History behind the

Maximum Lot Trading Robot

 

When I started trading Forex more than 20 years ago, I did my first course in a place called Midrand, between Pretoria and Johannesburg in South Africa. There was a trader that did the course 4 months earlier that had turned $15 000 into $165 000 in the 4 months after the course using a self-developed method. I was lucky enough to spend time with this trader and the position sizing method he used I called the method the Maximum lot method which I later adapted to double accounts in 1 trade.

 

Essentially he found a method that had a 90% accuracy rate and combined it with the approach of a maximum lot which risked the most he could risk on the next trade. When one does the calculation, you will realise that you do not blow your whole account when things go wrong (especial when using low leverage) but you can record huge gains. Sounds risky but a few months later he was up to $450 000.

 

At various stages of Expert4x, I traded variations of this method and even offered a money-back guarantee if I could not double client accounts in one trade. See an old offer from those days on the right.

 

We promoted this technique in the early years of Expert4x - see the course for 2009 on the right - still downloadable if you search for "maximum lot Expert4x".
I recently met some of my old trading buddies who are now retired and we had a good chat about the "Good old days" and the maximum lot technique. I suddenly realized that this technique has never been automated as it originally was a manual trading approach. So in the last few weeks, I create an automated, continuously traded version of the Maximum lot trading system.

Current details about the Maximum Lot Trading Robot

Except for the Moving Average Indicator this Trading robot can be regarded as a Random trading robot that makes money based on the favorable return on risk ratios.

 

Its success (which is not always obvious) is based on

 

  1. Very aggressive positions sizing for all trades

  2. Very favorably positive and negative exit levels which create extremely good return on risk ratios

  3. Transaction stops and targets which again can be used to create a favorable return on risk ratios

  4. The fact that the trader does not have to risk all of the account balance as described in the introduction.

The Maximum Lot Concept

Expert4x has always looked at unique and uncontroversial trading approaches and the Max Lot approach is no exception.

 

A brief description of the Maximum lot approach is that it is based on the concept of making more money during a winning streak than losing during a losing streak.

 

A simple illustration would be:  Let's say so much is risked on a trade that 50% of the capital would be gained if the trade went well and 50% of the capital would be lost if the trade went badly. This does not sound exciting if one looks at 1 trade.

 

But...

 

Let's look at the extreme case of 3 trades in a row being successful and 3 trades in a row being unsuccessful.

Suddenly a return on risk ratio of almost 3 to 1 has been created.

 

But let's take this one step further. Let's say the trades above did not have equal targets and stop. Let's say the stops were 50% of the Targets

 

The above results will change to

 

Suddenly the return on risk ratio has improved to over 4 to 1

SO HOW IS THE MAXIMUM LOT CALCULATION DONE?

 

The objective is to trade the maximum possible lots for a particular trade based on the stop loss used

 

Based on 1 Main lot (1.0) we need to know what the Margin requirement is and the value of a Pip.  Let's assume a Stop and Target of 50 Pips and the Capital to be risked is $500. So let's say for the GBPUSD the main lot requirement is $1000 and the value of 1 pip is $10

 

So the formula is:-

 

1st DEAL:  Capital to be risked ($500) divided by Margin required ($500) + the stops loss required (50 x $10 = $500) = $500/($500+(50 x $10)) = 0.5 lots

 

NEXT DEAL AFTER POSITIVE RESULT: So if the Deal is positive (50 pips x $10 x 0.5 lots ) = a gain of $250 will be made. The Capital for the next deals becomes $750. So the lot sizing for the next deal becomes

$750/($500+(50 x $10)) = 0.75 Lots

 

NEXT DEAL AFTER A NEGATIVE RESULT: So if the deal goes negative (50 pips x $10 x 0.5 lots) - a loss of $250 will be made. The Capital for the next deals becomes $250. So the lot sizing for the next deal becomes

$250/($500+(50 x $10)) = 0.25 Lots

"Easy Peasy"

Quote: Albert Einstein

Enough of all this theory !!!

Show me the  MONEY

Watch this video to download a Maximum lot Excel model for advanced calculations

Watch this space

In the meantime watch this video to see how $10 000 was tested to grow to over $800 000 in 12 months (8000% return)

 

Settings

How the Max Lot Trading Robot works.

The direction of trade is supplied by a Simple Moving Average. If the Moving Average is pointing up the EA will buy and if it is pointing down it will sell. You can change the setting of the Moving Average and you can even reverse the direction of trade if you wish.

The Robot will trade continuously. As a trade closes another will open. The big thing about this Robot is that it will always risk the maximum amount of lots on each trade. See the calculation on this page. So if the previous transaction was positive lot-sizing (also known as Position sizing) will increase and if it is negative lot-sizing will decrease. So lot-sizing can increase dramatically in successful trends and decrease at a much lower rate when in an unsuccessful phase.

So only 1 transaction will be active at a time.

Trading stops and resets for an instant when the total of all trades entered since the last start hits the Equity Target or Equity Stop Equity levels set. It will then automatically restart based on lot sizing based on the new equity levels.

Each transaction has a Transaction STOP and transaction TARGET determined in pips.

Account Size required

When using the Maximum Lot Trading Robot you can nominate how much of your account you want to risk. So you could have a $1000 account and you only would risk, say, $100 on each Maximum Lot Robot run.  You would need a micro account that allows 0.01 lot sizing. If this is the case a Minimum of $1000 would be the suggested minimum account size. The Maximum lot Robot is mainly supplied to show the principles of the Zero to Hero Robot Course.

Robot settings input

There are only a few decisions you need to make for this particular trading robot. Many other Robots can have over 30 settings or decisions to make. Each setting is an instruction to the Robot as to what to do. So there is a master and servant relationship. You have to give the robot (your servant) orders (settings) on what to do.

Sometimes as masters we do not always know what to tell our servants to do.  Don't worry about that because that is what the Robot Trading Course is all about - it will teach you how to find the best orders (settings) to give to Robot (Servant) using techniques such as optimization, settings analysis and forward trading we will find the settings that work for us.

To start with often the default settings provide a good starting point.

All The settings

Decision 1: How do you want the EA to determine the targets for each run.
It can do that on a fixed basis in which case the run target and stop will be fixed $ amounts for the life of the EA trading.
Or it can be done on a % of Trading Equity basis. This means that the Target and stop for new runs will be based on the percentage of the Trading Equity balance at the start of a run.
Decision 2:  How much of your Account do you want to risk in $. So, for example, if you have a $10 000 account you may only want to risk $1 000 if you decided on the amount based on Risk settings
If you went for the Percentage of account-based % based Risk settings you would enter say, for example, 10%
Decision 3: What Run Target do you want to set?
If you went for the amount based Risk Setting you would enter say, for instance, $3000. This would represent a gain of 300% ($3000) on the amount risked.
If you went for the percentage-based Risk settings you would enter say, for instance, 300%. This would represent a gain of $3000 ($300%) on the amount risked
Decision 4: What Run Stop do you want to set?
If you went for the amount based Risk Setting you would enter say, for instance, $200. This would represent a loss of 80% ($800) on the amount risked.
If you went for the percentage-based Risk settings you would enter say, for instance, 20%. This would represent a loss of $800 ($80%) on the amount risked
Decision 5: Do you want run the position sizing based 100% on the Maximum Lot calculation for to you want smaller lots (less than 100%) or bigger lots (More than 100%)
Decision 6: How sensitive do you want the simple Moving Average setting to be? Generally under 4 will be very sensitive and over 4 will be less sensitive.
Decision 7: The Robot will choose the direction of the next trade based on the direction the MA is pointing - Up will buy and down will sell. You have the opportunity to reverse that logic.
Decision 8: What size Transaction or trade Stop do you want to use (in Pips)
Decision 9: What size Transaction or trade target do you want to use (in Pips)
Minor Decisions: Maximum spread to enter a trade
During a days trading the spreads that are payable will vary considerably and can become extremely high. To avoid trades during these very high spread times (Like near announcements) you can specify the level of spread you do not want new trades to be opened
Minor Decisions:  Color and Direction for the descriptions on the charts
You can specify the color and direction of descriptions on your trading charts
Magic number : A magic number is a number that identifies the Robot being used on a particular chart. Good practice is to have different numbers every time you use the EA (Robot) on a different chart. It is essential when using the Robot to trade different charts but the same currency

Please note that the EA does not come with set files or guide settings. It is part of the Zero to Hero Course where students find settings as par to the course

Important information about the Maximum Lot trading. 

 

Maximum lot trading is a position sizing technique. IT IS NOT A TRADING TECHNIQUE. Therefore it does not provide entries, exits. To enable the Maximum Lot principle to be used it has to be added to a trading technique. 

 

To enable trading of the Maximum lot Robot a simple moving average has been added to give direction to new trades. 

 

The maximum lot technique can be applied when using any % of equity setting available in most trading robots. The trick is to use very high % of equity percentages so that they become close to the maximum lot %. 

 

So the success of Maximum Lot concept is reliant on the trading technique used to create entries. Below is a video that shows this % of Equity setting being used on a number of Robots to create exceptional results. So remember these result come for combining the Maximum lot concept (%of Equity) with a very good trading strategy.

 

How do I get my hands on the Maximum Lot Robot?

To download the MetaTrader 4 and MetaTrader 5 versions of the Maximum Lot trader simple provide your email for download instructions

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