Trend Following Quest

brokertrader, I have 2 suggestions for you, not forcing you to accept.

1. You are taking too much risk. First you must understand compound interest. By compounding small wins, it will get you more than having a roller coaster ride although roller coaster ride is fun and exciting.
2. Respect the higher time frame trend. If you want to trade with trend, you need to look at multiple timeframes. For me, I look at Weekly, Daily, H4 and finally H1 before deciding what to do. This is the reason why I build an automated EA because it is too time consuming and confusing to keep looking at charts.

Hi,

1. I know the rule of going by 2-3% of account size risk per trade, but I'm not interested in that, because I did it in the past and first, it's too boring for me, and second, it doesn't fit my goals. I take my trade as a hobby for now, and my target is to eventually become very profitable quickly, not in 10 or 20 years from now, that's why I said in the past that I have to find the correct risk for me, the one that brings profits quick enough as long as the system remains durable. I need one year to take off, the day it happens I know that my account will be more safer than now and so even taking a 30% loss like I got recently.
The key for me is finding the equilibrium point between the risks which sooner or later translates into losses, the profits which translates into account grow and one important point that is almost always ignored, the recovery time when you take a loss.

2. This rule applies for medium/long term position or swing trades. As I mentioned on my first post, I trade mainly H1 and H4 time frames and even being in that lower time frames for a trend following system which is mine, I still only trade once per day or a bit more on average, so it's now perfectly manageable. I'm in the process of writing an EA anyway, I know a bit about programming as you can see from this thread but still have some aspects that are a bit difficult to translate into code but it will happen...

Thanks for your suggestions but as you can see, I know perfectly where I am and what I'm doing and even if that still doesn't work, all is fine for now !

Trade well!

The Rebuilding Episode 4 - Going fully Automatic -66%

Still going through hell as the account took another hit again. This time I had to adjust my risk going with a base leverage by trade of about 20 instead of near 30 before but I will not be able to test this before September as anyway July and August are shitty months to trade.

This time, was the time! I finally coded the EA for my system which I have been testing since two weeks now and which seems okay. So, from September, as I won’t trade this system in August, I will go fully automated.

In parallel I just started trading an additional system that I would like to test as well but I see that trading both system in the same account won't help to have a clear view on their individual performance so I will certainly be separating them and maybe who knows starting a new thread for that. For the time being, I will have a couple of trades here to see if this new system is worth the effort or not even if it eat into this account.

These last two weeks of July were quiet as it is usually in July/August which are vacation months at least here in Europe. It’s my turn now to be on vacation before coming back in September with a fresh EA and a different system and looking forward to see how they will perform in the coming months.

Winners are not people who never fail but people who never quit. - Edwin Louis Cole
Maybe that's why I'm still here ;-)

Account Stats:

Episode 6 - Account bust - -100% - End of Season 1

I spent what was left in the account to test that second system. I did the best, the good, the bad and the ugly. It was a good experience (you will know why in the next post) but useless as long as I couldn't really write any rule about it, allowing me to rinse and repeat the winning trades. Anyway, maybe, the lesson to learn here was to not trade two systems at the same time, that just brings confusion and nothing more.

Rest in Peace and Thank you.

"Don't cry because it's over, smile because it happened."
-Dr Seuss

Season 2 - A New Automated Era

The good thing about the second system I tried is that it revealed to me why my initial system was doing so poorly these last two months. I could see it backtesting the EA during that same period and almost seeing the same results. So I could write some code in the EA, not to avoid it totally, I couldn't, but at least to limit the damages to something acceptable and not putting the account in jeopardy during those times.

I have also changed my mind about funding my account and instead of going very slowly, I've preferred this time to put a more substantial amount of cash to risk relative to the previous one. Certainly this shows either that I'm confident that the EA will work flawless or that I'm naïve and that I will lose it all again.

Time will tell, let this EA run and accumulate hours, days, weeks and months and see if it fulfills my expectations or not.

"I'm looking forward to the future and feeling grateful for the past"
- Moke Rowe

Season 2 Prologue - Good Warm-up week ending with 14.5% Profit.

Ending the month and first week of trading by the EA on a positive note.

Let’s hope that this will set the tone for the coming months ;-)

This is also the beginning of a 300 days forward test which in case of success, should bring me to end of June 2019 !
Total of test days completed so far : 8/300 (2.67%)

“I find hope in the darkest of days, and focus in the brightest. I don’t judge the universe.”
- Dalai Lama.

S2-E1 - Quite bad for a start but..., +11%

Fortunately terminating the month positively thanks to a manual trade I did on the last trading day of the month so I’m just happy.

The EA did particularly bad for entire month and this could by a cause of concern but it isn’t yet as EU was just at the end of a period of accumulation/distribution that lasted for the last 4 months as shown in this picture. And more than that, in september only, EU has been ranging in a tight channel of no more than 120 pips. This is what caused the EA to perform poorly.

Attached Image (click to enlarge)

By backtesting it, I could clearly see how the EA performs poorly when being in the last phases of these acc/dist periods, I see clearly that it’s when some average range fluctuation is low which is what exactly happens at the end of these periods which sometimes last for weeks and even months.

In the future,I will try to detect such kind of periods, if possible from beginning to the middle of them as soon as I have 2 or 3 points and where the EA is still capable of trading correctly and then, disable it manually until we are out of those consolidation periods.
As these consolidation periods are huge, lasting from 3 to 4 months, I guess and hope that I should be able to do it in the first 2 months so I think it’s doable, I will see.

Now that we have broken that consolidation triangle, I consider that we are out of it either for an up or down move at least for the next month and which should bring some volatility for november and december, that’s my medium term view, so the EA is enabled.

Attached Image (click to enlarge)

S2E2/10 - Account Busted Again :-( -100%

As I was seeing the EA doing poorly during this month, I thought again that I could somehow back it up and again I did the good, the bad and the ugly.

I need to admit that without counting today’s conditions, my lifestyle and my work doesn’t gives me enough free time to trade well and stay focused. More than that, I don’t possess the self control that allows to not overtrade and not revenge-trade after a losing trade. So it’s time to decide once and for all that I cannot manually trade seriously and that I would instead do better in focusing on EA corrections in the future.

Knowing that I had to put more effort at it, I was again on my desk, my account showing zero and with an EA not capable of doing anything good in the current market conditions. I didn’t want to throw everything in the bin as there was a good amount of effort in it, and, with the exceptions of the last 3 months, the EA was doing really well. So I worked on it, again and again, trying and testing and after spending 4 full days and good chunks of their nights at it, I finally came with a solution that surpassed all my expectations. I could break and redress that damn drawdown lasting since mid August ! And the best part is that I did it without altering its previous performance, I could even improve it quite dramatically.

But let's stay prudent, I don’t know if this time is the right one, If I finally have an EA capable of working in any condition or if it’s just temporary until the market changes its character again ! But how to know it without trying ?

Previous version of the EA, one year of back-testing.

Attached Image (click to enlarge)

The new version, same period.

Hello Broketrader, I send a pm, could you please have a look at that, thanks

Hi, Sorry but I don't engage in any other activity outside of my trading, lack of time for that, but you can contact FerruFx, he's a professional coder.

S2E3 / Good for a new Start / +52.5%

With the exception of the first drawdown, which was again my fault, the EA worked as expected so it’s a successful month and fortunately the results are positive.

I’m learning to focus on time and not on profits, having in mind that I just need time, to let the EA trade and do what it needs to do. I’m aware that there can be long periods (months) with flat and even negative results and that’s OK as long as the overall result, over a year, is positive. I just need to be there waiting patiently better days.

I had to handle a constant flow of ideas that were coming just while observing the trades and thinking about how I could improve this or that. Some of them were rubbish while others were pure gold, overall, the results are good, as I could increase the profits while at the same time reducing a bit the drawdown on the same backtest period and without changing too much the overall profit chart. A very intensive work based on observation, the EA is now at version 49 and I’m just exhausted !

Interesting to note also is how the final profit results varies according to the first trading month. I have shifted my back test one month forward and the final profit was divided more than 10 times ! But again, it’s OK as long as the chart stays positive overall.

Explorer Stats:




One year Back Tests:

S2E4 - Good Resiliency seen in a desperately flat December, -8.1%

Even though I’m recording losses for this month I’m quite happy and serene with the results. The month had only a range of 216 pips which is the lowest since last July !

It looks like there was nothing to do except wait and limit the losses. Hopefully, given the historical low ATR, we should see some increase in it next month and let’s hope some profits as well!

The EA is now in version 51 from version 49 last month. Two improvements that increased the profit while keeping the drawdown in check! After 2400+ lines of code, I’m seeing that it’s coming near maturity as it’s almost bug free and that I have also explored all ways of improvement but who knows, maybe more ideas will come.

On the account side, I will keep funding as long as it’s below 2K even if I get losses in between. The idea behind this is to be in the market with enough funds (2K) at the moment I get ideal conditions for the EA to make substantial profits and take off. Let’s hope that 2019 brings such a market and that I’m still here to trade it.

Account Stats :



One year EA Backtests :

So long without updating this journal that I thought that I should add an update for the records and keep a trace of my journey...

So again, after being bored watching my EA not performing as it should, I switched to manual trading again, and again I crashed the account, so had to question myself again about my way of trading so I started from scratch.

I removed everything from my chart, spent hours listening to music and just watching the EURUSD naked chart, spotting the places where it was good to enter and exit and figuring out how to detect those areas.

I finally created a system that seemed to work, I say seemed because it was based on historical chart, and was doubting that it could work live.
There was only one thing to do and it was to test that so good looking thing live.

I didn't want to put too much money on this before testing it, so I funded a cent account with 10$ (lol), which on a cent account translates into 1000$ which is enough to make a real test without sacrificing too much real money and still doing real trading and not demo shit.

My results went well above my expectations as this account is now near 20x what it was at the beginning and only in 10 days !
Here's a picture of it:



So good that I then funded my visible account with 100$ added to 32$ of broker bonus I got from February trading so I had total of 132$ which was enough to give it a try. I had some bad trades at the beginning from trades where I didn't respected my rules, but finally grown the account by 450+% in the first week of march:



All this is very good and promising but too much fresh to come to any conclusion yet, what is granted is that I have never traded so well and be so profitable so quickly this is very impressing and promising but what is still true is that I still lack discipline and sometimes don't trade by the rules I really have to do a big effort on this.

Finally, about the system itself, I have switched from trend trading to swing trading with a system that allows detecting turning points and another system that allows to enter at very good levels at those turning points, turning points are high low swings visible on the daily chart. What is good about it is that it seems viable in ranging and trending markets but this I still have to witness it by trading it live... I still have to calculate it's win rate with live trades but on historical charts it shows something like 70-80%, incredible and impressive but that's what I've found!

On the risk side and with such a win rate, I didn't hesitate to go from 30% of account risk on first trades when the account is small to 10% once that the account reaches some level, say 1k on standard account. And the trades have always the same profile, meaning that they always have a 1 to 5 or 6 risk reward ratio !
Then you understand why the account can grow so quickly when while risking 10% you can have a return of some 50% of account !

Until the next!

After some additional tests that erased my gains and again some refunding, I didn’t believe I could recover almost all my losses in just one composite trade but here I am again, happy and with an account near break-even !

For me, it looks like, that to really be sure of the good I have to check all the bad first and that’s what I just did again, still tried some variants of my method that I though had some value just to be proved that in fact not.

So now it’s time to stop playing around and trade this method and nothing else, with no other artifact or indicator and that’s what I will try to do in the coming April !

Stats for the month: