Now we’re setting up for a bullish entry.
So much set-up. So little action.
Finally, (finally!) on Sept 12, 2007 a trade is entered long.
Entry statistics for this trade:
Attached Image
Afterwards, stops and alerts are adjusted daily. Price versus TS is monitored to make sure it is within limits.
By Sept 28, 2007 the trade enters ‘preserve mode’ and we get a ‘free trade’ meaning a profit is locked in even if the trade gets stopped out.
“Notice that tile closing price is 1.4267 and the value of the Tenkan Sen is 1.4053, which is a 2 14-pip difference. Our trading plan had stated that if price was 200 pips away from Tenkan Sen, we should exit. As a result, we should exit, right? Yes, because that is in our trading plan.”
And then…
“If you reached this point and have not noticed a mistake then you are not paying attention to your trading plan at all. I am purposely putting errors all over the place to make sure you follow your trading plan.”
Oh, this is grade-school BS! MP can take his patronizing attitude and stick it right back up his trading plan.
Here is the trap MP laid for the unwary reader:
“In our trading plan, it mentions that you exit when price is 200 pips or more away from the Tenkan Sen when it is flat. If you look at the charts, the Tenkan is not tlat so we should not exit.”
MP makes himself an unreliable narrator at this point. He can blame any problems with the book or the system on his clever ruse, and avoid taking responsibility for them.
I still want to take this outside the realm of the theoretical and see how his stated performance compares to the actual trading opportunities of the time, but for now I’m unhappy with this book, and this system seems both timorous and excessively management-heavy, especially from this algo trader who prefers to do as little busy work after the initial setup as possible.
This trade exits finally on October 3, 2007, with a profit as shown in 3.60
MP continues with more detailed descriptions of his 2 year backtest but this is exhaustive (and exhausting) and I think we understand as much as we are going to understand at this point. It’s nearly time to do some examinations of our own. First though, let’s see what he thinks of his 2 -year performance