Looking on a naked chart, can you pick the best strategy?

The question is, how We can use this indicator to earn something.
If You take a look to a chart with this indicator (e.g. 2MAs strategy), let's say on 1h You will see, that there are Times when the strategy performs well, and then there is a time when strategy performs bad.

If You check this indicator with the standard strategy tester on Metatrader You will find out, than the indicator performs very similar to a result of standard tester.

This means that if according to the indicator there is a time when the strategy performs well, if You trade the same way You should get a positive result of Your trading (minus of course the costs of trading, such as spreads).

And opposite: if the indicator is showing that this kind of a strategy performs bad, maybe it's better not to trade, and wait for a better time with this strategy, so you don't loose money you have earned before.

Please consider this conclusion for yourself. We will be observing much, much more!

Regards!

I also wanted to show You dkrock why I didn't want to admit that looking on 4HR chart is always good for confirmation of 1HR chart.

Same strategy on H1 and H4 charts, same currency, same set-ups.




This is of course and example and normally changes are not so big, but according to what performance indicators are showing, is that the same currency pair on different timeframes can have at the same time a different characteristic, e.g. H1 - swinging, H4 - trending and so on...

Yes. They both were showing sell, so you would have sold. The 1HR turning to sell was your buy exit signal. When the 1HR turned back to buy, that was your sell exit signal. You said you didn't want to discuss this topic, using BOLD type, so I left your thread. Not sure what you want me to tell you. I checked my 1HR template and the sell was signaled for 90 pips, then reversed back to buy and is nearly 90 pips again and possibly still climbing. So far, 180 pips on two turns. If I understand you correctly, you don't take those trades though, and your indicators are not set up to do it, so not sure what you want to me say. Sorry.

I don't trade 1HR / 4HR charts, so I cannot show you what I mean in comparison to your pics. However, I can show you how I measured the "swing" for those trades. Please understand I am an intraday swing trader. These are NOT my entries and exits. Just because I can see the swing trade does not mean I take it. Again, I target only vertical movement, so I only trade the sweet spots of the swing. While the pic shows 2 trades, I would have actually done it in 4 trades and made 242 pips. I deleted the indicators because they are my intellectual property. Again, good luck with your technique. Initially I thought you were trying to swing trade. Sorry for the confusion.

Hi dkrock.
I hope I wasn't understood as being offencive, if so I am sorry for that.
The idea I am talking about in this thread should be taken more like a curiosity, and not like a trading advices.
I believe this curiosity can potentially give some knowledge about the market, especially to the "rookie" users, but I hope that also experienced traders can find it quite interesting.

This is my personal sharing of knowledge that I sacrified few years to get.

Yes, You are right that this thread is not about some specific type of trading. This is about the idea, that:

1. we can have indicators, that are showing accumulative performance of as many strategies as we only can program in such indicators.
2. we can observe if those strategies work,
3. we can observe when, how, they work,
4. we can compare performances of similar strategies one next to another,
5. we can see how change the characteristics of such strategies performances in time (if it is smooth, or it is radical)
6. if characteristic change, we can see if all strategies change performance at the same time,
7. and what was very important to me, after some time of such "testing" we might be able to look on a naked chart, and know which strategy was probably performing the best, and what will perform well in near future.

Please forget the two last charts I published. I was just trying to show, (what I also found thanks to the same idea as above) that even if general approach of checking other timeframes is correct, in under some conditions, especially when used incorrectly, it can fail.

You are the "red flag" user, so I guess this thread will be more like a curiosity to You.
I am not yet putting down here the way I trade personally because I am affraid that it would make more mess than utility to this thread.

Ones again thank You for Your feedback!
And You are welcome to give Your advices, share a bit of Your experience, I find it very interesting.

Regards!

OK, one more indicator that I'd like to publish: working the same way as previous ones, i.e. checking the performance of simple strategy.

This indicator is name Marecki_Bollinger_basic_trend which means that it is checking performance of following type of trading:

If Close[X+1] > Bollinger Band(var_periods, var_StdDev, upperBand, at X+1) than strategy stops selling and starts buying, and opposite
if Close[X+1] < Bollinger Band(var_periods, var_StdDev, lowerBand, at X+1) than strategy stops buying and starts selling.


To avoid misunderstanding when I write "starts buying" I don't mean It is opening many positions. It opens one, virtual long position, and keeps it until "stop buying" and "start selling". At that moment strategy closes virtual long position and opens virtual short position.

Saying other way:
when our strategy is buying: we are accumulatively collecting pips up, and loosing pips down.
when our strategy is selling: we are accumulatively collecting pips down, and loosing pips up.

If You have questions so far, please ask!

Regards!

OK guys, I hope that some of You tested already the indicators I posted above.
If not I encourage you to do so.
I still am ready to help You out if you have some questions concerning those indicators and the idea itself, because I am really affraid that my English is not yet good enough to be 100% clear when I am explaining something.

Let's get back to the title of the thread. Looking on naked chart can we pick the best strategy? This question is not so stupid as it may seem to experienced guys on the beginning.

Please take a look on those two charts below:





Those two are USDJPY H1 charts. What is important chart "2" is direct continuation of chart "1".
When looking on a naked charts we see that on both there are some times when price goes up and there are some times when it goes down.
Someone could expect, that if he or she has a simple strategy with good set up, this would work well on both charts.
But checking this with only one indicator (Marecki_Bollinger_basic_Trend) from previous post I have this result:

1. +2600 pips, performance mostly rising
2. - 4600 pips, performance mostly declining

And this is the same instrument, same time frame, same strategy set-ups, only shifted scopes.

At this moment I will give You probably the most important conclusion of this thread: What I observed during my whole work, with dozens of strategies tested, strategies don't tend to change their performance slowly, so a trader has time to observe and change a strategy or only a set ups.
Most of the time, most of strategies change performance radically (more like a red line than green line on the image below).


I would also say, that there is a kind of "switch moments" that come without a warning, when performance is switching from gaining to loosing and opposite.

And this "rule" applies to the most of strategies I have tested so far, no matter if based on oscillators, trend indicators, price action, volume indicators. Just the "red line" shapes are different.

Ones again, please ask questions if You have any!

I will post more of my observations with pleasure if there is only some interest in this topic.

Regards!

Hi,

To not to write to much of theory, I am posting now another performance indicator:
This is calculating performance of strategy based on MACD

accumulatively tested strategy is:

stop selling and start buying on Open[X], when MACD (X+1) > MACD (X+2) and opposite
stop buying and start selling on Open[X], when MACD (X+1) < MACD (X+2)

Attached File(s)

Marecki_MACD_Rise_Fall_trend.ex4   7 KB | 442 downloads

Regards!

I just wrote another RSI based indicator, that is checking performance of strategy trending up and down when crossing RSI levels min and max (here default 20 and 80).

So we're checking accumulatively a strategy that is :
buying when crossing RSI_min level up
selling when crossing RSI_max level down

Hi there,

To make a nice set of tools for everyone I am adding new indicator of performance for trending Momentum() to the pallete.
Trending, because this is thought to be long when Momentum is above 100 and to be short when Momentum is below 100.
Collecting accumulatively like always.

I'm calling "trend trading" generally when a strategy is buying high to sell higher , and is selling low to buy lower.

I'm calling "counter trend trading" generally when a strategy is buying low to sell high, and selling high to buy low.

Regards!

Hi,

Another simple performance indicator: Marecki_MAS_cross_trend, is as previous indicators checking performance of simple strategy (2 MAs cross ) in a trending direction, so as faster MA crosses up the slower one it starts to buy.
When the faster one crosses the slower one down it starts to sell.

If a trader is a "trend trader" he could expect that it is better to buy when faster MA is crossing the slower one up.
This indicator shows IF-WHEN-HOW it works.

Please ask if having some questions!

//This indicator in principle is almost the same as simple MACD performance, the difference is only that MACD is probably calculated based on different type of MAs (exponential?), but You can compare it by yourself. Marecki_MACD indicator is already published in this thread.

Regards!

I think I will publish maybe 1 or 2 more indicators in this thread. Then I would like to present how it is possible to use it, so I'll try to make some real money trades in new thread, maybe in a "TRADING SYSTEMS" forum.
Also Guys, if You would like to try some other simple strategy please propose it in this thread, I'll analyze if it is possible to make a performance indicator based on it and will try to do so and publish.

Hi,
As for this moment this will be the last indicator to our palette.
I think this is enough to play with those indicators, and maybe to learn something from them.

This indicator Marecki_Last_candle_direction_trend is drawing performance line of a strategy that is starting to buy if previous candle was long, and starting to sell if previous strategy was short.




Regards!

Above are some simple examples of performance indicators. Mostly trending.
We however are not limited to them. We can for example:

1. Program into Performance Indicator strategies based on different built-in technical indicators (RSI, MFI, Awesome Oscillator, Gator, etc ....)
2. Program PI that a strategy trades only long, or only short.
3. Change positions sizes, also depending on the direction (e.g. 1 long, 0.5 short)
4. Combine different indicators into one
5. Reverse strategy type, e.g. from trending to counter trending

That's how I was doing this and still sometimes do.
If You would like me to make some additional performance indicator, please write in this thread - if it is gonna be possible I'll try.

Regards!

Hi Marecki,

Your idea is quite interesting. I am new to FX. I would like to learn and try more in order to become successful trader.
I would like to ask for your av what is your best strategy by using those indicators you posted.
Thus, i can apply it to my trade strategy.

Thank you for your help and support.

Best rgds,

Farang007