KangarooEA_v7.0/7.1 - Lotsize Limitation

[Dutch]

Hi all,

Some of you have noticed that we implemented a lotsize limitation (2.0 lots) for all accounts in KangarooEA version 7.0/7.1.

In this post, we'd like to share why we decided to implement this limitation and offer a solution for those wishing to trade above 2.0 lots per trade.

There are a few factors which determine the longer term viability and profitability of any EA.

First of all, we all know that if an EA get cracked (so-called 'educated'), a few things happen:

1. profitability deteriorates over time, and often the EA becomes a loser
2. lots of people start making mods negatively impacting the performance

The first reason is the one to think about for a minute. Why is that?
We think it's because the market gets swamped with same order requests from thousands of accounts (be it the buy/sell signal or the TP/SL area).

We think Kangaroo has been offering very steady profits since launch (Nov 2010) because we were able to prevent Kangaroo from being cracked.
It literally took 1000's of hours to protect Kangaroo and prevent it from being educated. We did this not only to protect our business, but also yours.

So we managed to clear the first hurdle and managed to keep Kangaroo exclusive for those who paid for it: you!

Now here's hurdle 2: Recently (last couple of months) we have noticed a lot of 'quick turns' or 'bounces' when price gets within a pip (or two) of TP.
This, we feel, is due to two possible reasons:

1. The large banks/liquidity providers see tons of Kangaroo TPs around same price sitting in their orderbooks. Now guess what they don't want price to do...and what they will thus try to prevent from happening.... So to mitigate this problem, we have developed and implemented Hidden TP and SL.
2. Some large commercial customers use Kangaroo on very large accounts (think MAM, PAMM or just a very large account). Remember fills are happening faster (and perhaps first) on larger blocks (easier to manage). So when a large (commercial) account closes at TP with 200 lots....guess where price will go...Yes: it will bounce in opposite direction. To control and curb this we've decided to gauge the market and implement a lotsize limit.

Moreover, we feel it's not fair that a million dollar account gets the EA for the same price as a 5000 dollar account. We know, it's a rather socialistic thought in a capitalistic industry...

Do we know all this for sure? Nope. But we just had to find out.

And once again: we do all this to serve and protect the 'smaller' retail trader (sounds like a police slogan).

If you are trading more than 2.0 lots per trade (equivalent to a 50K account and trading at Risk level 5), and you are trading on a personal account and wish to raise the limit, please email us a screenshot of your terminal (and showing Kangaroo loaded on a chart) and we can raise your limit to 4.0 lots per trade for the cost of an additional license ($499). You'd make that back in just over a trade.

I hope this all makes sense a bit.

Cheers,

Dutch.

[GEOakes]

I thought this table maybe interesting:
RooRandRLotExamples.png

Std Profit is using 18 pips (20-2pip spread) per trade set (maybe 1 trade, or up to 6 depending on the pair, and slippage too.)
Std Risk is the same for AUD and EUR since total trades X pips = 360 are at risk - also know as the 'sleep at night' value.
Trading less than $10K? Lots, Std Profit, and Std Risk adjust down, but you get the picture.

Std is also based on a Std lot size trading account, /10 if Mini /100 if micro as approprate.

[GEOakes]

And, since this is a nice thread to put all things in one spot:

RecoveryTime.png

Since I'm sure we want to live off of our winnings, a simple view of how the risk affects the recovery.

My point here is for a lot of new folks to see the balance view of things. I've lived thru the SLs, I accept what it is, and I know what I'm dealing with.

[alexra]

I have never used Kanga, just received that notification email because been registered in forum after been trading with Nick and Dutch on Orderflow room, but this lot limitation had drawn my attention. I am not sure how Kanga trades, but I guess it is not a blasting scalper like MDP that moves orders all the times. If it is not, how difficult it can be for a massive trader to put it on a trade copier and trade it with any lot size they wish?

I think there are much easier solutions without limitation to the end user, just like partial take profit as price is closing to the final TP, proactive trade management when close to TP stop loss also gets much closer to prevent turn around, time-based partial profit taking in the area - you name it.

Just a thought of someone who's quite neutral to the cause.

[mook757]

using a trade copier is against the terms of use and tulipfx will probably suspend your license if they find out somehow.

[Antny]

Yes, one could always use a trade copier, but if they were every discovered, they would most likely be permanently banned. For anyone that has the kind of money that would open the allowance to use a trade copier would easily be able to afford another license to the kangaroo. The risk of being permanently banned would not be worth it..... in my opinion. That and it would technically be stealing and karma always gets you. Too risky.

[Ozzie]

I can tell you tales of traders using trade copiers and having their accounts hit badly. So if you are contemplating a copier, think again...things can go wrong.

Anyway. it was either lotsize limitations or switch to a PAMM system and turn off Kangaroo altogether for everyone.

We thought this was a much better method to attempt to limit the large funds who use Kanga (we have heard from various birdies that companies who list their address on Wall Street even use Kanga).

While flattering, it is not fair to those whom the Kanga is made for - retail traders; nor is it nice to have managed funds claim their performance is in part thanks to our work.

[alexra]

Ozzie, I agree completely, but technically I think it is hardly possible, really, for anyone who wants to use it on a big account to prevent it. If you trade millions I see no problem to invest 10 grand into getting a really good copier done for a purpose, and most likely these funds will be using non-MT4 so they would indeed use trade copiers from MT4 to something else for example just MT4-FIX bridge/matching system..

I would even say that the way EAs published one cannot really prevent them to be decompiled and used or even sold again, as there is very little intellectual property rights protection in this field and surely no patent applying. If you protected it well enough or generate trading signals at server - this is fine, I mean just in principle.

[alexra]

Yes, one could always use a trade copier, but if they were every discovered, they would most likely be permanently banned. For anyone that has the kind of money that would open the allowance to use a trade copier would easily be able to afford another license to the kangaroo. The risk of being permanently banned would not be worth it..... in my opinion. That and it would technically be stealing and karma always gets you. Too risky.

Yeah, how difficult it is to apply under a different name, or organization again? Karma.. tell that to Madoff and many others. I think honesty and karma means nothing in investment business. It is a shark pond.

[Ozzie]

Ozzie, I agree completely, but technically I think it is hardly possible, really, for anyone who wants to use it on a big account to prevent it. If you trade millions I see no problem to invest 10 grand into getting a really good copier done for a purpose, and most likely these funds will be using non-MT4 so they would indeed use trade copiers from MT4 to something else for example just MT4-FIX bridge/matching system..

I would even say that the way EAs published one cannot really prevent them to be decompiled and used or even sold again, as there is very little intellectual property rights protection in this field and surely no patent applying. If you protected it well enough or generate trading signals at server - this is fine, I mean just in principle.

Yeah, $10k to copy a product that we sell for $300.

We have been fortunate that our work has not been able to be hacked, so that is a small mercy that we still ultimately have control over it. *touch wood*

Anyway, we will see how this goes, hopefully it helps. No harm in trying. Over the past 18 months we have established a good reputation with KangarooEA, and we plan to go on from here (retail EAs) towards serious managed funds. If we can establish a good reputation in the 'lemon market' that is retail EAs - then taking the next step should be easy!