1H Swing Trading on EURUSD

Took profits on what I think was my last trade with this trend 20-17 and also because I have to learn to take profits consistently.

Then I have been taking some random trades trying to be with the flow but there was not really a clear direction. My last short bias is from that 4H pin-bar candle which wick could be signaling a short term top but if there is no PA to confirm I could get out of it very quickly...

Previous low broken, waiting for a lower high.....or was that last push it? Any how, I am waiting for the MA break and change in color. Have a lovely weekend folks!

First of all, thank you BT for your sharing your trading system so generously!
I ran a simple backtest using the rules stated in post 1. Exit position when new counter side signal appears. I have uploaded two plots. In attachment `backtest_swing_trade.png` is the pips profit and loss cumulative plot from 2015-01-1 till 2020-03-03. In `swing_trade_dur_pip.png` plot is the relationship between trade duration in hours and pip gained.

A few points I see are:
1. The strategy performs only good after year 2018. Not sure if its because the parameters are tuned based on this period.
2. The strategy can capture some big movements, but also has too many small losses. Result in a net loss in long run.
3. Trades PnL are linearly correlated with its holding duration, Pearson correlation is 0.67.
4. Statistic shows that for trades have less than 10 hours holding period, there is no chance to win, but it doesnt mean we would definitely win if we wait 10 hours and then enter.
5. The mean pips PnL for trades with less than 48 hours are -27pip per trade, for those above are +35 pip per trade.

Hope it can bring you some attention and ways to improve it. Also please note that my calcualtion/script/data may contains error. Dont completely trust it untill someone else can crosscheck it.

Kind regards,
XL

In the goal of becoming a consistent, and hopefully winning trader, beginning with the next trade, I have decided to write down (report) my plans for the trade and at the beginning of every trend, so in the future I will have a clear statement to which I can refer and see how well or bad I executed my trades and if I'm improving or deteriorating.

These short reports will look like tickets in which I will detail all the aspects of the trade: Risk, Entry and Exit and on which I will also write back, at the end of trade, how the execution was done and of course, the result of the whole operation.

This will also give me a clear result by trend instead of by trade, as any trend will carry one or two initial trades but eventually some extra ones.

As with all the things I try and experiment, I don't know in advance if this will help or on the contrary limit my trading, if it's good or bad, so again, I will be pragmatic before adopting this definitely while at the same time being open to recognize if this really brings the consistency I could be happy with.

Have to try to find out...

So this is my first Ticket for future trend 20-18:

=========================================
TRADE 20-18 / BALANCE : 12 K / STATUS : OPEN
=========================================
MAXIMUM RISK (a) : 10% (1200) over 100 pips => 1.2 Lots
=========================================
TRADE PLAN
ENTRY (b) :
:::: Trade 1: Enter 30% (0.36L) on TL cross before SMA Signal.
:::: Trade 2: Enter 70% (0.84L) at SMA near signal.
EXIT (c) :
:::: On trend-line cross before SMA signal.
:::: On signal if no other clear sign.
=========================================
EXECUTION
ENTRY (b) :
(1) 0.25L @ 1.1318 SL 50 pips
.
.
.
.
=========================================
EXECUTION CONTROL : AP=As Planned / F=Failed
Risk (a) :
Entry (b) :
Exit (c) :
=========================================
RESULT :
=========================================
COMMENTS :
Entry (1) was near but before TL cross but is also
partial, 0.25/0.36 lots
=========================================

Ok, certainly that your intentions are good, but certainly true also you have not read the thread and not even the first post where I clearly say “Please don't post charts or other material not related with the system or of different pairs.”

And there was a reason behind that, which is not that I think that I have the better system in the world and that the others out there are crap, no, it’s because I’m definitely out of that vicious circle where a lot of traders are trapped, and it’s the same reason why I don’t want any additional filter or artifact to the system I currently trade, so I will tell you, maybe it will sound familiar to you and if not, certainly for somebody else.

You know that story of the trader that builds or get a system, he trades, he wins, he get a losing streak, he realizes something is missing to his system, a yeah that MACD or STOCH filter was missing to filter bad trades, he trades, he wins, he has a losing streak again, oh! Bollinger bands or ichimoku clouds, how could he have missed them! He trades, he wins, he has again a losing streak, tired he realizes it was not the right trading system for him so he puts it in the trash bin, he goes back to FF trading system forum list looking for that new “state of the art” system because he’s convinced that his own was just crap. So he gets that new system and guess what… he trades, he wins and he gets a losing streak and the story repeats again and again and not because he’s looking for an acceptable or eventually good system, no, he’s looking for a perfect system which just doesn’t exist.
Now certainly that some are crap but certainly that some are good as well, the thing is that he doesn’t understand that a system is only one component alongside with psychology and money management, and on the system itself, he doesn’t understand either that adding more variables (filters) trying to make it perfect, only changes its nature making of it another similar but different system, and that by doing so he never knows if the original system he got was good enough to bring him the success and consistency he’s desperately looking for.

I know so well that story, but that was the past for me, not the present, period !

I think that now everyone understands why I refuse adding stuff to something which, not being perfect, gives me what I think is really a good edge and far enough to be successful as long as I align good money management and psychology with it.

If you understand that as well, please kindly delete your post (Edit > Delete).
Thank you for that.

Apologises. Been through all that too.
Post deleted respectfully.

No issues, thank you

Hi xialoei,

Thanks for your work! It reminds me again how important market judgement and money management will be when those times will come and that I sense that the system is not working as it should. Still as I said already I don't want to add more filters or try to improve it because I know it will only be a waste of time, I'm repeating myself like a broken record, but it's OK. I Prefer to focus in developing skills that will allow me to be aware to see at which moment I should pay special attention to money management and of course, above everything, the market.

Yes, I created the system based essentially on 2019 data and now of course present 2020 data, I had no data previous to that.

Now, there are several factors that your test cannot take into account:

a) Sometimes it's possible given the price action, to sense if we are in front of a fake signal or not, for example, let's say you ride a long trend, then it reverses and you initiate another trade and the retracement of that trade is big enough to generate a contrary signal, what is the price action on that signal ? is there exhaustion or on the contrary has the sma been crossed with strong momentum ? That needs human judgement that no automated test can replicate and no need to go into 2018, there are examples of that in 2020!

b) Trend lines are an important trait of this system and your test doesn't account for them. Not always but sometimes they are even capable of avoiding a fake signal or a second fake signal.

c) How an automated test can take into account incoming important news ? Impossible ! I, as a human, if for example I see that a signal is coming at 14H CET close, knowing that a 14H30 we have the NFP numbers, maybe I will think twice before entering, maybe I will enter small, maybe I will enter and exit at 14h25 if the price hasn't traveled a good distance in my direction, or maybe, I will enter and put a stop loss at BE, whatever I decide, it will be my own judgement and no automated test can simulate that.

Those are also the same reasons why this system cannot be automated and I could continue with more examples but I think that you get the idea.

Hi together,
try to backtest the both indis - but they are dont working. Any tips?

https://charts.mql5.com/24/972/eurus...services-2.png

hello traders! broktrader hi! is it advisable to make another trendline? seeing that price broke the last and mad a high or we just simply adjust like mine? thanks

Hi !
Sometimes I add "secondary" lines but in this specific case I will keep the original, for me the break was a fake, nothing more.
But that's just my way of doing...

This time the trend is clearly broken, no doubt and we are close to the next sell signal.

I have a bit changed my plans for my entry, I will add on signal or on SMA, but my position will be only 30% of my final position, the 70% remaining will be entered on the next retracement if there is any! I will also add on further retracements with tight stops, I want to experiment again what I did on the previous trend and see how it works...

Will post a chart when the signal is here...

Edit:
Well, I just realized that entering 30% and 70% is not different at all from what I wrote in post #744, at least in that regard, I'm consistent... what I was thinking in fact is that I will get that position in 2 trades, one already there and the next to come.

On the retracement I expect the price to not travel more than 50 pips once he's back to SMA or near of it, so my stop will be 50 pips instead of previous swing high. This is because I consider that once the signal is there, the trend is somehow "locked" and that the price shouldn't travel very far on the other side of the SMA. Narrowing the stop loss allows for bigger lot size. Greed is talking but somehow under control as all this is only allowed once that signal is present.

On H1 is broken, but i wait the same on H4 for confirmation

Went above trend line but closed below it, seems a bit undecided but following hours will fix the direction...
Waiting touch of SMA to complete my 30% or cancel if up trend resumes !

Closed above trend-line again, bears getting mad, bulls I don't know... we will see next close...

hi friend, you have a good method here.
be carefull with your trades.
kind regards!

Hi tnavi, thanks for the kind words and Welcome if you are following !

What a flat day today....

The trend-line break looks like a cardiogram...



But let be positive even if we don't know the outcome... the more we shift to the right, the more valid becomes the trend-line break...

Added the remaining part of the 30% on SMA touch, SL 50 pips away...