SAR system based on QQE Adv and MACD Platinum

Jim,

You've hit on the key: namely, that every "hedge" ultimately resolves itself into a single nett position, at every point along the way. Hence you can simplify both your thinking and the math, and see your proposed modification for exactly what it is, by merely studying the nett positions in the sequence.

Also, having a single position open means that you'll incur less costs (spread+swap) than having multiple offsetting positions, hence it's financially more efficient. (Remember that br0kers tend to charge more swap on counter-carry trades than they pay out on carry trades). If you're considering migration from H4 to M15 then obviously spread costs become more significant, because the spread is greater relative to your trade targets. With some br0kers, the extra positions may consume additional margin, thereby reducing the number of allowable progression steps for your martingale.

Once you've resolved everything down to nett positions, you'll simply end up with a modified martingale sequence. If the modified sequence is more 'gentle' than the fibo-based sequence, then you'll end up setting more distant profit targets, in order to achieve your breakevens. Conversely, if the modified sequence is more severe, then the breakeven targets will be closer, and thus more easily achievable, but the sizing sequence will escalate out of control more quickly, on the occasions when the targets are not met. That's the trade-off; alas, there's no free lunch, no matter what MM you use.

Hence I suspect that both your existing and your proposed MMs are approximately equally good; and neither removes the prospect that, given enough time, the martingale will eventually cause a sequence that's ugly enough to result in a margin call. The more frequently you trade (e.g. M15 v H4), the sooner this is likely to occur.

Just my 2 cents' worth,
David

This is what I have found out with Platinum or other custom indicators with same problem: MACD Platinum should be the only indicator on the chart preferably and if you need to have other indicators, Platinum should be the first indicator on the chart.

As far as I can tell, the curve plotted by MACD Platinum is the same as that plotted by Zero Lag MACD. The Platinum signals occur at the same time that the ZL MACD crosses its signal line. Of course that assumes that you use the same settings for each indicator (12,26,9).

I've modified the ZL MACD in the above link (the mql4.com site) so that the histogram is replaced by a line, and attached the result below.

In the screenshot, note that the MACD Platinum's heavy line is actually the 'signal' line, i.e. it corresponds to ZL MACD's dotted line; while MACD Platinum's dotted line corresponds to ZL MACD's solid line.

Here's a screenshot ...

bratcevdg, thanks for the screenshot but that doesn't really help me as I don't understand what the error means. If you could send me a private message with your email address, I can send you the MACD Platinum indicator. I've actually got a couple of versions which you can try and hopefully that will solve the problem. I have loaded the same version you have on many MT4 platforms without a problem, so not sure why you are having issues. PM me.

IamTHAT did offer a suggestion that you may wish to try. I'm not sure if it will work, but I admit that I always load MACD Platinum first up onto the charts. Might be worth a shot.

hanover, you are right about the zero lag MACD being identical. The MACD Platinum was probably a lot easier to spot the crosses with the red and blue dots on it, but your new indicator took care of that problem.

With regards to your comments on the revised method I mentioned about keeping all trades open, I hear what you are saying about additional carry costs etc. Not sure about spreads though, as though trades would have all been opened and closed anyway, so that shouldn't make a difference.

I haven't really tested it as yet and would really like to have a good look at it before committing to it. Once I work out all the possible outcomes and how to deal with them, I may be in a position to talk to Christina about a modification to the current EA. She has already built me a couple of EAs that I can elect to have hedging by either 'true/false', so I know it can be done. But this is nothing I will worry about at the moment as I want to get the basic EA up and running first.

From my pretty quick manual backtests, the only advantages I can see about keeping all trades open, is it keeps me basically one step behind in margin requirements when the sequence builds up to the 3rd trade and more. There is also the possibility or more profit once price goes through the break even point if I left the trades running until the next signal, but I guess I could do the same with the current model. Then I get back to the reason why I elected to get out of a sequence at break even, and that was to reduce risk as soon as possible by closing higher position sized trades and starting the sequence again with my base lot. Again, at the end of the day, I'll probably trade this method on at least the 4hr charts and let the EA do it's thing with regards to entries, but there is nothing stopping me from manually managing a trade once it is up and running, and if I am can't get to my charts for a while, at least I know what the EA will be doing.

Plenty of work yet if I want to consider any major mods like what I have suggested, and at the moment I am just tossing a few ideas around and looking for feedback like yours, which is greatly appreciated. I'm sure there are plenty of smarter maths whizzs' than me out there that have thought about all of this stuff before, but there is nothing like a challenge. Sometimes it just hurts my head though Cheers. Jim

Trade update:

Nothing to report other than my EUR/JPY short is looking a little sad at this point.

Hi Buff,

Many thanks for sharing your ideas on this fibo hedge system. If well understood, the key point of your system is the ability to hedge your losses so that you close everything in positive. After all the most important is to end up with more dollars. Tell me if i am wrong but the indicator used is not so important, it just has to be able to follow a good trend and reverse quickly when the price reverse.

killerpips, no worries. You seem to get the general idea of how the system works, but remember this is just a rough idea which could be improved on or modified by anyone. You are right about the indicator, it's not that important. I just chose those two indicators as I am comfortable using them. You could use whatever you wanted to identify the trend. Right at this moment is a good example of why a manual trailling stop would be of use as the EUR/AUD had some nice potential profit on the long, but the market currently heading south after news. It may hold, but looking a the indicators at the moment, I doubt it.

Trade update:

EUR/JPY hit the break even target at 125.72, so that sequence is now closed at an overall break even result. The sequence begins immediately with a short 1x at this same price of 125.72.
No other changes for now. Cheers. Jim

Another thought whilst laying bed early this morning. My latest idea with regards to keeping all trades open until profit made has a slight flaw. As the first two trades in the sequence are both for 1x, then it would be impossible for the 2nd trade to ever make a profit or even reach break even as it is the perfect hedge. So if the profit wasn't made on the 1st trade, then I would have to wait until at least the 3rd trade to potentially make a profit. Just not viable in this format as a lot of the times the 2nd trade is the big move I am after. Solution to this problem? Change the sequence slightly by dropping one of the 1x trades so the sequence would just be 1,2,3,5,8 etc. That is a fair change, so I'll do more research on this and it will be on the backburner for now.

Trade update:

EUR will now test this method as I am now short 1x at 1.3398, which is the 2nd trade in the sequence. There was a loss of -144 on the previous long, so now I have an overall break even target of 1.3254.

EUR/AUD is now short 1x at 1.3010. There was a profit of +20 on the previous long. This is now the 1st trade in a new sequence. This was up about 170 pips at one stage so it was quite a fair bit to give back, hence my previous communication re using a manual trailling stop on these big moves. But then the problem is that sometimes that your stop might take you out of a trade prematurely before the trend does go in the direction it was supposed to. Bit of a catch 22 here.

EUR/JPY remains short 1x at 125.72.

At least now I have cracked the +3000 pips mark. Cheers. Jim

Start Date : Jan 10th 2013 on 6x pairs / Jan 30th 2013 on 3x pairs
Closed results to date : +3011 pips

Hi, Jim,

I have not had time to read this thread for the last couple days, the system I presented below is based on the rules I last talked to you still. If there is any changes, then we will wait for the next update.

For anyone who wants to test this system, make sure you thoroughly understand the rules and it's advised to watch my demo videos first.

http://screencast.com/t/ofxFZCw4Lc

http://screencast.com/t/LdzgCfFWiV

http://screencast.com/t/7j80pm9Q7

http://screencast.com/t/6sXRKdbQPd

Jim, I have sent the EA to your personal email, please test for a couple days yourself and see if you think my understanding of the logic is correct or not, if you do not find anything wrong with it, feel free to publish it.

Thanks.

Also by the way, you have sent me a few different versions of those indicators by different names, I assume you want me to use those 2 you attached in the very first post of this thread, those are 2 indicators being called inside EA.

Thanks Christina, received the email with the EA attached. Looking forward to testing it over the next few days. I'll check out the videos also. You are right, I do have a couple of versions of the same indicators, but the two that I posted on this thread are fine as I have them all on my platforms anyway. Okay, time for some testing.

And there you have it fellow traders, the first version of my EA is now in my hands. This EA is called FF SAR. I will offer it to Forex Factory members once I make sure it is working correctly. Even though I have called this the first version, if it does work as requested, this may be the only version. And as usual Christina has supplied me with a number of videos to show me how it all works. All the bases are covered.

Trade update:

Nil changes to any of them. Cheers. Jim

I've had a bit of a chance to play around with the first version of the SAR EA and it seems to be doing what it is supposed to. The problem is that I have so many options/set ups to choose from, that is hard to nail down one that shows consistency. I was leaning more towards the larger timeframes so I can keep an eye on it without too much worry, or even possibly the smaller timeframes where I chase after a specific profit target. As it turns out, there seems to be some potential on the good ol' EUR 1hr chart. I have done a snappy YouTube video showing an example of the EA in action, and can be viewed at

This is still a work in progress, with plenty more testing to be done. If anyone would like a copy of the EA, just drop me a email through my contact details on my website. The more testers, the better, and I would appreciate any feedback. Cheers. Jim.

Trade update:

EUR is still short. No changes here yet.

EUR/JPY is now long 1x at 124.57. There was a profit of +110 on the previous short. This is now the start of a new sequence.

EUR/AUD is now long 1x at 1.3022. There was a loss of -12 on the previous short, which gave me a break even target of 1.3034 for the entire sequence (now 2 trades) and this break even target was hit pretty quick, so that sequence is now closed and a new one begins. So now long 1x at 1.3034.

Start Date : Jan 10th 2013 on 6x pairs / Jan 30th 2013 on 3x pairs
Closed results to date : +3121 pips

Trade update:

With regards to the EUR, it appears I made a boo boo previously on where I called the last short. It should have been at 1.3380 and not 1.3398. I read the wrong candle. So that changes things a little. Instead of being a -144 loss, it is actually a -162 loss. No need to call a new break even target as it has now reversed to a long at 1.3398 for 2x. There was a loss of -18 on that short, and added to my previous loss of -162, that equals -180. As this new trade is 2x, really only need half of that amount to reach my overall break even to the upside, so the target is 1.3488. Not overly confident of that happening! Sorry about the mistake, but back on track now.

No other changes a this time.

Testing not going too well on the new EA due to the fact my computer has some memory (lack of) issues at the moment, which is really slowing me down. Might be time for an upgrade or kick the families rubbish onto their own computers. Frustrating....Cheers. Jim

Thanks Buff, brilliant work.

A couple of suggestions I have regarding the system if you don't mind me sharing. The system is based primarily on the use of the QQE indicator cross, without the need for RSI to cross 50 as is the case with the Rebellion system. The MACD platinum seems to already agree with the QQE on the vast majority or trade signals given. One thing that the Rebellion developer was talking about with regard to the QQE parameters was that they can be modified to suit longer timeframes e.g.: changing RSI period 8 to 14. Not to mention the other parameters of the QQE indicator. This is something that would be worth backtesting/optimizing, considering that you have been testing this system on the 4hr chart. Additionally, different QQE parameters may suit 1hr comapred to 15min etc etc

I also like your idea of possibly setting profit targets. Another thing to backtest and optimize over the years, however we would probably get different TP's for different pairs due to volatility mainly.

I have been sporadically forward testing your system idea on renko charts and haven't found it to suit as well as 4hr or 1 hr. With renko, I would suggest the need for an overall MA filter e.g.: 100 sma or something similiar. Once again, this could be optimized, however I am digressing.

Thanks for your work and transperency on the project and I do think your idea has potential. Its important to think of your testing as "units" rather than in "lots" because it can be quite daunting to hear your trading 34 or 55 lots in order to achieve a break even. So obviously the final amount of lots strictly depends on initial lot size you begin with.

Does the EA have the option to set a break even stop? I don't remember seeing it. My last suggestion would be to have a BE set after "x" number of pips in profit to limit the risk of a good trade going bad. If a trade achieves an outcome of BE, the next signal could be taken at the same lot size as the previous trade so that it doesn't disrupt the sequence, however you will save yourself going into more negative pip territory.....does that make sense!?

Many thanks again for your work and I hope it proves profitable. If it doesn't, I'm sure you'll come up with many more ideas in the future.

Thanks,
Kirk.

Hey Kirk,

Thanks for the kind comments. Funny you should mention adjusting the parameters on the QQE as that was on my to do list for today and had a chart set up to test already. You are also right about the MACD Platinum already in sync by the time a QQE cross occurs, which probably isn't ideal for this system. This was mainly for a couple of my other EAs that took multiple sequences of trades also but in a different manner, as the MACD Platinum would tend to end the trend first which would be the signal not to open any further sequences on these EAs.

I'm not sure if I gave you a couple of my other more traditional EAs (LACW & Mod MACD). These have a few more indicators, including multiple MAs, that might work with your renko charts. I have used them in the past on renko for a scalping type mode where I monitored the charts, and seemed to do okay. Just didn't like watching the charts for hours on end. If you would like copies, just drop me an email.

The profit targets issue is something that Christina are working on at the moment. Just trying to come up with some better options on how the EA handles them. And you are right, each pair is different, so that does have to be taken into account.

I also agree with your statement on the 'units' instead of 'lots'. I have tried to stay away from the term 'lots', hence my use of position size like '2x', which could relate to 2x anything. My level of trading would have me use 0.1 lot as my base lot on the 1hr, 4hr and possibly daily charts. Smaller timeframes like the 5m or 15m, that position size would be larger. Also that is why I am not putting my profit in $, but pips instead. I think I will set up a MyFXBook account with a $ value that can be tracked using this method with the EA once it is confirmed as doing what it should.

No the EA doesn't have a break even stop. That b/e stop would be me manually placing it or moving a trailling stop. It is something that could be looked at in the future, so thanks for the idea. Cheers. Jim

Trade update:

All quiet on the Western Front. EUR/JPY is going to town, but the EUR is a little undecided. No changes as yet.

I've had a pretty good look at the SAR EA now and it seems to do what it is supposed to do. So why not share it here and let others have a play. For instructions, either read this thread or go to post no.129 and watch Christina's videos which are pretty comprehensive. But if you are still having problems, then drop me a line. I would also appreciate any feedback on the EA, including any nice settings that you may find etc. Cheers. Jim

Trade update:

All quiet still and no changes.

Hi how many lots have you had to maximum open to go back to break even ?

Best regards

Hi Buff

I have been sitting in the back ground,but reading your thread,from the start,
I would like to thank you for all the work and effort you have put in,so that others may benifit,from your efforts.
I will give the ea a test

Logic38

logic38, thanks for those nice comments. I look forward to see how you go with the EA.

jgadefelth, not sure if you are talking about the trading here, which you can just go back through the thread and read, or the backtesting on the EA. I tend to disregard settings that give me a large drawdown, so anywhere on the fib sequence after 34 is usually when it get ugly. Remember the sequence is 1,1,2,3,5,8,13,21,34,55,89 etc. So if I started with 0.1 lot, then at the 34 level it would be 3.4 lots. It all depends on your start value though. Then you also have issues with regards to leverage, like with Oanda I am only at 50:1 but with XE Markets I'm at 888:1. So plenty of variables.

Trade update:

EUR/JPY is now short 1x at 125.84. There was a profit of +122 on the previous long. This pair seems to be the go to pair at the moment. Just wondering how long this can last.

EUR/AUD is now short 1x at 1.3056. There was a profit of +29 on the previous long. So new sequence begins.

Start Date : Jan 10th 2013 on 6x pairs / Jan 30th 2013 on 3x pairs
Closed results to date : +3272 pips

Buff

Thanks mate for sharing the EA online for all, very generous indeed. When I get a chance I will test and provide feedback via this forum.

I'll also try optimizing different parameters as well, especially the QQE. I'm thinking a smoother RSI and signal line (i.e.: higher parameter values) should provide fewer but "better" longer term signals ultimately resulting lower DD....but we'll see!

Cheers,
Kirk.