Follow the Candles

Hi dokopy,

no limitation / expiration whatsoever.

Thanks.

Greetings to all... I have been following this thread for several weeks now. Forgive me please as I feel compelled to offer my 2 cents worth... And please also understand I mean absolutely no disrespect, but cannot help but ponder the following subjects, after which I would like to offer how I work this strategy - NO EA's!

Before I begin, let it be known that I fully understand that the goal of this strategy appears to be to pull a 5% profit each week without much work.

1. TREND TRADING - LONG TERM CHARTS... If a trader is wanting to trade with long term trends, as this strategy suggests by using monthly, weekly and daily charts, the likelihood of quick profits - in my opinion - is unsustainable. Monthly trends, weekly trends and daily trends WILL have countertrend moves. Allowing an EA to determine which currency pairs are trending and placing baskets of orders for short term profits seems - uhhhmmm - lacking a due diligence to a traders account.

Personally, I never let EA's do my work or my trading for me. EA's cannot pickup on the things that our eyes can. They can gather information, but cannot judge beyond the scope of what they have been programmed to do.

For example, an EA might determine that the AUDUSD is a buy, but cannot see that the RBA will lower rates Monday night... That same AUDUSD buy from the EA is not going to see a completed five wave impulse Elliott Wave to the upside... That same EA is not going to see the completed butterfly pattern to the upside... That same EA is not going to see the trendline break, it won't see the order flow, it won't see that volume is declining to the upside, it won't see the MA cross, it won't see the doji (indecision) candle on the weekly, it won't see the OB condition on your indicator... Etc Etc Etc - so why would you let it trade for you if it won't see things that may cause your trades trouble and cause your account pain?

SEE where I am going with this? I mean no harm, I want to help traders here see what work has to be done to make it successful for the long haul.

2. EA FOR EASY... If a trader desires easy money trading forex, that trader may not realize just how hard trading profitably on a long term basis forex can be. In fact, it is my belief that trading forex profitably for the long run is likely one of - if not the most - difficult professions known to mankind. We all want to find easy money - EVERY SINGLE ONE OF US wants that!

An info commercial at 3am on a Wednesday back in 2007 had me believing that trading forex was easy money... this is my true story by the way -
now 12 years later - IT REMAINS THE HARDEST JOB I HAVE EVER HAD... fortunately, my technical analysis background and new found understanding of order flow and volume have me on the right track.

I see posts of traders losing $500 / $1000 a week here on this thread - and they are "trading with the trend" ??????? Seriously????
that confirms that trading is not easy. I am of the belief that EA's just add to the difficulty.

QUESTION: Rather than donate to losses, how much technical analysis training will $500 / $1000 a week get you?
ANSWER: A busload.

3. TRADING WITH A BLIND 10% STOP LOSS... Seriously? Letting an EA determine and trade for you at a risk each week of a 10% stop loss on your account? That to me is insanity. An EA will never be able to determine the proper price level for a stop loss placement. Heck, for years I couldn't even figure out proper stop loss placement looking at the charts!!! -

I strongly recommend letting price tell you ideal areas for stop loss placement. let me repeat that...
LET PRICE TELL YOU WHERE TO PLACE A STOP LOSS. Look at the charts - see them clearly - like no EA can.

4. CURRENT CANDLES... Using the current monthly candle is ok for trend, except at the beginning of the month. Using a current weekly candle is questionable to me, especially on a Monday afternoon. The candle may not have had enough time to develop to see if it is going with the trend. I use the previous weeks candle as its trend is confirmed by its close. Using the current daily candle is also questionable to me - for the same reason - It has not had enough time to develop for me to see if it is going with the trend. I use the previous daily candle - Monday's closed candle. Its close confirms its direction. I do not use a 4H candle, but if I did - you guessed it - I would want to use the previous closed candle so I could see its confirmed direction.

Here is how I handle this strategy. MANUALLY. My charts are set up and I fill in the blanks on an excel worksheet every week for 28 currency pairs.
Starting with monthly, then weekly, then daily. It takes about 15 minutes to complete the basic analysis that the EA can do. Lets see what this week looks like:

Lets dig deeper at the 10 pairs to see if anything removes them from our list!

1) NZDUSD - MONTHLY DOJI - OUT

2) GBPCAD - MONTHLY DOJI - OUT

3) GBPCHF - MONTHLY DOJI - OUT

4) USDJPY - WEEKLY DOJI - OUT

That's a 2 minute candlestick analysis and I am now down to 6 possible pairs. Take some more time yourselves on these 6 pairs to see if anything else would have you eliminating any other pairs for the week.

That's it for today. I hope this helps someone out there. I hope this will have you looking at your pairs this week and evaluating how much loss could have been avoided.

adjust to 4% Take Profit Start Wednesday 3:00

It's not easy to develop longterm profitable EA and it is possible to implement all kinds of geometry in EA for decision making. EAs can have the same "eyes" what you mentioned. But the main advantages of EAs:

1) Backtesting history
2) Optimization - find out the best parameters
3) Discipline - no emotions and 100% trading according to defined rules

You may have a lot of parallel EAs running (more than 100) on n accounts with various setups - manually you can forget something and make mistakes.

Anyway, I put like on your comment because there is truth in your words too

But the author of this thread is true too - profitable strategies can be simple. If statistics prove that - why overcomplicate?

I already run the modification of this strategy (backtested with 10 years data) on the real account. You can see it in my profile. So let's check this out after several months. Meanwhile, I continue optimizations because I found better setups on M15 charts. I will run them in a separate account. But need about 100 hours to backtest. You see - not so easy with EAs...

my basket for this week (opened at the regular Tue 3am rule)and like everyone else initially went into drawdown - and is currently in the black to the tune of around 120 pips

blam

Yep, my basket of very small trades was down around 0.75% and am now up around 1% and expect to close everything soon - can't see much forex price action in Thanksgiving week after tonight's NY close. Nice.

same here...still running...

These are some good points. I for one have never and will never trade through an EA. Your point on taking note of the economic calendar is bang on the mark and too often ignored.

But the principle here appeals to my experience of all price charts in every class I have looked at - that long-term trending asserts itself more often than short-term counter-trending. It therefore follows that in an uptrend there will be more up days than down days, and vice versa in a downtrend. And they will be stronger up moves in an uptrend and stronger down moves in a downtrend.

Simplistic I know but statistically true. UNTIL - you get to the last counter-trend move, which can be dramatic and demands either a trade stop-loss or disciplined vigilance. But I only need to be right 6 times out of 11 to make money and continue to run the strategy (which are two separate criteria).

Also, the principle of using a basket of trend-following trades appeals to me as it automatically incorporates multiple positions on the higher probability pairs. Whenever looking at a new trade in forex, I am keen to see what the other pairs comprising the same currencies are doing and if most of the other 6 charts are adverse, I won't be going in. So, when the GBP is strong, the basket will automatically be overweight GBP.

I'm intrigued enough by the basket trade idea that I am exploring additional criteria for trade selection.

My basket is close now due TP 5%

Thanks for your feed back. I agree that EA's serve a great purpose in back testing, optimization and emotional-less trading... and I agreewith you that many traders are perfectly comfortable using them. I meant absolutely no disrespect to the thread author or any traders using EA's. In fact I respect very much the efforts - and even more so - the willingness to share - the systems, research and results.
I just meant to put a few thoughts out there as it looked (possibly) like a few traders were just jumping in and losing large sums quickly on trades that may need more than a couple of days to materialize, and hoped to point out that a good EA can still overlook some things that can cause account balance pain.

A very happy holiday season to you - and thanks again! -
PS: I put a like on your comment as well.
Cheers!

Greetings! Great points and many thanks for sharing your feel about basket trading. Much respect for your thoughts and for sharing them here!
Happy Holidays to you!
Cheers!

final result's of this week:


EDIT: as you see DD% was 5.09% and P/L% was 2.35%, it means price went up to 2.74% negative (DD-P/L). as respects i considered about 0.01 lot per 1000$ balance for this week and according to my previous weeks results, i think if i consider 0.03 Lot per 1000$ Balance is th safest value and the chance of 10% SL hitting will be very low.

EDIT2: it was the first week that i tested 3:59 instead of 3 as open times of trades and the result was much better than previous weeks. so i continue with this open times for next week to see how it goes.

Open on Thursday 4% TP HIT
Result on Two A/C

I just traded two days during this week and here are the results, Both hit 5% tp.
Lot size=0.02

Results this week:

Time open Tuesday 10:05 GMT
Close Friday 19:00 GMT
Profit approx. 1.63%

Ive read through the entire thread and was just curious if you guys are opening and closing your trades manually with the entry and exit rules in post 1 or are you still using the EA? Just asking because I saw where the EA has had some issues and didn't know if it still worked for the most part

Thanks

I'm using the EA v1.1 with different times from Post 1. EA has worked fine for me.

Thank you, Ill download it and give it a try

Results for the whole week: