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-   -   How to optimize a Trading system So That win % or RR increase (https://www.forexfactory.com/thread/1030649-how-to-optimize-a-trading-system-so-that)

tommydoginti Oct 14, 2020 11:08pm | Post# 101

{quote} The Profit Factor alone is not so important. The most important thing for any strategy is the absolute size of the edge in relation to the friction cost. You can have very robust strategy even with profit factor 1.1 if the expectancy per trade is multiple times the friction cost. You can also have a strategy with very high profit factor like 3+ and it is still a bad strategy. For example most martingale and grid systems tend to have very high Profit Factor until they crash. We all know these strategies are garbage in the long run but short...
Hi guys. Just saw this post and the situation Hasib facing is exactly the same as what I am going through (I am new to trading for a few months in only)
Totally agree with you about the life span of strategies can be short, otherwise everyone would be millionaires with a single EA.

My first strategy is also giving 52-55% win rate with 1.1R. But my approach is not to further optimize it after trying for a week. I found a lot of strategies work only on a few pairs, or within a period of time. I only have 1yr of data to backtest. My thought is if it is CONSISTENTLY profiting last year, i.e. Mostly green months and only one to two flat/red months, it is likely to work at least a few months into the future. I just keep my greed, and stick with the basic. I also dont have the psychology to trade with discipline for now so I learned to write EAs.
In the process I learn a lot about indicators and market interpretation also MQL4 coding

I then move on with a bit more knowledge, and start developing another strategy. Base on my skill level I try to look for a strategy in ANOTHER approach. In my case my first is trend following, so I looked for reversals. Again found a strategy that look profitable, backtest to prove it profitable, forward test a month in demo, then just put it on live.

Repeat the process. Now I am into third and forth strategies. I know more about indicators, so my third is based on volume and oscillators, forth is Renko and momentum.

Just my opinion from my experience.
1. If optimization is not done in a few tries, then just move on before you curve fit. An EA giving you 2-3%/ mth is not bad at all.
2. Have both demo and live acc, test ur strategies on Demo before proceeding to Live. If a strategy has continuous DD over long time (still figuring out how long), put it back to Demo to see if its time is gone
3. Learn coding if you go for EA. I learn both PineScript on TradingView and MQL4. Pinescript is easier for strategy manual backtesting and MQL4 if really go for EA.
4. Start with very basic things. Maybe MAs, then RSI, then Price Action, Oscillators, chart types, etc. along the way you learn very well the function of each indicators, you may also learn how to code them into your EAs!

But congratulation for starting with a winning strategy

hasib Oct 15, 2020 5:25am | Post# 102

Thanks, tommydoginti. I will start learning MQL4 programming soon.

tommydoginti Oct 15, 2020 6:34am | Post# 103

Thanks, tommydoginti. I will start learning MQL4 programming soon.
Best of luck! Dont feel interior if you can only write an MA to rely on in the beginning. My first experiment with EA was simply a MA cross. But bit by bit I was able to add another part of the code to improve it when I became more skillful.

Slowly but surely you will be able to write an EA following your rules no matter how complicated it is. Knowing the code itself also allows you to modify the EAs that you have and tested before as shared in this post. They can become truly "your" EAs when you have the power to optimize its scripts

hasib Oct 16, 2020 1:39am | Post# 104

1 Attachment(s)
Here are the settings, I have used in my backtesting. anyone can play with it. If you got any good setting you can share with us too.
Thanks everyone
Click to Enlarge

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tk-forex Oct 17, 2020 2:13am | Post# 105

If you are confident that 1 to 1 RR will yield slightly above 50% on your trade system, maybe you can consider double up your risk on your next trade after losing one, it is like martingale system, instead of double up lot size when the price goes against your direction, you double up the risk on your next trade signal.

havo Oct 17, 2020 9:00pm | Post# 106

I have a trading system when market conditions are good it produces a 60% win rate @ 1 to 1RR. when market conditions are not that good it produces around 50%+ with the rate with the same RR.
Then you dont have a "system" you just a pretty chart with some indicators that makes you feel "good/secure" about the mouse click you are about to make

Sorry to burst your bubble but 50/50 results its just random trading with random results.. period

How can we follow our system better so that we can win? how can we manually trade successfully?
Pretty easy, read the price and what its doing, be consistent following the market so you dont miss a possible incoming trade (they always come, just wait) conditions and thats it..

easy to do; NOW can YOU make that every day??


How to improve our mindset and how to stop revenge trading? How to become consistent in trading?
Thats an easy one too: Stop acting like an 8 year old, be a grow man and take responsibility of your actions!! you want to make in this activity? then you have to do it the right way or your gona hit the highway of doom.. your choice

I am interested to know those things from experienced and successful traders.
In the end, after all the crap any human can read about this can be resumed in this: Trading is an easy game of visual patterns, patience to wait and consistent behavior everyday.. if you dont have that as a human being before starting trading, well then level up my friend, as simple as that

hasib Oct 18, 2020 1:00am | Post# 107

{quote} Then you dont have a "system" you just a pretty chart with some indicators that makes you feel "good/secure" about the mouse click you are about to make Sorry to burst your bubble but 50/50 results its just random trading with random results.. period {quote} Pretty easy, read the price and what its doing, be consistent following the market so you dont miss a possible incoming trade (they always come, just wait) conditions and thats it.. easy to do; NOW can YOU make that every day?? {quote} Thats an easy one too: Stop acting like an 8 year...
Thanks for your advice.

BlackNapkins Oct 18, 2020 2:23am | Post# 108

Hasib,
Can I ask you this ...
RR=1 This is only exit strategy you are using?

hasib Oct 18, 2020 4:56am | Post# 109

Hasib, Can I ask you this ... RR=1 This is only exit strategy you are using?
what do you mean?
RR 1 means if I risk 50 pips I target 50 pips.

hasib Oct 18, 2020 5:06am | Post# 110

1 Attachment(s)
I tested one of the FF popular trading strategies, Period March 2020 to Oct 2020. I get 101 Trade signals.
I use 1 to 1 RR to increase the win rate. I tested it in H4 chart since H1 chart doesn't give good results.
win rate is 58%, But That popular trading strategy thread traders claim they have more win rate.
I have a doubt that they really test that trading strategy seriously.
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BlackNapkins Oct 18, 2020 5:06am | Post# 111

{quote} what do you mean? RR 1 means if I risk 50 pips I target 50 pips.
Excuse my English, please. I kow what RR=1 means. I am trying figure out what is your exit strategy...
Are you closing trades only when reaching 1R of profit or SL?

hasib Oct 18, 2020 5:49am | Post# 112

1 Attachment(s)
After adding 1 indicator, It filters out 35 trade including losing and winning trade. In the end that indicator increases the win rate. Very interesting observations. Now the win rate is 67% with 1 to 1 R.
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BlackNapkins Oct 18, 2020 5:57am | Post# 113

Filtering trades you are making sample size smaller ... you have betters result but reliability is lower

hasib Oct 18, 2020 6:17am | Post# 114

1 Attachment(s)
Filtering trades you are making sample size smaller ... you have betters result but reliability is lower
Not really, I test more signals in the same pair. IN 101 signal the win rate increase. see the picture.
The win rate is now 69%.
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ryuryu Oct 18, 2020 6:23am | Post# 115

69% win rate...

100% - 10% -10% -10% -1% + 69% = ?

Also don't forget to deduct commissions, spreads and swaps.

hasib Oct 18, 2020 6:31am | Post# 116

67% win rate... let's study math a little: 100% - 10% -10% -10% -3% + 67% = ?
I just present the 101 trade signal or entry whatever you call it. From 101 trade I win 70 trade and lose 31 trade. so win % is 69 and loss % is 31%.
Net gain % is 39%. Please see the excel screen short. you will understand, Bytheway you told us you will share a BB EA, we are waiting for that.

since I Tested the strategy in the H4 chart and we target 1 to 1R and the spread is only 2 to 3 pips in eurusd, so not a big deal here.
And if anyone afraid of swaps I recommend opening a swap-free account.

BlackNapkins Oct 18, 2020 6:53am | Post# 117

Dear Hasib,
My conclusion was concern first excel picture.
Adding filter, you are changing conditions for entries. You are changing the system.
So in first system you get 101 entries and second system you get 66 entries… that what I was saying…Next excel picture shows correct numbers of entries for both systems. That is what I pointed out before…
But in my opinion (I do believe is not only mine) 100 trades is not good enough to calculate probabilities like win rate…
My intention to post in your thread, was to turn attention and effort to prepare perfect exit… most of the system have system of rules to place a trade and ONE rule to close it. Why do not work on strategy on closing trades?? Why do not spent some time to enter a trade when market suggest to and leave the market when market suggest doing it?
That’s all I would like to say … please excuse for interruption
I like see people searching solutions.
Stay well

hasib Oct 18, 2020 8:07am | Post# 118

Dear Hasib, My conclusion was concern first excel picture. Adding filter, you are changing conditions for entries. You are changing the system. So in first system you get 101 entries and second system you get 66 entries… that what I was saying…Next excel picture shows correct numbers of entries for both systems. That is what I pointed out before… But in my opinion (I do believe is not only mine) 100 trades is not good enough to calculate probabilities like win rate… My intention to post in your thread, was to turn attention and effort to prepare...
well said, Thanks for your advice. I completely agree with you we should not only need good entry we also need a good exit too. Stop and Take profit placement is very crucial in every trade. we have to understand overall market conditions to do that. I personally use ATR to understand the market possible range. I use 1 to 2 R in my every manual trading but when market conditions change I close early with less profit or little loss. but when comes to use systematic trading, a rule-based exit is the way to do it.
about the trading system, I just getter a small sample size, I need to test that strategy last 10 years how it performed and I need to use it in several pair before start trading with that system. I will also test a little high RR if I found that strategy is performing well I will keep that strategy.

ryuryu Oct 18, 2020 9:17am | Post# 119

{quote} I just present the 101 trade signal or entry whatever you call it. From 101 trade I win 70 trade and lose 31 trade. so win % is 69 and loss % is 31%. Net gain % is 39%. Please see the excel screen short. you will understand, Bytheway you told us you will share a BB EA, we are waiting for that. since I Tested the strategy in the H4 chart and we target 1 to 1R and the spread is only 2 to 3 pips in eurusd, so not a big deal here. And if anyone afraid of swaps I recommend opening a swap-free account.
Can't find MT5Orders.mqh file. I need it to compile the EA. It seems to me that MT5 was updated several times and that file gone.
If you have please share.

mtako Oct 18, 2020 11:16am | Post# 120

I tested one of the FF popular trading strategies, Period March 2020 to Oct 2020. I get 101 Trade signals. I use 1 to 1 RR to increase the win rate. I tested it in H4 chart since H1 chart doesn't give good results. win rate is 58%, But That popular trading strategy thread traders claim they have more win rate. I have a doubt that they really test that trading strategy seriously. {image}
I am not talking about what you are doing. I appreciate everyone has its own journey. This is a minuscule part of my own experience AND this is a very diverse field where there are "many roads that lead to Rome".

This post just reminds me about, oh no...

Not thinking of how many times the price has NOT shown me how it works with this strategy?

Not knowing that it is so often an illusion that a strategy works better on higher timeframe, just because it has happened less times.

Not realizing that to be a worthwhile 'pattern', a 'pattern' needs to have a minimum number of occurrences.
That anything I was working on was just another grain in the sand, no gem pebble like I felt perhaps it was ! I also could find several fruit shaped patterns on the beach or in the clouds, several hundreds even, but got really sick when I tried eating a sand apple, just like trading live with a really profitable high Timeframe strategy I had developed based on two years and just about 200 trades. Wait, the market never did that around my strategy!? How is it now exactly when I start using it it changes ?
It hadn't changed, I just didn't know it well enough. and that and that and that... that really hurt my tummy also

All the times I worked to strike gold when I wasn't even close to bronze, and was actually walking away from the gold mine thinking I was getting closer...

Today, happily I can laugh at myself. But what a long period of wasted time and effort years ago. And we didn't have the computer power to backtest and explore like today !

Without looking at enough trades throughout enough time to develop a strategy, along with other important factors I won't get into, I wasted so much time and effort.

If I could go back in time and relive, I would minimum MINIMUM at ALL times, work with many instruments and see how they confront several hundreds or thousands occurrences of the strategy, and throughout as many years quality history is available.

No exceptions, ever.

Peace and have a wonderful Sunday everyone !


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