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Would you trade this system? New system #2. 10 replies

Osama Part Two 13 replies

My OSAMA System

  • #41
  • Nov 12, 2006 11:54am Nov 12, 2006 11:54am
LOL!

I love people, they have a chance to learn a thing or two here and all they can do is pick at the person who's trying to teach. It's amazing.


Good luck with your OSAMA system.
  • #42
  • Nov 12, 2006 12:01pm Nov 12, 2006 12:01pm
Quoting saaedb
LOL!

I love people, they have a chance to learn a thing or two here and all they can do is pick at the person who's trying to teach. It's amazing.


Good luck with your OSAMA system.
thank you for your support saaedb.
  • #43
  • Nov 12, 2006 3:00pm Nov 12, 2006 3:00pm
Quoting saaedb
LOL!

I love people, they have a chance to learn a thing or two here and all they can do is pick at the person who's trying to teach. It's amazing.


Good luck with your OSAMA system.
I'm trying to help him out. He's not calculating his risk correctly. I'm confused on what the problem is here.

Anyways, good luck with your journal.
  • #44
  • Edited 4:20pm Nov 12, 2006 3:54pm | Edited 4:20pm
After looking over my chart, thinking a lot about my system, and almost constant genetic backtesting with my computer over the weekend, I've decided to expand it to other currencies for the benefit of traders more interested in other currency pairs than the eur/usd.

This system had been designed with the eur/usd in mind, and I've always been hesitant to try it out on other currencies but anyway, I tested it on the three other majors, and the results were as expected. The profits were around 50% a month for 5% risk in each trade. Drawdown was still low, not going above 7%.

In a few hours I'll post some detailed statistics for each currency pair.
  • #45
  • Nov 12, 2006 4:22pm Nov 12, 2006 4:22pm
The problem with this discussion is a common mis-understanding. When a trade is entered, a portion of the trading account is allocated to what is called the "margin". This is a deposit. This money is not risked. It is secure. It is returned at the end of the trade, regardless of the outcome of the trade. The risk is the money which will be lost if the trade is exited in a negative position. The margin is not the risk, and the margin is not risked. It is totally secure.

The margin is held by the broker until the end of the trade, then returned to the trader's account. During the trade it is not available to be used as drawdown in case the trade goes into the negative direction. So the margin should be subtracted from the trading account when assessing whether the available capital is sufficient to cover the stop. If not, the account will be margined out before the stop is hit.

Quoting aicccia
I understand it, this is how.

$1000 mini account.

I open a trade with 10% risk where each pip is worth $2.

The trade goes negative 20 pips and I close it.

20(pips I lost) x 2(value of each pip)= -$40 that I lost.

The -$40 is my drawdown, and you'll see that it's less than the 10% of $1000 which was my risk. My drawdown percentage in this case was 4%, which is less than my risk percentage 10%. That's how.
  • #46
  • Nov 12, 2006 4:53pm Nov 12, 2006 4:53pm
Quoting itme
The problem with this discussion is a common mis-understanding. When a trade is entered, a portion of the trading account is allocated to what is called the "margin". This is a deposit. This money is not risked. It is secure. It is returned at the end of the trade, regardless of the outcome of the trade. The risk is the money which will be lost if the trade is exited in a negative position. The margin is not the risk, and the margin is not risked. It is totally secure.

The margin is held by the broker until the end of the trade, then returned to the trader's account. During the trade it is not available to be used as drawdown in case the trade goes into the negative direction. So the margin should be subtracted from the trading account when assessing whether the available capital is sufficient to cover the stop. If not, the account will be margined out before the stop is hit.
lol it's a good thing you showed up itme or idk what would have happened. I had to read your post a few times but now it makes sense. The thing that was messing me up is the fact that I don't use stops, so when other people used a definition of risk(which I totally understand) that involved stops, I wasn't how to apply that or if it was the right definition of risk for my system. I guess technically I'm risking my whole account on each trade since I don't use stops. I can see that when I've said "risk" in the past, I should of been saying "margin".

Kudos to Itme.
  • #47
  • Nov 12, 2006 5:36pm Nov 12, 2006 5:36pm
Quoting aicccia
it's one of the standard indicators like the MACD. Actually it's dirived from the MACD. Look at the macd and you'll notice there's a sma line running up and down through the histogram. The osma indicator is the histogram - the sma. So on the macd where the histogram is above the sma line, on the osma you'll have a positive histogram. On when the macd histogram is below the sma line, you'll have a negative osma histogram.

The full name of the Osma is "Moving Average of Oscillator". Myabe this rings a bell.
what software are you using. i also use the osma indicator and never see a sma running through the histogram on MT4 or any other software really. do you mean the signal line?
  • #48
  • Nov 12, 2006 5:41pm Nov 12, 2006 5:41pm
Quoting ProdiG
what software are you using. i also use the osma indicator and never see a sma running through the histogram on MT4 or any other software really. do you mean the signal line?
I'm using metatrader, I was talking about the sma line (or signal line) running through the histogram of the MACD, not the osma. It's the difference between the signal line and the histogram on the macd that creates the osma. The osma is the best indicator of momentum that I've ever seen. I use several different osmas in my system.
  • #49
  • Nov 12, 2006 5:52pm Nov 12, 2006 5:52pm
i always thought the osma was the histogram. i was told that when u plot the macd the white bars are the macd fast line and the red was the slow line abd the osma was the histogram itself. i dont use mt4 as my main charting but the histogram and osma were always pretty similar.
  • #50
  • Nov 12, 2006 8:52pm Nov 12, 2006 8:52pm
Quoting aicccia
After looking over my chart, thinking a lot about my system, and almost constant genetic backtesting with my computer over the weekend, I've decided to expand it to other currencies for the benefit of traders more interested in other currency pairs than the eur/usd.

This system had been designed with the eur/usd in mind, and I've always been hesitant to try it out on other currencies but anyway, I tested it on the three other majors, and the results were as expected. The profits were around 50% a month for 5% risk in each trade. Drawdown was still low, not going above 7%.

In a few hours I'll post some detailed statistics for each currency pair.
sorry guys I expected to have all the analysis done by now but for some reason it's taking a whole lots longer than expected and it won't be done for another 4-6 hours. My poor computer has been crunching numbers non-stop all weekend, I guess she's just getting tired. I keep telling her, "you can do it, just think when once you get this figured and wait a few quick months, as many fans as you want, in fact screw fans, we'll get you a bad ass water coolling system, 4 gigs of ram, SLI video cards, come on baby, just imagine yourself there." And then she speeds up a bit. lol jk... but yeah, about 6 more hours so I'll just post everything in the morning.
  • #51
  • Nov 12, 2006 10:47pm Nov 12, 2006 10:47pm
Good luck with your system... Don't allow the naysayers to divert your attention... Please keep the posts coming...... Thanks for sharing with the FF community.....
  • #52
  • Nov 13, 2006 2:16am Nov 13, 2006 2:16am
Quoting aicccia
lol it's a good thing you showed up itme or idk what would have happened. I had to read your post a few times but now it makes sense. The thing that was messing me up is the fact that I don't use stops, so when other people used a definition of risk(which I totally understand) that involved stops, I wasn't how to apply that or if it was the right definition of risk for my system. I guess technically I'm risking my whole account on each trade since I don't use stops. I can see that when I've said "risk" in the past, I should of been saying "margin".

Kudos to Itme.
Thanks aicccia. We're getting a little closer now, but the definition of risk as you're using it (with no stops) is NOT your margin used, but rather your account balance minus your margin used. If your account value is X, and you "use" 10% of X as margin to open your position, then with no stops your risk would be equal to X - (X*.1) or X*.9 which means you are rising 90% of your account on each trade. Now for MOST trading systems that would be an insane amount of risk. However I do know of some valid systems that use this approach, but require unusual money management techniques to function.

I know this is your journal rather than a teaching thread, but I would like to know if you would be willing to explain your entry/exit rules.

BTW, I'm honored by your signature. Thanks!
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  • #53
  • Nov 13, 2006 2:23am Nov 13, 2006 2:23am
Okay I'm really tired but w/e. I know this is going to be an awful lot of numbers, but bear with me, I'll try to present it as clearly as I can.


I'll know start keeping track of signals on the 4 majors: eur/usd, gbp/usd, usd/chf and usd/jpy. Personally I will only trade money with the eur/usd and keep the other three currency pair sigals expiremental. I have the most faith in the eur and this is why. We'll start with the worst first to build the suspense. lol. Rate of return percentages are per month and drawdown percentages are per 12 weeks for usd/jpy and gbp/usd and per 6 weeks for eur/usd and usd/chf.

1)USD/JPY-60% are profitable trades over 12 weeks
with 5% margin in each trade= approx. 35% rate of return
approx. 6.5% drawdown
to obtain 200% ROR a month=approx. 13% margin per trade
approx 17% drawdown

USD/JPY was by far my worst performing pair.

2)USD/CHF- 83% are profitable trades over 6 weeks
with 5% margin in each trade= approx. 56% rate of return
approx. 6.9% drawdown
to obtain 200% ROR a month=approx. 8% margin per trade
approx 12% drawdown

3)GBP/USD-80% are profitable trades over 12 weeks
with 5% margin in each trade= approx. 76% rate of return
approx. 4.9% drawdown
to obtain 200% ROR a month=approx. 7% margin per trade
approx 7% drawdown

And the Eur/Usd is the best performing pair which is why it's the only one I'm putting my money into.

4)EUR/USD-83% are profitable trades over 6 weeks
with 5% margin in each trade= approx. 64% rate of return
approx. 4% drawdown
to obtain 200% ROR a month=approx. 7% margin per trade
approx 5% drawdown


So yeah there it is. Now we wait to see if these percentages hold true for forward testing.
  • #54
  • Nov 13, 2006 2:35am Nov 13, 2006 2:35am
Why do you say that the EUR/USD is the best performing pair when the GBP/USD achieved a higher rate of return? Rate of return would be my personal measure of performance - call me greedy if you want to.

If I were you, I would trade GBP/USD with 20% margin per trade. Your maximum drawdown would probably still be less than 50% I think.:

3)GBP/USD-80% are profitable trades over 12 weeks
with 5% margin in each trade= approx. 76% rate of return
approx. 4.9% drawdown
to obtain 200% ROR a month=approx. 7% margin per trade
approx 7% drawdown
  • #55
  • Nov 13, 2006 3:02am Nov 13, 2006 3:02am
Quoting itme
Why do you say that the EUR/USD is the best performing pair when the GBP/USD achieved a higher rate of return? Rate of return would be my personal measure of performance - call me greedy if you want to.

If I were you, I would trade GBP/USD with 20% margin per trade. Your maximum drawdown would probably still be less than 50% I think.:

3)GBP/USD-80% are profitable trades over 12 weeks
with 5% margin in each trade= approx. 76% rate of return
approx. 4.9% drawdown
to obtain 200% ROR a month=approx. 7% margin per trade
approx 7% drawdown
it's actually quite a bit less than 50%. lol
  • #56
  • Edited 4:01am Nov 13, 2006 3:39am | Edited 4:01am
Trade 2)
BUY USD/JPY @ 117.63
4:39 AM ET
Monday, 11/13/2006
  • #57
  • Nov 13, 2006 4:08am Nov 13, 2006 4:08am
Quoting diallist
Thanks aicccia. We're getting a little closer now, but the definition of risk as you're using it (with no stops) is NOT your margin used, but rather your account balance minus your margin used. If your account value is X, and you "use" 10% of X as margin to open your position, then with no stops your risk would be equal to X - (X*.1) or X*.9 which means you are rising 90% of your account on each trade. Now for MOST trading systems that would be an insane amount of risk. However I do know of some valid systems that use this approach, but require unusual money management techniques to function.

I know this is your journal rather than a teaching thread, but I would like to know if you would be willing to explain your entry/exit rules.

BTW, I'm honored by your signature. Thanks!
I don't know if I'll ever explain completely. Maybe if Itme explains her Q theory stuff I will. Of course if this proves to all be rubish then be all means I'll tell you anything you want. But...if it isn't rubbish then it's pretty much priceless.... and I'll give signals and explain general concepts.

But remember I'm really not sure what to expect. All the statistics are from backtesting. This isn't a proven system yet by any means. I'm still in the expiremental stage.
  • #58
  • Nov 13, 2006 4:50am Nov 13, 2006 4:50am
Quoting aicccia
I don't know if I'll ever explain completely. Maybe if Itme explains her Q theory stuff I will. Of course if this proves to all be rubish then be all means I'll tell you anything you want. But...if it isn't rubbish then it's pretty much priceless.... and I'll give signals and explain general concepts.

But remember I'm really not sure what to expect. All the statistics are from backtesting. This isn't a proven system yet by any means. I'm still in the expiremental stage.
Thanks aicccia, that was a good answer. I respect the fact that this is your journal and not a teaching thread, so you are free to disclose as much or as little as you wish. Thanks for what you are sharing as it is pleasantly thought provoking.

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #59
  • Nov 13, 2006 5:43am Nov 13, 2006 5:43am
I'll never explain my Q theory! It would be too dangerous to reveal, as it could destabilise the world economy!!!!!!!!!!! And if your system, aicccia, works as well as it appears, you should use it only for good, and not release it to the public. Otherwise it will be put to evil use by unscrupulous criminals to amass huge amounts of capital, which will be re-invested in the war industry, the disease for profit industry, the industries which prey on slavery, the industries which cause and prey on technological stagnation such as the oil industry (watch "Who Killed the Electric Car"), the industries which exploit monopolies such as the agribusiness and water business, the vice industries such as the sex slave trade, the pornography industry, the narcotics industry, the gambling industry, the cigarette industry, the alcohol industry, the junk food industry, etc. and you will thereby be responsible for unimaginable suffering.
  • #60
  • Nov 13, 2006 12:09pm Nov 13, 2006 12:09pm
Hey there's nothing wrong with some friendly poker or a cold bottle of fine wine....apparantly I said the wrong thing. lol

But Itme is right.
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