Topic: Pyramiding EA?
Hello all I hope you are all having a great summer.
I would like to try and build a pyramiding EA if possible and do some testing with it. I am sure most of you are aware of pyramiding but for those that are not familiar with the strategy it involves moving your stop to break even at a certain point and then using the existing equity from the open trade as margin for a new position. If that second position also moves into profit at a certain point that position is moved to break even, and the stop for the first position is moved to the same spot as the stop for the second position (in profit).
In theory you can keep adding like this but obviously the more positions that are added with fairly tight stops, the less and less likely it is that your trade will hit the Take Profit level before stopping out.
The idea with pyramiding is that your risk stays constant throughout the trade regardless of how many positions are added, because you are using the "locked in" equity from the open trades to cover the potential loss on the newest open position should it turn around on you and hit your stop.
Obviously this method will only work when price is trending well, and even then you will have many losing trades before catching a winning trade. The idea in theory is that your winning trade will be many times larger than your losing trades.
I hope that I have explained the theory of pyramiding well enough. There are marketers out there selling such EAs that will allow you to input your: i) Account Size, ii) Risk factor, iii) SL, iv) TP, and v) "top up levels" (new add-on position levels) EA will calculate the rest and auto trade the pyramiding strategy for you. However these marketers charge approximately $300.00 U.S. for the EA.
Since we the best Forex Strategy Building Software already I thought there must be a way to build a similar EA using FSB?
The first road block as I see it is the strategy building using FSB doesn't appear to let you use a manual opening for the "Opening Logic" such as a pending order or a market order. But I am sure there is a workable solution to this.
The second road block as I see it is that FSB allows you to add positions but only when there is another "opening logic" condition satisfied. What we want with pyramiding is another opening position when the trade is in profit by "x" pips.
If anyone has any suggestions on how building such an EA with FSB may be possible I would love to hear them. But I understand if a pyramiding EA is just too far outside the scope of what FSB was designed to do.
Thanks in advance.