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  • #101
  • Aug 5, 2019 11:02am Aug 5, 2019 11:02am
I don't quite follow how you got to "reenter buy trades when stoch32 X 50 up" when you haven't addressed what to do between the moment stoch8 X 50 down until stoch32 X 50 up.


Simple - standby mode (no trading) until always-in (stoch32X50) is confirmed


As the rules currently stand, no, this is not a counter-trend sell

You are right - but one look at H4 will tell you that we're in an uptrend and this is a retracement.

But - generally speaking - very impressive - I bow my head in awe (wouldn't steal candy from a baby, though)
  • #102
  • Aug 5, 2019 12:05pm Aug 5, 2019 12:05pm
Quoting josi
I don't quite follow how you got to "reenter buy trades when stoch32 X 50 up" when you haven't addressed what to do between the moment stoch8 X 50 down until stoch32 X 50 up. Simple - standby mode (no trading) until always-in (stoch32X50) is confirmed As the rules currently stand, no, this is not a counter-trend sell You are right - but one look at H4 will tell you that we're in an uptrend and this is a retracement. But - generally speaking - very impressive - I bow my head in awe (wouldn't steal candy from a baby, though)
But we don't look at H4; we have only the stoch32 as a proxy. And even though the stoch32 agreed that H4 is in an uptrend at the beginning, it SIGNALED a change to down trend. As the system stands now, the indicators signaled that the H4 down move went too far to be a mere pullback; it failed to stop and continued down to signal a direction change. Backtesting and evaluating the failures is the only reasonable way to determine if this occurs at a rate that would significantly change the long term results if it were changed.
To free Gazans of Hamas, use whatever it takes.
  • #103
  • Aug 5, 2019 12:47pm Aug 5, 2019 12:47pm
Here is the (almost) equivalent of looking at the H4 chart. The area between the verticals includes all of the time range that is on the first image. Note that even looking directly at this bigger chart, there is a clear 1-2-3 up-down up. That is sufficient, and "normal" to end an up move and go into reversal. And that is exactly what happened with price. If I were manually evaluating this, I would do exactly as I indicated in the previous image. I would be counting the down move as the first leg of a new down trend, not as a pullback. However, becasue I ALWAYS watch the next larger AND next smaller charts, I see on this one that even though the stoch crossed below 20, the stoch32 did not reach 50 to signal it is a valid trend change ON THIS CHART. becasue I would be watching the lower chart, I would have a good view of when this down leg ends, and can check this bigger chart to see what actually happened with the stoch32 at that point. The fact that the stoch32 never reaches 50 gives me a clue that this is highly likely to turn out to be an up move with another pullback that has extended into a 1-2-3-4. So the safe thing is to exit the sell here, then simply wait to see where the followig up leg goes. If it stays below the prior top, it becomes a valid rally to the down leg before it.

Then I expect the leg3 continuation down. But seeing the stoch32 staying above 50, I already expect this will be a weak down move, so I will stay out. Again if I were manually trading this, I would already be off of this chart and on to a higher one. But for this exercise, I would buy when I saw on the lower chart that the pullback was finished. And I would expect to see a rather strong up move, becasue of the stoch32 staying above 50 and moving upward. However, we see it did not make a strong up leg, but it did at least continue with a 1-2-3 up sequence.

No reason to discuss the chop after that; as I said, I would not even be looking at this chart anymore, so I would not even see that chop.


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  • #104
  • Aug 5, 2019 7:31pm Aug 5, 2019 7:31pm
Very interesting thread! Thanks to the OP and all those who contribute thoughts, ideas, suggestions and constructive criticism. Originally I thought I’d like to be a scalper, but it took me a while to learn that I cannot handle the emotions or the chart time necessary. I have been studying approaches for the D1 charts, but occasionally can handle the H4 charts. So this thread is very appealing to me. I’ve read thru it once, but will go back numerous times until I understand the nuances of this method. Huge thanks to the wisdom and guidance this forum provides - I just might make it yet!
  • #105
  • Edited 2:37am Aug 6, 2019 1:46am | Edited 2:37am
post 103/DrDave

I must say you explain your method pretty coherently.
You may be a master, after all.
If you find the time you should do this sort of anlysis more often - and maybe even in more detail using charts with enough marks to reference every explanation as precisely as possible.
We could learn a lot from you.
And once again I bow my head in awe (still not stealing candy from a baby)
  • #106
  • Aug 6, 2019 3:31am Aug 6, 2019 3:31am
Quoting josi
post 103/DrDave I must say you explain your method pretty coherently. You may be a master, after all.
Thank you for your kind words. I assure you, I am no master. But I have studied the "patterns" that I speak of and the cycling of smaller charts compared to larger charts and determined conditions that have high probability of occurring. In many situations, there is more than one option that must be considered. But the key point of the strategy is in letting the price action SHOW YOU which of the options it is taking. This REQUIRES lagging indicators! This REQUIRES "getting in late". So by waiting for a CONFIRMATION, you give up a few pips to get a HIGH PROBABILITY of a winner with usually very low drawdown, and even at times, EXPECTED drawdown, as you see I STATED IN ADVANCE on one of the actual trades.
Quote
If you find the time you should do this sort of analysis more often - and maybe even in more detail using charts with enough marks to reference every explanation as precisely as possible. We could learn a lot from you.
LOL. I cannot devote so much time to trading related issues. If I were to regularly provide annotated charts and detailed explanations, I would have to modify my business plan to incorporate a subscription study group.
Quote
And once again I bow my head in awe (still not stealing candy from a baby)
I think that I merely have a different perspective than most people of how the charts are interconnected. I don't see that it is anything awe-inspiring, but thank you for the compliment anyway.
To free Gazans of Hamas, use whatever it takes.
  • #107
  • Aug 6, 2019 5:51pm Aug 6, 2019 5:51pm
Quoting DrDave
Here is the (almost) equivalent of looking at the H4 chart. The area between the verticals includes all of the time range that is on the first image. Note that even looking directly at this bigger chart, there is a clear 1-2-3 up-down up. That is sufficient, and "normal" to end an up move and go into reversal. And that is exactly what happened with price. If I were manually evaluating this, I would do exactly as I indicated in the previous image. I would be counting the down move as the first leg of a new down trend, not as a pullback. However,...
great post. Can you please post your template?thanks
  • #108
  • Edited 4:53am Aug 7, 2019 3:40am | Edited 4:53am
There was mention previously for the MACD EA limiting the number of open positions as a kind of position protection. With that in mind, I'm thinking about a trailing stop strategy for the stoch system. But instead of limiting the number of open trades, using a trailing stop and forward pending orders. Trailing stop maybe of an EMA(5) of the ATR(N), N to be determined (maybe something in the range 2-5?). Similarly, pending order set, immediately after an order placed, for N pips (N to be determined) beyond the entry of this most recent order. The trailing stop moves in tandem with the pending order placement.

Why?

We have observed, at least on limited data, that the orders opened earlier in window tend to be winners, whereas those opened later, especially the ones near the window close, tend to be losers. In addition, there are an unknown number of add-on trades, and they are only seen when there is a significant retracement. So for much of the high momentum, we are just sitting watching price bars going, going, going and not pyramiding our way to higher profits by getting in on that. The way it stands now, we wait until their is a momentum drop and only after momentum resumes do we make an add-on.

Buy making all of those add-ons by pending orders, we get to reap pips from the strong momentum. And by trailing ALL of the open orders to the same SL value, several of the earliest trades will be in profit, and should be significantly more in profit than the sum of the losses of any of the later trades, resulting in positive pips when the basket is closed.
To free Gazans of Hamas, use whatever it takes.
  • #109
  • Edited 7:42am Aug 7, 2019 6:16am | Edited 7:42am
Let's all say it together... 10 pips a day--KA-CHING!
(2 LOTS x 5 PIPS --> 10 PIPS)
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  • #110
  • Aug 7, 2019 6:57am Aug 7, 2019 6:57am
Quoting DrDave
Let's all say it together... 10 pips a day--KA-CHING! (2 CONTRACTS x 5 PIPS --> 10 PIPS) {image}
You are gonna need a big truck to take all those pips to the bank DrDave.
  • #111
  • Aug 7, 2019 7:41am Aug 7, 2019 7:41am
Quoting 40PipsAlan
{quote} You are gonna need a big truck to take all those pips to the bank DrDave.
LOL This is just 1 lot, 10 pips per day. A small handbag will do, with room to spare.
To free Gazans of Hamas, use whatever it takes.
  • #112
  • Aug 7, 2019 8:23am Aug 7, 2019 8:23am
DrDave
We have observed, at least on limited data, that the orders opened earlier in window tend to be winners, whereas those opened later, especially the ones near the window close, tend to be losers. In addition, there are an unknown number of add-on trades, and they are only seen when there is a significant retracement. So for much of the high momentum, we are just sitting watching price bars going, going, going and not pyramiding our way to higher profits by getting in on that. The way it stands now, we wait until their is a momentum drop and only after momentum resumes do we make an add-on.

This, once again, is a valid point - but following your logic to the extreme this implies:
buy "big" right at the beginning of the trend movement, and instead of add-ons increase the size of this one trade; buy doing so you harvest most of the momentum

more important is when to exit
you could trail candles (i. e. 3 last)
use support & resistance (after each breakout move SL to (above for downtrend/below for uptrend) last but one retracement
use ATR (i. e. 3x)
or pre-define an TP-zone: i. e. when stoch crosses again, when MACD changes direction, use resistance on higher TF etc.
  • #113
  • Aug 7, 2019 8:57am Aug 7, 2019 8:57am
Quoting josi
.but following your logic to the extreme this implies:
buy "big" right at the beginning of the trend movement, and instead of add-ons increase the size of this one trade; buy doing so you harvest most of the momentum
"Buying big" right at the start exposes you to huge risk. By scaling in and trailing a stop to take out the entire basket reduces the risk plus locks in profit on the earliest trades.

An EA to backtest the two options would be very valuable.
To free Gazans of Hamas, use whatever it takes.
  • #114
  • Aug 7, 2019 9:24am Aug 7, 2019 9:24am
Quoting DrDave
{quote} "Buying big" right at the start exposes you to huge risk. By scaling in and trailing a stop to take out the entire basket reduces the risk plus locks in profit on the earliest trades. An EA to backtest the two options would be very valuable.

a) if you are right and Momentum gets smaller and the early entries produce more and bigger winners the overall risk wouldn't be bigger if you money-managed it correctly because
quote: ...the orders opened earlier in window tend to be winners, whereas those opened later, especially the ones near the window close, tend to be losers...
if your own words are true then it logically follows to enter early and money-manage your trade (risk, SL, taking partial profits etc)
b) of course: your SL defines the risk + you have an overall approach as to how much (1-3%) of your capital can be in one trade.

"An EA to backtest the two options would be very valuable"
if BFXS finds the time to code it I'd gladly help backtesting
  • #115
  • Aug 7, 2019 12:35pm Aug 7, 2019 12:35pm
Quoting josi
{quote} a) if you are right and Momentum gets smaller and the early entries produce more and bigger winners the overall risk wouldn't be bigger if you money-managed it correctly because quote: ...the orders opened earlier in window tend to be winners, whereas those opened later, especially the ones near the window close, tend to be losers... if your own words are true then it logically follows to enter early and money-manage your trade (risk, SL, taking partial profits etc) b) of course: your SL defines the risk + you have an overall approach as...
But I don't want to have to money manage a big chunk of my risk amount. It sounds like you are advocating with "buy big" to put on say 80% of the total amount willing to be risked (maybe you mean even more?). I have 0 data on this, so my alternative to risking a big chunk very early in an unexpected move, I will risk a much smaller amount on the first entry, then scale in to the "big buy" equivalent stepwise rather quickly. I lack sufficient data to determine the probability of failure within some N number of bars, either after entry or from the swing that started the move, to go with the "buy big" scenario.
To free Gazans of Hamas, use whatever it takes.
  • #116
  • Aug 7, 2019 12:45pm Aug 7, 2019 12:45pm
Hello everybody, how is it going?

This thread has been really active and you guys have great points and opinions. The conversation here is very informative. Although there are a few posts that I haven't read, but I'll make sure I read them all.

Now, regarding the Stochastic EA. There have been so many changes of rules here, and I was so confused as to which rules are the most up to date when I finally got the time to start working on the EA, so I created this EA and I will explain how it works. If I have something wrong, please tell me so I can fix it.

First, we're using Stochastic (32,8,1) Signal Line only (I will refer to as Stoch32 Signal), and Stochastic (8,3,3) both Stochastic and Signal Line (I will refer to Stoch08 Main and Stoch08 Signal).

BUY WINDOW:
Whenever Stoch32 Signal crosses above 50, the buy window opens. There's an external option where you can buy at the open of the buy window or ignore it.
If we are in the buy window (Stoch32 Signal is above 50 and SLOPING UP) and Stoch08 Main crosses above Stoch08 Signal, then we buy.
We exit all buy orders if the Stoch32 Signal crosses below 80, or if it didn't reach 80, then when it crosses below 50 (which initiates the sell zone).

SELL WINDOW:
Whenever Stoch32 Signal crosses below 50, the sell window opens. Again, there's an external option where you can sell at the open of the sell window or ignore it.
If we are in the sell window (Stoch32 Signal is below 50 and SLOPING DOWN) and Stoch08 Main crosses below Stoch08 Signal, then we sell.
We exit all sell orders if the Stoch32 Signal crosses above 20, or if it didn't reach 20, then when it crosses above 50 (which initiates the buy zone).

Regarding the "enhanced" system where DrDave is combining the Hull MA and HA candles. I am thinking of creating an EA based on those rules next.

We have nice debates here, keep it up guys!

Have a nice week!
Attached File(s)
File Type: ex4 Stochastic Trading EA.ex4   10 KB | 317 downloads
  • #117
  • Aug 8, 2019 12:25am Aug 8, 2019 12:25am
Quoting TOTOx4
{quote} great post. Can you please post your template?thanks
There are only 4 indicators. Do you really think you need to receive a template?
To free Gazans of Hamas, use whatever it takes.
  • #118
  • Aug 8, 2019 12:32am Aug 8, 2019 12:32am
Quoting DrDave
{quote} But I don't want to have to money manage a big chunk of my risk amount. It sounds like you are advocating with "buy big" to put on say 80% of the total amount willing to be risked (maybe you mean even more?). I have 0 data on this, so my alternative to risking a big chunk very early in an unexpected move, I will risk a much smaller amount on the first entry, then scale in to the "big buy" equivalent stepwise rather quickly. I lack sufficient data to determine the probability of failure within some N number of bars, either after entry or...

what I suggested was based on logical deduction (taking your own words as a) true and b) statistically sound)
if you are more empirically inclined try Popper's falsification and come up with examples that prove my suggestion wrong
until then:
quote: ...the orders opened earlier in window tend to be winners, whereas those opened later, especially the ones near the window close, tend to be losers...
if your own words are true then it logically follows to enter early and money-manage your trade (risk, SL, taking partial profits etc)

If - for example - I am willing to risk one percent of my account on each trade, then I'd risk this one percent on the most promising trade (not the less or even least promising one - according to your own statistics; see: quote) because this is the one trade that is statistically most likely to be the best one.
Now, if - as you said in a previous post - you trust your strategy: logically this is were you'd put your money.
That's all I'm saying.
  • #119
  • Edited 1:08am Aug 8, 2019 12:41am | Edited 1:08am
Quoting Bfxs
BUY WINDOW:
Whenever Stoch32 Signal crosses above 50, the buy window opens. There's an external option where you can buy at the open of the buy window or ignore it.
If we are in the buy window (Stoch32 Signal is above 50 and SLOPING UP) and Stoch08 Main crosses above Stoch08 Signal, then we buy.
We exit all buy orders if the Stoch32 Signal crosses below 80, or if it didn't reach 80, then when it crosses below 50 (which initiates the sell zone).

SELL WINDOW:
Whenever Stoch32 Signal crosses below 50, the sell window opens. Again, there's...

This sounds clever and interesting - let's see how it works.
Thanks for the work and time you put into this.

Unluckily your EA doesn't allow the user to enter a magic number, so you can't run it on multiple currencies (i. e. forward testing)
I know this is DrDave's and your project but to improve it faster it may be an idea to let users fiddle around with it more.
The possibility to enter a
magic number (mulitple currencies, forward testing)
choose between fixed lot-size and percentage of account
SL (amount in pips or number of candles)
TS (amount in pips or number of candles)
TP (amount in pips or number of candles)
even possibly to give 3 or 4 exit variables (Stoch/Signal-cross; entering into or breaking out of threshold (80/20) etc)

If you also posted the .mq4 other users could maybe make more improvements.

just saying, man
don't want to hazzle
  • #120
  • Aug 8, 2019 1:32am Aug 8, 2019 1:32am
Quoting josi
{quote} This sounds clever and interesting - let's see how it works. Thanks for the work and time you put into it. If you also posted the .mq4 other users could maybe make more improvements. just saying, man don't want to hazzle
He based the EAs on code that he paid for and agreed not to release, so no mq4 will be forthcoming unless someone else decides to code it independently.

We Don't have any data yet to even decide if the basic ideas that I presented have any reasonable chance of success. No need to be concerned about adding refinements at this point.
To free Gazans of Hamas, use whatever it takes.
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