SteadyMartinGear V1.0 User Manual English 20151118 Steady Martin Gear
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SteadyMartinGear EA V1.0 User Manual An EA developed by a trader himself Copyright Information Reproduction or selling this Expert Advisor without prior written permission of the author is unlawful. Please read the License Agreement at the end of this manual before using the EA. Copyright 2015 – http://steadywinner.com All Rights Reserved Copyright holders: Ming and Henry, SteadyWinner Development Team Website: http://steadywinner.com Email: steadywinner@gmail.com SteadyMartinGear EA V1.0 – User Manual Page 1 Honesty is our Policy Disclaimer and Risk Warnings Trading any financial market involves risk. This manual, the EA and the content of our website and all related correspondence are neither a solicitation nor an offer to purchase or sell any financial instrument. Although every attempt has been made to assure accuracy, we do not give any expressed or implied warranty as to its accuracy. We do not accept any liability for error or omission. Examples are provided for illustrative and educational purposes only and should not be construed as investment advice or strategy. No representation is being made that any account or trader will or is likely to achieve profits or losses similar to those discussed. Past performance is not indicative of future results. (This user manual was last modified on 2015.11.18) SteadyMartinGear EA V1.0 – User Manual Page 2 SteadyMartinGear V1.0 Release Note SteadyMartinGear is a combination of three words: "Steady", "Martingale" and "Gear". Martingale is a kind of money management system which increases the lot size after losing. It seems to be paradoxical to link this word with "steady" because for long, traders consider martingale a risky system. SteadyMartinGear is an attempt to merge the two with a gearbox so that the risk becomes manageable. In short SteadyMartinGear is to put martingale under control and make it into a stable and contained EA The main features of SteadyMartinGear V1.0 1. A universal money management and account parameters reading system transplanted from our flagship product, SteadyWinner. 2. Can Trade two currency pairs: EURUSD and USDJPY. 3. CapitalShare parameter controls the portion of account balance used for trading (by percentage or as a fixed amount). 4. GearSteps parameter controls the number of steps when increasing the lot size (4 steps or 5 steps). 5. Users can change the colors of the text on the control panel so that they are visible on a dark or light background. Thank you for supporting SteadyMartinGear. We hope you love the EA and enjoy a long lasting happy trading life. If you have any question, please feel free to email us at steadywinner@gmail.com To existing users of SteadyWinner EA (including Small Account version) SteadyMartinGear is neither an upgrade nor a replacement for SteadyWinner. It is a different EA. Please do not use the same mindset and method to mange it. Since it is a martingale EA, the risk is a lot higher than that of SteadyWinner. It demands more monitoring and control action such as profit withdrawal. Existing users of SteadyWinner can skip the first chapter and the two appendices of this manual. Please read all the other chapters. Most parts of this user manual, though look familiar, are completely rewritten for SteadyMartinGear. SteadyMartinGear EA V1.0 – User Manual Page 3 Chapter 1 - Introduction SteadMartinGear (V1.0) – User Manual This document will attempt to introduce you to the possibilities of automated forex trading, and it will also guide you through the setup of the SteadyMartinGear EA (V1.0). What is Forex? The foreign exchange (Forex or FX) market is by far the largest market in the world, in term of cash value traded. It includes trading among large banks, central banks, currency speculators, multinational corporations, governments, and other financial institutions. The trade happening in the Forex markets across the globe currently counts in trillions a day. Retail traders are a small part of this market. Characteristics of the Forex market Enormous trading volume Low minimum investment Very high liquidity Geographically decentralized Long trading hours - 24 hours a day (closed on weekends) Large variety of factors affecting currency exchange rates. How can I participate? There are hundreds of retail Forex brokers online. Some have their own trading platforms, but many use the MetaTrader 4. Individuals can open a standard, mini or micro forex trading account with a broker and take part in the market. Free demo accounts are usually offered. Here below are some reputable brokers. FXCM (UK) - http://www.fxcm.co.uk Pepperstone (Australia) - http://www.pepperstone.com/ FXDD (Malta)- http://www.fxdd.com/ What is a Trading Platform? A trading platform is the software that you have to install on your computer in order to be able to interact with the trading desk. It usually has a place for live market quotes, charts and your account information. You use the trading platform to open or close trades, adjust take profit and stop loss levels and so on. SteadyMartinGear EA V1.0 – User Manual Page 4 What is MetaTrader 4? MetaTrader 4 is a free trading platform developed by a company called Metaquotes software (www.metaquotes.net) and is one of the most popular trading platforms among retail forex brokers. MetaTrader gives a trader the ability to write a program which completely automates the trading operations of the MT4 platform, using the MQL4 programming language. What is an Expert Advisor? An Expert Advisor (EA) is a program written in the MQL4 programming language, which has the ability to automate the opening and closing of live trades on the MetaTrader 4 forex trading platform. It can also manage Stop Loss, Take Profit and Trailing Stop levels according to preprogrammed parameters. Every EA trades differently. A well-tested, solid EA can be left unattended to trade a live trading account, hoping that the balance will grow as a result of the program’s logic to enter the market. Requirements for setting up an automated trading system - A computer - An Internet connection - MetaTrader 4 (Free download) - An Expert Advisor program (like the SteadyMartingGear EA) - A demo or live account with a forex broker - You may need a VPS later on if you don’t want to switch on your computer 24 hours a day, 5 days a week. SteadyMartinGear EA V1.0 – User Manual Page 5 Chapter 2 - The trading logic of SteadyMartinGear V1.0 SteadyMartinGear is a trend following martingale EA. It is composed of two parts: [1] trading signals and [2] a 5-step martingale system. The trading signals provide an analysis on market conditions and set the trading direction, while the 5-step martingale system controls the lot size and ensures that the risk is manageable Trading signals Trending or Ranging? The traditional way of understanding the market is to divide it into the trending market and ranging market. Different markets call for different strategies. A single strategy might wins in one but fail in another. But the question is how we can tell which market we are in. The method we use is Bollinger Bands + Envelope. The red lines in the diagram below are Bollinger Bands, while the blue lines represent Envelope. When the blue lines embrace the red lines, it is ranging market. When any one of the red lines (the upper line or the lower line) breaks out, it is the trending market. We stop trading when the market is ranging, because the market direction is not clear. It is easy to lose. In trending markets, the direction is clear. If the trend lasts for some time, the chance to win is high. We use the same principle to monitor the market conditions on different timeframes. SteadyMartinGear EA V1.0 – User Manual Page 6 Market Direction Indicator The charting software we are using has an obvious drawback. When we use a high timeframe, we cannot see detail movements. When we use a low timeframe, we lost the whole picture. We have to flip between timeframes if we want to see both. The concept behind the indicator called "Market direction indicator" is to help traders to see the market conditions of 4 frequently used timeframes say (D1, H4, H1 and H30) at a glance. It shows four dots on the upper right corner each stands for one timeframe. The dots can have three colors: [1] Green, buy. [2] Red, sell. [3] Grey, wait. Here are two examples. Example 1 - This is a chart on EURUSD. From left to right the first two dots (D1, H4) are green, which means an upward trend on higher timeframes. The third dot is red, which means a down trend in medium timeframe. The last dot (M30) is green, which means an upward trend in lower timeframe. Example 2 - This is a chart on USDJPY. From left to right the first dot (D1) is green, which means an upward trend. The other three (H4, H1, M30) are grey, which means the market is ranging. SteadyMartinGear EA V1.0 – User Manual Page 7 The Market direction indicator is for human eyes. It is drawn here only for illustrating the general trading logic. An EA does not need to see the colors of the indicator. We can simply input the readings of the indicator and make it into an EA. 5-Step Martingale System Martingale In forex, the word "martingale" usually means a double-up system. After losing, the trader increases the lot size by 100%, such as 1, 2, 4, 8 and 16 and so on. The increment ends only when the trader finally wins. This kind of money management system has a bad reputation because if the trader did not win after several attempts, the lot size would rocket up and finally blew up the trader's account. However, the definition of "martingale" can be extended to cover all kinds of systems that increase lot sizes after losing. We called them "increments". The increments do not have to be 100%. They can be milder, like 50% or smaller. We have done a research with a simulator. Even a 20% increment can make the backtest curve go up smoothly. The chart on the left below is the win/lose ratio (the yellow line). We can see that on the whole we do not have any luck. If the lot size is fixed, we will lose. But when we use increments, we can win with a bad win/lose ratio. The green line on the right shows the balance when we use an increment of 20% after losings, and a decrement of 20% after winnings. To make the green line straight, 20% seems to be the minimum requirement. We have lower values, it worked but the green line is not that smooth. SteadyMartinGear EA V1.0 – User Manual Page 8 It works even if the increment is 0.01. Here below is an example. The lot size is increased by 0.01 after losing and reduced by 0.01 after winning. In the long run, it forms an upward curve. But it is not smooth and sometimes, it can take so long to recover from heavy drawdowns that most traders will lose confidence and give up after falling into the dip. The win/lose results of the simulator is by random. In extreme cases, there can be 20, or even 40 losses in a row. However, this is very rare in forex, if we believe that forex is not random. What’s the difference between SteadyMartinGear & traditional martingale EAs? Traditional martingale EAs pay little attention on market directions. Basically it is just a simple money management machine. It looks alright at normal times, but cannot stand difficult market conditions. Those extreme market situations are like typhoons, earthquakes, and tsunamis. Though not common, they will surely strike. That is why martingale EAs cannot be used for long. They blow up accounts. Usually martingale EA venders can only show short-term results and prey on inexperienced traders. Some of them are scammers who put cheating code in the EA, making the EA stop trading on historic losing days. Actually there is a way to find out even if we do not have the source code. It is by changing the date of the historical data to a few weeks earlier or later, and you will see the difference. We are honest developers. To make SteadyMartinGear works, we put a lot of attention on monitoring the market directions. This helps to reduce the chance of consecutive losses. Also, we use 99% tick data backtest to ensure that the account is safe in all testing years, and the drawdown level is acceptable. Here are two backtest reports. The capital share was fixed at US$1000 and the base lot size is fixed at 0.01. This is to help readers to see clearly the maximum drawdown both in value and in percentage. (SteadyMartinGear’s lot sizes can grow with account balance and this will be discussed in Chapter 5: Money Management.) SteadyMartinGear EA V1.0 – User Manual Page 9 EURUSD, 2010/1/1–2015/9/30, CapitalShare=-1000, GearSteps=5 USDJPY, 2010/1/1–2015/9/30, CapitalShare=-1000, GearSteps=5 SteadyMartinGear EA V1.0 – User Manual Page 10 Base Lot Size 1X If we want to lower the drawdown, an increment and decrement of 20% will be enough. Since the smallest trading lot size of MetaTrader 4 is 0.01, to have an increment/decrement of 20%, the smallest lot size must be 0.05. But many traders might not have enough capital to implement this strategy. For example, if a trader has only US$1000 in his account, to start with 0.05 lots, he will over trade. To cater for small accounts, we will use a base lot size of 0.01. To cater for different capital amounts, SteadyMartinGear will calculate the optimum lot size from the available balance and stop loss so that the loss of a trade will not exceed 1% of the account. We called this 1X. In MetaTrader 4 the minimum value of 1X is 0.01 (or Min Lot). Multi-Step Increment / Decrement SteadyMartinGear will start with the lot size of 1X. When it loses, the lot size of the next trade will be doubled. When it wins, the lot size of the next trade will be halved, until it goes back to 1X. Though we try very hard to avoid, sometimes there will be losing streaks. If we let the lot size increase indefinitely, it could grow beyond control and blow up the account. Therefore, there must be a stop to protect the account. The way to do it is to limit the number of increments. While SteadyMartinGear always start with lot size 1X in a new account, on a 5-step increment setup, the lot size will varies between 1X, 2X, 4X, 8X, and 16X. If you find this too risky, you can choose a 4-step increment (1X, 2X, 4X, 8X) instead. SteadyMartinGear EA V1.0 – User Manual Page 11 Important notes when using the SteadyMartinGear EA Though we have tried all means to prevent busting our accounts, there is no way to eliminate that possibility. According to Murphy`s law, whatever can go wrong will go wrong. The only thing we can do is to use the EA with great care. Here are some rules users should observe 1. SteadyMartinGear is a high risk EA. Do not put all you money on it. As explained by many investment theories, a healthy portfolio should consist of high-risk, medium-risk, and low-risk investments. High risk investments should be limited to 10-20%. Most of our money should be put on EAs that will never bust your account (such as SteadyWinner). 2. Use a separate account for SteadyMartinGear so that it will not affect others. SteadyMartinGear can trade EURUSD and USDJPY, so we can use two charts and set CapitalShare to 50%. (Please see Chapter 4: Parameter settings for detail.) 3. The smallest lot size of MetaTrader 4 is 0.01. With the existing stop loss, users should have at least US$1000 to run SteadyMartinGear. If a user wants to trade both EURUSD and USDJPY, the initial capital should be doubled (US$2000). According to backtests, it can trade both pairs at the same time so please do not take the risk of running two currencies with only the money for one. 4. Withdraw regularly. At least users should withdraw their initial capital before accumulating. For example, if the initial capital is US$1000, please withdraw (in one lump sum or by several partials) US$1000 of profit. After retrieving the initial capital, we still recommend frequent withdrawals, at most leaving half of the profit to accumulate and achieve the compound effect. SteadyMartinGear EA V1.0 – User Manual Page 12 Chapter 3 - How to set up SteadyMartinGear V1.0 1. Download and install MetaTrader 4 from your chosen broker or from MetaTrader4 website http://www.metatrader4.com/en/download if you have not selected a broker yet. 2. When you run MT4 for the first time, it will prompt you to open a demo trading account. Do so. It is free. Some demo accounts expire in three months. Demo accounts at some brokers never expire. Of course, if you have a live account, you can set up SteadyMartinGear on it. 3. Unzip " SteadyMartinGear V1.0-Build*.zip ". Right click the unzipped folder "MQL4", and then click "Copy". * represent an 8 digit date code of the EA’s final compilation date which changes from time to time 4. Open target folder. For MetaTrader 4 -Build 600 and newer versions, target folder is:To find your broker’s MT4 data folder, select from the menu bar File Open Data Folder Every instance of MT4 will generate an independent Data Folder, the name of which is some strange combination of numbers and letters. Right click the blank space in the folder, click "Paste". You will see 3 message boxes saying target folder already exists, one for MQL4, one for Expert, one for Indicators. Click "Yes" to all of them. SteadyMartinGear EA V1.0 – User Manual Page 13 5. Close and then restart MT4. Choose "View" and the "Navigator". Now you should see the EA already installed. (See diagram below) 6. Open a EURUSD H1 or USDJPY H1 chart. Drag-and-drop the EA to the chart you want to run it on. This will result in a pop-up box. Make sure you click on "Allow live trading" under the 'common' tab of that box so that the EA will work. Click OK. If you did everything right, you will see a tiny smiling face at the top right hand corner of the chart. Your automated trading system is now up and running. NOTE: SteadyMartinGear can read data from various timeframes. It does not matter which timeframe the user put it on, the result is just the same. SteadyMartinGear EA V1.0 – User Manual Page 14 If the little face is not smiling (if it is a frown), it means you did not check the "allow live trading" check box when you attached the EA. To fix this, simply right click anywhere on the chart, and select "expert advisors" from the drop down menu and then "properties" to get to the current EA’s properties. Once there, on the common tab, click to “allow live trading” and click “OK”. If there is still no smiling face, try to check if you have clicked the “Expert Advisor” button on top and make it green. That is it ! This button should be green. The smiling face Note: For the EA to work, you must switch on your computer 24 hours a day, Monday to Friday. If you find this too troublesome, you can put it on a VPS (Virtual Private Server). SteadyMartinGear EA V1.0 – User Manual Page 15 Chapter 4 - SteadyMartinGear V1.0 Screen Display and Parameter Settings Screen display All customers please read this section very carefully to understand the definition of each display items and the use of various parameters. Attention: :SteadyMartinGear V1.0 Demo Version can be used on Demo accounts only. V1.0 Full Version has no limitation. SteadyMartinGear uses a simplified display panel. Here is a list of abbreviation used: Acc Type = Account Type: Account Type can be Demo or Real Currency = Account Currency: Base currency used when opening the account Acc Bal = Account Balance: Current balance of the account Gear Steps = Gearbox Steps: Number of Steps in increment Min Lot = Minimum Lotsize: Minimum lot size of the account Min Bal = Minimum Balance: Minimum initial balance required by the EA Cap.Share = Capital Share: Percentage or value of capital used by the EA (See Parameter Settings for detail) Max Spread = Maximum Spread: Maximum spread allowed. If current spread > Max Spread, the EA will stop trading Avl Bal = Available Balance: Balance that can be used by the EA. It is affected by Account Balance and Capital Share 1X Lot = Base Lotsize: Minimum lot size controlled by Money Management Max Lot = Maximum Lotsize: Maximum lot size controlled by Money Management & Gear Steps Next Lot = Next Trading LotSize: The lot size of next order Cur Spread = Current Spread: Current spread SteadyMartinGear EA V1.0 – User Manual Page 16 Parameters Settings Follow these steps to open the inputs tab: right click anywhere in the chart – when you see the menu, choose Expert Advisor – then properties – then click Inputs tab. The parameters of SteadyMartinGear can be divided into [1] Personalization settings, [2] Trade management settings, and [3] Color settings. We will explain each of them below. Personalization Settings (parameters in the red box) MagicNumber - Default is 338822. (We highly recommend you change it) MagicNumber is used by an EA to track and manage its own orders. By using different Magic Numbers for EAs you use, all EAs can “live peacefully” together and will not mess with orders from other EAs. We recommend you change it, so each SteadyMartinGear customer uses different magic numbers and make those market makers difficult to corner us. Comments - Default is Trader-SMG. (We highly recommend you change it) Comment is written by EAs mostly for human users to recognize the EA’s order. MT4 will frequently modify the comments. For example, MT4 will add [sl] to the end of comment if the order was closed by a StopLoss hit or add [tp] if the order was closed by a Take Profit hit. For similar reason like MagicNumber, we recommend changing the default to something only meaningful to you. LicenseKey - Please enter the order number on the confirmation letter when you buy the EA. License Key won’t be checked during the refund window period. After that period, you will receive an updated that contains your private license. After the update, your License Key will unlock the EA. SteadyMartinGear EA V1.0 – User Manual Page 17 Trade Management Settings (parameters in the blue box) CapitalShare – Default is 100 (100%), this parameter can be used in two ways: Input a positive number indicates a percentage of account balance available to the EA. The maximum is 100 (100%) For example: enter 50 means we want SteadyMartinGear to use 50% of the account balance. Input a negative number, the number after the “-” sign will be used as the maximum dollar amount available to the EA For example: enter -1000 means you want SteadyMartinGear to use at most 1000 dollars for trading. Of course, this function will be effective only if you have more than 1000 dollars in the account. Attention: if you enter 0, the system will reset it to the default value, 100 (100%). GearSteps – default is 4, can be set as 4 or 5 GearSteps control the lot size increment steps of SteadyMartinGear. Enter 4: there will be 4 steps - 1X, 2X, 4X, 8X. Enter 5: there will be 5 steps - 1X, 2X, 4X, 8X, 16X. Please see Chapter 5 – Money Management for details. MaxSpread – default is 4.0, range is 1.0 – 4.0 If entered a non-zero number, SteadyMartinGear will compare this value with the current spread before opening a trade. If current spread is higher than the value, SteadyMartinGear will not open trade. This can prevent the EA to open trade when spread is too high. SteadyMartinGear EA V1.0 – User Manual Page 18 EURUSD and USDJPY are pairs with high liquidity so spreads should be very low. If your broker’s spread offers on the 2 pairs are constantly higher than 4, you should consider switching to another broker. Note: You should only set MaxSpread to 1.0-2.0 when your account has super low spread (the low spreads usually come at a price of fixed commissions). Setting the MaxSpread too low could completely stop SteadyMartinGear from trading. Color Settings (parameters in the green box) Some customers use bright color backgrounds in their charts. In SteadyMartinGear V1.0 you can change the colors of the display text to better suit your chart backgrounds. Double click the text you want to change, click the pull down menu/triangle and you can use the palette to choose the colors you want. SteadyMartinGear EA V1.0 – User Manual Page 19 SteadyMartinGear EA V1.0 – User Manual Page 20 SteadyMartinGear's requirement on brokers Technically, the money management of SteadyMartinGear v1.0 is very advanced. It can run on all brokers be it 4 or 5 digit brokers, nano, micro, mini, or standard accounts, normal broker or ECN broker. It can calculate lot size correctly for accounts based on US Dollars, Euros, British Pounds, Australian dollars, JapaneseYens, and so on. SteadyMartinGear can recognize the difference and make the necessary adjustment. No extra setting is needed. However, we recommend you open your account with a regulated broker in a country with a sound legal system (such as Britain). In case the broker fails, the regulator will arrange takeover and liquidation. There is still a chance to retrieve all or part of your capital. We have experienced such a process and eventually recover all our capital with the help of the liquidator. Leveraged forex is a high risk game plus SteadyMartinGear is also a high risk EA. Please find a safer broker to run it. SteadyMartinGear EA V1.0 – User Manual Page 21 How much capital is required to run SteadyMartinGear? The minimum capital requirement of SteadyMartinGear is calculated by StopLoss Pips, Pip Value and Min Lots of the account. The table below shows the minimum capital requirements of common account types. The figures in green show the minimum capital requirements for all account types. If your account currency is not US dollar, SteadyMartinGear will automatically calculate the equivalent of the minimum funding requirement, and remind you when your balance falls below safety levels. Notes: 1. If you have limited capital, you should use a broker with Micro accounts. (Theoretically a Nano account would be more ideal, but currently few brokers provide Nano accounts and because the lot size settings are different, liquidity could be low. The EA might have difficulty opening and closing trades. If you find a good Nano broker, please let us know.) 2. The above table shows SteadyMartinGear's minimum capital requirements when you trade a single pair. We suggest you put in 20-30% more capital as a buffer. This can help the EA withstand the most adverse market conditions. 3. If you trade both EURUSD and USDJPY pair, please double the Minimum Capital amount, but one set of buffer, says 30% or above, should be enough. 4. When the available balance falls within the range of 50% -99% of the minimum funding requirement, SteadyMartinGear will prompt you with a yellow alert (EA ALERT), which tells you to add money or increase CapitalShare as soon as possible. 5. When the available balance falls below 50% of the minimum funding requirement, SteadyMartinGear will prompt you with a red alert (EA STOPPED) and stop trading. You must now add money or increase CapitalShare. 6. In order to give SteadyMartinGear enough room to maneuver during adverse market conditions and help it recover earlier losses, we cannot make the fund control too tight, but please do not exploit this loophole by trading two currency pairs with money for one. It is very, very dangerous. You’ve been warned. SteadyMartinGear EA V1.0 – User Manual Page 22 Chapter 5 - Money Management SteadyMartinGear's initial lotsize (1X) SteadyMartinGear is a martingale EA. In order to reduce the threshold of capital requirements, in the design of money management systems we first considered the lowest lot size (Min Lot). The EA will double up the lot size of the next trade after a losing trade, while after a winning trade that lot size will be halved. In a typical Micro account, if SteadyMartinGear loses a few trades in a row, the lot size will rise from 0.01 to 0.02, 0.04, 0.08 and 0.16. At 0.16, the EA will stop double up, as it is already the upper limit. Further increments will likely blow up the account. If the EA wins a few consecutive trades, the lot size will reduce from 0.16 to 0.08, 0.04, 0.02 and 0.01. At 0.01, the EA will stop to reduce because it is already the lower limit; and cannot go any lower. The above example of consecutive win / lose is an extreme case. Under normal circumstances, SteadyMartinGear will win and lose alternately and the lot size will go up and down like the gear changing in a car. Here is a simplified example: Order Lot size Win/lose Order Lot size Win/lose Order Lot size Win/lose 1 0.01 Win 8 0.16 Lose 15 0.01 Lose 2 0.01 Lose 9 0.16 Win 16 0.02 Lose 3 0.02 Lose 10 0.08 Win 17 0.04 Win 4 0.04 Win 11 0.04 Win 18 0.02 Lose 5 0.02 Lose 12 0.02 Win 19 0.04 Win 6 0.04 Lose 13 0.01 Win 20 0.02 Win 7 0.08 Lose 14 0.01 Win 21 0.01 Win ... However, the use of 0.01 as a starting lot size only applies to small accounts. If the user has a big account (for example $20,000), this starting lot size will become too small. Since most EAs use percentage in money management control, we begin with a trade that would only loss 1% of the Account Balance if it was stopped out. We calculate the exact lot size for that trade and call it Lot Size 1X, or just 1X. The formula is 1X = (Account Balance * 1%) / (Stop Loss Pips * Pip Value per Lot) With this 1X as the starting lot size, the usable lot size increments depend on user input to the GearSteps parameter and all lot sizes are multiples of 1X: If GearSteps is 4, the usable lot sizes will be 1X, 2X, 4X, 8X (four steps) If GearSteps is 5, the usable lot sizes will be 1X, 2X, 4X, 8X, 16X (five steps) SteadyMartinGear EA V1.0 – User Manual Page 23 The minimum capital requirement of SteadyMartinGear As mentioned above, SteadyMartinGear's starting lot size is 1X. If the order closes by stop loss, we will lose 1% of our balance. Also, this 1% cannot be less than the account's minimum lot size (Min Lot). We can then treat this amount as 1 % of the minimum capital. If we multiply this number by 100, we can get the minimum funding requirement. Here is the formula: Min. Capital Requirement = Min. Lot Size * (Stop Loss in Pips * Pip Value per Lot) * 100 Take the classic Micro account as an example. Since the minimum lot size is 0.01, applying the formula described above, its minimum capital requirement is 0.01 * (100 pips * US$10) * 100 = US$ 1,000. SteadyMartinGear's Money Management Since SteadyMartinGear is a martingale EA, the trading lot size cannot be simply calculated using N% of account balance. It start trading with the base lot size 1X that will cause 1% capital loss if that trade get stopped out. All martingale increment will base on multiples of 1X. As the account balance grows, 1X grows with it. We continue to use a classic Micro account as an example. Suppose the available balance for the EA is US$1,000, since 0.01 is smallest possible lot size, the next increment must be 0.01. When the available balance reaches US$2,000##, 1X will become 0.02 and the increments will be 2X=0.04, 4X=0.08, 8X=0.16, 16X=0.32. The earning power of the EA is doubled (so is the risk.). The next trigger point is US$3,000, 1X=0.03. Theoretically, the time to reach this next trigger point will be halved. The process of accumulation will become faster and faster. What happen if the user has a starting capital of $ 10,000? For a start, 1X = 0.10, when his available balance reaches $ 11,000, 1X will jump to 0.11, which means his balance only needs to increase by 10% to trigger the jump. Of course, this is to assume he is also using a Micro account. If he uses a Mini Account in with minimum lot size 0.1, then he has to wait for the available balance to grow 100% to trigger the first jump. This is similar to an account with $1,000 and a minimum lot size of 0.01. Remark: ## In the above example of Micro account, we could have used conventional Rounding method, so that when available balance reaches $ 1,500, 1X becomes 0.02. But SteadyMartinGear already uses 100% martingale, we want to avoid too much risk in other areas, so we use the Round Down method, which requires available balance to fully reach $ 2,000 before 1X become 0.02. Now let us look at some backtest reports. SteadyMartinGear EA V1.0 – User Manual Page 24 EURUSD, 2010/1/1–2015/6/30, Initial Capital US$1000, CapitalShare 100%, Gear steps 4 EURUSD, 2010/1/1–2015/6/30, Initial Capital US$1000, CapitalShare 100%, Gear steps 5 SteadyMartinGear EA V1.0 – User Manual Page 25 USDJPY, 2010/1/1–2015/6/30, Initial Capital US$1000, CapitalShare 100%, Gear steps 4 USDJPY, 2010/1/1–2015/6/30, Initial Capital US$1000, CapitalShare 100%, Gear steps 5 SteadyMartinGear EA V1.0 – User Manual Page 26 Some observations: Maximal drawdown dollar value would increase when we use Gear Steps 5 instead of Gear Steps 4. But the increase of Max DD% in USDJPY pair was indeed very gentle. When using Gear Steps 5, the Profit Factor of both currencies improves. Again, the increase in USDJPY pair was milder. At the time of finalizing this manual, USDJPY equity curve just suffered an equity curve dip but bases on past bacttested pattern, we believe it will climb out from that valley soon. If that makes you worry, please just don’t trade this pair for now. We must declare we will not advocate the use of Gear Steps 5. First of all, different traders have different attitudes towards risk. Second, when confronted with extreme market conditions, SteadyMartinGear with Gear Steps of 4 can withstand 2-3 more losing trades. Probably, this could save you from account blow-up. SteadyMartinGear EA V1.0 – User Manual Page 27 Chapter 6 – SteadyMartinGear Setup and Management SteadyMartinGear is a martingale EA. No matter what we do, we cannot eliminate the possibility of accounts blow up. The chapter serves as a reminder of risk and our suggestions on Setup and Management of SteadyMartinGear Stage 0 - Mental Preparation Let me be honest, in a worst case scenario, a user can encounter extreme market conditions immediately after he started SteadyMartinGear and suffer several losing trades in a row making his available balance quickly fell below 50% of Minimum Capital Requirement and triggered the EA’s emergency stop. Although we did not see this in backtesting, we must always get prepared for the worst. Please ask yourself questions below. If you answer NO to any of the question below, you should not use SteadyMartinGear in your account: 1. Can you afford to lose (all) the money you use as capital for SteadyMartinGear? You should consider feeling of yourself and your family. 2. Are you sure you won’t need the money in the foreseeable future, say 1-2 years? 3. SteadyMartinGear’s equity curve can dip into a valley from time to time (unfortunately, this is true for all Martingale EA) and can sometimes take several months to recover. Do you have the courage and patience to wait and see it recover? 4. Can you follow the strategy we suggest? No hurry, you may need to finish reading the rest of this chapter to answer this final question Stage 1 - Initial Setup When you fully understand the risk and you are ready to run SteadyMartinGear, please follow these steps for initial setup: 1. Prepare at least US$1,000#, find a popular, regulated broker in a country with a sound legal system and open an independent Micro Lot accounts to run SteadyMartinGear (if you find a good broker which offers Nano accounts, please inform us). 2. If you open an account with only $1,000#, you can trade EURUSD on H1 chart, because it was the better pair in our backtests. If you have $2,000#, you can trade both EURUSD and USDJPY*. Set the CapitalShare parameter to 50 on both EA instance, so that each one occupy half of the funds in the account. If you have $3,000, you can change the CapitalShare percentage for each pair as long as each pair has an Available Balance meeting the Minimum Capital Requirement. 3. Set GearSteps to 4 or 5 according to your risk preference. Backtest results show that UERUSD had a violent equity curve, while USDJPY* had a relatively gentle curve. You can be conservative by setting GearSteps of both pair to 4 or aggressive by setting both of them to 5. If you want a balanced medium, setting GearSteps 5 for USDJPY* and 4 for EURUSD pair sounds good. SteadyMartinGear EA V1.0 – User Manual Page 28 # Please note the figures above are just Minimum Capital Requirement for a Micro account. In adverse market condition, adding 20-30% buffer capital would be very helpful. If you are trading 2 pairs, 1 set of buffer capital, say 30%, should be enough. If you have Mini or Standard Account, the Minimum Capital Requirement can be found in Chapter 4. Please adjust your capital amount proportionally. * At the time of finalizing this manual, USDJPY equity curve just suffered an equity curve dip but bases on past bacttested pattern, we believe it will climb out from that valley soon. If that makes you worry, please just don’t trade this pair for now. Stage 2 - Ongoing Management The following strategy will initially slow down the growth but it can maximize the protection of funds. Please follow them: 1. Whenever the cumulative profit reach 20% of the principal, withdraw all the profit, if you want the account to grow faster, you can take out half of the profit (10% of the initial capital). Insist on doing so until you have withdrawn the entire principal. Note that some brokers have service charge on withdrawal that frequently doing so can erode your profit. If withdrawal is free for you, or you have a large account, you should begin withdrawal when profit reaches 10% of the principal. 2. After withdrawing your principal we still recommend you regularly withdraw half of your profit (or a percentage of it). Some traders might think they are now playing with pure profit, that was someone else’s money, and don’t care about upcoming loss. I would say, if you really want to become a successful trader that accumulates wealth, please treat all your profit as your own money and manage them with caution. To implement this set of strategies, the biggest struggle is a choice between withdrawing earned profit or leave it in the account to accelerate compound effect. When I face similar situation in the past, I tried many times to test my luck, and leave the funds in the account. Each time the market taught me a hard lesson and I blew up several accounts. The market began to reward me until I learned to become cautious. We know that some people will not listen as they would rather try their luck. Remember, you’ve been warned! Can SteadyMartinGear trade with fixed lot size? SteadyMartinGear is a martingale EA so we cannot directly enter a fixed lot size. But the user can input the negative value of the EA’s Minimum Capital Requirement (as shown on the EA display) in the CapitalShare parameter which has the effect of fixing the base lot size 1X and force SteadyMartinGear to use a fixed set of lot sizes when opening trades. This can help users testing the EA or management of other trading accounts. For example, in a Micro account, you set CapitalShare parameter to -1000 and force the EA to trade with a fixed set of lot sizes (0.01, 0.02, 0.04, 0.08 and 0.16). SteadyMartinGear EA V1.0 – User Manual Page 29 Closing remark Thank you for your support. We have prepared two appendices for your reference. Please feel free to email us at any time. (steadywinner@gmail.com) Ming & Henry SteadyWinner Development Team SteadyMartinGear EA V1.0 – User Manual Page 30 Appendix A - Backtesting How to perform a conventional MT4 backtest properly Backtesting in Metatrader is not as easy as we first thought. Please follow the steps below and you will get better results. Historical data is essential in backtesting, you must download them from reliable sources. If you are new in backtesting, please start by downloading historical data from Tools –Hisotry Center – Forex – EURUSD – Download. It may take a few minutes as the files are very big. The download screen should look like the picture below: Please make sure you download all M5, M15, M30, H1 data because SteadyMartinGear uses multiple timeframe prices to calculate indicator values. Otherwise, you cannot test properly. Because the data are renewed very often, it is hard to collect data of the same period. We suggest you do the download during the weekends when the servers are less busy. Before you start backtesting, make sure you enter a spread, otherwise, MetaTrader 4 will use your account’s current spread and your backtest results are likely to be different every time. After setting the spread, you may enter a date range and then click [Start]. We usually use 2 pips (20 points for 5-digit quote) for backtesting spread as this is higher than normal spreads of most popular brokers. SteadyMartinGear EA V1.0 – User Manual Page 31 Note: If you want to backtest with different parameters, may be GearSteps=5 and see what would happen, you can Expert properties panel, click the input tab. Change the value from 4 to 5 and click [OK]. You can change other parameters as well. SteadyMartinGear EA V1.0 – User Manual Page 32 After the test, you can click the Results tab shows the details of each transaction. Clicking the Graph tab shows the equity curve SteadyMartinGear EA V1.0 – User Manual Page 33 The Report tab is a summary, showing Profit Factor, Maximum and Relative Drawdowns. We can save the report by Right Click anywhere on the summary and select “Save as Report” from the pop-up menu. Here is a sample tester report: SteadyMartinGear EA V1.0 – User Manual Page 34 More Precise Backtesting with Tick Data The historical data above are from Metaquotes, which are downloadable no matter which broker you use. Though far from perfect, the Metaquotes data is widely used since it is free. It is good for testing mid to long term strategies. But starting from SteadyWinner 5.0, we started to use a more precise Tick Data system for backtesting. To understand why, let’s look at a 1 minute candle. A candle only tells us the Opening, Highest, Lowest, Closing price within that minute. But it doesn’t tell us whether the price reached the Highest point first or the Lowest point first. The diagram below shows 2 possible price movement patterns within 1 minute that would produce exactly the same M1 candle. However, to an EA seeking only a few pips, such difference could mean live or death. Assume the EA opened a BUY order with Entry Price at the orange line, Stop Loss at the red line and Take Profit at the green line. If the price hit the Lowest point first, the order would be closed by Stop Loss (the left blue circle). But the order could be closed with a Take Profit if the price hit the Highest first (the right blue circle). We need a set of data that simulate every movement within the minute and that is where tick data backtesting come in as it gives a more accurate picture of how an EA would have performed in history. The backtesting process is the same, but with tick-by-tick data, the modeling quality is better. All the backtest reports we used in this manual are Tick Data backtesting reports (you can tell by the 99% modeling quality). Recently, MetaTrader 4 no longer allows backtest using outside data source. So we need a tool to overcome this limitation. We are using Birt’s Tick Data Suite from EA review dot net. Since this is a commercial product, we are not going to discuss details here. If you want to do your own Tick Data backtesting and are interested in Tick Data Suite, please visit Birt’s website: http://eareview.net/tick-data SteadyMartinGear EA V1.0 – User Manual Page 35 Backtesting focus for SteadyMartinGear SteadyMartinGear is a new product. We put special focus on the following criteria when doing backtests 1. Profit Factor (PF) Profit Factor = Sum of dollar won / Sum of dollar lost (in the test period) It is the simplest and most reliable Performance Indicator of an EA. A Profit Factor of 2 means for every 1 dollar we lose, we expect to gain 2 dollars back. The Profit Factor of SteadyMartinGear is close to but still under 1.5. 1.5 is the benchmark we will try to achieve. 2. Maximal Draw Down The maximum drawdown MAX DD indicates how much % of capital we could lose according to history backtest if we start at the worst point and suffer many losses. For SteadyMartinGear, the Maximum Draw Down is around 20%, which is acceptable. 3. A respectable Equity Curve We don’t believe in silky-smooth or straight-line equity curve. An EA trading for months without a single loss is incredible. We think a natural Equity Curve of an EA should have some drawdowns, but we try to make sure the EA does not take too long to recover from such a drop. Interestingly, EAs with a good PF usually have nice Equity Curves. SteadyMartinGear EA V1.0 – User Manual Page 36 Appendix B – Resources to learn forex and MQL4 If you like to know more about forex trading, you can learn from the following sources: For Forex beginners http://www.babypips.com/school/ Learn how to use Metatrader (Metaquote Official Website) http://www.metaquotes.net/en Popular Forex forums http://www.mql4.com/ http://www.forexfactory.com/ http://www.forex-tsd.com/ http://www.donnaforex.com/ http://indo-investasi.com/ Learning how to code MQL4 MQ4 is very similar to the C programming language. Once learned, you can code your own EA or customize existing ones. Below are some resources to learn MQ4. It would be much easier if you have programming experience in C. [1] The MQ4 course by Coder Guru. This is the first book I read, but the English is sometimes unreadable. http://www.forexmt4.com/_MT4_Tutorials/Mql%204-%20Metatrader%204%20Develo pment%20Course.pdf [2] A book by S. Kovalyov at http://forum.mql4.com/12929 This book is free on http://www.mql4.com/ but is difficult for beginners. [3] “MQ4 for Traders” by David M. Williams. This is an easy book, but you have to pay for it. The author also offers a free email course on his website. I suggest you read this book first. http://www.iexpertadvisor.com/metatrader-mql-expert-advisor.htm [4] There is a new book called “Expert Programming” by Andrew R. Young. It is the first comprehensive guide to MQL programming. The author is an experienced coder, and he gives in-depth SteadyMartinGear EA V1.0 – User Manual Page 37 analysis on building complicated EAs. Source code is included. You can buy it from Amazon or other online book stores. [5] There are some courses on MQL4 in Udemy, you can visit the website do a keyword search for “MQL4”. https://www.udemy.com/ SteadyMartinGear EA V1.0 – User Manual Page 38 Where to buy SteadyMartinGear? SteadyMartinGear V1.0 Demo is free, but can only be used on demo accounts. SteadyMartinGear V1.0 has no limitation. It can be purchased at our website: http://www.steadywinner.com. The price is US$50. Our product is very much underpriced. If you like it, please support us by buying your own license. Refund Policy We assume that you have run the demo version for some time before making any purchase. However, if for any reason you cannot run the EA or find it unsatisfactory, a refund is possible. The distribution is through ClickBank. They will hold the money for 60 days in case customers have complaints. We are honest EA developers. Any claims for refund will be handled according to the rules set by ClickBank. Unfortunately, we found some abuse on this policy. Usually, these are users who know very little about backtesting. For example they buy the EA on Saturday and backtest it without knowing how to correct the weekend high spread. Some of them even do not bother to download the historical data. Of course, the results were disappointing. They thought they were scammed and asked for a refund on Sunday or Monday. Such misunderstanding could be avoided if they try our demo version first and contact us if they have questions. That is why we want to set a restriction that we will entertain request for refund after 40 days. One or two weeks are too short a time to judge an EA. We will not ask for your trading records, but we do hope that you have used it for some time, live or demo. Also, if you can, please state a specific reason for refund, this will help us improve our products in the future. Disclaimer and Risk Warnings Trading any financial market involves risk. This manual, the EA and the content of our website and all related correspondence are neither a solicitation nor an offer to purchase or sell any financial instrument. Although every attempt has been made to assure accuracy, we do not give any expressed or implied warranty as to its accuracy. We do not accept any liability for error or omission. Examples are provided for illustrative and educational purposes only and should not be construed as investment advice or strategy. No representation is being made that any account or trader will or is likely to achieve profits or losses similar to those discussed. Past performance is not indicative of future results. SteadyMartinGear EA V1.0 – User Manual Page 39 License Agreement for SteadyMartinGear Product This License Agreement (hereinafter the “Agreement”) is a binding legal agreement between you as an individual or single entity (hereinafter the “Licensee”) and SteadyWinner Development team (hereinafter the “Licensor”) for the use of the SteadyMartinGear product including the EA and user manual together with all prior and/or subsequent versions, and all updates thereto (hereinafter the “PRODUCT”). By using the PRODUCT, the Licensee agrees to be bound by the terms of this Agreement. If the Licensee does not agree to any part of the terms of this Agreement, THE LICENSEE CAN NOT INSTALL, USE, DISTRIBUTE, OR REPLICATE IN ANY MANNER, ANY PART, FILE OR PORTION OF THE PRODUCT, OR USE THIS PRODUCT FOR ANY OTHER PURPOSES. LICENSE GRANT. The PRODUCT is licensed, not sold. Upon acceptance of this Agreement the Licensor grants the Licensee a personal, nonexclusive, nontransferable, royalty-free license to use the PRODUCT on the trading account registered on the Licensee’ name for a live time. DESCRIPTION OF OTHER RIGHTS AND LIMITATIONS. 1. Limitations on Reverse Engineering, Decompilation, and Disassembly. The Licensee may NOT reverse engineer, decompile, create derivative works, modify, translate, or disassemble the PRODUCT, and only to the extent that such activity is expressly permitted by applicable law notwithstanding this limitation. The Licensee agrees to take all reasonable, legal and appropriate measures to prohibit the illegal dissemination of the PRODUCT or any of its constituent parts and files to the fullest extent of all applicable local, federal and international laws and treaties regarding anti-circumvention, including but not limited to the Geneva and Berne World Intellectual Property Organization (WIPO) Diplomatic Conferences. 2. Transfer. The Licensee may NOT rent, lease, or lend the PRODUCT. The Licensee may NOT permanently or temporarily transfer ANY of his/her rights to any individual or entity. Only the Licensee has the right to use the libraries, redistributables, or other files of the PRODUCT (or any portions thereof) for autotrading with the PRODUCT. In particular, the Licensee may NOT share copies of the PRODUCT with other users. The Licensee may NOT reproduce or distribute any PRODUCT documentation owned by the Licensor without the Licensor explicit permission. The Licensee may NOT distribute the PRODUCT, in any format, to other users for any purpose. SteadyMartinGear EA V1.0 – User Manual Page 40 LIMITATION ON AND EXCLUSION OF DAMAGES. The Licensee can recover from the Licensor only direct damages up to the amount the licensee paid for the PRODUCT. The Licensee cannot recover any other damages, including consequential, lost profits, exchange trade loses, special, indirect, incidental or any other damages. This limitation applies to claims for breach of contract, breach of warranty, guarantee or condition, strict liability, negligence, or other tort to the extent permitted by applicable law. It also applies even if repair, replacement or a refund for the software does not fully compensate the Licensee for any losses; or the Licensor knew or should have known about the possibility of the damages. TECHNICAL SUPPORT SERVICES. The Licensor will provide the Licensee with technical support services related to the PRODUCT ("Support Services”) within the version line (e.g. V3.) and license type. Use of Support Services is governed by the terms and conditions of this agreement, Licensor’s policies and terms described in the user manual, in "on line" documentation and/or other Licensor provided materials. COPYRIGHT. All title and copyrights in and to the PRODUCT (including but not limited to any images, algorithms, settings, demos, source code, intermediate files, packages, photographs, animations, video, audio, text and "applets" incorporated into the PRODUCT, the accompanying printed materials, and any copies of the PRODUCT and its parts) are owned by the Licensor. The PRODUCT is protected by copyright laws and international treaty provisions. TERM AND TERMINATION. The Agreement becomes effective when the Licensee agrees to the terms and conditions of this Agreement by downloading, using, accessing or manipulating the PRODUCT, and this Agreement will terminate immediately upon notice to the Licensee of the fact the Licensor knows the Licensee materially breaches any term or condition of this Agreement. Starting from this notification the Licensee cannot use the PRODUCT and ask Licensor for further support and assistance. ACKNOWLEDGEMENT. THE LICENSEE ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THIS AGREEMENT AND AGREES TO BE BOUND BY ITS TERMS. THE LICENSEE FURTHER AGREES THAT THIS AGREEMENT IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE LICENSEE AND THE LICENSOR, AND SUPERCEDES ANY PROPOSAL OR PRIOR AGREEMENT, ORAL OR WRITTEN, AND ANY OTHER COMMUNICATIONS RELATING TO THE SUBJECT MATER OF THIS AGREEMENT. SteadyMartinGear EA V1.0 – User Manual Page 41
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