If you're looking to take your trading to the next level, the Labouchere EA could be just what you need. This Expert Advisor is designed around a unique lot management strategy based on the Labouchere system.
Understanding the Labouchere System
At its core, the Labouchere system focuses on balancing your stop loss (SL) and take profit (TP) levels. Ideally, these should be equal or nearly equal. The strategy involves using a specific sequence of lot sizes, which you can adjust based on your risk tolerance. For instance, you might start with a sequence like this: 0.01, 0.02, 0.01, 0.01, 0.01.
When you open a trade, you'll always add the first and last numbers from your sequence. So, your initial trade would be 0.01 + 0.01 = 0.02 lots. If this trade is profitable, you simply cross off those two numbers from your list. Your new sequence would then look like 0.02, 0.01, 0.01.
If your next trade ends up being a loss, you’ll add a new number at the end of your list equal to the total of your last trade. So now, your sequence would be 0.02, 0.01, 0.01, 0.03.
Continuing this process, you’ll open a new trade using the first and last numbers in the list, which would be 0.02 + 0.03 = 0.05 lots. You keep repeating this until your list is empty or you only have one remaining number. At that point, you either stop trading or restart the cycle.
Features of the Labouchere EA
- Trade entries are triggered by the intersection of the main and signal lines on the stochastic indicator.
- Only one order is active at any given time.
- Trades are executed at the opening of new bars.
- This EA offers a feature to either start a new cycle after completing the previous one or to halt trading altogether after a cycle ends.
- It includes a timed operation function.
- There’s also a reverse trading option, allowing you to switch between Buy and Sell orders as needed.
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