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Simple Daily Trend Reversal Trading System

  • #1,441
  • Dec 21, 2017 12:15pm Dec 21, 2017 12:15pm
Quoting Alorente
Hello guys, I have been reading the entire thread in the past few days and I have to say I am greatly impressed by the system created by mrdfx. Time will tell how profitable the system will be, but from my past 30 years of experience I already see many strong points underlying it. A few years ago, several friends and I created the Extreme TMA system, which is {file}
Thank you very much Alorente for sharing. I agree this is an amazing post and really appreciate mrdfx and ebcheckrs for their hard work on this and God bless them for sharing this for free, as most people would try to make money on this.I will add your indicator, and thank you for sharing.

So if I change time frame I should change it in indicator setting? (I know might be little stupid question as answer probably yes)
  • #1,442
  • Dec 21, 2017 12:31pm Dec 21, 2017 12:31pm
Quoting Alorente
Hello guys, I have been reading the entire thread in the past few days and I have to say I am greatly impressed by the system created by mrdfx. Time will tell how profitable the system will be, but from my past 30 years of experience I already see many strong points underlying it. A few years ago, several friends and I created the Extreme TMA system, which is also a Trend Reversal system. It was profitable then with around 70% winners, but what really made it a giant winner was a year later when I began filtering out all trades that were against...
Interesting post, could you elaborate on how this trend filter works? What algorithm it uses?
  • #1,443
  • Dec 21, 2017 12:39pm Dec 21, 2017 12:39pm
Arrow appears on strong S/R level in gold, if it's rejected by 200 MA,then our conditions are met, i am planning to go short, Please share your ideas
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Om Namah Shivaya
  • #1,444
  • Dec 21, 2017 12:41pm Dec 21, 2017 12:41pm
Quoting Alorente
Hello guys, I have been reading the entire thread in the past few days and I have to say I am greatly impressed by the system created by mrdfx. Time will tell how profitable the system will be, but from my past 30 years of experience I already see many strong points underlying it. A few years ago, several friends and I created the Extreme TMA system, which is also a Trend Reversal system. It was profitable then with around 70% winners, but what really made it a giant winner was a year later when I began filtering out all trades that were against...
Hello Alorente thank you for the kind words and advice. I take it that this indicator you are suggesting is based on MA from what I see?

Basically I see it is using the 200 SMA for selecting the overall trend?

May I ask which optimized setting you used it, and I'll add it to my manual trades and see if it improves things.
Truth is like poetry. And most people f*cking hate poetry.
  • #1,445
  • Dec 21, 2017 12:42pm Dec 21, 2017 12:42pm
Quoting Alorente
Hello guys, I have been reading the entire thread in the past few days and I have to say I am greatly impressed by the system created by mrdfx. Time will tell how profitable the system will be, but from my past 30 years of experience I already see many strong points underlying it. A few years ago, several friends and I created the Extreme TMA system, which is also a Trend Reversal system. It was profitable then with around 70% winners, but what really made it a giant winner was a year later when I began filtering out all trades that were against...
Nice, do you have the source .mq4 file ? Then i could include this in the EA (as an option)
  • #1,446
  • Dec 21, 2017 12:45pm Dec 21, 2017 12:45pm
Quoting senthilan
{quote} Thanks for sharing alorente, please confirm the settings for 4 hr TF {image}

These are my settings. It is especially important to change the Trend Time Frame to 1 Day instead of H4.
Attached Image
Observation is the path to discovery.
  • #1,447
  • Dec 21, 2017 12:46pm Dec 21, 2017 12:46pm
Good results with EA auto trade today, with the following settings. The main changes are the SL and OrderTS settings, as well as the timing filter used.
I'm testing relatively conservative take profit, my SL is probaly quite larger than I'd like, but looking to get a feel for max drawdown.

Time filter is taking advantage of intra-daily hours, playing around with LO NY close - give or take.

@ebeckers
The time filter, is it possible to program an option to decide whether finish hour 'closes' all open trades OR finish hour 'keeps open trades open, but prevent NEW trades from being taken' or have the option for both?
That way could give flexibility to those looking to keep the EA on a server (set & forget) as well as taking advantage of specific volatile periods for entry.

Let me know if I'm barking up the wrong tree in regards to this, might be a silly idea.
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  • #1,448
  • Dec 21, 2017 12:57pm Dec 21, 2017 12:57pm
Quoting Alorente
{quote} These are my settings. It is especially important to change the Trend Time Frame to 1 Day instead of H4. {image}
Thanks for your reply alorente, as we know, the core idea of this strategy is reversal trading, as i back tested, if we use Major trend arrow indicator, we missed many trades which also includes successful one, But, this indicator is very good for some other trend following strategies, instead of this we can use 200 EMA for major trend, Hence, we can visibly see the breakouts and rejections
Om Namah Shivaya
  • #1,449
  • Dec 21, 2017 12:59pm Dec 21, 2017 12:59pm
Quoting Alorente
{quote} These are my settings. It is especially important to change the Trend Time Frame to 1 Day instead of H4. {image}

That makes sense if we are trading a 4 hr chart we want to see what the daily trend is
what do the arrow x and arrow y parameters do?
Thanks
  • #1,450
  • Dec 21, 2017 1:16pm Dec 21, 2017 1:16pm
Quoting sheppy
{quote} That makes sense if we are trading a 4 hr chart we want to see what the daily trend is what do the arrow x and arrow y parameters do? Thanks
adjust its position on the chart.
Blessed is the one who takes refuge in Him.
  • #1,451
  • Dec 21, 2017 1:25pm Dec 21, 2017 1:25pm
Quoting mrdfx
{quote} Hello Alorente thank you for the kind words and advice. I take it that this indicator you are suggesting is based on MA from what I see? Basically I see it is using the 200 SMA for selecting the overall trend? May I ask which optimized setting you used it, and I'll add it to my manual trades and see if it improves things.
Over the years I have struggled to define what is the major trend. I have tried dozens of methods and none of them are perfect. In the end I settled for a clean and simple solution that works very well in most cases. The conditions are:

Green Arrow: The last bar close is above the Daily 200 simple MA.

Red Arrow: The last bar close is below the Daily 200 simple MA.

So basically if price closes above the Daily 200 simple MA, we are in an uptrend. If price closes below the Daily 200 simple MA we are in a downtrend.

This works quite well, but in your system you would have to add a slight change to the ZigZag condition for the EA to work well. There will be instances when, for example, your system will call for a Buy but the Trend Arrow shows Red because price is slightly below the 200 MA, thus the trade is not taken. Letīs say price continues higher and moves above the 200 MA and the trend arrow changes to Green but we are not in the trade. No problem, when price crosses the Daily 200 MA, over 90% of the time, the MA will be tested from the other side before continuing higher. This process may take 15, 20 or more H4 bars to complete and it is actually the ideal setup to enter a trade, but since you only have a 10 bar look back on the ZigZag, this trade will not be opened. I have changed this setting to a 50 bar look back and the problem is solved.
Observation is the path to discovery.
  • #1,452
  • Dec 21, 2017 1:30pm Dec 21, 2017 1:30pm
Quoting Alorente
{quote} These are my settings. It is especially important to change the Trend Time Frame to 1 Day instead of H4. {image}
Would it not make more sense to perhaps use the H4 time frame for H4 trading ans D1 time frame for D1 trading?

I have also looked at the 200 SMA and a lot of successful trades would be missed. Yes it would filter out some losers, but it would also filter out some winners which is what we don't want. Thanks for your suggestion and contribution, perhaps if other traders like this suggestion ebeckers can add it as an option in a future update.
Truth is like poetry. And most people f*cking hate poetry.
  • #1,453
  • Dec 21, 2017 1:58pm Dec 21, 2017 1:58pm
Quoting senthilan
{quote} Thanks for your reply alorente, as we know, the core idea of this strategy is reversal trading, as i back tested, if we use Major trend arrow indicator, we missed many trades which also includes successful one, But, this indicator is very good for some other trend following strategies, instead of this we can use 200 EMA for major trend, Hence, we can visibly see the breakouts and rejections
That is what I thought too with my Extreme TMA trend reversal system... I said: "A trend filter will not work because I will miss out on too many counter trend trades" I was wrong.

In trading, the key to success is avoiding losses. For example, here is the USDJPY chart of the period between Nov. 8, 2016 and Dec 20, 2016. The pair went parabolic and advanced from 101 to 118 in 45 days. I have marked with Red arrows the Sell trades that would have been stopped out without a trend filter. Ouch! That is pure pain there... Those losses would have been completely avoided with the Green Trend Arrow at your side. Not only that, this pair would have been a huge winner during this period by entering the Buy trades which the Green Arrow allows.

Plus, this Trend Reversal system opens many trades. More trades than you need... The key is to open winning trades. The filter helps considerably in that respect.
Attached Image (click to enlarge)
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Observation is the path to discovery.
  • #1,454
  • Dec 21, 2017 2:11pm Dec 21, 2017 2:11pm
Quoting Alorente
{quote} That is what I thought too with my Extreme TMA trend reversal system... I said: "A trend filter will not work because I will miss out on too many counter trend trades" I was wrong. In trading, the key to success is avoiding losses. For example, here is the USDJPY chart of the period between Nov. 8, 2016 and Dec 20, 2016. The pair went parabolic and advanced from 101 to 118 in 45 days. I have marked with Red arrows the Sell trades that would have been stopped out without a trend filter. Ouch! That is pure pain there... Those losses would...
I can see how this works, but I think in reality, with the example you've given, you'll struggle to find many traders that will hold onto trades for 30 days +. The potential for a ridiculous draw-down is also relatively high.
  • #1,455
  • Dec 21, 2017 4:40pm Dec 21, 2017 4:40pm
Quoting Alorente
{quote} That is what I thought too with my Extreme TMA trend reversal system... I said: "A trend filter will not work because I will miss out on too many counter trend trades" I was wrong. In trading, the key to success is avoiding losses. For example, here is the USDJPY chart of the period between Nov. 8, 2016 and Dec 20, 2016. The pair went parabolic and advanced from 101 to 118 in 45 days. I have marked with Red arrows the Sell trades that would have been stopped out without a trend filter. Ouch! That is pure pain there... Those losses would...
I just checked the same time period which you have mentioned. Actually based on the ziz zag arrow there are not so many valid trades available. Also except one trade rest all would give you atleast 45pips or even more. I suppose, after you get the signal from arrow you look for 15sma and mbfx for confirmation and not the other way around.
  • #1,456
  • Dec 21, 2017 7:10pm Dec 21, 2017 7:10pm
EA just kicked in shorts for EURUSD, EURJPY, EURGBP. I was already short CHFJPY from earlier today. It has "finally" started moving.
  • #1,457
  • Dec 21, 2017 8:12pm Dec 21, 2017 8:12pm
Shorted EURUSD, EURGBP, and EURJPY H4
Attached Images
  • #1,458
  • Dec 21, 2017 10:41pm Dec 21, 2017 10:41pm
Have exactly the same as hzs10. Shorted today, and am still in a trade from Dec 20 when I shorted the USDCAD - now making some good pips.
  • #1,459
  • Dec 22, 2017 12:34am Dec 22, 2017 12:34am
@mrdfx,
could you please send me/us the setup based on post #1360 for H1, please.

Could you please let me know, what means OrderHiddenSL= 50.

(I' m still learning......

renkotop
  • #1,460
  • Dec 22, 2017 1:37am Dec 22, 2017 1:37am
Quoting Alorente
{quote} Over the years I have struggled to define what is the major trend. I have tried dozens of methods and none of them are perfect. In the end I settled for a clean and simple solution that works very well in most cases. The conditions are: Green Arrow: The last bar close is above the Daily 200 simple MA. Red Arrow: The last bar close is below the Daily 200 simple MA. So basically if price closes above the Daily 200 simple MA, we are in an uptrend. If price closes below the Daily 200 simple MA we are in a downtrend. This works quite well, but...

Thank you for sharing

I think to be in the trend and not counter trend trades is ideal even though we might miss some trades
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