many people have asked me and continue to ask me how my strategy works and what is my exit strategy if things go wrong.
This is a brief description of how the Turtle EUR strategy works:
Turtle EUR use an Expert Advisor to manage trading operations, the Auto Money Management (the risk for each trade) is set to 2%.
The system run on my own server and, whenever possible, I constantly watch the open trade.
In the 90% of the cases the strategy open in the right direction and close the trade in a few hours, sometimes in a few days.
The remain 10% of the cases, when the strategy open in a wrong direction, after a loss of about 150-200 pip, it open a recovery trade in the same direction of the initial trade with a higher lot size (from 3x to 4x depend which pair is involved).
This way, thanks to small movements towards the right direction the strategy closes all trades in overall profit.
Actually the system works with EURUSD and GBPUSD currency pair.
Only one trade is open at a time.
I would not say that this is a typical martingale system. Martingale does not work the way that Turtle EUR works. The Expert Advisor opens only one additional trade and the risk is beforehand specified by me. Furthermore, the additional trade is triggered only during specific conditions, unlike more martingale systems. My point is that if you trade with reasonable risk, your account should be safe enough and long-term profitable.
This is how my strategy works, sometimes it can happen that the first trade goes wrong.
If the loss in pips exceeds the threshold value of 150, a recovery trade can be expected with a higher lot size.
But this is not an exact value, the distance in pips may be different, because the strategy wait for a good market condition to open the recovery trade.
Unfortunately I do not have a magic wand.
This can cause an increase in heartbeat, but for 10 years of backtest and 3 years of real trading the strategy has worked well and will continue to do so in the future.
The Plan B
Question: What’s happen if also the Recovery Trade fails and the price is not retracing enough (after all what has not happened in the past, sooner or later it can happen in the future)?
Answer: Actually I setup the maximum allowed drawdown for the account, his value is 30%.
This option is based on the current drawdown, which is the difference between the current account balance and equity.
Also if the trades remain open for more than a month (4 weeks), they will be manually closed.