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Daily Trading Strategy [ADR + RSI = High Probability]

  • #221
  • Edited 3:54pm Aug 6, 2020 3:41pm | Edited 3:54pm
Hello guys,

on which time frame is it used ?


If you don’t use a time frame which allows you to systematically take each setup then your hit ratio is just biased, for the better or for the worse, but will therefore only be random.

And even if you take systematically each set up, a few weeks is far from enough, why hasn’t anybody backtested it yet, seems very mechanical to me ?

Anyone familiar with the London close strategy? This thread has nothing new, it works great on a volatile market, probably best in August where volume is low and/or during the pandemic that triggered volatility and constantly risk on/off shifting. Actually even a EA based solely on a RSI with a r:r of 1 would have worked.

The problem with this “strategy” is that with a 1:1 r:r it will fail ultimately overtime and to have an appropriate risk:reward (1/3) you will have to get in earlier making it not better because the hit rate ratio will plunge. It works all great during volatility but once a trend is there it will take up all your profits and more.

There is no such a thing as an easy mechanical system, you will have to come up with better than that, which is called discretionary.

Do not get me wrong, I hate to burst a bubble.


Cheers,
LDFX Trading Ltd
  • #222
  • Aug 6, 2020 3:53pm Aug 6, 2020 3:53pm
Quoting LDFX
Hello guys, on which time frame is it used ? If you don’t use a time frame which allows you to systematically take each setup then your hit ratio is just biased, for the better or for the worse, but will therefore only be random. And even if you take systematically each set up, a few weeks is far from enough, why hasn’t anybody backtested it ? Are you familiar with the London close strategy?
Just know that the strategy looks for reversals after ADR is hit. Please elaborate more if there is any value to be offered for the current strategy

It is used on the 5min TF but there is sufficient warning time for upcomming trades
  • #223
  • Aug 6, 2020 3:57pm Aug 6, 2020 3:57pm
Quoting PipBros
{quote} Just know that the strategy looks for reversals after ADR is hit. Please elaborate more if there is any value to be offered for the current strategy It is used on the 5min TF but there is sufficient warning time for upcomming trades

Thanks for your answer.

I know exactly how this works, but 5 minutes TF, really ?!

Hasn’t the thread starter said 30 pips stop loss max ?
LDFX Trading Ltd
  • #224
  • Aug 6, 2020 4:05pm Aug 6, 2020 4:05pm
Quoting LDFX
{quote} Thanks for your answer. I know exactly how this works, but 5 minutes TF, really ?! Hasn’t the thread starter said 30 pips stop loss max ?
What TF do you suggest?
  • #225
  • Aug 6, 2020 4:07pm Aug 6, 2020 4:07pm
Quoting LDFX
{quote} Thanks for your answer. I know exactly how this works, but 5 minutes TF, really ?! Hasn’t the thread starter said 30 pips stop loss max ?
to address some of the points you raised, if you read through the whole thread we already discussed about looking if we can make it more than a 1:1 risk reward ratio, and im the one who said i prefer taking trades which have a stop which doesnt exceed 30pips not the owner of the thread. but we put all our suggestions away so that we stick to the rules of the original owner and see how it goes for a monthand maybe tweek after that after gathering enough information.

yes we know its a mechanical system and if your read the whole thread (like i said) we mentioned it would be easier to backtest if the ADR showed past data, but it doesnt. So if you have an ADR indicator which shows past values, by all means do share , it will save us alot of time.

until then il just post daily and hopefully brainstorm trades which dont work and how we can tweek them in the future.
"Cut your loses short and let the winners Run"
  • #226
  • Aug 6, 2020 4:10pm Aug 6, 2020 4:10pm
Quoting PipBros
{quote} If I understood Zoheb correctly. The trade should be taken at the first MACD cross to the left once ADR is hit. I've seen 2 or 3 trades where you use a MACD cross after the ADR was hit. Just an observation Seems like today wasnt to good
i just crosschecked the EurNzd trade you highlighted i thought i had done it well. do you mind highlighting were its supposed to be. and yea today there were alot of bad trades but thats why we do this so that we find ways to improve it.
"Cut your loses short and let the winners Run"
  • #227
  • Aug 6, 2020 4:15pm Aug 6, 2020 4:15pm
Quoting meck1
{quote} i just crosschecked the EurNzd trade you highlighted i thought i had done it well. do you mind highlighting were its supposed to be. and yea today there were alot of bad trades but thats why we do this so that we find ways to improve it.
Its getting late here.

I'll go through some of the screenshots tomorrow
  • #228
  • Aug 6, 2020 4:23pm Aug 6, 2020 4:23pm
from 11pm (gmt +2 ) (after ny session) i noticed spreads go crazy like this on GbpCad which was still running which had a spread of 20 pips from 2.9pips during the day. so sometimes might be risky leaving them overnight. (after end of NY session) . Its just an observation im making.
Attached Image (click to enlarge)
Click to Enlarge Name: spread.JPG Size: 106 KB
"Cut your loses short and let the winners Run"
  • #229
  • Aug 6, 2020 4:24pm Aug 6, 2020 4:24pm
Quoting PipBros
{quote} Its getting late here. I'll go through some of the screenshots tomorrow
sure thing
"Cut your loses short and let the winners Run"
  • #230
  • Aug 6, 2020 4:25pm Aug 6, 2020 4:25pm
Quoting meck1
from 11pm (gmt +2 ) (after ny session) i noticed spreads go crazy like this on GbpCad which was still running which had a spread of 20 pips from 2.9pips during the day. so sometimes might be risky leaving them overnight. (after end of NY session) . Its just an observation im making. {image}
How do you leave only the pairs if you want?in my appears all pairs.
Attached Image (click to enlarge)
Click to Enlarge Name: a.PNG Size: 58 KB
  • #231
  • Aug 6, 2020 4:34pm Aug 6, 2020 4:34pm
Quoting meck1
{quote} to address some of the points you raised, if you read through the whole thread we already discussed about looking if we can make it more than a 1:1 risk reward ratio, and im the one who said i prefer taking trades which have a stop which doesnt exceed 30pips not the owner of the thread. but we put all our suggestions away so that we stick to the rules of the original owner and see how it goes for a monthand maybe tweek after that after gathering enough information. yes we know its a mechanical system and if your read the whole thread (like...

I have read the whole thread.

You are right, I do not have a way to accurately measure the max daily negative/ positive excursion on backtesting, but paper backtesting is still the best option.

30 pips stop anyway is absolutely unbelievable, and for a 5 minutes TF?! For a 1:1 r:r ratio the price will have to go down 50 to 100% for most major currencies while being it counter trend. A high ADR mostly means that the pair has finally broke through and is trading higher/lower. It is therefore total nonsense to aim for such huge counter excursions especially for just a 1:1 ratio...

Check out “London close strategy” on FF, perhaps you will learn something.


Cheers,
LDFX Trading Ltd
  • #232
  • Aug 6, 2020 4:34pm Aug 6, 2020 4:34pm
Quick visual backtest from 10/2019 until 08/2020 on AU M5:
- 82 times ADR was exceeded
- 57 times we had and entry (RSI was OB/OS)
- no trade management, SL and TP was set on entry
- for RR 1:1 -> 30 wins / 27 losses (Win% 53, Total: 3R gain)
- for RR 1:2 -> 26 wins / 31 losses (Win% 45%, Total: 21R gain)

Usually, I like to backtest 100 trades before doing any stats but I don't have more M5 data on my platform for AU, so that's why sample size is small. Most of the wins went to 3R-5R, but there were some outliers that went 10R+. Seems to me that implementing some sort of trailing SL would do even better.
  • #233
  • Aug 6, 2020 4:46pm Aug 6, 2020 4:46pm
Quoting LDFX
{quote} I have read the whole thread. You are right, I do not have a way to accurately measure the max daily negative/ positive excursion on backtesting. 30 pips stop anyway is absolutely unbelievable, and for a 5 minutes TF?! For a 1:1 r:r ratio the price will have to go down 50 to 100% for most major currencies while being it counter trend. A high ADR mostly means that the pair has finally broke through and is trading higher/lower. It is therefore total nonsense to aim for such huge counter excursions especially for just a 1:1 ratio... Check out...

The guys are doing a great job thus far helping each other and posting results,their charts look really informative and we can learn more and more via having positive threads enhancing day to day trading,all I see you do is talk,why don't you trade it,look for some pips and be positive.You're spreading stupidty like coronavirus,if this was my thread you're banned immediately.I have a group and channel,its peaceful with traders who love trading,not debate why another one strategy will fail because XYZ......it seems negativity very common in decent threads now. Zoeb has doe well time and time again on YT channel sending hrs with educational material,I will not stay quiet and let fools spoil the man work.
  • #234
  • Aug 6, 2020 4:48pm Aug 6, 2020 4:48pm
I DISLIKED and IGNORED.....keep posting guys :-) great job so far.
  • #235
  • Aug 6, 2020 4:50pm Aug 6, 2020 4:50pm
Quoting bopuc
Quick visual backtest from 10/2019 until 08/2020 on AU M5: - 82 times ADR was exceeded - 57 times we had and entry (RSI was OB/OS) - no trade management, SL and TP was set on entry - for RR 1:1 -> 30 wins / 27 losses (Win% 53, Total: 3R gain) - for RR 1:2 -> 26 wins / 31 losses (Win% 45%, Total: 21R gain) Usually, I like to backtest 100 trades before doing any stats but I don't have more M5 data on my platform for AU, so that's why sample size is small. Most of the wins went to 3R-5R, but there were some outliers that went 10R+. Seems to me that...

On a ask price charts for shorts and a bid price charts for longs ? Otherwise it would be much worse regarding the spread overnight and over week end, let alone the news...

How much stop loss ?

Anyway regarding your visual backtesting, a 1:1 r:r 53% hit rate is not enough to make money.
LDFX Trading Ltd
  • #236
  • Aug 6, 2020 4:58pm Aug 6, 2020 4:58pm
Quoting bopuc
Quick visual backtest from 10/2019 until 08/2020 on AU M5: - 82 times ADR was exceeded - 57 times we had and entry (RSI was OB/OS) - no trade management, SL and TP was set on entry - for RR 1:1 -> 30 wins / 27 losses (Win% 53, Total: 3R gain) - for RR 1:2 -> 26 wins / 31 losses (Win% 45%, Total: 21R gain) Usually, I like to backtest 100 trades before doing any stats but I don't have more M5 data on my platform for AU, so that's why sample size is small. Most of the wins went to 3R-5R, but there were some outliers that went 10R+. Seems to me that...
Quick question, dd you factor in the Macd-trendline condition in your statistcs?
"Cut your loses short and let the winners Run"
  • #237
  • Edited 5:11pm Aug 6, 2020 4:59pm | Edited 5:11pm
Quoting scsstnt
{quote} The guys are doing a great job thus far helping each other and posting results,their charts look really informative and we can learn more and more via having positive threads enhancing day to day trading,all I see you do is talk,why don't you trade it,look for some pips and be positive.You're spreading stupidty like coronavirus,if this was my thread you're banned immediately.I have a group and channel,its peaceful with traders who love trading,not debate why another one strategy will fail because XYZ......it seems negativity very common...

Well if my comments are not constructive because they are contrarian then I am sorry to hear that.

You mentioned debating, this is what I am doing, you just want to close the debate because my thoughts are going against yours, guess you don’t know what debating is and have never heard of Socratism?

Negative comments should be part of your learning curve otherwise you will never learn and this thread will be aseptic. Also how do you know that I have not traded it at all ? I actually did and for quite some time, that is why my first though was about the 1:1 r:r ratio and that I referred to the London close strategy.

Well, I am not surprised though, narrow minded peoples take criticisms very badly and only want to hear what they want to hear.




Cheers,
LDFX Trading Ltd
  • #238
  • Aug 6, 2020 5:03pm Aug 6, 2020 5:03pm
Quoting scsstnt
I DISLIKED and IGNORED.....keep posting guys :-) great job so far.

Congratulations !

If only a contrarian view is needed to be ignored then it really shows your wisdom. Censoring your ears and eyes isn’t gonna help in trading.
LDFX Trading Ltd
  • #239
  • Aug 6, 2020 5:06pm Aug 6, 2020 5:06pm
Quoting bopuc
Quick visual backtest from 10/2019 until 08/2020 on AU M5: - 82 times ADR was exceeded - 57 times we had and entry (RSI was OB/OS) - no trade management, SL and TP was set on entry - for RR 1:1 -> 30 wins / 27 losses (Win% 53, Total: 3R gain) - for RR 1:2 -> 26 wins / 31 losses (Win% 45%, Total: 21R gain) Usually, I like to backtest 100 trades before doing any stats but I don't have more M5 data on my platform for AU, so that's why sample size is small. Most of the wins went to 3R-5R, but there were some outliers that went 10R+. Seems to me that...
i did mention earlier in the thread about how a 1:2 risk reward ratio would be more profitable. im not suprised. Thanks for the data aswell. really wish we could use the ADR indicator to look back and back test.
"Cut your loses short and let the winners Run"
  • #240
  • Aug 6, 2020 5:07pm Aug 6, 2020 5:07pm
On my broker spread is <1 pip for AU so I just added 1pip to entry/exit.
I didn't take news into account for backtesting.
You're right regarding 53% for RR 1:1.
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