Alright.....since the developer isn't being 100% up front....I decided to dig around a bit. I am looking at the code now and the risk is calculated as.....the initial position size is in direct proportion to the account size. Risk 1 = 10%, risk 2 = 20%, risk 3=30%. The calculation is account (equity * risk%)/10,000,000. So.....in my case, I am running risk of 1 with a $40,000 balance. 40,000 * 0.1=4,000 then....4,000/10,000,000=40,000 SO....the position size is $40,000 or 0.4 lot.
Now....At one point in time I had changed the risk to 2 on the GBPUSD, and then later changed it back to 1 because the risk was WAY to high. Since then, it has stayed at 0.5 lot, so....there must be a log file somewhere that it stores the last used position size and will not allow it to drop back down to a smaller starting position size.
Next up....time to edit the risk settings, and find that log file and alter those 'last known lot sizes', so that it will start using a resonable risk amount. I believe I am going to lower it to 1% risk. That should give it a much higher survivability.
well done. but what is meaning of '4,000/10,000,000=40,000 '? in my case, I used small account of $1000 and $2000. for both accounts, initial lots size is 0.01(one micro lot).
until now, the maximum lot size is 0.09 in order to recover the loss at the EUR/USD down trend as you knew which just ended.
I asked their support may time about the Relation between Risk level and percentage, they never told. 10% risk is quite huge from risk management, not only for martingale strategy, even for other trend following strategy.
did you mined more? 10% for risk level 1 is for the initial trade? or for the maximum per trade, or maximum loss for all open trade?
for example, they talked about for everal time that the maximum stop is 600pips (personally I am it is true or not).
for the lot size, at the beginning, only one micro lot, and then increase gradually. but we did not the details. Tom should tell the details to the client, otherwise lots of refund will happen within 2 months. other way is please do the homework ourselves by open the code, especially DLL. we should not do that, but we pay very high, but could not get valuable product and support.
for drawdown, I think myfxbook and MT4 define it for closed trades only, not for open trades. for my trial account, drawdown is more than 20%, but from statement analysis of MT4, it is only 2.62% finally after all trades closed. please correct me.
#1- The statement refers to the amount of money being leveraged.
#2- !0% is for the LOT SIZE of the initial trade, and in the case of this system, it is actually the calculation used for the first 3 trades.
I have not spent enough time to find what the maximum stoploss is yet, but.....If I had allowed the EURJPY to continue, it would have either gotten stopped out at -600 pips.....or it would have open orders that were over 700 pips in the red....and still running. This is precisely why I say they are being evasive. i was told the stoploss was -400 pips, not I see others were told -600 pips. Is it -600 pips per position, or -600 pips based on the initial position???? We have no idea because they haven't said. Let's assume they mean -600 pips from the initial position.
To make this simple, I am going to use the actual trades placed in the EURUSD. Here are the trades:
#1- 0.4 lot @1.3779
#2- 0.4 lot @1.3718
#3- 0.4 lot @1.3667
#4- 1.30 lot @ 1.3612
#5- 2.50 lot @1.3558
#6- 3.80 lot @1.3495
SIDE NOTE: The market did make a pullback due to some sovereign eur buying and some other factors which closed out these positions for a $960 profit. But for the sake of this thought experiment, lets assume these same entry characterististics were applied to the big drop in September where it did not make any pullbacks big enough to trigger the TP before hitting the theoretical -600 pip stop.
So...we analyze these trades and you can see a grid for the position distribution of around 50-60 pips between positions. Position #6 is opened 284 pips below position #1. Now....in a normal martingale, it will continue to open positions according to the rules until it hits maximum stoploss. Before we do that....let's assume (since we already know it won't hit the TP no matter what) it doesn't open anymore positions before hitting the -600 pip stop. Here is what the stats would be at the stop(to keep it simple we assume 1 pip @ 0.1 lot is $1):
#1- 0.4 lots @ -600pips= -$2400
#2- 0.4 lots @ -539pips= -$2156
#3- 0.4 lots @ -488pips= -$1952
#4- 1.3 lots @ -433pips= -$5692
#5- 2.5 lots @ -379pips= -$9475
#6- 3.8 lots @ -316pips= -$12008
This leaves with a sum total loss of......-$33683. Remember this is one pair, traded minimum risk, on a $40,000 account...AND it is based on the real life possible entry characteristics of entering on or near the peak on Sept 8th 2011, with the bottom of the trend being Sept 12th 2011. Using 500:1 leverage, and $250/lot, the necessary margin is $2200. I am trying to make everyone understand risk here. They are NOT telling you the actual real life risk you are putting on your account. For this experiment, we ONLY used trades that my account had actually taken as a reference. This nearly blew out the account on a single pair giving it the benefit of the doubt. What does this scenario look like if the progression of adding positions continues? You will get a margin call before you account can hit the stoploss. If I use the current progression, lets assume the next position is 55 pips further down, and it will most likely be 6.3 lots. So position #7 would be 6.3 lots @ -261pips for a loss of -$16443. Position #8 would be 10.1 lots @ -206 pips for a loss of $20806. #9- 16.4 lots @ -151pips= -$24764. #10- 26.5lots @ -96pips= -$25440. Let's assume the EA stops here. That gives us a total theoretical loss of $121136. Now....let's factor in the hedging. Looks like the grid still remains between 50-60 pips, so....a 600 pip drop gives us 5 winning shorts, but lets call it 6 to be generous(even though it is impossible). 0.4 lot @ +50 pips= +$200, so 6 $200 wins adds $1200 to our equity. Oh yeah....and by the time the last losing position is opened, the margin requirement would be $17025.
At this point everyone should be seeing that we are in a margin call situation LONG before we get anywhere near the -600 pip stoploss. This is for ONE pair on MINIMUM risk. This happened in 3 days (Sept 10th and 11th were the weekend). I am not using a theoretical price action here, I used a real life, the-market-actually-did-this-in-the-real-world, event.
The author knows this. Remember people, forex is about making money. The author is trying to sell licenses. This EA is promoted to make about 10% a month. How many people do you think would be interested in it is he was marketing it at 1% per month? The risk is set dangerously high due to marketing purposes. You can't sell a 1%/month system for $2000.....or a monthly fee of $97. What is the chance you will make it beyond 60 days without your account crashing???? Nearly 100%. All they need is for it to survive beyond 60 days and the money is non-refundable. This system is being marketed to people that aren't good enough to be profitable in forex on their own. How many of those people are going to realize that they need to cut their losses short in under 3 days time? None. They are targeting new traders, and unsuccessful manual traders. I am not saying everyone using this EA is a newbie, because i see several people complaining about the minimum risk being high, and wanting lot size restrictions, etc. Those people know what is coming up and they are looking to protect their capital.
So, why am I saying all this? I am trying to educate the new traders. This system IS a profitable system. BUT...and this is the most important part.....you NEED to know when to cut your losses, and when to withdraw your profits. Heck, even good traders will sometimes not catch on that the market is not going to retrace before this would blow the account. Martingales are highly profitable, and as such, are even more dangerous.
This is true of any EA. The more profitable it is, the more dangerous it is. Fast Cash = Flash Crash. If you run this EA live, please make sure that you aren't fooling yourself. Understand that this EA can close your account. You must be willing to lose the entire account. If you aren't, then start by quitting using any EA that uses a martingale system and learn to trade manually first. When you can trade manually and succeed, you have the necessary skills to deal with an EA of this sort. Trading forex is not easy, unlike every marketer would have you believe. Otherwise, 90% of traders would not be losers. Most traders know just enough to lose their money slowly over an extended period. The newbies, know just enough to over-leverage and give their money away to the first stop hunter. You can ignore me if you prefer. I am just trying to help the same way I wish someone would have helped me when I first started.
So, that said, go ahead and ignore me. You will remember what i have said here when you suffer your first massive DD.