This is something I have been trying to do for years and have finally found a way. This EA could genuinely be said to be no loss given a tiny Lot size and a large account as it only requires a small breakout (the kind that usually happens several times a day) to be profitable. It can only fail in a very long period of consolidation within a tiny range. Most EAs that attempt a no loss strategy fail because they run 24 hours a day and so inevitably encounter bad periods.

     We easily solve this problem by only trading once a day at the volatile UK/EU or US opening time. Also, it is more profitable and practical to close for a small loss if we encounter long consolidation and simply trade again the next day. In practice, we win around 90% of the time, which is more than good enough.

     Hedging seems illogical - opening a trade in both directions can't make a profit, can it? If we get the mathematics right, the answer is yes! We create an imaginary channel a few pips above and below the current price, Buy at the top line and sell at the bottom line. The trick is that the TP of the Buy trade is set at the same level as the SL of the Sell trade and vice versa. Let's say the Buy trade is triggered so now there can only be two outcomes - the price continues upwards and hits the TP or the price falls and triggers a Sell trade. The Lot size of the sell trade must be larger so that if it continues to fall and hits the TP, the profit is greater than the loss of the Buy trade. However, if the price rises again and triggers another Buy trade, this but trade must gain be bigger so that if it hit the TP the profit is bigger than the loss from the Sell trade! This continues until a TP is hit. Once either TP is hit, all trades are closed for a guaranteed profit.

    This principle is a sophisticated Hedging method that is usually done manually using Pending Orders which is complex and very time consuming as we need to monitor the trade constantly. Obviously, an EA can do this very easily and more accurately for us. The method is similar to Martingale but without the risk as trades are only opened in opposite directions, so the risk is partially cancelled out rather than added to. During development, we realised that the number of trades should be limited (probably to four) and a relatively small loss accepted. This rare loss was reduced when an Eureka moment showed us that rather than allowing the trades to run and either hit the TP or SL, the trades could be closed either on hitting the TP or on hitting the price where the next hedging trade would have been opened if the price moved against us. Since this is earlier than the SL, our loss is reduced by about 30%.

    By only trading at volatile times of day, we can avoid sideways movement, which would result in a series of Buys and Sells That never hit either TP. However, unlike Martingale, the loss is not as big because some of the trades will necessarily be in profit to cancel out the losing trades. When the mathematics is right and backtesting done correctly, losses will be very infrequent and much less than the accumulated profits...

Coming Very Soon!

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