Zone Recovery Trading Algo, How to Turn ALL Your Losing Trades into Winners

Forums ProRealTime English forum ProBuilder support Zone Recovery Trading Algo, How to Turn ALL Your Losing Trades into Winners

Viewing 8 posts - 1 through 8 (of 8 total)
  • #108103

    Is this feasable:

    https://www.youtube.com/watch?v=DJz4E7VyeSw @41 mins and 30 seconds Joseph Nemeth introduces his “Zone Recovery” Trading Algorithm. The idea is you never take a loss because the algo Martingales it’s trade size to always stay ahead in the number of positive ticks for the trade – pls see the image below. Nemeth states he backtested the system using a 200 pip Zone and on 10 Lots and with 20 moves back and forth through the Recovery Zone the most it cost him was 3,600 pips drawdown (from 124 mins), tha tsound like a lot…

    At around 125 mins he states that — in relation to how many times the algo has crossed up and down through the Zone Recovery area — “the market can stay there all it wants (ranging market) it won’t be there (long)… the most I’ve seen it was 6 (not sure if he means 3 longs and 3 shorts or 6 pairs of long/shorts through the Recovery Zone) in the last 36 months.”

    Zone Recovery Hedging:

    1st Long
    Enter £1.00/tick long at 1.2950 with profit target of 1.3100 (150 ticks).
    1st Short
    If market falls to 1.2900 enter short at £1.40 tick to target 1.2750.

    Zone Recovery between:
    1.2950 and 1.2900

    2nd Long
    Enter £1.00/tick long at 1.2950 with profit target of 1.3100 (150 ticks).
    2nd Short
    If market falls to 1.2900 enter short at £1.40/tick to target 1.2750.

    3rd Long
    If market fails to hit 1.2750 enter £1.90/tick long at 1.2950 with profit target of 1.3100 (150 ticks).
    3rd Short
    If market fails to hit 1.3100 and falls to 1.2900 enter short at £2.50/tick to target 1.2750.

    I was wondering what the code would look like for that and jotted out a outline here:

    Everything written in parentheses () is were I came unstuck in proreal language coding or am unsure if the outline is stated in the correct terms.

    What do you think? Too good to be true? Hit a long term ranging market and run out of margin!?

    Cheers
    Bard

     

     

    #108107

    Coded that many times before. It’s also called sure fire hedging. It works ok,  like any other martingale if you have infinite money and time 😉

    #108108

    Coded that many times before.

    Not in ProRealCode I’m guessing unless you coded separate long and short strategies as it is not possible to be long and short at the same time in a strategy?

    #108110

    Right,  as the strategy needs to control both buy and sell orders at the same time. This technique was very popular back in 2010 and before.

    I came across a lot of articles recently that deal with it…

    #108389

    Hi @Nicolas,

    If you had a wide Zone Recovery Area (200 or 300 ticks for example) then you could be tied up in position hedges for possibly weeks until a break out occurred. My intention though was to a use R Squared strength in an attempt to avoid those flat periods and take no more than 3 longs and 3 shorts as per the code above – as you say time is finite and tying up capital for weeks wasn’t my goal! 

    I understand that there would need to be two systems but am not sure how to code it. I  have put together the basics below of what I thought it might look like (but it would need separating).
    My question is how to code the two systems so that it knows how many trades are active at any one time and therefore it knows when to take the individual 3 long trades and 3 shorts. It will also need to know if a long trade or a short trade has been taken first because of the different position sizes needed depending on whether the first trade is long or short trade. 

    I’m using a variation of count of positions, although I never got that idea executed with this code below, despite spending hours on it: https://www.prorealcode.com/topic/increase-number-of-position-based-on-30-tic-moves/

    I’ve see lots of different examples on PRC and attempted to incorporate those code ideas into this code. The bulk of the idea was written by Maz here: https://www.prorealcode.com/topic/hedging-strategy/

    I’m trying to figure out how the two systems would be coded: A long system with a first long trade size of 1 perpoint and last short trade of 2.5 perpoint and code to monitor the long entries and short entries and then another system that is the short system who’s first trade will be 1 perpoint short (instead of 1.4) and who’s last trade will be a long trade at 2.5 perpoint.  I was curious to see if this could be an effective strategy?

    Cheers
    Bard

    When I tried a different entry using Heiken Ashi is red flagged the code: IF XClose >= XOpen THEN ZRABUY=1 endif   and also   IF XClose <= XOpen THEN ZRASELL=1 endif, although it’s no different code layout wise style to using stdev[0] > stdev[1] etc as an entry?

     

    #108406

    I don’t recommenced to use 2 strategies to simulate hedging as a desync might happen between the 2 systems and the result could be catastrophic. The main problem is that even if we simulate fake opposite order in both strategy, it doesn’t give you the information that the order was validated by the broker or not and effectively been put on market.

    #108414

    Right, thanks Nicolas. Curious to know, why does IG allow Force Open (hedging) but PRT doesn’t?

    #108420

    ProBacktest was not designed in the first place to do that. Hedging is not a “normal” or “logic” situation in trading/investment, not a natural way, that’s why I think it was not considered, back at the beginning of the 2000’s when ProBacktest was created.

    1 user thanked author for this post.
Viewing 8 posts - 1 through 8 (of 8 total)

Create your free account now and post your request to benefit from the help of the community
Register or Login