the Desphilic method is a defensive trading system to protect you from loose. The Desphilic system is comprised of 2 main expert advisor (EA) and a trading strategy:
1- grouped-Iman-Trailing.mq4 as your trade protecting EA.
2- DAPosition creator as the position creation tool.
3- the trading strategy which is compliant with defensive trading ( Desphilic strategy )
#A- System components: the system is comprised of 3 main parts:
##1- A protecting Expert Advisor (EA) This EA should be running in a MetaTrader4 terminal on a computer which is always up and running with a very low latency (short ping time) to the trade server. Usually this computer is a VPS (Virtual Private Server ) or it can be a dedicated server located geographically close to your brokers trade servers. The EA source code can be retrieved from the system git repository at address:
https://github.com/desphilboy/Desphilboy-trading-system
the grouped-Iman-Trailing.mq4 is the source code for this expert advisor which is a customized trailling stop acting on your trades (in case of profitable trade) and creates stop-loss for positions or moves existing stop losses so that the trade will close before it go back in loose. When a trade is in profit, this EA will move the stop-loss for your trade and maximizes the benefit according to the settings you have provided when starting it and based on position belonging to one of the four groups (LongTerm, MediumTerm,ShortTerm,UserGroup). this EA must be running all the time to protect your trades. Please note that this EA will not act on trades which do not belong to any of 4 groups. To create a position belonging to one of those four groups, you need to create it with DAPositionCreator.mq4 ( the other EA belonging to this system).
##2- A Buy-stop and Sell-stop creator EA this EA runs on MetaTrader4 on you own laptop or computer. you can run this on a normal computer and it does not need to be permanently on and it can be safely exited after you are done with trade creation. This EA is the "DAPositionCreator.mq4" in repository of the system. This EA can mass-create trades for you with predefined stop-loss and take-profit and LOT volume, in your predefined price range and belongin to the groups you specify. This EA will communicate all these info to the server, using the trade-magic-number (Magic number is a trade attribute in Mt4 systems) and your server will recognize the trade and will know its designated groups and acts on them as desired for that group.
##3- Desphilic strategy the trading strategy itself is a main part of this system. in Desphilic trading system, no stop-loss or take-profit is expected for a trade but still you can have them if you like. In addition there always are pending orders buy-stops and sell stops on the chart which are positioned according to trader decision. The trader can use any number of buy-stops or sell-stops anywhere on the chart according to his prediction about price movement. Buy stops normally start form about 20 PIPS above the current price and sell stops start from about 20 PIPS below the current price in the chart. The Theory behind this is: if price moves up, it will hit your buy stops one after other and you will gain profit. if it moves down, it will hit your sell stops 1 after other and again you get profit. Absolutely this does not mean that you will always win with this strategy, as told before, the whole system is a defensive protective system to prevent big looses. maximizing the profit is still on traders shoulders and depends on how you position your Buystop/Sellstops and how good you predict the market moves. see section D for more info.
#B- System mechanism of work:
Heart of this system is a coeficiented trailing stop. this algorithm uses 3 parameters to define its behaviour on a trade:
1- the coeficient (C):
C is normally one of fibonacci retrace ratios(i. e. maxRetrace = 0.618, halfRetrace = 0.5, lowRetrace = 0.382 and minRetrace = 23.6, noRetrace = 0).
2-Step (S):
S is the number of PIPs you must be in benefit before system considers to do any action. differences less than S will be ignored as they are regarded being by accident or to low to consider.
3-constant Trailing (T):
T is the number of PIPs you want your stop-loss to be behind the price when system acts on a trade.
the algorithm calculates price ref using this formula:
priceDifference = current price - positionOpenPrice
Ref = priceDifference - T - (priceDifference - T) * C
and if Ref - S > currentStopLoss then changes the stop loss to be equal to Ref.
in addition, you can specify 4 values for S,T,C and assign each set of (S,T,C) to one of the 4 groups (LongTerm, MedTerm, ShortTerm, User) and then create a trade in one of those groups. the system will apply your defined group values to the trades belonging to that group.
example: (PIPs are small pip in this system which is 0.1 of a real PIP)
you can set short term S=50, T=200, C= 0.382 and Long term S=70, T=500, C= 0.618 then you can create 2 trades and put one of them in short term and the other one in long term group. then the trade which is in long term will be applied a trailing stop with 50 PIPS trailing and 7 PIPs step and 0.618 retrace factor while the trade you have created as short term will be applied a trailing stop of 20,5, 0.382 .
#C- How to run this system:
##1- you need to hire a VPS or dedicated server.
I do not recommend any VPS provider here because this is a free software and do not want to bias toward any business. you can find hundreds of VPS and dedicated server providers by simply searching (googling) it. (if you still need recommended provider private message me using "Desphilboy@yahoo.com"). A good VPS will have a small ping time ( probably less than 10 milli seconds ) to your trading server and will have a good stability and enough CPU, Memory and Hard-Disk space to run your MetaTrader4 without problem. Personally I recommend Linux systems but how you run your server is totaly up to you. you will normally need to remotely access the server using VNC or RemoteDesktop and for this you will need a good internet connection as well ( recommend speed at least 2Mbits/S) but you will not need to connect to server frequently. After you run yor server once and execute grouped-Iman-trailing EA on your account on server, you will not need to connect to server anymore unless you want to change your server setup or your trade group S,C or T values.
##2- On your VPS
after you get access to your VPS, install a MT4 there and login to your trade account and run "grouped-Iman-Trailing.mq4" on one of the charts. this will manage all your trades and you do not need to repeat this on every chart. to run the EA you will need to copy the source file in the experts directory and then compile it. for How to do that there is a good help page form metaqoutes but briefly you need to copy that file into the expert directory which is normally "C:\Program files (x86)\MetaTrader4\MQL4\Experts" on windows or "~/.wine/drive_c/Program files (x86)/MetaTrader4/MQL4/Experts" on Linux. for successfuly compiling these files you will need "desphilboy.mqh" file in the same directory. then you will need to run MQL4 editor and press compile. this compiler is accessible from Mt4 menue. After successful compilation you will see the EA available in the navigator ( do a refresh if not) and then drag-drop it on your chart and it will attach itself to the trading chart and will bring up the parameters window which you can use it to change the EA parameters like S,C and T for different groups. you can now disconnect from the VPS and we are done with it unless you want to change gruop parameters.
NOTE 1: do not shutdown or suspend or logout the VPS, just close your own client window and disconnect. VPS must keep running and also the Mt4 termminal must keep running on it.
NOTE 2: your auto-trading must be enabled both in main switch and in EA parameters dialog. ("AutoTrading main switch" is a button on Mt4 tool pane which is initially red dot and changes to green triangle when enabled and for our purpose it must be always green. meanwhile there is a tich box in EA properties dialog for enabling auto trading and it must be ticked)
NOTE3: do not run it straight away on your real money account. instead try it first on a demo account and get familiar with the system at no expense.
NOTE4: A PIP value in all EAs in this system is 0.1 PIP which is called a point or a small PIP. (this means you must put 10 for 1 PIP and 50 in our numbers means 5 real PIPs)
##3- On your own computer now open your normal trading Mt4 terminal on your own computer. repeat the steps for compilation of EA for DAPositionCreator on you own computer. Open a chart and add "DAPositionCreator" EA to your chart and create some trades. to do so, again your auto trading must be enabled and also there is a switch in EA parameters named "creat positions" which must be true. If your setup is all correct, you will see system acting on your trades when price goes up and down. there will be a stop-loss created for your trades when they go into profit more than the T+S value specified for their group. this trailing stop will protect your trades from going back into loss.
NOTE: you must always have either stop loss for a trade or must have oposit pending trade ( have buyStop to protect Sells and Sellstop and have Sellstop to protect buys or buyStops) to manage the risk.
NOTE: this system does not replace money management rules or technical analysis or trader knowledge, they are still valuable and necessary for a successful trade.
NOTE: System will not react on trades created manually or using any other trading system. it acts only on its own creatd trades.
DISCLAIMER: this is not a sold or for profit system,I will not and nobody have the right to ask you any amount of money for using this system. Also the system comes as it is and there will be no compensation on the money you loose on or interpreted to be lost because of this system so, use this system at your own risk. Trading forex involves massive risk on your investment and you must understand exactly what you are doing. this system does not help you if you do not have enough knowledge about trading forex and/or other markets.
#D- Desphiic (Desphilboy) Method:
The theory behind Desphilic Method or desphilboy trading system is this assumption: A mid-aged Iranian Haji Bazari called "Haji Bazrafshan" who is a very rich man, theoretically with no financial limits, is the forex market dominant player and always moves the market in such a way that makes small participants loose. this is why 90% of traders are loosing all the time. We never judge "Haji Bazrafshan" and we do not know why he does these moves. Sometimes it is possible to anticipate Haji's next move from his previouse behaviour and from market info and sometimes it is not. Because of this, you need to protect yourself against so called "market opposite movements" or the evilish movements of Haji. Opposite movement is the move which is always exactly in reverse direction of all news, fundamental and technical analysis and rules and normally continues until you are convinced that whatever you were thinking was incorrect or you do not understand anything correctly about the forex market and the truth is exactly opposite of your current understanding and therefore you close your positions in loss. Then suddenly, Haji changes market direction to whatever you were thinking before and was actually correct. This movement is actually an existing reality and is caused by major participants pushing price in reverse direction until they hit a large number of stop-losses which is the sign of other traders loosing their money. they change market direction after that to the correct direction which is what you had thought and analytics had anticipated and news were confirming.
Desphilic method starts by putting number of buy stops and sell stops with some distance from the price, lets say we put 5 sell stops starting 10 pips below the current price and leave 20 pips between each or them and have 5 buy stop starting 10 pips above the current price and 20 pips between them. ( for example if current price of AUDUSD is 0.7, then sellstops at { 0.699, 0.697,0.695,0.693,0.691 } and buyStops at {0.701,0.703,0.705,0.7070,0.709})
Because we are going to protect ourselves against opposite movements, we will always keep stops ( BuyStop or SellStop ) in reverse direction. actually we will always have both buy stops and sell stops. our buy stops always start some pips above the current price and sell stops some pips below the price. If price goes up, it will hit our buy stops and converts them into long (buy) positions and we gain profit, if price goes down, it will hit our sellStops into short (Sell) positions and we will profit again. actually our buy/sell stops act as stop-loss for each-other. if price reverses at a sell, that sell goes into loss, we put another sell stop a few pips below it and leave it. price cannot make other loosing sell for us unless passing and giving profit to the one which is reversed at. if price reverses at a buy, that buy goes into loss, we put another buy stop a few pips above it an leave it. market cannot make another loosing buy for us, unless giving benefit to the one which is currently in loss.
if we have 2 or more winning buys or sells, we will then put a stop-loss in benefit area for all of them but the last one. this means if the price suddenly reverses the movement, it will close all trades in benefit except the last one.
you can be bullish or bearish by changing the distance between your positions or putting different stop-loss/take-profits for them. or closing your positions when you think they are in maximum benefit.
the only recomendation is this: "Always keep some buy stops and some sell stops"
with desphilic method it is still possible to loose money but the only way to loose big money is when the market crashes or there is a very fast movement so that slippage goes high and becomes more and more and your broker cannot buy or sell for you, or you are away and nobody is taking care of your trading account.
to minimize these possibilities we have written or system of expert advisors and we use a VPS to monitor our trades 24/7/365 and also have a better delay.
the big-loose risk can go down to 0% by using a proper money-management rule and general risk management as before. actually you can still use all methods which are recommended by professionals or experienced traders and still a good trader can perform much different from a bad trader. this method does not replace trading knowledge and will not help a dizzy or lazy man to win. you will still need everything which you need as a normal trader. the only benefit of this method is to lower the risk and protect you against valotile market and big looses due to spikes and sudden market collapses ONLY WHEN IT IS POSSIBLE.
A set of forex trading instructions and Expert Advisors for MT4
1- Our trading infra structure:
A- Machine No.1 the "trading machine"
We use a Linux server ( fedora 23 is recommended ) as our trading machine which is supposed to be located on a data center close to the market or broker servers. There are lots of companies and businesses around who provide you with a proper service of this type and you can get various types and levels of these services with diferent fees. you can find these services by simply googling the keywords "VPS in new york city", "hire cloud servers", "servers suitable for trade" or similar keywords. When hiring these services have in mind that the most important factors of a server for trading purposes are its network-delay to your brokers server and its stability (it must have less than 10ms delay and must be 24/7 always online and connected to network). You should be able to hire a server with less than 10ms ping-time delay to your brokers server by something less than 50$ per month. If price or ping time differ very much from this, you are probably on a wrong track.
B- Machines No.2 and 3,4 ... so on
These machines are normal clients probably laptops, Desktops, Mobile phones or any other kind of device capable of running a MT4 client. we recommend Fedora on a laptop for the client( FAQ: will I be able to use fedora for normal daily computing usage? YES! You can). this machine might run any OS , but we recommend linux and we put instructions for linux. If you are using windows that is ok, but your commands and settings may differ a little bit.