Easy Does It off the TDI indicator - EDI TDI
I would like to submit a trading strategy for discussion that I think has a lot of potential. It would no doubt be very easy to turn into an EA. The strategy stems off of Xmanís S3 system here at FF, which is in turn an offshoot of Big Eís TMS system. No doubt many of you are already familiar with these strategies and there are already some EAís in place that you may have tried.
So first the dessert, before the meat and potatoes:
I did a visual backtest of the strategy on the E/U from the first of the year forward. Iím proposing it to be traded on the H4, so not a large data set but it shows a lot of promise. EDIT: Trading this live since the end of April I have switched to the main entry off of the Daily.
Now a caveat here, for the backtest it was a bit difficult to tell exactly where the entries and exits would fall in relation to the TDI. I tried to be conservative in my estimates, going with the nearest new bar opening, as thatís when the TDI updates.
Having said that, the attached pdf is an excel file of the trades that would have been taken this year and the results. Lot sizes were a bit difficult to decide on as I didnít want to try and adjust them to each trade, so I went with an average of about 50 pips. Based on that I figured a risk factor of 1% per trade to determine lot size. I do feel in live trading, which I have begun, the actual stops may be lower, allowing a larger lot size for the same risk %, enabling a faster equity growth.
From Jan 1st through April 23rd there were 22 trades taken. There were 16 winning trades for a total of 1,344.4 pips and 6 losing trades for -92.8 pips. Total account equity increased by 35.44 % during that time.
As mentioned Iím using the Traderís Dynamic Index with alerts as my only indicator (other then trade info indiís, if you don't like all the indi's take em off). I trade it on the Daily as I feel that gives more opportunity for trending then shorter time frames. Then I stack orders based on the H1 (when I'm in front of my computer)
Low spreads are always a plus.
All indiís and template are attached.
When the green TDI is outside of the blue bands and then crosses red we buy/sell. Stop loss is set below/above the last swing low/high which will be nearby. SL will be moved to BE when profit is approx. 25 pips.
Once the initial daily entry has been made and trade has been moved to BE and as long as the green remains on the same side of red that initiated the daily entry, then I move to the H1 and stack orders based on the TDI Cross irrespective of the blue bands. SL treatment is the same as on the daily.
If the initial Daily entry hits SL before stacking starts I would reenter based on stacking criteria.
When green crosses back over red in the other direction on the Daily chart that run is over. Occasionally, after a long run, our reset point will be an immediate entry in the opposite direction (providing that the green has traveled all the way back outside the blue bands before crossing red again).
Trader discretion. Many will exit all positions when reset occurs on Daily.
I however am going to use the strategy as an entry to Graeme's Equity Millipede approach. If you haven't read that thread yet, you owe it to yourself to do so. Here's the thread: http://www.forexfactory.com/showthread.php?t=245149
So, when the Daily turns back against my trades, I will close half my positions and let the others ride. If entry conditions are met, as stated above, in the opposite direction then I will start to stack trades that way.
As you can imagine, it's impossible to be at the computer for all the H1 stacking trades, especially if you're in slumberland during the London session. So an EA for this would be awesome, and I don't think, that complicated.
I found and EA for trading the TDI cross that Xaphod had already written. Hopefully it wouldn't be too difficult to add the 'bands' criteria and other parameters. So for you coder's out there that might be interested in tackling this, let's give it a go and see if this has legs.
Meanwhile I am continuing to trade this live as best I can.
Let the discussions begin.
EDIT 5/27/12: I'm trying a few new indicators to try and filter the trade exits. They may or may not stay part of my strategy, but here they are for now.
EDI TDI Indicators.zip
So here is a current trade series I am in on the AUDUSD.
First, a note on the charts. I have quite a few indicators on mine because that's the way I like it. You can use or take off which ones you like. For the strategy at it's simplest, all you need is the TDI indicator at the bottom.
So for this series my initial daily cross entry was on May 3 at 1.02548. (I was a little late getting in on this one) That trade is still open.
Since then I have had 10 more entries on the H1. 7 of those have closed, some at a loss some at break even for a total of -65 pips.
4 trades are still open for a total floating profit of 469 pips.
One of the indicators on the chart is the Sonic SHI channel. This indicator is from Xman's S3 system and is set up to display a daily channel on the lower time frames. While not a direct part of the strategy it can give some good indications as to when price might reverse.
As you can see on the chart, price is currently hitting the bottom of the channel and the TDI is flattening out. We maybe seeing a turn to the upside and will need to employ our exit strategy. Then again, price may continue down, in which case we'll stack on the H1 and hold our positions open.
The AUDUSD is the best trade I have going now and the one I picked to illustrate what I'm trying to do.
I have a total of 5 trade series open with the following floats:
I see we've had over 600 views on the thread since yesterday...
Any questions or commments.
On what criteria do you enter from the H1?
I somehow missed that.
So just green over red in trend direction.
Yes, that's what I've been trying. In my mind it's basically a pullback/continuation in the daily trend.
I used to follow X-man's thread, but now I trade PA on daily charts.
I will try your method, it seems interesting.
You know how these threads go. I'll keep updating my progress as long as there seems to be interest. I'm curious myself to see how it works in connection with Graeme's Equity Millipede philosophy.
Interesting thread. Thanks for sharing. When you gave your win % in the first post, was this just for the initial entries or does that include the stacked trades as well?
Hi Spiderman, I think what you are proposing here it's very interesting, so I've subscribed to your thread
I've added the trade explorer for this live account so that those interested could see the trades across all pairs and monitor the progress. While the floating equity is good right now, we have a dd in the balance. This is of course due to hitting our stoploss on several trades. I have yet to go through a complete cycle where I close half my positions on a daily reversal. When that happens it will hopefully replenish the coffers.
Thanks for doing this. I attempted to put the template and indicators on my IBFX charts last night, but it crashed every time. I suspect it may be because I am using MT4 Build 409, but unfortunately that is all that IBFX has available at this time. I may have to open a demo acct somewhere so I can see it in action firsthand.
So did you first try the system w/o the stacked trades?
I initially started trading the 4H only. But I wanted to be able to stack trades with the trend in keeping with the Equity Millipede system. I can't sit in front of my charts every minute so I felt the need to switch to a higher time frame.
I was going to go Daily for my main signals and then stack on the H4. However as I looked back on several charts I saw a greater potential to stack trades on the H1, so that is where I'm staying at the moment. We shall see if that pans out.
I have an EA that I'm trying out that I can place on a chart while not at my screen and it will place an order on every TDI cross. I can set it to only trade in one direction, which is good, but it doesn't allow me to set it to only take trades once the previous has been moved to BE. So I can't really set it at night yet. That's one of the things I'd like to get coded in.
I see. I'm curious about how you are doing your money management with the stacked trades. Are they a percentage of your initial entry? i.e. 0.5 lots for initial entry and stacked trades are 0.1 lots?
When the green TDI is outside of the blue bands and then crosses red we buy/sell.
So you wait green to cross blue, then you take next cross only ? My backtesting results not so good at all.
What type of backtesting did you look at? Do you have any chart data you may be referring to.
Please illustrate the entry on the chart above. Thanks
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