Hello world!

Welcome to my Forex Robot Blog! I will share with you my experiences and results so you can have more information to do your own due diligence when it comes to forex trading. I am sure you will learn some new things. Enjoy and I look forward to hearing from you and collaborating with you.

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Trailing Stops and Multiple Lots

This article is going to describe two slightly more advanced trading techniques:  how to trail a stop and how to maximize profits by trading multiple lots.

by:   Richard Krivo

@RKrivoFX – Twitter


Let’s cover using multiple lots first…

Since as traders we always want to minimize risk as much as possible, I offer the following cautionary note:  each time a trader adds an additional lot to a trade, they take on more risk.  It may still be only one trade, but the size of the trade obviously plays a part.  For example, if a trader opens a single trade with a 100 pip stop, they take on 100 pips of risk.  If they open the same trade but with three positions, they are taking on 300 pips of risk!  It is imperative to be sure that the size of your account can handle the additional risk.

Here’s a quick way to make that determination…

A trader should never place more than 5% of their trading account at risk at any one time.  When trading a 10K lot, one pip, depending on the pair being traded, is worth roughly $1.  So a 300 pip stop would equate to a $300 risk.  If we divide $300 by .05 we get $6000.  That means unless you have a $6000 account you should not be taking on $300 worth of risk.  Possibly the trade can still be taken but with some adjustments to the size of the trade or the size of the account.  Either the size of the trade can be made smaller or the size of the account can be increased.

Moving on to implementing the strategy…

Since a picture, or a chart in this case, is worth a thousand words, let’s take a look at a historical 1 hour chart of the GBPNZD to see how we can employ our trailing stops and multiple lots strategy.


Here’s how we will trail the stop…

Since the pair is in a downtrend, we could enter the trade by selling three 10K positions at the point labeled  “Short Entry”.   Price has broken through support triggering our entry and the stop would be placed at the “Stop 1″ level.   As price continues to move in our favor and breaks below the second green support level, we would close one of our three positions and move the stop to the “Stop 2″ level.

By doing this we have locked in roughly 110 pips of profit

We also have placed our stop above a new resistance level so that our two open positions are protected.  Moreover, since our stop is now below our entry at this point, if the pair retraced and hit our stop we would show a small profit on the remaining two open positions plus the 110 pips we gained by closing the first position.  At this point, we have removed all risk from this trade.

As price continues to move in our favor, making lower highs and lower lows, when it moves below our next green support level we would close out one more position locking in a gain of about 310 pips on that one and move our stop to “Stop 3″.  As it was in the case above, we have locked in more profit and, by trailing our stop to the next level of resistance, we are protecting our “floating profit” on the remaining third position which is still open.

On the last open position we will simply continue to trail the stop using the same method as above.  When price no longer continues to make lower highs and lower lows, we will be stopped out at some point as the pair retraces.

So as price moves through the next green support level we would advance the stop to “Stop 4″.

We can see that price did not continue to move lower and, as price retraced, we were stopped out at the “Stop 4″ level.  Since our third position had been open since the very beginning of our trade, we were stopped out with a gain of 320 pips on the last 10K lot.


Overall, the total gain on the three lots was 740 pips


Had a single lot been placed on the trade the gain would have been 320 pips.  Now, don’t get me wrong, 320 pips is nothing to sneeze at.  However, given the choice, I’ll opt for 740.

From these examples the potential benefits of manually trailing one’s stop and trading multiple lots is quite apparent.

As always, when trying anything for the first time, be sure to test the concept out in a demo account numerous times until you completely understand the process.

All the best and good trading,

Richard Krivo

@RKrivoFX – Twitter


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How to Update to a New Build

Having a challenge updating to the newest MT4 Build even though you clicked on the nag button in the task bar?

Well here is the solution: Right click on your MT4 icon on your desktop. Click on Run as administrator. The platform will open and so will the nag button to update to a newer Build. Click on Start and the platform will start to download all the files that pertain to the newest Build. Then click on Update and Restart.

Run as administrator

Run as administrator

Voila! You should now have the newest build running on your MT4 platform.

Hope this helped you.

Feel free to post any questions you may have.

Mike Torres
(305) 389-0170


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Analyzing Risk Per Trade and Margin In Use

What should be our risk per trade? And what about margin?

Well I am sure we all have heard from various sources that we should risking no more than 1-3% of our account per trade.

Personally I believe that the value or percentage of risk per trade is relative since we all have different tolerances for risk.

In addition, if you only have a few EA’s in your account and have a smaller Risk Per Trade, you most likely will not Margin out your account since the lot sizes will be small enough to accommodate several EA’s in your account.

However if you have too many EA’s in one account and still trading a conservative 1-3% Risk Per Trade, then there is a possibility of margining out your account especially if you are using a lower leverage account such as 50:1.

Therefore you must have a balance between not having too many EA’s in one account and only opening the proper lot sizes according to the balance or available at anyone time.

What that being said, this all seems redundant because in the end we personally should be calculating more or less what lot sizes the EA is ultimately going to open since we are responsible for the inputs and outputs from those EA’s.

Remember GIGO. Garbage In, Garbage Out

I wish there was a better or more positive phrase than this. Maybe you know of a more positive one?

Please post your viewpoints or comments below if you have something different to add for the benefit of the readers of this blog.

Thank you and till next time…safe trading.

Mike Torres



(305) 389-0170

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Instant Execution or Market Execution?

To find out if your MT4 broker is Instant Execution or Market Execution, click “the New Order” button and look at the “Type” field. You will see there if your broker is Instant Execution or Market Execution.

This information is good to know because some EA’s use Instant Execution and some use Market Execution.

What is the main difference between Instant Execution and Market Execution?

With Market execution the order is opened without Stop Loss or Take Profit. The SL and TP is added or modified later.

Here is a list of my brokers and their types of execution:

ATC Brokers = Instant Execution
FinFx Brokers = Market Execution
Forex.com = Market Execution
ILQ Brokers = Instant Execution
MB Trading = Market Execution

Based on my brokers above tt appears that most are Market Execution.

What type of execution does your broker have?

Hope this information helps you.

Contact me if you have any questions or comments. Or you mayn just post your comments on my blog below.

Have a great year!

Mike Torres
Miami, FL
(305) 389-0170
(305) 389-0170 cell

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Margin of Error

Around June 2011, my Oanda demo using Crescendo v1.3 closed
out a basket of trades in major loss when the account reached 50%.
There were 9 trades really 11 trades that lost -$5,094.90 due to a
700 pip run to the downside.
You can see the trades and stats here:


I have learned a few things from this experience.

1) I was trading too large of a lot size of 1 mini for a $10,000
balance on a 50:1 account leverage account.

2) However if I did want to use 1 mini lot for a $10,000 balance
I should have increased the Max DD % to 70% instead of 50%.

3) And most importantly, the fact that we may experience technology
error, broker error or possibly broker abuse. In fact, this point #3
really can affect points #1 and #2 and are really out of our control.

I was looking at my demos using the different versions of Crescendo
and looking at Max DD’s and ROI’s etc. and thought of emailing you
my analysis.  However as I was writing this to you I noticed what
really happened to this Oanda account.

Yes the account lost 50% due to the Max DD setting set to 50%
however there is something more grave than that.  I see technology
error or perhaps broker error.  I can’t really pinpoint it right now.
I suppose I could go to the log files and try to figure it out but the
main point is that we as traders have to prepare for these two
very important aspects of automated trading.

When I started to look at the trades I noticed that there were more
losses than what was showing on the chart. I thought there were
9 loss trades because that’s all I saw on the chart by looking at
the arrows and lines painted on the chart.  However I went to
the MT4i statement and noticed that were 11 loss trades than
and what is more strange is that the lot size on one of trades is
2 minis instead of 1 mini.  And on some of the trades they were
duplicated or doubled.  In other words, two trades entered
essentially at the same time.

Here are the calculations on what happened:

$323 margin requirement for 1 mini of GBPUSD

9 positions margin requirement = $2,916
but really 11 positions were open due to the
double trading = $3,553 for margin

50% of the $5,000 account  – $3,553 only left
$1,447 breathing room for the price to move
and come back and therefore was not enough.

The errors are in bold below:

-707.80 pips or -$1,415.60
-707.80 pips or -$707.80
-628.70 pips or -$628.70
-565.50 pips or -$565.50
-488.50 pips or -$488.50
-392.90 pips or -$392.90
-285.70 pips or -$285.70
-208.60 pips or -$208.60
-208.60 pips or -$208.60 (Double trade)
-139.30 pips or -$139.30
-53.70 pips or -$53.70

Total of -4387.1 pips or  -$5,094.90

If you look below, why is there such a big difference
in transaction numbers between 502 and 523?  Why
did it open it at 2 minis and then open it at 1 mini?

And then on down you will see the double trading
again with transaction # 7464012 and 7464013
Notice how the transaction numbers were back
to back.

5976502 5/30/2011 23:00 Buy 0.2 GBPUSD 1.6546 7/12/2011 2:48 1.58382 -1 415.60 -707.8
5976523 5/30/2011 23:00 Buy 0.1 GBPUSD 1.6546 7/12/2011 2:48 1.58382 -707.8 -707.8
6052042 5/31/2011 23:00 Buy 0.1 GBPUSD 1.64669 7/12/2011 2:48 1.58382 -628.7 -628.7
6083262 6/1/2011 11:03 Buy 0.1 GBPUSD 1.64037 7/12/2011 2:48 1.58382 -565.5 -565.5
6129170 6/1/2011 23:01 Buy 0.1 GBPUSD 1.63267 7/12/2011 2:48 1.58382 -488.5 -488.5
6636923 6/10/2011 11:00 Buy 0.1 GBPUSD 1.62311 7/12/2011 2:48 1.58382 -392.9 -392.9
7018971 6/16/2011 11:00 Buy 0.1 GBPUSD 1.61239 7/12/2011 2:48 1.58382 -285.7 -285.7
7464013 6/22/2011 23:00 Buy 0.1 GBPUSD 1.60468 7/12/2011 2:48 1.58382 -208.6 -208.6
7464012 6/22/2011 23:00 Buy 0.1 GBPUSD 1.60468 7/12/2011 2:48 1.58382 -208.6 -208.6
7496312 6/23/2011 11:00 Buy 0.1 GBPUSD 1.59775 7/12/2011 2:48 1.58382 -139.3 -139.3
8687210 7/11/2011 11:00 Buy 0.1 GBPUSD 1.58916 7/12/2011 2:48 1.58379 -53.7 -53.7


If you notice from the screen shot below that all I needed was
to use a tiny bit more of the available equity  to allow the price
to come back up to the 50% fibonacci retracement level in order
to eventually close the basket.  But because I had the Max DD
set to 50% it didn’t allow it.

You will see that in the screen shot below that price moved
700 pips against the very first open Buy positions.  However
notice that the basket most likely would have closed at the
50% fibonacci level or at 1.6171.

Just curious, what’s your opinion on this experience?

And what would you do to help or prevent this from
happening to you?

Thanks for collaborating with me on this.

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Retail Forex Traders Summit – September 12, 2011

Hear from Top Players on the Street

Forex Trading Summit in New York Sept 12, 2011

Dear Readers,

I will speaking at the Retail Forex Traders Summit at 4:30 pm on September, 2011 on Forex Automated Trading.

As many of you know from personal contact and following my blogs that my passion for trading the forex market is through the use of expert advisors.

However not only will you hear me share some secrets and tips to trading forex using expert advisors but you will hear from other top players in the industry as well when it comes to trading forex.

Save the date and plan to come out and learn and network with great traders. I believe that by attending seminars and networking with other traders that you will be able to cut down your learning curve greatly.

Pre-register early now at this link and save off your registration fee.

I look forward to meeting you on September 12, 2011.

Call me at (305) 389-0170 when you get there and perhaps we can meet before my presentation.


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Forex Combo Robot Results March 1 to June 1, 2011

My Forex Combo Robot v2.42 equity curve as taken from my stats page:


Strategy #1 Scalping:

Strategy #2 Breakout:

Strategy #3 Reversal:

All Three Strategies Combined:

As you can see from the above screen shots that the Reversal Strategy #3 is doing the best so far.

By the way, I changed the stop loss for the scalping strategy to -70 pips instead of -100 pips. Let’s see if that will improve the results.

For more information on this expert advisor, please visit: ForexComboRobot.com

Please Contact Me if you would like a copy of my presets.

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How Can You Tell If You Have an ECN Account?

Here are some ways you can tell if you have an ECN account:

1. They usually have non Fixed Spreads, all ECN brokers should have non fixed spreads.

2. They usually charge commission with non fixed spreads, if they don’t charge a commission please ask yourself how they stay in business.

3. They have rollover, all ECN’s will have to disconnect for 5-10 minutes at 5pm EST. If you can still place a trade at this time I would be wondering how they are getting quotes through, they are most likely taking the other side so that the trade goes through.

4. Finally, look for “requotes.” I have heard that some market makers or deal desks cancel demo and live accounts due to the trader’s profitability.

If you have anything else to add, please Contact Mike

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The End of dbFX – An Analysis

The End of dbFX – An Analysis

Not only was the exit of dbFX from the retail market a headline grabber, the transfer of clients to Gain Capital once again brought two powerful industry leaders into a bidding war. The dbFX/FXCM partnership was at one point a source of great pride for FXCM, as the white labeling of the Trading Station platform by dbFX legitimized FXCM’s effort to be a serious player in the currency market. The joint venture represented 2.3% of total FXCM revenues in 2010. We can estimate that to be $8 million based on FXCM’s 2010 end of year reports.

It’s interesting to note that FXCM didn’t end up acquiring dbFX’s clients, although it would have been a very natural deal. dbFX and FXCM share the same platform; hence, shifting from one broker to another here could be as seamless as it gets. It’s not that FXCM doesn’t have enough cash: about $50 million of the proceeds from FXCM’s recent IPO was added to the balance sheet. This is in addition to the $150 million already on the FXCM balance sheet. FXCM CEO Drew Niv has publicly stated that they plan to buy other forex brokers. So with this massive amount of funds available, did FXCM act too conservatively or is it simply standing by for dbFX clients to switch to FXCM anyway because of the Trading Station software?

FXCM management has always stated that they are conservative in their approach and grew the firm debt-free. Let’s take a look at some numbers from recent acquisitions in the industry. March 2011, saw the acquisition of GCI Capital by FXCM for $5 million. In October 2010, Gain Capital paid $7.99 million plus 15% of future net earnings during the next 18 months for the clients of CMS Forex. In May 2010, FXCM acquired the ODL group for $2.2 million in cash and 5.25% of FXCM pre-IPO, valuing the deal at $54.9 million. It looks to me that, compared to Gain Capital, FXCM is very conservative with cash outlay when it comes to acquisitions. While the details of the dbFX acquisition are not yet public, it remains to be seen if the sticker price of the deal was too much for FXCM.

FXCM can certainly take lessons from the CMS acquisition by Gain Capital. CMS clients balked at the idea of giving up their much loved VT Trader for the Forex.com proprietary platform. As a result, Gain Capital has made plans to reintroduce VT Trader exclusively to their newly absorbed CMS Forex clients. Another industry standard, the Metatrader platform has legions of followers that are willing to switch brokers but will not abandon their Metatrader charts. Loyalty to trading platform runs deep in the FX trading community. If Gain Capital is not able to offer a platform that meets the expectation of dbFX clients and clients flee en masse, FXCM will have scored one of the biggest coups of the year.

Deposits tend to be generally larger at institutions that can offer clients safety of funds. dbFX capitalized on its status as a bank by advertising the protection offered by the Deposit Protection Fund of the Association of German Banks. Because of the demographic that dbFX catered to, the average account size is most likely bigger than the average account size at FXCM and Forex.com. In fact, we hear that dbFX’s average account size is well over $100,000 which is almost 15-25 times higher than FXCM/GAINs average account size.

Using data from the CFTC financial report on FCMs and the Q1 2011 client profitability reports the average account sizes can be estimated using a division by 0.6 factor to achieve the total number of active and inactive accounts. FXCM had 20,223 traded accounts (active only) and $140 million in US client deposits (includes both active and inactive accounts) giving the average active account size at $4150 ($140m/(20,223/0.6)). Similarly Gain Capital had 13,937 actively traded accounts and $143 million in US client deposits (active and inactive) which comes to an average account size of $6150 ($143m/(13937/0.6)).

Excerpt from http://forexmagnates.com/the-end-of-dbfx-an-analysis/

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