Hi Ale. Looks interesting. very good test results but to make a money management we need only to look at how much you are risking. Not having looked into the code, can you predict how much you are risking?

Cheers Kasper

Hey Ale,

Thanks for sharing, it looks like an interesting strategy but could you please explain in more detail how it it intended to make money?

I installed the indicators and backtested the strategy but I’m confused about the intentions with the settings for the cumulative orders since orders are added when price is going the wrong way and the exit only seem to kick in for profits but not for stop loss.

I also tried running it on the DOW for reference, it had a 94 % win rate but yestereday it would have build up a position of 12 short contracts while the price kept rising and wiping out 20 % of the account in a few hours.

Great blog post! I’m familiar with averaging down since earlier on, I just to swing trade H4 charts increasing my position size for each entry, in demo I made a 1000 % profit in 6 months on my real account I made about 25 % a month for two months then… I got my first and so far last margin call. That was manual trading which creates a lot of psychological pressure which we can easily eliminate here.

Anyway we should be able to make major improvements for this strategy by modifying the following features of the grid code;

• Reverse the grid step function, in its current state the grid code add on positions with a smaller distance when the ATR is high and with a greater distance when ATR is low. For this system we want the opposite, when ATR is low and the market is likely to be ranging we add on positions with a smaller distance and when ATR is high and the risk of the price going the wrong is also high we want a long distance between the entries.

• Use the grid step intervall to ensure that orders are not stacked to tight, if we sell and the price goes up by 1 pip for each bar we don’t want to build up a large position by adding an entry on each new candle.

• Use a hard stop loss to keep losses moderate when the price is going the wrong way and doesn’t retrace.

I started integrating the codes, the below is a long only draft but no trades in the backtest, I wouldn’t have been surprised if the grid step didn’t work but I can’t figure out why there is no first trade taken on DAX 1m for the past week since the original code takes a few trades.

// Definizione dei parametri del codice
DEFPARAM CumulateOrders = true // Posizioni cumulate disattivate
defparam flatafter=183000
defparam flatbefore=090000
indicator3, ignored, ignored = CALL Divergenze(close)
c7 = (indicator3 > 0)

//c8 = (indicator3 < 0)

once RRreached = 0
accountbalance = 10000 //account balance in money at strategy start
riskpercent = 1 //whole account risk in percent%
amount = 1 //lot amount to open each trade
rr = 5 //risk reward ratio (set to 0 disable this function)
sd = 0.25 //standard deviation of MA floating profit


//dynamic step grid
minSTEP = 3 //minimal step of the grid
maxSTEP = 20 //maximal step of the grid
ATRcurrentPeriod = 150 //recent volatility 'instant' period
ATRhistoPeriod = 3000 //historical volatility period

ATR = averagetruerange[ATRcurrentPeriod]
histoATR= highest[ATRhistoPeriod](ATR)

resultMAX = MAX(minSTEP*pipsize,histoATR - ATR)
resultMIN = MIN(resultMAX,maxSTEP*pipsize)

gridstep = (resultMIN)

// Condizioni per entrare su posizioni long
indicator1, ignored = CALL "universal 30"
c1 = (indicator1 <= -1)
c2 = (close < open)
c3 = (low < low[1])
IF c1 AND c2 AND c3 THEN
BUY 1 CONTRACT AT MARKET
ENDIF

// case BUY - add orders on the same trend
if longonmarket and (c7)=1 and tradeprice(1)-close>=gridstep then
BUY amount LOT AT MARKET
endif
//money management
liveaccountbalance = accountbalance+strategyprofit
moneyrisk = (liveaccountbalance*(riskpercent/100))
if onmarket then
onepointvaluebasket = pointvalue*countofposition
mindistancetoclose =(moneyrisk/onepointvaluebasket)*pipsize
endif

//floating profit
floatingprofit = (((close-positionprice)*pointvalue)*countofposition)/pipsize

//actual trade gains
MAfloatingprofit = average[20](floatingprofit)
BBfloatingprofit = MAfloatingprofit - std[20](MAfloatingprofit)*sd

//floating profit risk reward check
if rr>0 and floatingprofit>moneyrisk*rr then
RRreached=1
endif

//stoploss trigger when risk reward ratio is not met already
if longonmarket and RRreached=0 and (close>positionprice) then
sell at market
endif

if onmarket and RRreached=0 then
SELL AT positionprice-mindistancetoclose STOP
endif

if longonmarket and (close>positionprice) then
sell at market
endif

//stoploss trigger when risk reward ratio has been reached
if onmarket and RRreached=1 then
if floatingprofit crosses under BBfloatingprofit then
SELL AT MARKET
endif
endif

//resetting the risk reward reached variable
if not onmarket then
RRreached = 0
endif

Hi guys. I have been puzzling with this in my head- between my family and other busy work schedule. I really like your 1 min strategy, and I also see that you in some way are using the avenging down strategy- adding position to a loosing trade. Because that’s what it is. It can be highly profitable, BUT also like CFTA I had a margin call- several times using this strategy in Manuel trading. It actually led to cancel one of my account and go into a thinking box- deciding weather or not I should trade at all.

I read the avenging down post a while ago, and I also listen to various webinars. One thing is clear. never add to a loosing trade and martin gale systems will eventually lead to ruin. It’s a mathematically fact.  However can we limit it- say 3 steps within a certain pip range, or whatever we like? But I see that you are adding position according to the indicators.

So I came up with the ultimate money management for you system.. are you ready…. 😛

BOOM!!!

Cheers Kasper 😀

//=====The KISS Money management
set stop loss 100

Hi Winnie.. place // in front of the Graph lines- then it will work.

Graph instructions are only for backtesting

I am testing it in Demo as well. don’t be fooled. it has already made 120 Euro this week. But 3 bad trades in a row will blow your account- you will never know when it will come

Cheers Kasper