Million Dollar Pips (MDP) EA Settings and Real Time Live Trade Analysis

[pharoh777]

Million Dollar Pips EA Settings and Trade Updates Thread:
Million Dollar Pips Vendor Site (clickable link)

Well. Without further adieu, below are my settings that I used to produce my 198% return in 2011. If you are new to MDP, I HIGHLY recommend you first read my posts about how it works and what to watch out for. You can find that review in two parts all located here: Million Dollar Pips EA Review and Performance

First off, as discussed in the prior thread, we DO NOT start MDP until early European session at the start of the week. We do this avoid the extremely low liquidity involved with the first Asian session of the week. Moves can be VERY erratic and we only want to trade when the numbers are in our favor to win. We will then continue to run MDP up until one hour before market close on Friday. We DO NOT trade MDP on holidays or the last two weeks of the year all for the same reasons stated above.

Second, Marc will be harmonizing his settings on his live test account to match those provided below AND I will be updating my performance results here. That way we have two different accounts with two different brokers but with the same settings. That way we can see what is broker-based performance vs. product-based performance.

Finally, there are essentially two kinds of settings with MDP.

1. Pure Risk Based: There are two settings here. Risk % and max orders. They don't affect the kind of trades taken and should not affect win %. It only changes both the size of the orders used and how many can be opened up at once. Now, it could be argued that max orders can affect performance because by the time the 5th order is opened the price may be different. I have avoided this by changing another setting I will discuss below. THESE SETTINGS ARE SAFE TO ADJUST BASED ON YOUR RISK TOLERANCE. They will not affect performance, only how much $$ you are risking every time MDP trades. Since I am using a new broker for example, I am cutting back Risk % from 1.5 to 1.0 until I verify my broker is profitable with MDP. If it loses a couple more sets of trades I may cut it to 0.5% per trade. Remember that total risk per set of trades is Risk % X Max Orders.
2. Performance Based: Pretty much all the other settings fit under this category. Keep in mind that performance settings DO have an impact on risk but that is from a secondary effect from these settings. For example, if you increase "num_orders level", you will increase the number of trades taken and it will DIRECTLY affect performance but only indirectly affect risk because it doesn't change the size of the orders or how many will open, BUT because it trades more, you are essentially risking more because time of exposure to the market is increased. THESE SETTINGS SHOULD NOT be adjusted UNTIL you have a complete understanding of your broker and how MDP trades. I personally don't recommend changing any of these settings although I can almost guarantee you there will be some debate here over these settings and guess what? We are FLEXIBLE traders more concerned about profit than pride!! If we collectively decide a setting needs to be changed to increase profitability, we WILL. I will provide any changes to settings in bold in future posts.

Million Dollar Pips (MDP) Version 1.2.0 EA Settings Used to Achieve 2011 Performance of 198% Return (8/15-12/21)

Show Diagnostics: False
This can be set to true when you first apply MDP to your broker. It gives you a lot of BROKER performance info like slippage, execution times, rejected order %. Once you know MDP is set right, put to false to streamline the program. Remember we want it doing as little as possible other than taking trades according to its rule

Show Debug: False
If true creates a huge file. Might be good to keep record if you were having problems in a technical sense that would be out of my scope of expertise.
Verbose: False
Gives extra information. Again, I tried to streamline the process so MDP can use all its resources just to make the trades
Silent: False
I like hearing the noise since you're never quite sure when MDP is going to trade so it's good for a "heads up". Be careful though and turn it down when you go to bed because after watching how much MDP can put in account (and lose sometimes) and how frantically it does that, you will learn to jump and run to the MT4 when you hear it go off (it becomes a Pavlovian response! lol). If I don't mute this before bed, it wakes me up from a dead sleep even when it's pretty quiet.
Num Orders Level: 0
NEVER EVER, EVER HIGHER THAN 0. 0=PROFIT Anything else=lots more trades but no profit from my experience. In fact, I have never actually met anyone who uses higher than 0 and made a good return at all. The higher the number, the lower the threshold is to enter the market and trade.
Additional Channels: 2
I found 2 to be the sweet spot for this setting. Higher number equals many more trades, but it DEFINITELY increases how risky the trades are. The higher the number, the lower the threshold is to take extra trades based on the different "channels" it uses to find trades.
Slippage: 0.5
I cannot remember if this was the default setting on the older version (1.1.6) or the default on the one I use now (1.2.0). Either way, this was the setting used to get my results.
Max Simultaneous Orders: 5 (this can be set lower if desired for less risk but 5 was my setting)
This sets how many maximum trades can be opened per "basket" of trades. It DOES NOT mean that 5 orders will be opened on every trade because it ranges from 1-5 if this is set to 5.
FIFO: False
For US broker compliance. If set to true, only one order will be opened at a time and regulations will be followed (BOOOOO DODD-FRANK!!!)
Pessimistic Testing: False
Makes back-testing much more accurate by using your broker conditions for spread and slippage. I don't really ever back-test for the same reason I don't use indicators other than EMAs, I don't like rear-view mirrors in trading. Past Performance DOES NOT equal future results
Funky Exit: True
If set to false, it stays with the trade much longer. This can mean much larger gains when the market moves quickly in your direction BUT what your experience is more likely to be is that your losses are much larger and more frequent. I have seen this debated both ways. I consider myself more conservative so I like this set to "true"
Auto Apply ECN: True
I've always use an ECN account to trade MDP and set to true so it tries to adjust the EA according to your broker performance. You can find a market making broker that claims to be ECN this way. You will get A LOT of error messages if you set this to true and your broker is NOT ECN.
Risk: 1.5 (I wouldn't go higher than 1.5 but 1.0 and 0.5 for test accounts is a good idea where we don't know if it's a good broker because this setting doesn't affect performance only risk)
This is how much you are risking per trade in percentage. Remember risk per trade set is this number TIMES max order so for these settings that is 1.5 X 5 = 7.5% per basket of trades also known as "waves" by some. Yes 7.5% risk is VERY high for me but MDP has proven to have numbers I like and I can go full throttle here. I have seen some people set this risk number as high as 10!!!!
Group Orders: True
The bottom line is that MDP makes A LOT of server requests for modifying order. I mean A LOT!! Many people have performance issues with this product simply for the fact that their broker cannot handle the insane number of modify requests for orders that a number of people using MDP all at the same time will bring to the table. Set this to "true" and it consolidates the orders into 1, larger trade and instead of 5 simultaneous requests for the same thing, there is only 1. This was the biggest performance factor I noticed in my settings other than "num orders level". The ONLY reason this should be "false" is if you are trading MDP on an account so large that the lot sizes cannot be consolidated becaus they are so huge they cannot get filled very quickly.
Trailing Resolution: 0.5
Can't remember if this is the default from this version (1.2.0) or from the prior version (1.1.6). Either way, it's what I used to get my results
Use Stop Orders: False
Funny thing is that even when set to false, it will sometimes open stop orders instead of opening at market. I don't understand but win percentage DEFINITELY went up & my order rejection rate went down when I set this to false.
Hard Stop Trailing: True
MDP can lose control of orders if set to false from my experience. This setting does force MDP to actually modify the order just to move the stop instead of doing it internally BUT if MDP does happen to lose control or connection gets interrupted even for a couple seconds, you have a safety stop there to close you out. And MDP doesn't have to send an extra order to close (which would take longer to execute than a broker-based stop already established). Some people will argue this slows down MDP and therefore is less profitable but that has not been my personal experience. I think "true" here is the conservative.

CONTINUED.............

[pharoh777]

Remember, to only use the EUR version of MDP!! Let me explain:

1. GBP/USD would be redundant and spreads are too high. The Pound has such a high correlation to the Euro, that most of the time they will try to go after the same trades. You are doubling your risk either unknowingly or unnecessarily AND slowing down BOTH versions by making them fight for broker execution and resources.
   
2. USD/JPY blew out 50% of my account during a BOJ intervention. Now, don't get me wrong, this could have been avoided if I had followed the "don't start till early Euro session at the beginning of the week" rule (guess how I learned THAT?). They chose the absolute thinnest part of the week to intervene so their intervention had the biggest impact. Will they intervene again? According to them they will. Am I taking that chance anytime soon? Nope. I honestly believe this pair has AWESOME potential and my returns before the blowout were amazing. But until we get through all the financial crisis and sovereign nations stop trying to directly intervene like this in their currencies, it is not safe to trade this pair.

I truly hope this helped in using Million Dollar Pips. I want to give you the most genuine, real, honest review and testing I can because I use my real money to trade and I want to make as much of it as I can from EAs. Please help make the process better by engaging in respectful debate and discussion here!! ALL questions are welcome! Also, if this review has helped you make a decision to purchase Million Dollar Pips, please do so here: Million Dollar Pips EA Vendor Page.

I am NOT an affiliate with any product I test or review here BUT purchasing through our link does help support this site so we can bring you the best reviews, honest forex education and advice; as well as top-notch customer service.

[noiseman]

Hi Just wondered if you had any idea why it was such a poor day yesterday? I find it difficult to get a grasp of how these EAs work (without sitting and watching the charts as they perform their trades). The BoJ intervention and news announcements/leaks etc can be pinpointed but not other less obvious reasons for a sudden daily drawdown. If you are trying to determine how well your broker performs with MDPs how long would you leave it running with a particular broker to assess it? Isn't there a risk of a major drawdown before you can identify if it is the broker rather than MDPs which is not performing

[pharoh777]

Hi Noiseman!!

As par for the course, your questions are EXCELLENT!! You ask extremely relevant stuff and tonight is no different. I'm going to tell you right now, those questions are pretty difficult to answer but I'm going to do the best based on my experience and understanding.

As far as why yesterday was a poor day, I don't honestly know. I didn't see the spike that triggered the trades, all I know is I lost 1.42% and -18 pips overall. Even running normally and profitably you are still going to have days where you lose 10% or more with my settings. I would say the max should be about 20% for any normal single day of trading loss wise. Sounds like a lot I know, but it doesn't happen that bad often and the winning days usually dwarf the losing ones. What IS important about yesterday is that MOST people who trade MDP lost. That is what we are looking for. You will find days where everyone chimes in about 15% gain or $8000 in one set of trades and when you lose on those days, it MIGHT be the broker you are using. But on days like the other day when pretty much everyone lost (although by varying amounts, again very normal for how sensitive this EA is) and you lose, then it's ok as long as it fits within the risk tolerance and normalcy of this EA.

Now let's talk about what the "ideal" trade for MDP looks like. This would be a large, quick spike that then stalls at the top (in enough time to let MDP open its basket of trades), then a quick retrace that plunges you into mega-profit. Then you would want a spike in the opposite direction and do the same thing. NFP is magic sometimes like that. This is the ONLY way I would ever trade NFP Friday. As far as the specific "bands" or "channels" Million Dollar Pips uses, I imagine that is a closely held secret by William Morrison for good reason.

And you brought up the best point about this EA and that's why I'm covering that last. If this EA is SO broker sensitive AND demo performance is so WILDLY different than live performance, how do we test MDP without blowing the account???

Here is the best I can come up with:

1. Use a very small live account with the same broker. Many brokers will allow you to open secondary accounts with them. Keep in mind that many brokers only give you good enough performance with larger accounts usually so it's pointless to use their "ECN" account that requires $2500 to open and then open a micro account that uses "market-making" technology and much slower or different execution. To test an additional account, make sure you are getting the same trading conditions as the main one you will be using.
2. I think it is just wise to crank down the "risk %" to 0.5 or 1.0 and "max-simultaneous orders" to 1 or 2. Do that for a month and if it makes money, then cranking back up those two settings will only increase how much capital exposure you have and the performance should stay the same.
3. Turn both "diagnostics" and "verbose" back to "true" and see what kind of error messages you are getting if any. ALSO VERY IMPORTANT: Make note of your "avg. execution time", "avg open time", and "avg modify time". Also note the "avg num unsuccess", "spread strength %". Then check to see if there are any exclamation points in front of the 4 ECN conditions on the chart. We can talk about those numbers or any error messages you find there. All those things are essentially your broker "report card" and will tell you a lot about your broker in general.

So taking those steps (Especially 2 & 3) should reduce the risk of severe drawdown. Number 1 is only if you can and want to be EXTRA careful. 2 & 3 should take care of most of it. Remember as I posted before, MDP is not a casual EA you can just throw on a chart and forget about. Great money doesn't come from being lazy. That's why we're all here instead of just buying the hype and blowing our money. This EA IS risky but in my opinion the benefits way outweigh the risks. We just have to pay attention to what's going on. You DON'T have to watch it trade, but periodically check and see if it did. Then pay attention to those numbers I showed you. You can figure out most problems that way. I certainly hope this helps! Don't hesitate to comment or ask any more questions.

Kindest Regards,
Omar

ps: Check back VERY soon into "due diligence" as we are about to test something VERY EXCITING!!

[pharoh777]

As promised also, I will be keeping all up to date on my personal performance with MDP here when it trades. I had one day of trades this week listed below:

Million Dollar Pips Peformance Update:

All Trades Taken 1/18/2012 broker time (UTC +2)

Group 1) -38 pips (9.5 pips x 4 trades)
Group 2) +12.5 pips (2.5 pips x 5 trades)
Group 3) +6.0 pips (6.0 pips x 1 trade)
Group 4) +1.5 pips (1.5 pips x 1 trade)

Total: -18 pips

Total Return For Day: -1.42%
Total Return For Week: -1.42%
Total Return For Month: -1.42%
Total Return For Year: -1.42%

[raa]

MDP trading strategy is a secret to hardly anyone, it takes 10 minutes to find this out if you apply some reverse-engineering to the charts with trades taken: it takes trades when price goes outside of 3 standard deviations from the mean (Bollinger ,3) on some period (35 I believe), and applies filters of minimum pip moves that MDP refers to as channels, you can get an idea of these pip distances if you switch debug and verbose on in MDP. So it's quite simple in principle, a typical mean-reverting strategy that HFT traders use for many years in stocks.

[pharoh777]

Thanks Raa!! I waited to respond to this because I wanted everyone to see this post because you provide some very nice depth of information to how MDP trades. You have given me knowledge I previously did not have. You have highlighted how important participation is and how it can bring new light to a subject and inform many people about something they may have not known.

I want to add though, that knowing what a certain trading strategy is and translating that into profits are two different animals. Many EAs try to use common trading strategies based on tested techniques but still fail horribly. How can that be?? Well, quite simply the application is more important than the strategy. Marc and all the pros here are masters of money management!! Forex Mentor Pro puts a lot of emphasis on it and it's important. You can give two traders the EXACT same system with the EXACT same rules and one can profit greatly while the other blows the account. Why? Because the profitable traders has stuck to the rules and used correct money management. Even an unprofitable system can be helped or turned profitable with a great approach to money management. Because as complicated as trading is, you can really only do one of three things: Buy, Sell, Hold/Sit Out! That's it. Any trades are a combination of those three things. What we as traders do is manage how and in what order those things happen.

Soooooo, back to how this relates to MDP. I again thank you Raa for this contribution. Spot on. So now that we know the strategy, shall we trash MDP and do it manually?? Some of you will be able to do that and make maybe better money than the EA doing it. If you are in that camp, I commend you on your skill and am in awe of your capability as a trader. I personally fall to the other side. The great thing about MDP for me even knowing the system is that IT watches for spikes, I don't have to AND it will be able to open the trade and modify it faster than I can as a human. It also trades without emotion and as much as I try to not trade with emotion, spikes ALWAYS get my adrenaline going, and in the frantic pace of that trading, I'm pretty liable to make some mistakes in order entry or something (I'm VERY fallible which is why I try to idiot-proof my trading as much as possible).

I suppose the most important lesson here is that you should know as much as possible about any system, method, EA etc... so YOU can make the best decisions with YOUR money. We are fortunate to have so many talented traders here who can educate us all on nuances that we may have not known before.

[pharoh777]

Million Dollar Pips Peformance Update:

All Trades Taken 1/23/2012 broker time (UTC +2)

Group 1) -13.8 pips (6.9 pips x 2 trades)
Group 2) -11 pips (5.5 pips x 2 trades)

Total: -24.8 pips

Total Return For Day: -1.57%
Total Return For Week: -1.57%
Total Return For Month: -2.97%
Total Return For Year: -2.97%

Once again, it seemed that almost everyone (I checked several high volume forums) lost on today's spike. I can TOTALLY deal with -2.97% drawdown but I am getting itchy to see a winning set. I've only had losing sets of trades this year (overall for the whole day, there HAVE been profitable trades). Again, PATIENCE is KEY. I still think we haven't seen anything yet on the conditions that MDP trades. There are plenty of naysayers and the more there are about this product and the less people end up using it, it should benefit the rest of us.

[pharoh777]

Million Dollar Pips Peformance Update:

All Trades Taken 1/24/2012 broker time (UTC +2)

Group 1) -5.6 pips (5.6 pips x 1 trade)
Group 2) -1.0 pips (1.0 pip x 1 trades)

Total: -6.6 pips

Total Return For Day: -0.51%
Total Return For Week: -2.07%
Total Return For Month: -3.47%
Total Return For Year: -3.47%

I am not really enjoying the constant loss of the year so far. This was a very high-flyer in 2011 and seems to be off to a rough start. Again, everyone I could find took similar losses or worse this morning. I haven't seen anyone post a winning trade for today. We just have to stay the course and see. -3.47% drawdown is nothing to worry about with MDP. One good set of trades and these little losses will be a distant memory.

[pharoh777]

Just wanted to let everyone know there might be a set of trades happening on MDP in ONE HOUR (12:30 PM Eastern Standard Time (New York)).

FOMC Meetings tend to throw the Euro around like a rag doll and the buzz around professional circles is this will be a big one simply for the fact there might be some "wording" changes in "tone". I know it sounds silly that a few words in pretty much a "boilerplate" statement might not sound like much, but EVERY WORD that the FED utters is scrutinized by many, many traders and moves the market.

We shall see. Hopefully we get some "ideal" spikes from it and MDP makes us all very happy!!!