Pick of the bunch
The 'Fat Fingers' trade in NY last night sent markets spiralling, and flowed on to the currency markets. As expected the HedgeMadness stops were triggered on all tests (where I had them). Some account were wiped completely because AEP was not on. The 50/40 test is holding up the best out of all.
I will get more serious about pursuing the 50/40 strategy by running it on other brokers for comparison. A job for the weekend.....
Volatility Up, Stops Hit
My hedge madness tests have finally seen some Account Sentry Equity Protection stops hit. This is good.
a) Account Sentry is working as designed
b) It stops me from compounding into infinity about future profits (as I have a tendency to do)
c) I can play with various settings to work out which is more prone to hitting stops, and which is overall more profitable.
Regarding point “c)” above....A more aggressive version may be more profitable in the long term. It may get the stops hit more often but bounces back quicker.
I have 3 versions running.
100/80 [Default]
50/40 [Aggressive]
25/25 [Madness!]
Keep and eye on the ‘Active Tests’ page for regular results. I will also start tracking them in a spreadsheet and put links up there as well.
Hedge Madness and SPH v4.6 update
Hedge Madness testing is going well. I am very pleased with the results and the minimal draw down. I am also satisfied that account sentry is running as designed and shutting the whole thing down when the account equity protection trigger is reached.
The default using (100 point PT and 80 point Martingale double down) has seen a maximum of 12% account draw down, mile away from the 30% draw down threshold I have set in Account Sentry. There is a more aggressive test (50PT/40 Double Down), which has shown to be 50% more profitable during the same testing period and for only a modest increase in maximum draw down. Having moved servers recently, I have lost the drawn down maximum, but will keep a closer eye on it in future.
I am conscious I have not run HM during a lot of news events, however that said I have run them during the week Greek bonds went into junk status and it survived with excellent results.
SPH v4.6 has been running equally well over the same period. It astounds me that this EA is free, but I guess I understand the concept a little better now. Offer the basic construct of the EA for free, and then collaborate to tweak and improve it. As the developer, you end up with an EA you can trust and profitable, not to mention the good karma!
Account Sentry
In trawling the MT E & I Yahoo Groups forums, I came across an EA called AccountSentry.
n. pl. sen·tries
1. A guard, especially a soldier posted at a given spot to prevent the passage of unauthorized persons.
2. The duty of a sentry; watch
In my test of HedgeMadness, I am running AccountSentry over the top as a 'fail safe' for account equity protection. It works by checking a real-time live draw down and based on the conditions, can close all open trades and halt any EA's running. As the said test is a martingale, I feel wholly more comfortable running it. I am currently testing it with account protection disabled, but instead using it as a tool to track risk during testing. That plan is to enable it's protection mechanism when trading live.
I had gone off martingale style strategies due to the risk. This type of fail safe has caused me to re-think my position. The testing continues.
An excellent resource
I recently stumbled upon the MetaTrader Experts and Indicators Yahoo group. They have some fantastic work, that is free to all. I encourage you to explore it. I currently am testing some of the EA's I found there.
20 Habits of highly ‘profitable’ traders
Thanks to TraderInterviews for brightening my day:
http://www.traderinterviews.com/links/20Habits
http://www.traderinterviews.com/links/20HabitsPart2
A nice refresher.