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A "different" crossover system - 600 pips on Friday alone in EUR and GBP

  • #21
  • May 6, 2004 1:57am May 6, 2004 1:57am
Quoting merlin
give me some exact rules and i will do a backtest for ya...computers dont understand discretion

By Discretion, I meant to point out the trigger condition. It should be on the opening of the signal bar. Thats all.

Thanks
  • #22
  • May 6, 2004 7:56pm May 6, 2004 7:56pm
afewpipsmore, i took a look at the Long side..

looks decent, but i wouldnt trade it due to its low profit factory and choppy equity curve. this does seem to have some potential, you would have to tweak it out a bit.

http://www.forexfactory.com/perf_report3.gif


http://www.forexfactory.com/perf_report4.gif


look at the code, am i doing the bolded line correctly? or should it be the opposite?

vars: ShortAvg(0),LongAvg(0);
ShortAvg = xAverage (low,3);
LongAvg = xAverage (open,13);

if low < ShortAvg and high > LongAvg then
buy next bar open;
setdollartrailing (close*500)
Relax and be happy.
  • #23
  • May 8, 2004 3:01am May 8, 2004 3:01am
Just thought I'd jump in here and point out something that does not appear to have been mentioned. Judging by the title of this thread (a different xover system -- 600 pips on Friday alone in EUR, GBP) it appears that maybe something about system development is unclear to some readers.

Catching trends is not difficult for almost any moving average system. In fact a two or three moving average system by definition HAS to catch every trend. When the market goes up the faster line HAS to cross over the slower line and when the market goes down -- vice versa. Of course if you worked at it you could design some really bad moving average xovers but even they will catch the big trends.

The problem faced by everyone designing systems is not catching the trends it is how to minimize the losses during market consolidation so that you don't lose too much equity between trends. Moving averages are the easiest part of system design so once you've spent a few minutes getting one that gets's you in a trend the focus has to be on how to minimize losses during non-trending markets.

Filtering, money management, and risk control, are the three main components of any system that are required to last through the sideways markets. Finding ways to eliminate false signals, not risk too much, exit trades with large profits, ratio of wins:losses, and size of win to size of loss ratio are the factors that will make or break the system.

That is just the system side of things. Once you have a system that encompasses all this you must obey the signals. Hard to do when the system has a string of losses that are longer and larger than anything that backtesting revealed.

One great example is the 5 minute 4x system strategy-2. It is a good system but it recently had 5 losers in a row on the USD/CHF and 5 in a row in the GBP/USD. It could get worse for the GBP because as of this writing it is not known whether the 6th trade in a row will lose or not. At the same time the EUR was stopped out twice in a row. The only ones paying out were the AUD and CAD. It takes discipline to keep trading during sideways markets like this when backtesting indicated a maximum of 4 stopouts in a row with the S2 system. Welcome to system development.

Fijitrader.
  • #24
  • May 8, 2004 9:10am May 8, 2004 9:10am
Quoting fijitrader
The problem faced by everyone designing systems is not catching the trends it is how to minimize the losses during market consolidation so that you don't lose too much equity between trends. Moving averages are the easiest part of system design so once you've spent a few minutes getting one that gets's you in a trend the focus has to be on how to minimize losses during non-trending markets.

Filtering, money management, and risk control, are the three main components of any system that are required to last through the sideways markets. Finding ways to eliminate false signals, not risk too much, exit trades with large profits, ratio of wins:losses, and size of win to size of loss ratio are the factors that will make or break the system.

That is just the system side of things. Once you have a system that encompasses all this you must obey the signals. Hard to do when the system has a string of losses that are longer and larger than anything that backtesting revealed.
Fijitrader.
Excellent post. I thought I should mention that there also is a balancing act required between catching trends and filtering out false signals. Just as it is very easy to catch major trends, it is also very easy to eliminate false signals. The major problem in filtering a set-up system such as MA crossover is that the filter should not cause you to miss any significant moves that the set-up is designed to catch. That is, you do not want to throw out the baby with the bath water. Not only should the filter eliminate false signals during a sideways market, but it should NOT eliminate signals for significant moves that may not however be the most monster trends.
  • #25
  • May 9, 2004 7:11am May 9, 2004 7:11am
Quoting fijitrader


Filtering, money management, and risk control, are the three main components of any system that are required to last through the sideways markets. Finding ways to eliminate false signals, not risk too much, exit trades with large profits, ratio of wins:losses, and size of win to size of loss ratio are the factors that will make or break the system.
well said my friend.
Relax and be happy.
  • #26
  • May 11, 2004 1:42am May 11, 2004 1:42am
Quoting vdeluca
Just as it is very easy to catch major trends, it is also very easy to eliminate false signals. Not only should the filter eliminate false signals during a sideways market, but it should NOT eliminate signals for significant moves that may not however be the most monster trends.
Wow!!!! You are the first person I've heard from who ever said it was easy to filter out false signals. I can give you 20 moving average systems and guarantee you that every one will catch every trend. But if you can filter out the false ones and do it easily then you have the holy grail of trading.

Please share with us how to easily filter out false signals? Every system developer I've ever come across works endless hours trying to eliminate false ones and most cannot do much better than leaving 30 to 40 percent false ones behind and that makes a pretty good system if the positive signals are statistically good for more pips than your risk.

FT
  • #27
  • May 11, 2004 6:01pm May 11, 2004 6:01pm
Quoting fijitrader
Wow!!!! You are the first person I've heard from who ever said it was easy to filter out false signals. I can give you 20 moving average systems and guarantee you that every one will catch every trend. But if you can filter out the false ones and do it easily then you have the holy grail of trading.

Please share with us how to easily filter out false signals? Every system developer I've ever come across works endless hours trying to eliminate false ones and most cannot do much better than leaving 30 to 40 percent false ones behind and that makes a pretty good system if the positive signals are statistically good for more pips than your risk.
FT
Please read my post again as you did not comprehend what I said. The difficulty is in filtering out ONLY false signals without also filtering out legitimate signals. I can give you a filter that filters out EVERY false signal, but the only problem is that it filters out everything else as well. Just like MA crossover systems will catch every trend, but also will trigger every whipsaw movement.
Cheers
  • #28
  • Edited 11:55am May 15, 2004 11:53am | Edited 11:55am
Hi all, new guy here for about 5th post on these forums
Reading all with great interest. Last night about midnight with sand in my eyes I came upon a site that made some sense. All these trading systems I am reading about use the standard tech indicators that were all developed before the advent of the computer. On this site http://www.wave59.com/ it kind of made sense to move forward - perhaps - with new indicators. I just may try their one month freebie and see if it performs. The old stuff is great and does work because it is self fullfilling like fibo numbers. They really have built themselves into the mass psychology of human behaviour with regards to the markets.

slick 60

P.S. From what I have been reading - MERLIN - You are really nuts! Man after my own heart. GREAT WORK!!!!!!!
  • #29
  • May 16, 2004 5:14am May 16, 2004 5:14am
your not the first person to call me nuts
Relax and be happy.
  • #30
  • May 24, 2004 10:48pm May 24, 2004 10:48pm
What ever happen to this system i believe bishop was working on it. Kinda just died off, havent heard any results of trading it.
  • #31
  • May 27, 2004 7:31pm May 27, 2004 7:31pm
Quoting merlin
your not the first person to call me nuts
Ok Merlin what was your final thought on this trading system?
  • #32
  • May 28, 2004 8:09am May 28, 2004 8:09am
Quoting bluemonkey
Ok Merlin what was your final thought on this trading system?
id use it on the long side when the ADX is rising.
Relax and be happy.
  • #33
  • May 30, 2004 12:41pm May 30, 2004 12:41pm
I would just like to mention that this bishop is stealing credit for a system he did not come up with, he just took it off another forum...
  • #34
  • May 30, 2004 2:03pm May 30, 2004 2:03pm
i think Bishop is the same guy who posted this strategy on moneytec, just under a different name. correct me if im wrong...
Relax and be happy.
  • #35
  • May 30, 2004 2:07pm May 30, 2004 2:07pm
Sorry, I dont see where bishop says it is a system he developed. I think he is saying.. hey try this, look what its done.... will it continue to be successful?
Then he tried making it fit his own style... which we are challenged to do... by adding filters and looking at different time frames.

I agree it would have been helpful if he gave his source... there may be more info there for others to explore.

Could we learn about this source? I for one would like to check it out.

Back in the first week of May doclouis asked this same question. No Answers.

Now THAT bugs me.

LOU
  • #36
  • Nov 11, 2006 11:32am Nov 11, 2006 11:32am
It's a shame that this thread is dead. DeLuca, Fijitrader, Merlin - I was breathless when reading - I'd never dream the three better minds come together in a moment... and be able to listen to them.

Now I am complaining, because nobody is listening to - why everything that is banal, vulgar, or simply stupid - has so many follovers, and something where the great personalities are participating has no response from the public.

Are the biggest trees the biggest because there is no bigger tree around?

Sadly,
lietuve.
  • #37
  • Nov 11, 2006 11:39am Nov 11, 2006 11:39am
twoblink had this idea too. Search "OCC Method" and you should find it. It makes a lot of sense, and I think it definitely could be profitable.

andersenws
"Youth is the trustee of prosperity." - Benjamin Disraeli
  • #38
  • Nov 11, 2006 12:02pm Nov 11, 2006 12:02pm
Hey Merlin,

Do you use TS to trade FX Futures or Spot?
From my understanding they work with cme and cbot for Futures and Gain Capital for Spot fx.

-Alex


Quoting merlin
once you know how to use tradestation you can program something like this in under 10 minutes.

i might actually trade this on the long side, it looks really good. and there is no form fitting, i never even optimized it.

as for a cheaper version of tradestation, the only thing i think is comprable is MetaTrader. but IMO it's limited and under supported.
  • #39
  • Nov 11, 2006 1:39pm Nov 11, 2006 1:39pm
there are MILLIONS of traders out there! who to say that somebody is 'copying' or 'stealing' somebody else's system. Unless the system is patented, there shouldn't be any worry
  • #40
  • Nov 11, 2006 2:43pm Nov 11, 2006 2:43pm
I've been using the DMI/ADX with the SIMPLE cross and had very good success with it for the past several weeks. I believe there have only been about 2-3 stop outs on a clean DMI entry with ADX support; but I've taken probably 50-60 trades on it. So I can verify Merlins findings.

I also found that if you mix the DMI with the SIMPLE, you have a "fast" trend system and a "slow" trend system combined. So to speak. This way, if you miss the entry for the "fast" entry (DMI CROSS), you can wait for the "slow" entry (SIMPLE CROSS) and by that point you should as well have ADX support of +20.

I enter on a signal of +20 or greater. +25 is where Welles Wilder said the ADX shows true trend. Now, at the same time, I've noticed that this combination works MOST efficiently on the 60 minute charts, which is the same time frame that Welles Wilder suggested usage on, other than the daily charts where it got stopped out SEVERAL times on my trades, so I have resorted only to the hourly.

You can find a daily log of my performance on it at:
http://www.muddbuddha.com/forum/viewtopic.php?t=80

Keep in mind when viewing the results that I only take trades up to 11AM EST and most often close any open orders no later than 2PM EST unless there is volatility to convince me otherwise.
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