Hi Jag,
Further to last post - comments in blue below.
6) Potential DD comes as swings are not big enough.. market doesn't move much and you keep opening trades and closing them when -H1 atr pips occurs. But this is why we choose the best phantoms... to have a chance to get in early on a potential big swing. This is why we use basket trading.
Several points here: (1) potential DD comes from the range expansion pattern which we have all discussed earlier - but not cutting winners means a greater chance of getting to pp on any one of the market swings. (2) It does not folow that although the trade will close out at BE when market reverses to -1hr atr, it will not neccessarily open a trade from one of the hedging pairs at that point (unless the Phantom PL for an opposing hedge pair is also positive). This does not matter however as it will open if the market swings far enough. (3) the idea of using the best Phantoms to start your real live trades (what I call the trading sequence) , is good. But this would mean that you have to have all 14 pairs inthe basket available to trade. As I beleive 3 pairs is sufficient - it would be pretty cool if the Phantom simply then picked another two pairs to create a perfect (pseudo) hedge. For example if E/U was the front runner - then the EA begins tracking only E/U, U/J and E/J for the trading hedge group. Or if the front runner was CHF/J then it would create the real trading hedge pairs as CHF/J, U/J and U/CHF.... just more thoughts
7) This negates the need to always have to trade after a basket is open...you only open trades when there is volatility. This would help get in on swings and get away from ranging periods that cause DD. YOu don't need to keep opening trades because you know that you can't lose more than your current open trades - h1 ATR pips. If that happens fine... that last trade was probably a bad decision.
Not sure about where you are going here? I think we keep the functioning of the core EA process which is place a trade whenever the Phantom PL is positive and all open positions are positive.... for now anyway.
I was suggesting that the volatility filter would only block the start of a trade sequence until it had hit the filter threshold. Not block individual trades.
I think most EA's and traders fail because after a loss they seem to either double down or lose composure and try to make up the loss. If the market doesn't give you the opportunity you can't force it.
Yep
If you didn't close out the trade the trade could potentially go against you more and you would need to have a bigger swing in the other direction with more trades to get your profit. By closing out bad decisions we are rewarding the EA for good decisions (phantoms that end up winning) and we are punishing the bad decisions.
Yes your BE setup will cover this nicely. May need to create the hr atr as a variable so it could be set at +1,2,3 hr atr's to test.
Its all up to the phantom resetting and choosing the phantom to help us decide a good vs bad phantom.
Over a long period of time you will notice that you have an edge because you are going with the money( choosing the best phantom every time ).
Love your thinking.
The DD occurs if phantoms keep opening only to be bad decisions every single time.. the amount that this happens would necessitate the need for the EA to trade over a longer period of time to get your profit... but the question is if this is better or worse than hoping that the bad swing patterns occurs to give us bad DD.
Yes exactly. But this is also why I would start with testing without the take 1/2 profit at +1hr atr, since I want the max chance of getting to my pp to start with. (testing will give us the answer here).
This will allow your account to survive over different patterns of swings.. aslong as there are some swings that are big enough to go atleast multiple H1 atr pips in profit (under volatile times of the day). If a smaller swing to a bigger one to a bigger one like you should in your post Charvo occurs... this would actually be good for the EA and would close out in profit probably after either 1 big swing or two smaller swings. Do you understand?
Yes I understand absolutely - and totally agree. This is very cool.
I don't necessarily agree with you saying you need to be always in the market... I think it should be the opposite... only be in the market when you need to be. It will always find a way (you will see this live) to try to hit your stops or find a way to kill your account.
This will be interesting to test out. Not sure which way is better - with market randomness, being in 24/5 may have its advantages we haven't forseen yet. It may have a positive survivor effect.
I hope you guys understand what I'm trying to say.. some criticism like always is expected and respected.
Loving it!!!
As for MM we can actually use the daily range to figure out where price should go to and since we don't have to worry about margin in this case we can use bigger lot sizes based on the amount of daily range we have left in the day. Ofcourse you want to limit it to x% of your account equity if range left is very high and nothing happens that day (you open and close many positions accumulating losers). But the amount of movement needed to get your profit is very low compared to now using very small lot sizes based on 0.5% of your account or whatnot.
Jag
Very good thinking again - and I like this all for MM and what I was also considering.
Well done Jag.
Tim
Further to last post - comments in blue below.
6) Potential DD comes as swings are not big enough.. market doesn't move much and you keep opening trades and closing them when -H1 atr pips occurs. But this is why we choose the best phantoms... to have a chance to get in early on a potential big swing. This is why we use basket trading.
Several points here: (1) potential DD comes from the range expansion pattern which we have all discussed earlier - but not cutting winners means a greater chance of getting to pp on any one of the market swings. (2) It does not folow that although the trade will close out at BE when market reverses to -1hr atr, it will not neccessarily open a trade from one of the hedging pairs at that point (unless the Phantom PL for an opposing hedge pair is also positive). This does not matter however as it will open if the market swings far enough. (3) the idea of using the best Phantoms to start your real live trades (what I call the trading sequence) , is good. But this would mean that you have to have all 14 pairs inthe basket available to trade. As I beleive 3 pairs is sufficient - it would be pretty cool if the Phantom simply then picked another two pairs to create a perfect (pseudo) hedge. For example if E/U was the front runner - then the EA begins tracking only E/U, U/J and E/J for the trading hedge group. Or if the front runner was CHF/J then it would create the real trading hedge pairs as CHF/J, U/J and U/CHF.... just more thoughts
7) This negates the need to always have to trade after a basket is open...you only open trades when there is volatility. This would help get in on swings and get away from ranging periods that cause DD. YOu don't need to keep opening trades because you know that you can't lose more than your current open trades - h1 ATR pips. If that happens fine... that last trade was probably a bad decision.
Not sure about where you are going here? I think we keep the functioning of the core EA process which is place a trade whenever the Phantom PL is positive and all open positions are positive.... for now anyway.
I was suggesting that the volatility filter would only block the start of a trade sequence until it had hit the filter threshold. Not block individual trades.
I think most EA's and traders fail because after a loss they seem to either double down or lose composure and try to make up the loss. If the market doesn't give you the opportunity you can't force it.
Yep
If you didn't close out the trade the trade could potentially go against you more and you would need to have a bigger swing in the other direction with more trades to get your profit. By closing out bad decisions we are rewarding the EA for good decisions (phantoms that end up winning) and we are punishing the bad decisions.
Yes your BE setup will cover this nicely. May need to create the hr atr as a variable so it could be set at +1,2,3 hr atr's to test.
Its all up to the phantom resetting and choosing the phantom to help us decide a good vs bad phantom.
Over a long period of time you will notice that you have an edge because you are going with the money( choosing the best phantom every time ).
Love your thinking.
The DD occurs if phantoms keep opening only to be bad decisions every single time.. the amount that this happens would necessitate the need for the EA to trade over a longer period of time to get your profit... but the question is if this is better or worse than hoping that the bad swing patterns occurs to give us bad DD.
Yes exactly. But this is also why I would start with testing without the take 1/2 profit at +1hr atr, since I want the max chance of getting to my pp to start with. (testing will give us the answer here).
This will allow your account to survive over different patterns of swings.. aslong as there are some swings that are big enough to go atleast multiple H1 atr pips in profit (under volatile times of the day). If a smaller swing to a bigger one to a bigger one like you should in your post Charvo occurs... this would actually be good for the EA and would close out in profit probably after either 1 big swing or two smaller swings. Do you understand?
Yes I understand absolutely - and totally agree. This is very cool.
I don't necessarily agree with you saying you need to be always in the market... I think it should be the opposite... only be in the market when you need to be. It will always find a way (you will see this live) to try to hit your stops or find a way to kill your account.
This will be interesting to test out. Not sure which way is better - with market randomness, being in 24/5 may have its advantages we haven't forseen yet. It may have a positive survivor effect.
I hope you guys understand what I'm trying to say.. some criticism like always is expected and respected.
Loving it!!!
As for MM we can actually use the daily range to figure out where price should go to and since we don't have to worry about margin in this case we can use bigger lot sizes based on the amount of daily range we have left in the day. Ofcourse you want to limit it to x% of your account equity if range left is very high and nothing happens that day (you open and close many positions accumulating losers). But the amount of movement needed to get your profit is very low compared to now using very small lot sizes based on 0.5% of your account or whatnot.
Jag
Very good thinking again - and I like this all for MM and what I was also considering.
Well done Jag.
Tim