Hi everyone,
As people have been talking about money management lately for FMT, I thought I’d share my thoughts.
I did a bit of manual back-testing when I first started using FMT to see if having a trailing stop would help.
I tried the following scenarios using data from June 1 to August 27 (3 months worth).
There were 48 trades in total.
Win Ratio = Number of winning trades / total number of trades
(winners do not include breakeven trades)
Strategy 1
------------
Default settings
Target 40
Stop 40
No Trailing Stop
Win Ratio 68%
Total Pips 720
Strategy 2
------------
Target 40
Stop 40
Trailing Stop 1: move to -20 when it reaches +20
Win Ratio 66.7%
Total Pips 820
Even though the win ratio was slightly lower due to a losing trade that didn’t occur in scenario 1, the total pips was greater.
So this strategy does seem to help minimise the losing trades overall.
Strategy 3
------------
Target 40
Stop 40
Trailing Stop 1: move to -20 when it reaches +20
Trailing Stop 2: move to +20 when it reaches +35
Win Ratio 72.9%
Total Pips 800
More winners, but it stopped some from going to their full target, hence less pips than strategy 2.
Strategy 4
------------
Target 40
Stop 40
Trailing Stop 1: move to breakeven at +30
Win Ratio 60.4%
Total Pips 760
Hmmm... less winners than default, though a few more pips
Strategy 5
------------
Target 40
Stop 40
Trailing Stop 1: move to breakeven at +35
Win Ratio 64.6%
Total Pips 720
Again, less winners than default, but same number of pips
There are heaps more possible strategies of course, but I got tired of doing it!
Admittedly this is only 3 months of data, so one can’t really draw any definite conclusions. But what it showed me is that the default strategy is by far the easiest in terms of walk away, stress free trading. There’s no point mucking around with money management if it’s stressful, time-consuming and only saves a few pips overall. In fact, this is the best strategy I’ve ever seen straight out of the box with no tweaking – awesome Mark!
However, I did decide to use strategy 2 because I thought the extra pips made it worthwhile, and because I’ve had so many losing trades elsewhere that I’ve become overly paranoid. Plus I have an automatic money-manager so I can walk away from it. It’s called ManageTPv2-4.mq4 and works really well - if anyone wants a copy you can find it here http://www.forexfactory.com/showthread.php?t=9553
Please don’t think I’m recommending using a trailing stop though – I’m just sharing the limited amount of back-testing that I’ve done, which could have given totally different results if it had been for a whole year for example.
I think we should all wait for Mark’s expert analysis and experience before making any major changes to his strategy, which already works brilliantly.
As people have been talking about money management lately for FMT, I thought I’d share my thoughts.
I did a bit of manual back-testing when I first started using FMT to see if having a trailing stop would help.
I tried the following scenarios using data from June 1 to August 27 (3 months worth).
There were 48 trades in total.
Win Ratio = Number of winning trades / total number of trades
(winners do not include breakeven trades)
Strategy 1
------------
Default settings
Target 40
Stop 40
No Trailing Stop
Win Ratio 68%
Total Pips 720
Strategy 2
------------
Target 40
Stop 40
Trailing Stop 1: move to -20 when it reaches +20
Win Ratio 66.7%
Total Pips 820
Even though the win ratio was slightly lower due to a losing trade that didn’t occur in scenario 1, the total pips was greater.
So this strategy does seem to help minimise the losing trades overall.
Strategy 3
------------
Target 40
Stop 40
Trailing Stop 1: move to -20 when it reaches +20
Trailing Stop 2: move to +20 when it reaches +35
Win Ratio 72.9%
Total Pips 800
More winners, but it stopped some from going to their full target, hence less pips than strategy 2.
Strategy 4
------------
Target 40
Stop 40
Trailing Stop 1: move to breakeven at +30
Win Ratio 60.4%
Total Pips 760
Hmmm... less winners than default, though a few more pips
Strategy 5
------------
Target 40
Stop 40
Trailing Stop 1: move to breakeven at +35
Win Ratio 64.6%
Total Pips 720
Again, less winners than default, but same number of pips
There are heaps more possible strategies of course, but I got tired of doing it!
Admittedly this is only 3 months of data, so one can’t really draw any definite conclusions. But what it showed me is that the default strategy is by far the easiest in terms of walk away, stress free trading. There’s no point mucking around with money management if it’s stressful, time-consuming and only saves a few pips overall. In fact, this is the best strategy I’ve ever seen straight out of the box with no tweaking – awesome Mark!
However, I did decide to use strategy 2 because I thought the extra pips made it worthwhile, and because I’ve had so many losing trades elsewhere that I’ve become overly paranoid. Plus I have an automatic money-manager so I can walk away from it. It’s called ManageTPv2-4.mq4 and works really well - if anyone wants a copy you can find it here http://www.forexfactory.com/showthread.php?t=9553
Please don’t think I’m recommending using a trailing stop though – I’m just sharing the limited amount of back-testing that I’ve done, which could have given totally different results if it had been for a whole year for example.
I think we should all wait for Mark’s expert analysis and experience before making any major changes to his strategy, which already works brilliantly.
Mario Loops
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lotterbe
well done bro,i did manual back testing it takes 4 hours per year,lets not panic
traderathome
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i am gonna stick to the simple rule until Mark brings out any changes. Hope mark would bring about a change as the popular forex saying cut your losses and let the profits run
Mario Loops
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Hi John
This is Mario,i dont know about where you live mate in England we spread bet,i think FXCM is $200 to open an account micro lots,is there nothing in Germany
Mario Loops
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John i just checked you have CMCmarkets in Hamburg give them a ring
Thanks for your answer but what is spread bet? And CMCMarkets doesn´t support metatrader 4 so i cant use the EA :-(
Mario Loops
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In UK they have spread betting classed as a bet so you do not pay tax,are you not able to place trade manually and have a demo metatrader account
Mario Loops
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Here John found one Forex Place in Frankfurt tel +49 302 555 7600,with metatrader,good luck
LIQUIDKNUCKLES
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HI, Can that management EA work on the same chart that the FMT EA is on there too?
bluedancer
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:smart: This is very helpful, thank you. I was thinking of using trailing stop on my live account as well. I am testing it on my demo for a while. I would be most interested in the number of losses in a row with your analysis, and if adding the trailing stop would decrease the number of losses. I am trying to find the highest reward possible, which comes with fewer losses, not total number of pips won.
bluedancer
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Fabius
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Really well done: you are the paradigm of what I mean when I say that we are here to share and learn
.Uh, here in Italy it's almost midnight. Tomorrow wake up few minutes before 7.30 to follow the system.
Best of luck to everybody and goodnight.
I use a trade management software program called Forex Executor Pro. It works very well and I have been using it for 5 months now without issues. It's not free but it was worth the small price. It has made it's money back and then some. It also has built-in trailing stop abilities and email that will alert you when your pending orders are filled and when they are stopped out. It also hides your s/l and t/p from the broker.
Not trying to sell it, but it does work very well.
Not trying to sell it, but it does work very well.
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traderathome
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i have attached the EURUSD pair to trade at the same london opening with 30/35 PT/SL settings lets give a go on my live account.i wanna make it to 25 pips PT but then my SL 35 a diff of 10pips i am risking more.not sure on this.but hammy could help me though
I ran a test on EURUSD taking trades at 1:00 GMT with a 40/40 SL/TP, 1-hour charts (it might take up to 11 hours to reach profit) here the resullts:
Initial deposit 300.00
total net profit 1000.30
Gross profit 1920.00
Gross loss -919.70
Maximal drawdown 162.00 (11.46%)
Relative drawdown 23.10% (88.00)
Total trades 71
Profit trades (% of total) 48 (67.61%)
Loss trades (% of total) 23 (32.39%)
consecutive wins (profit in money) 10 (400.00)
consecutive losses (loss in money) 3 (-120.00)
How does this look, looks interesting to me.
Initial deposit 300.00
total net profit 1000.30
Gross profit 1920.00
Gross loss -919.70
Maximal drawdown 162.00 (11.46%)
Relative drawdown 23.10% (88.00)
Total trades 71
Profit trades (% of total) 48 (67.61%)
Loss trades (% of total) 23 (32.39%)
consecutive wins (profit in money) 10 (400.00)
consecutive losses (loss in money) 3 (-120.00)
How does this look, looks interesting to me.
Last edited:
Daily Trader
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I have been using this software too and I find that the order fills are much better and the system protects the user from stop hunting as actual stop/TP is only stored on the user's system
