 1: 3 profit ratio and 0.1 starting lot....now we be at a loss of -$55(adding 1 unit after each loss)
Our 11th trade would be 0.11 assuming we win that one we would win $33( 11*3 ) so we now have an overall loss of $22(55 -33)
Using our profit ratio (1 : 3)....we are required to move 3 steps back after each win ...so we will now be betting 0.8lotsize
Assuming we win again ..we win $24 which gives us overall profit at $2(24-22) for that series...Now If our GTTP had been reached we cancel all orders and reset orders....if not we move 3 steps back again
So assuming we have a loss of $50 or 500 we alwys follow the predetermined sequence for example using 1:3 profit ratio...means we alwys move 1 step ahead when we lose and 3 steps back when we win till we reach our GTTP
Same applies for Profit...if we make a profit of $500 or 50 and haven't reached our GTTP we move 3 steps back on each loss and 1 step ahead wen we win
So Regardless of loss or profit we always move x steps ahead and x steps back respectively till we reach ouR GTTP
Hi Sir Hope You doing Okay
The lotsizes are predetermined on by the profit ratio on the basis of wins and losses we get...
Assuming we use a profit ratio of 1:3 and starting lotsize of 0.1.Now if we have 5 consecutive losses we would have a total loss of -$15( 0.1 ; 0.2 ; 0.3 ; 0.4 ; 0.5) adding 1 unit after each loss
Now on the 6th trades we be betting 0.6 and assuming we win that one we would win 0.6* 3 thus $18 and subtracting our loss of $15...we remain with $3 actually profit.....Now if our Global Target Take Profit was reached we cancel all orders and reset lotsizes
Taking another example say we lost the first 10 trades using again 1: 3 profit ratio and 0.1 starting lot....now we be at a loss of -$55(adding 1 unit after each loss)
Our 11th trade would be 0.11 assuming we win that one we would win $33( 11*3 ) so we now have an overall loss of $22(55 -33)
Using our profit ratio (1 : 3)....we are required to move 3 steps back after each win ...so we will now be betting 0.8lotsize
Assuming we win again ..we win $24 which gives us overall profit at $2(24-22) for that series...Now If our GTTP had been reached we cancel all orders and reset orders....if not we move 3 steps back again
So assuming we have a loss of $50 or 500 we alwys follow the predetermined sequence for example using 1:3 profit ratio...means we alwys move 1 step ahead when we lose and 3 steps back when we win till we reach our GTTP
Same applies for Profit...if we make a profit of $500 or 50 and haven't reached our GTTP we move 3 steps back on each loss and 1 step ahead wen we win
So Regardless of loss or profit we always move x steps ahead and x steps back respectively till we reach ouR GTTP
Hey! Sorry for the delay with response, I'm quite busy these days.
That's what I asked at the beginning.
You want to set profit-to-loss ratio (3:1) as a parameter?
But you'll have this ratio in your strategy only if you disable all functions except SL and TP (that must be 3 times bigger than SL). In all other cases you'll not have expected loss and profit sizes.
Thus, using your 2nd example, 11th trade (1.1 lots, correct? you missed decimal) may be closed with profit $3 by trailing-stop, and overall loss will be $52 (55-3). What lot size should use EA for the next entry? 3 steps back (0.8), 1 step back (1.0)? Another? Why?
This money-management can work for strategies with single order in market and fixed SL/TP.
CP has series of orders and a lot of options to close series with or without profit.
So, my question is: "how to apply this MM to such a complex system?"
Hi Sir..... main difference between the two systems is that the D Alembert is far less risky than the Martingale...the base use of martingale is to double up everytime after a loss...and your drawdown can get huge....with D Alembert you adding 1 unit after each loss and removing one unit after each win ...Its very hard to blow up your whole account as the progression is much smoother (see attached image below )( can be modified we can decide to add 2 units after a loss and remove one after a win or vice versa...) Can the Current parameters in CP EA increase lot after a win and decrease after a loss.. haven't been able to achieve that
D Alembert
With good risk/reward ratio lets say 1 as to 3...we can decide to add 1 unit after each loss and remove 3 after each win...works much more efficiently in outstaying a streak of losses than Martingale... For example with Martingale after 10 consecutive losses with a lot coeff of 2...we would have a total loss of $512(drawdown) ....but with D Alembert we would have $55(drawdown)...with a progression like 1 ,2, 3, 4, 5, 6, 7, 8, 9, 10 ...and we win trade number 11 ...means we get around $33 with 1 : 3 R/R ...we jump 3 steps back if we win...we recover all the losses...if not we continue from step 7 .....we can have 30 losses and maybe 5/6 wins and end up in a profit... without the risk of killing our account....Hope Andrey Sir will help us with this