Well said, safety first and profit second...
Hi guys and gals,
Intro
My first post here.
I’m a veteran trader, with 10 years of experience in EA trading and about 100k hours of screentime under my belt.
Using (amongst others) Life Changer EA during the last 4 years I have traded my main account from 5k up to 25k.
General observations
Before going into details about the pairs, chart timeframe and other settings I have been using for the Life Changer EA, a couple of observations based on reading and re-reading the 110 pages of this thread.
- Many 90% rule traders. If you don’t know what the 90% rule is in forex, Google it
- Many people posting in this thread lack the most basic education.
They don’t seem to know what an average daily range is, don’t know how to calculate the pip value for a forex pair based on position size, don’t know margin requirements, etc. etc.
One word of advice, “Babypips” has an excellent comprehensive free education. Go study.
- Many traders have unrealistic expectations.
Watch Lambo Raul videos on Youtube and you’ll see what I mean.Forex trading is a marathon, not a sprint.
Folks expecting an ROI upwards of 5% per month will most likely blow their account.
- Many traders are undercapitalized. You need serious money to make serious money.
Alternatively, if you don’t have “serious money”, you will at least need to be very patient.
There’s nothing wrong opening a 5 USD cent account, but don’t expect to turn that into a 100 USD (cent account) in a year…
My Life Changer EA settings
Pairs: AUDCAD, AUDNZD, NZDCAD
Why these pairs? Look at the pairs traded by similar grid expert advisors such as North East Way, Waka Waka, Hundred Eggs. The ”DNA” of these 3 pairs (daily range, swings, pullbacks) makes them very suitable for grid trading.
Timeframe: M30
Not too quick (M15), not too slow (H1) for me.
Fixlot
0.01 per 500 capital
Step: 40
This represents (at the time of writing) approx. 80% of the daily range of the pairs I am trading
Takeprofit: 30
This will give a profit factor between 2.30 and 2.50.
Multiplier: 1
Anything above 1 is martingale (be it soft or hard martingale) and will blow up your account.
It' s not a question of if, but WHEN it blows up. The only “right” way to using martingale and grid trading in general is by controlling the downside.
That means using an equity stop/max drawdown of X%.
Using a multiplier of 1 is a trading technique employed by some institutional traders. It’s also known as cost averaging.
The advantage of cost averaging – as opposed to martingale - is that your account will be able to withstand much larger sustained movements.
Using multiplier 1 and 1 microlot per 500 capital, by the time it opens the 8th trade in a grid the drawdown is 15%.
Stoploss: 280
Why 280 pips? Simple. By the time the Life Changer EA opens the 8th trade in a grid, the first trade is 7 x 40 pips = 280 pips in drawdown. That means a 5-day sustained solid drop (or rise) at 100% of the ADR, without sufficient pullback to get out. By this time, I’m in a 15% drawdown, which I consider my max acceptable drawdown. So far (4-year period) the max number of trades in a grid I’ve had has been 6.
Maybe there’ll be a day it gets to 8, which means I’ll incur a 15% loss of capital.
Trailstop: 10
Trailstep: 1
Max pairtrades: 2
ROI
These setting will yield an average of 3% per month.
To give you an idea of compounding at 3% ROI per month:
500 USD starting capital * (1.03 ^ 12) = USD 712 capital end of year 1
500 USD starting capital * (1.03 ^ 24) = USD 1016 capital end of year 2
Doubling your account in 2 years time isn't so bad, is it? Go talk to your bank manager, ask him what interest rate he'd offer you for a 2-year USD 500 depo...
There’s a myfxbook account (it's not my account), that has been running the Life Changer EA using exactly these settings and pairs for more than a year.
Search for “life changer” in the systems section and you’ll find only 1 system running on an ICMarkets demo account
with a RoMaD of 10. The user is “Tortellini”.
Trade safely!
