FX Martingale Pilot Manual

Transcription

1 C O D I N G T R A D E R. C O M FX Martingale Pilot Manual Version 1.00

2 Table of Contents FX Martingale Pilot... 2 Martingale System in Trading... 3 Installation... 4 How does FX Martingale Pilot works How to use FX Martingale Pilot Disclaimer / Disclosure... 18

3 FX Martingale Pilot Are you often right about the direction of the trade but still ends up with a loss because you got into it too early? FX Martingale Pilot is a user-friendly semi automated trading program which overcomes the predicament of traders timing the market wrongly. Enhanced Martingale System Derived from the Martingale system, the program gives you more leeway for being wrong in a trade. As long as the market moves in your direction anytime during the course of the trade, you will end up with a profit. Dummy-Proof Usage Unlike most automated trading programs which required complicated setup, the program is designed for dummy-proof usage. Enter your trade direction, stop loss and risk tolerance level and the program will take over from there. Transparent Strategy As a user, you will know exactly what the program is doing and when it is going to enter/close a trade. Non Trading Mode The program provides a non trading mode which allows you to test out different settings before entering into a trade which you are comfortable with. (Non MetaTrader users can use the program and enter the computed trades in your own trading platform.) FX Martingale Pilot is NOT a black box trading program. It requires you to tell it what to trade and the amount of risk which you are comfortable with. Base on your inputs, it will calculate the levels and sizes to trade using our enhanced Martingale system, and only executing the trades when you instruct it to do so. In short, FX Martingale Pilot is the ideal tool for retail traders who want control over how they trade yet leveraging on technology to compute the best possible trades for them. To learn more about FX Martingale Pilot and other trading applications from CodingTrader, please visit For technical support / enquiries, our technical support team at support@codingtrader.com 2

4 Martingale System in Trading Trading is usually a low expectancy game where the odds of winning are low, if not negative. To overcome this, traders use creative position sizing systems to gain an edge over the house. A Martingale system is a negative progression system every time you lose a trade, you increase your position size. You continue to increase the size of each trade until you finally win. After you win, you start all over again trading the initial position size. The underlying assumption is that after a string of losses, you will eventually win. This is true as you cannot lose infinitely. Do note that long strings of losses are possible which is why you seldom hear gamblers using the Martingale systems in casinos becoming millionaires. So why use the Martingale system in trading? The difference between gambling and trading is that Casino games have fixed odds (which are always against the gamblers) whereas the odds in trading are never fixed. The market is constantly changing and most importantly your trading system decides the odds of your trades! Making use of an enhanced Martingale system, what FX Martingale Pilot essentially does is it inflates the risk by trading more in a controlled approach during a loss to increase your odds of winning, thus giving you a higher return. 3

5 Installation Download the exe installer (FX_Martingale_Pilot.exe) from the website. Double-click the file to start the installation process. FIGURE 1 Installer opened 4

6 Click Next to display the Disclaimer. FIGURE 2 Disclaimer 5

7 Click Next to display the License Agreement: You must accept the License Agreement and click Next to continue. FIGURE 3 License Agreement 6

8 Select the MetaTrader 4 installation that FX Martingale Pilot should be installed into and click Next. FIGURE 4 Choose MT4 Directory 7

9 Confirm that the installation options are correct and click Start. FIGURE 5 Confirm installation option 8

10 Confirm that the installation options are correct and click Next. FIGURE 6 Installation completed The FX Martingale Pilot program is automatically installed into your c:\program files\mt4 installation\ where mt4 installation is your MetaTrader 4 broker installation folder. That s it. You have successfully installed FX Martingale Pilot! 9

11 How does FX Martingale Pilot works FX Martingale Pilot requires you to tell it what to trade and the amount of risk which you are comfortable with. Base on your inputs, it will calculate the levels and sizes to trade using our enhanced Martingale system, and only executing the trades when you instruct it to do so. Below are the input parameters: 1) direction BUY / SELL. The direction which you want to trade in 2) entryprice The price to enter the initial trade 3) finalstoplossprice The price to close all the trades in loss. This is the risk portion of your trade. Instead of setting this as your normal stop loss price, set this price a few support/resistance level away from current price. This is the final price which you think will not be reached without a significant pullback in the direction of your trade. As long as price pulls back before touching this final stop loss price, you will end up with a profitable trade. There is a trade off in setting the price far from your entry price. The further the price is from your entry price, the smaller your eventual profit will be. This is because the program will automatically reduce the size of your trades within your reward:risk level. 4) numpipstakeprofit The number of pips to take profit on your trade. This is the reward portion of your trade. If the trade moves this number of pips above any of the entries anytime within the course of the trade, the trade will be closed at a profit. By setting a small number of pips to take profit, the probability of the trade winning is high. The trade off is your profit will be smaller as the program will automatically reduce the size of your trades within your reward:risk level. 5) numlevels The maximum number of times the program will enter the market. By increasing the number of entries to the market, the probability of the trade winning increases. The trade off is your profit will be smaller. 6) percentageaccountrisked The percentage amount of your account value which you will risk for the trade. The higher the percentage risked, the higher your profit will be. We advocate setting this value between 5-30% of your account. 10

12 Trade Example 1 (Reward Risk Ratio: ~1) In this example, we want to 1) SELL the market at an 2) entryprice of with a 3) finalstoplossprice of We set the 4) numpipstakeprofit (reward) at 67 and the 5) numlevels at 3. This gives an initial reward:risk ratio which is close to 1. (67:71) Risk of 71 pips is calculated by the program based on the finalstoplossprice and numlevels. The percentaccountrisked is set at 20%. In this example, the account size is $100,000, thus with 20% account risked, $20,000 is at risk in this trade. (Total loss will not exceed this amount) FIGURE 7 Trade example 1 Input parameters 11

13 FIGURE 8 Trade example 1 Chart 1. Initial Entry: 3.85 units is sold at nd Entry: Price goes up 71 pips to and instead of taking a loss, adds 4.08 more units, giving a total of 7.94 units. [Loss: 3.85 units x 71 pips = $ ] (assume 1 pip = $10) 3. 3 rd Entry Price goes up 71 pips more to , add 8.42 more units, giving a total of units. [ Loss: (3.85 units x 142 pips) + (4.08 units x 71 pips) = $8370] 4. Take Profit: Price goes down to (last entry of ). Close all units for a profit of $

14 Notice that you still make a profit even though your close price of is higher than your initial entry price of Note also for this example that each additional re-entry doubles the total previous units traded. This is because the reward:risk ratio is ~1 in this example. For example 2 where the reward:risk ratio is higher, each additional re-entry adds a smaller percentage of the total previous units traded. If you are observant, you should have also noticed that some of the prices are not nice round figures. These are adjustments made by the program to ensure that your trades are within the risk limit. Slight adjustments might also be made to the finalstoplossprice to ensure profit/loss calculations are exact. Trade Example 2 (Reward Risk Ratio: ~2) In this example, we want to 1) BUY the market at an 2) entryprice of with a 3) finalstoplossprice of We set the 4) numpipstakeprofit (reward) at 100 and the 5) numlevels at 3. This gives an initial reward:risk ratio which is close to 2. (100:51) Risk of 51 pips is calculated by the program based on the finalstoplossprice and numlevels. The percentaccountrisked is set at 20%. In this example, the account size is $100,000, thus with 20% account risked, $20,000 is at risk in this trade. (Total loss will not exceed this amount) FIGURE 9 Trade example 2 Input parameters 13

15 1. Initial Entry: 8.18 units is bought at FIGURE 10 Trade example 2 Chart 2. 2 nd Entry: Price goes down 51 pips to and instead of taking a loss, adds 4.17 more units, giving a total of units. [Loss: 8.18 units x 51 pips = $4171] (assume 1 pip = $10) 3. 3 rd Entry Price goes down 51 pips more to , add 6.3 more units, giving a total of units. [ Loss: (8.18 units x 102 pips) + (4.17 units x 51 pips) = $10476] 4. Take Profit: Price goes up to (last entry of ). Close all units for a profit of $8180. The profit in example 2 is also much higher than the profit in example 1. ($8180 versus $2579) This is because of the higher reward:risk ratio. By having a higher reward:risk ratio, the program will allow you to take on more risk thus resulting in a higher profit. 14

16 Note that in both examples given above, the close price is worse off compare to your entry price but you still make a profit! Trade Example 3 (Loss) FIGURE 11 Trade example 3 Chart Not all trades will end up in a profit. Occasionally price will move drastically against the trade. Example 3 shows a trade where we BUY the market and price goes down all the way. In this case, the trade is being stopped out. All positions are closed when the maximum risk allowed (percentaccountrisked) is reached. 15

17 How to use FX Martingale Pilot The FX Martingale Pilot program is located in Navigator->Expert Advisors. Double-click on FX Martingale Pilot to open its configuration window. After entering the various input parameters, set the actualtradeflag parameter to false. This will put the program in non-trading mode where you can view the calculated information on the chart without entering the trades. You should adjust the parameters to a comfortable level before placing the actual trades. FIGURE 12 Trade Information Panel FIGURE 13 Calculated Price Level 16

18 After the trade is completed, you will need to remove the program from the chart. Right-click on the chart to bring up the context menu. Select Expert Advisors->Remove to remove the program from the chart. Note that to make use of the program s automated trade management feature, the MetaTrader 4 platform will need to remain on throughout the course of the trade. Alternatively you can close the platform and manage the trade yourself by closing the positions when the profit target is reached. In either case, the positions will be closed when their stop loss prices are hit, limiting your loss to the initial risk amount set. FIGURE 14 Remove program from chart 17

19 Disclaimer / Disclosure Forex trading on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade forex, you should carefully consider your investment objectives, level of experience, and risk appetite. You must be aware of the risks of investing in forex and be willing to accept them in order to trade in these markets. Trading involves substantial risk of loss and is not suitable for all investors. CodingTrader.com has taken measures to ensure the accuracy and timeliness of the information in the application, however, does not guarantee its accuracy and timeliness, and will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information, inability to access the information, for any delay in or failure of the transmission or the receipt of any instruction or notifications sent through this application. This application is neither a solicitation nor an offer to buy or sell currencies. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. 18