Mind and Machine Scalping system for risk-averse retirees

Dear simnz, last two day's I tried many times and many ways without indicator, using 10/12/15 pips Grid, but result is 000. If you have an indicator that show's the range or you have a pinpoint entry signal then I must try to make a spreadsheet based on previous data.
Manually you can trade with this strategy but making an E.A with this...impossible.
Because, 6-7 years ago I use an E.A with my own strategy similar like your strategy. First 7 trading day that robot performance was unbelievable and 8th day E.A burn my account.
Real ac balance was: 1193$
7 day's balance turn into: 33078$
8th Day balance: 0.31$
After that, I love manual trading.

I think you were trading martingale. You were using multiplying of lots. I never use martingale . Only constant size lots.

My strategy is simple.



1. I have given enough information to make data sets for logging the frequency of breakouts and consolidation/sideways trades happening in M1 TF

2. Use your eyeballs and experience to locate a probable consolidation or sideways zone.

3. Mind and Machine method requires both the use of eyeballs and an EA . The EA is still under development. I will send you for backtesting by PM. I will upload only after you say backtesting working well. Otherwise will go back to the drawing board.

4. Machine is absolutely needed to deliver 15 times more trades than can be used manually by a human being.


5. Averaging Down or Average Up is used for money management and quick results. (More details in next posts)

Set up pending trades on both sides of the current price within a defined high low range and divide the range is smaller size of grids with pip size which is smaller but that can cover broker commission and give profit. The example range is 50 pips. You divide it into 5 grids drawn at 10 pips distance with TP of say 8 pips with no stop loss.

If the price is pulling back, it will go down by 50 pips distance and recovers in steps of 10 pips then at every recovery step, hits 8 pips profit. If it keeps recovering it will hit 50 pips high, then the profit will be 8 pips x 5 grids = 40 pips.

If it does not recover and plunges to 50 pips low, then it will hit equity loss at 60 pips. This means the price is trending and we should quit because our trading plan is to benefit from sideways or consolidation. Not from breakouts or by predicting direction.

simnz

I came across your thread and downloaded the RectBreakout EA can you explain how to use it. I read through your post but I still don't understand it

If you are a coder, I can explain you. You are free to use my information for commercial agenda. I don't mind it. As long as you provide mql.

If you are a trader, the EA is not working because the programmer has deactivated it.

Simnz,
I like the very good idea of giving back by helping the senior citizen wanting to learn the trading business. I wish you much success with you endeavor.

One of the to a strong mind is to keep the mind constantly engaged.

Best of trades to you & you group.
__________________________________________

I have sent by PM a document explaining the strategy and the working of the EA under development.

Dear Hoda,
My methodology that I teach to seniors is basically to provide them an avenue for brain workout and generation of income in a less stressful way and using limited trading hours.

Trading as such is a mind game. There is no fixed formula to get success. So each to his own. A trader may choose to predict or another may work with what is given by the market. It is easy to analyse charts in hindsight. That's what we all do and decide on which course of action to take . Some use both ways as well.

I have taught and practised Proactive as well as Reactive style trading with them. I use my real account at Interactive Brokers and they use demo trading at MT4.
Wait for the MT4 indicator to be finished. You can use paper trading account of Interactive Brokers to test their platform.

Trading is something you have no control over nor you can influence the market. Whatever the market does, you have to accept it. Reactive kind of trading is something which they enjoy, based on my couple of years' experience of working with them. So the system is based on this premises.
Predictive kind of trading can also be done . But it requires different skills , mindset and hours to spend on trading.

1. Find a broker who is reliable, not inflating spreads, does not charge swap fees.

2. Find an instrument (symbol) that can generate income for traders in different time zones.

3. Find the average daily volatility of the symbol because income generation is the main motive. Equity indices provide on an average 2% daily .

4. Look for brokers who charge fixed $ commission. But in case of MT4 brokers, you won't find such brokers. Even if you find them, it is of not much help because they are depending upon liquidity providers. Liquidity providers change spreads frequently based on market conditions and their profit consideration. So directly or indirectly, MT4 retail trader ends up paying in spreads inflated by either the broker or liquidity providers from time to time.

Big brokers keep different accounting books so that they don't use external liquidity providers often. Only as a last resort . Their income comes from attracting both buyers and sellers and be in a position to offset the bid/offers from their own customers. This is the best way they can earn more money.

5. CFD is a kind of symbol created by the market makers using different price feeds. Some brokers prefer to use Futures price feeds coming from the Exchange prices and charge a fixed $ commission or spreads. Brokers using Futures price feed liquidity providers or having their own system of using futures price feeds like to provide smaller margins and smaller sizes of trades attractive enough for retail traders with lean pockets. GBE brokers and FXFLAT don't charge swap fees. Fxflat is the only broker known to me that uses actual Exchange price feeds (not a CFD derivative) but using MT5 platform. Finding transparent brokers is a tough exercise. You have to do due diligence.

6. Now collect latest data to know an idea of a trading size which can occur frequently and can leave a profit after meeting two way trading costs. The excel sheet provided on this thread is a useful tool that does it based on yesterday's or today's price movements. The frequencies are measured in terms of thresholds using
Pip sizes and Bar sizes and try to find which trading hours are actively traded known hours of Open, Close, Data Release, convergence with opening of other markets.
The spreadsheet collects basic raw data candle wise so that all sorts of filters can be used to arrive at some statistics.

For Sideways trading, it will be useful to collect statistics on the frequencies of pullbacks , continuation and reversals. Breakouts are caused by the official market makers to balance the liquidity flow. Except for the official market maker, who has the access to the orderbooks of all traders, nobody else can know the timing of their price moves.

But relatively, it is easier to know their consolidation patterns, which they do very often in a day. You can use Quantrenkov indicator on this thread to print sideways boxes based on date and points size. Excel is using same thresholds of Points/pip size and Time.

In terms of consolidation zones, you can reasonably expect them to happen for hours before the major data releases of FOMC or Central banks meetings , Job Reports and such other major economic events that act as catalyst that triggers volatility in the market. In other words no guess work is involved. And you can use your Excel expertise to start collecting data for such events or by looking back at one year's data . Spreadsheet generator indictor has that facility. If you use 0 index value, then it will be for current market. If you use 1, 2, 3, or 4 it will look back at the past periods.

7. Machine or bot or EA is needed to do away with mechancial trading by a human being. I have practised a bot provided by my broker, Interactive Brokers, that helps execution of the trades ( it is a utility and not a signal generator) that can execute trades in a blink of an eye that sometimes the retirees are able to meet
the daily profit target in a couple of minutes. I am working on developing 100% same tool for MT4 which can just save time for the elderlies. It does not use
martingale trading . It uses Equity Stop Loss only when using mini grids with individual TP, staggered over a Range

For a major grid of say 50 pips or more, there is no need to use mini grids. Major Grid of Pending Order is used (instead of market buy or sell) for averaging up when Selling High and Buying Low. For averaging down when Buying Low and Selling High. It you set up 4 master grids at different price locations, each of 50 pips then you can average down or average up easily, exit at breakeven, or with profit locked, or loss taken, etc.

8. The bot has no capability of using any indicator to forecast or think to be in a position to trigger entry. Thanking has to be done by you. Very simple. This tool is made for traders who observe the chart and locate probably consolidation, sideways zones (for reactive traders) and Breakouts/breakouts (for trend forecasters).
The major advantage is Speed of execution of trades, Averaging up and down to help position management. Proft will be less, so also Loss.

9. After you modify the spreadsheet parameters, I will prepare a Risk Control Plan as is practised by professional traders working for funds and banks.

If you are using mini grids, simply use Reopen TP for continuous trading and many retirees have made 200 pips in a range of 50 pips range and in 20 minutes using margin needed for 50 pips distance (and not 200 pips) . Those retirees use Interactive Brokers and not MT4 platform. Please wait for the MT4 EA to be finished. If you have Interactive Brokers account, you can use their paper trading account and test it.

I have added another indicator which can help observe Strong Zones of Resistance and Support based on previous price movements.
The sole objective is to help Chart Observation rather than getting dependent upon the indicators to give signals. Indicators selected are the ones helping the eyeballs and facilitating the brain to decide when to enter.

Risk controls...ideas copied from the Rule Books of Professional Traders

In order to be a consistently profitable trader, follow a system and the rules focussing on:

Manage the Downside

Protect the profits

Reduce the risk

Following are the rules that are meant to instill good habits. Think of them as your ticket to consistent profitability.

Profit Targets are essential for achieving profitability and to show that your risk management is working.

You can set Minimum days for trading from 1 to 5 days maximum. Similarly set Maximum Best Day profitability to 25% in order to control your euphoria and emotions. Quit trading when 30% is achieved.

Profit Target: 5% or $500 for 10k equity margin

Best day profit Calculation: 10K Example: $500 Target ÷ 4 = $125 .

Set a Daily and Weekly Loss limit based on maximum days and maximum loss based on best day profit calculated.

For Day Trading set a daily limit for $125.

Set a Trailing Maximum Drawdown. Understand the difference between Account Balance and Equity, Margin% to figure out how to set a Trailing Maximum Drawdown.

Understand what is Buying Power. As you build or lose equity, your buying power will increase or decrease based on your end of day P&L.

Do not hold any positions into major economic releases.

Scaling is Important:

1. It acts as a guide on how to responsibly leverage a growing account
2. Over-leveraging causes the most damage to long-term success

Subscribed. Love what this thread has to offer.

Glad to see what you are doing here and I agree with alot ot the principles laid. Right now I have alot of good going on in my life (including trading). But when I can, I would show and post something from my production trading work/system.

Scaling up and Down using an auto trading utility

Look for an auto trading trades execution tool which works continuously when the consolidation happens even when you are increasing or decreasing trades

Use execution bot or utility to scale traders by using Order Types Buy/Sell Limits and Buy/Sell Stops. Pending Orders help you manage scaling very well.

Look for an execution utility which conducts trading during consolidation without deploying extra margins . It will reduce your losses in a big way if the utility has the algo to range between high and low for several times rather than just using it one time.

Examples:

When using Order Type Sell Limit to reduce losses. It should have a facility of liquidating trades and buying with profit frequently as against just selling a closing trade. Even when the trade is closed, it can continue to make profits and reduce the losses further without deploying extra margins as long as it keeps moving in the grid.

Similarly using Order Type Buy Limit to increase profits. It should have a facility of buying and selling with profit frequently instead of just buying and selling a single trade. It will help pile up more profits without deploying extra margins.

When using Order type Sell Stop to reduce trades, look for an algo trading bot described in the above two examples to keep cutting losses when the Sell stop trading is in consolidation stage.

Pyramid profits when trading breakouts, you may deploy same tool to increase profits when the breakout is in consolidation stage.

A live trade for Buy Limit (Buy Low on pullbacks and Sell High) done today using the machine (trading bot)

Two different views derived from Assumptions

What is trailing Drawdown? How does the Max Drawdown work?

Attached Image (click to enlarge)

It is a good trading practice to use the maximum DD is of the “trailing” type that is calculated on the top of the equity.

Example:

Starting balance of $ 10,000 means that at $9,600 you are in drawdown. $400 is your drawdown threshold.
If the account balance goes up to $ 11,000 it becomes the new threshold a trader can't go below is $ 10,600
The calculation is always done once the trade is concluded, the top equity is updated only at the end of the transaction and not on the free float.
It is a good practice not to allow , in any case, to exceed the maximum drawdown threshold of $400 with open trades.
Example: If the max drawdown of $ 400 is indicated in the step it is not possible to go to - $ 400 with an open (floating) position.
You should immediately liquidate the trades before it hits $400 drawdown.



The Excel spreadsheet is attached.

Just found my way here... man I love threads like this. Even if I KNEW it wouldn't help w/my trading, I'd still participate in these data threads.

I have read all of the thread, don't understand much, but am enjoying the discussion.

Just to derail the thread for a few moments, some similarly aligned thoughts.

For the past few weeks, I have mostly been trying to trade AWAY from an average or midpoint. If you can imagine something like a 200SMA on any chart... that would be waiting for the consolidation, and trading as price moves away from the SMA. Typically, I note I would always initiate as price is away from the SMA, in an attempt to trade back to the SMA.

So recently, I have been doing the OPPOSITE of the idea in the thread.

But to the data...
I have a basic trend indicator, it is either up, down or sideways. The indicator itself is not special, for now, just know its up/down/sideways. You can see this on the image with the red/green dots. Here, when the trend is defined, the dots show the horizontal price level on the chart.


As shown on the chart, on each occurrence, I measure the distance price moved ABOVE that line, and the distance price is BELOW that line. I have checked this over various time periods, #s of samples, different bar intervals, and ON AVERAGE... when the trend is up, there are TWICE as many uptics as downtics. The inverse is true when the trend is down. When the trend is zero, the number of uptics to downtics is about the same.

I can show you this in the image below. Here I'm just showing one example of H4 chart, EU with the uptrend. Also shown is the same data, but showing how the tics zero out when its zero.


The above ideas aren't enough for profit, but I have been using it as a big TF filter. It seems to be better to be long ABOVE that line, when the trend is considered to be up.



Another idea I have looked at was the time of day. Obviously, I was looking to try to trade as the ranges expanded.... but I wonder if the same could be used to find LESS volatile times?

Attached below is an image of an idea... this is nothing revolutionary. It simply plots the AVERAGE bar size for each 30 min, and you can see where the low volatility times occur. I wonder if this is the best places to trade the system shown by the OP.. as these are the less likely times to have wide range bars?




Even w/all the above, looking forward to the thread. Any ideas for data to post, pls let me know.

I appreciate your post and the methodology used by you for detecting ranges.

1. If it is ok with you, kindly share the trend indicator you are using for painting the big picture in terms of Up, Down and Sideways. That is what I am doing actually planning the trades manually by looking at the big picture mostly.

2. I am sharing the link for the data generated by using the spreadsheet generator indicator is on this link. As a rule, I always provide mql files of any indicator or EA which has been designed by me based on my real-time experience.

This spreadsheet has been very helpful in planning and executing trades . I can give it 50% of the share to my satisfactory way of trading to the statistics I gather in real time and for short-term trading and forward testing on demos.

https://www.forexfactory.com/thread/...2#post13940832

I don't know Excel. So a FF member coded this spreadsheet generator for the use of elderlies to collect basic data of OHLC and tick volumes mainly with the indicator facilitating printing of the summary data (in Text form for elderly traders like me), as well as Excel formatted spreadsheet.

An Excel expert gets all basic data needed . you can use filters, visuals and data sets using the basic M1 TF data and derive probability statistics relating to
(a) Up (d) Down (c) Sideways movements. FF prgrammer has provided a few filters and told me to find an Excel expert to get statistics which will be helpful in
determining the size of smallest TRADEABLE SIZE in terms of Pips based on thresholds inputs, HOT HOURS of trading, Trends lasting in MINUTES thresholds.

It facilitates measuring the price moves in terms of Points/Pips and Bars/Time.

He told me it can also facilitate measurement of frequency and duration for occurence of Breakout, Breakdowns, Pullbacks, Continuation, and reversals if proper filter in terms of thresholds are defined. His capability was to design a basic spreadsheet generator.

I am glad I have found in you a passionate data buff with Excel expertise. Thank you for the offer.

I might be a bit behind, as I do everything in NT. So most of my data exports will be produced from what I build in NT.

I rarely use MT4 for many things.

The indicators I don't mind posting, but they're all NT indies.

NT means what? Is it a software or trading platform?
How different is it from Excel ?
By the way, are you referring to Ninja Trader?

I also use Ninja Trader, MT4 and MT5 for analysing trades and designing trading system and ideas. With no Excel or any programming language knowledge, I just use them for watching price actions . I am totally incapable of programming any codes.

Trading Platform is Interactive Broker's . I use it because of lower trading costs, reliability, transparency, and providing a couple of patented trade execution tools.
One of the tools, Scale Trader, is the one I use for Sideways Trading.

If you can get the logic of Scale Trader fully copied and embedded in a Ninja Trader auto-execution tool, it will boost your trading. Or even in MT4 or MT5 EA.

It will be appreciated if you can post Ninja Trader indicator and auto-trading tools.
Thank you.

The Power of Observation

(using eyeballs and the brain) to locate Consolidation Zones with High Low range of 50 or 60 pips and the trader becoming a machine operator to start the trades execution tool.

Manual trading or posting Pending Orders is not required if you have a good machine or EA (for MT4).

Wanted a Scale Trading Coder

If any developer wants to program a trade execution utility - Scale Trader for use on MT4 or MT5 or Ninja Trader , I am willing to share my real trading experience with them and help design it with rules and explain the whole system.

Those wanting to develop it for generating signals as well to trigger trade entries are also welcome.