Hi everyone! My strategy again took the place in the top three, moreover - it took first place! Of course, as we all understand - to win a prize and withdraw a prize “these are two big differences”, but any case, I am very happy. In this post I want to talk more about my strategy, and explain why my strategy was able to take first place in December. As I wrote in my previous post about the same strategy, the principle of opening positions is an attempt to follow a local, intraday trend, supplemented by Martingale strategy to compensate for losses (yes, I know that words "Martingale" and "to compensate for losses " are written in one sentence, for they will sound funny, but still, it works). The position is opened according to the following principle - if there is currently no open position and the hourly candle has closed bullish - at the next candle strategy opens a long position, if the candle closed bearish - at the next candle strategy opens a short position. The emphasis in this case is placed on the fact that the price movement of a particular instrument in the market will usually continue rather than reverse. I believe in a certain inertia of price movement.
Thus, my strategy works great in cases where the price makes significant movements in one direction, the strategy follows the local, intraday trend very well. But - the strategy shows much worse results at a time when the price is in a flat, at times when the price can not choose any direction and goes constantly up and down in the channel. At this time, Martingale method help to compensate for losses, by doubling the size of the next position after the stop loss. Both situations, can be seen in the two screenshots below.
Given the use of the Martingale method, I use the relatively small (for the Trader contest of course) size of the starting position size - only 1-2 million, while most other participants trade in sizes of 5-10 million, and even more. In practice, contrary to the established skepticism regarding the use of Martingale, this method, in combination with the relatively reasonable principle of opening a position, consistently shows rather good results.
I must also note an important point - I always use the stop loss size two or at least one and a half times less in pips than the take profit size in pips. Most often - a stop loss of 15 pips, a take profit of 30 pips. Expected profit should always be higher than the expected loss. Of course, this reduces the number of profitable trades, but here we return again to Martingale method. I fundamentally do not understand and do not accept numerous strategies in which take profit of 5-10 pips, and stop loss of 100-200 pips.
I have been launching this strategy every month for a couple of years, and of course it does not take prizes every month, but anyway - it has won prizes six times already. I consider this a very good result, especially considering the fact that I do not recall the cases when my strategy led the account to margin call. Equity drawdowns sometimes are very large, unfortunately, but the strategy always climbs up again, and the worst months it still ended up at the level of 60-70-80 thousand in the account, relative to the starting 100 thousand. In conclusion, I want to say that the Martingale method still deserves attention, with a cautious approach it is really capable of making a profit. December is a good example, the strategy doubled the deposit size, the finish balance of 198 thousand, with a maximum drawdown of only 8-9 percent, as I recall.
Thank you all for reading, successful trading for everyone!
Thus, my strategy works great in cases where the price makes significant movements in one direction, the strategy follows the local, intraday trend very well. But - the strategy shows much worse results at a time when the price is in a flat, at times when the price can not choose any direction and goes constantly up and down in the channel. At this time, Martingale method help to compensate for losses, by doubling the size of the next position after the stop loss. Both situations, can be seen in the two screenshots below.
Given the use of the Martingale method, I use the relatively small (for the Trader contest of course) size of the starting position size - only 1-2 million, while most other participants trade in sizes of 5-10 million, and even more. In practice, contrary to the established skepticism regarding the use of Martingale, this method, in combination with the relatively reasonable principle of opening a position, consistently shows rather good results.
I must also note an important point - I always use the stop loss size two or at least one and a half times less in pips than the take profit size in pips. Most often - a stop loss of 15 pips, a take profit of 30 pips. Expected profit should always be higher than the expected loss. Of course, this reduces the number of profitable trades, but here we return again to Martingale method. I fundamentally do not understand and do not accept numerous strategies in which take profit of 5-10 pips, and stop loss of 100-200 pips.
I have been launching this strategy every month for a couple of years, and of course it does not take prizes every month, but anyway - it has won prizes six times already. I consider this a very good result, especially considering the fact that I do not recall the cases when my strategy led the account to margin call. Equity drawdowns sometimes are very large, unfortunately, but the strategy always climbs up again, and the worst months it still ended up at the level of 60-70-80 thousand in the account, relative to the starting 100 thousand. In conclusion, I want to say that the Martingale method still deserves attention, with a cautious approach it is really capable of making a profit. December is a good example, the strategy doubled the deposit size, the finish balance of 198 thousand, with a maximum drawdown of only 8-9 percent, as I recall.
Thank you all for reading, successful trading for everyone!