MTP Development Notes 12 | What is stepwise tracking? Not following everything helps protect your account.
Hello, this is Tsumo.
This article isthe 12th note in the MTP development notes.
Today as well, I will talk about something that does not collapse before winning.
The theme this time isStage-by-stage following.
When you hear about a copy EA, you usually think like this.
When the Master enters, the Slave enters as well.
If the Master increases, the Slave increases too.
All positions follow the Master.
It's very easy to understand.
But in MTP, we think a little differently.
Following everything is not always the correct answer.
Rather, because you follow everything, there are times when the Slave account becomes strained.
Especially in operations that include averaging down and splitting entries, this difference is quite large.
Therefore in MTP,
not “whether to follow everything at the Master,”
but
“from which stage to follow”
is considered.
This is stage-by-stage following.
Stage-by-stage following is not a setting that sacrifices opportunities.
It is a design that protects the account by choosing where to enter..
Today, we will talk about that.
MTP-related products are here.
MTP: Master [Free]
https://www.gogojungle.co.jp/tools/indicators/79103?via=usersMTP: Slave [Paid]
https://www.gogojungle.co.jp/tools/indicators/79106?via=users
Copy operations can be dangerous when following everything
In copy EA, it often looks correct to faithfully follow the Master.
The Master takes the first position.
The Slave also takes the first position.
The Master takes the second position.
The Slave also takes the second position.
The Master takes the third position.
The Slave also takes the third position.
This is the simplest.
But there is something I want to think about here.
Master and Slave are not under the same conditions.
Different account funds
Different lot settings
Different fill prices
Different spreads
Different margin availability
Different tolerance for drawdown
In other words, even if the Master can endure a certain position, it does not mean the Slave can endure it in the same way.
Nevertheless, if you mechanically follow every position, sometimes only the Slave side becomes strained.
The Master has room.
But the Slave is heavy.
A lot that is no problem for the Master
can be too large for the Slave.
The Master splits as planned.
But the Slave bears a large drawdown from the early stages.
These kinds of things happen.
In copy operations, the important thing is not only being faithful to the Master.
Follow the Slave account in a way that does not break it..
If you miss this, copy EA will not be a handy tool anymore.
It becomes a device that dutifully assumes the Master’s drawdown too.
Being dutiful is virtuous.
But, if the EA is too dutiful, the account will tire first.
Entering from the first stage makes drawdowns easier to bear for a longer time
With averaging down and split entries, the early positions tend to bear drawdowns for longer periods.
Enter with the first position.
Go against you.
Enter the second position.
Go further against you.
Enter the third position.
At this time, the first position has been bearing drawdown for a long time.
If the market recovers, you might be able to recover as a whole.
But that time is long.
This state of “bearing longer” is heavy on both the account and the mindset.
When there is drawdown, judgment becomes dull.
Should I enter next?
Should I wait?
Should I stop?
Should I lower the lot size?
Should I bring profits closer?
Everything becomes heavier.
Moreover, if you follow from the early stages, the number of positions tends to increase بسهولة.
Having many positions makes the total lot size increase easily.
As total lots increase, even a small adverse move can cause a large damage to the account.
Therefore, it is not always correct to pick up everything in the early stages.
Rather,there are cases where skipping the early stages can shorten the time bearing drawdowns.
Of course, skipping the early stages means you may miss out on profits.
Do not enter where things are dangerous..
In the market, there are important moments where entering later, even if you enter later, is more robust than entering early.
Stage-by-stage following is not for giving up profits
When people hear about stage-by-stage following, they may think like this.
If you skip the first stage, you miss the opportunity.
If you enter early, profits are larger.
If you don’t follow everything, copy EA loses its meaning.
Indeed, there are such aspects.
If you enter from the early stages, profits when things go well increase.
In situations where Master exits quickly with profits, skipping the early stage can result in missing out.
This is true.
However, stage-by-stage following is not just to maximize profits.
It is a setting to protect the account..
Rather than taking all opportunities, avoid dangerous early stages.
Rather than copying all positions, enter at stages your account can withstand.
This is the philosophy.
Stage-by-stage following is not a setting to discard opportunities.
A setting to skip high-risk early stages.
This is quite important.
Profits that you cannot take do not reduce the account.
But positions held from bad positions reduce the account.
If you have to take everything and the account becomes strained, it is better to skip some from the start.
The market is not very kind to those who aim to take everything.
It sometimes rewards you.
But afterward, it comes back decisively to recoup.
The market is quite skilled at business.
FollowFromStage is a way of deciding where to join the action
In MTP,FollowFromStageis simply,
the concept of from which stage the Slave follows the Master
is determined.
Follow from the first stage
→ Slave follows from Master’s first positionFollow from the second stage
→ Slave follows from the moment Master has the second position onwardFollow from the third stage
→ Slave participates after Master has accumulated positions to a certain extent
In other words, FollowFromStage is to
decide where to join the fight
.
This is quite important.
Because the stage at which follow starts drastically changes the Slave’s risk.
Entering from the first stage offers many profit opportunities.
However, the drawdown time tends to be longer.
Entering from later stages reduces profit opportunities.
But since the Master has already experienced some counter-moves, the Slave may aim for favorable positions.
Of course, entering from the later stages does not guarantee safety.
If the market reverses further, it becomes difficult.
But at least,
“following everything because the Master has it”
allows risk to be designed.
This concept is valued in MTP.