TulipFx' Kangaroo EA

This is a discussion on TulipFx' Kangaroo EA within the Forex Net Trap forums, part of the Specialists' Corner category; Originally Posted by phil8 Hi I'm no expert so don't take this the wrong way, but on Gaps, if you ...

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Old Sep 28, 2011, 10:10pm   #177
 
surferking's Avatar
Joined Oct 2010
Re: TulipFx' Kangaroo EA

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Originally Posted by phil8 View Post
Hi

I'm no expert so don't take this the wrong way, but on Gaps, if you add positions as the trade goes against you, this is surely chasing losses which I think is a real no no in trading.

A straight win would have a stake of only 0.5% whereas a loss would always loose 2%. I'm trying to get my head around it but I would have thought that a short run of losses using that strategy would hit your trading pot fairly hard.

Like I say, this isn't a criticism given my poor results on gaps over previous weeks.

Regards

Phil
Maybe I'm not explaining myself clearly. What I mean is scaling in risk at 0.5% per trade up to a maximum of 2% per pair. (so win from 0.25% to 1.5% of pot per pair traded)

It's just a way of smoothing the equity curve by lowering overall risk, but may yield lower overall growth if there's never any movement against the opening price.

I'm happy to scale in positions going against an initial entry price as it is all part of the natural eb & flow of price and just means I'm getting more pips when it overall wins and halving overall risk if it goes against. Of course there's always times when you get a direct movement from entry to win and you wish you'd traded full stakes but that kind of thinking can give bigger drawdowns.

Just my way of playing it as I'm quite confident in the long-term statistics on the strategy, appreciate it isn't for everyone.
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