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2006 Automated Trading Championship

  • #21
  • Nov 21, 2006 11:58am Nov 21, 2006 11:58am
Quoting vder
Just curious if anyone else has been monitoring the championship. I find it intriguing, not to mention, when I take a closer look at their trades! Some of them have huge stop losses. I was shocked to see that some of them have 70-100+ pips as a stop loss! is this normal? I usually have mine set to between 40-50 pips.
Don't think that because an automated program does well with 100 pip stop that you should change yours to 100 pips. I hope you weren't implying this.
  • #22
  • Nov 21, 2006 12:10pm Nov 21, 2006 12:10pm
ROFL....no way. The good thing about automation is that it can close orders while one is away or while one sleeps. No way would I consider changing my stops to 100+ pips lol. Thats too much risk for me to handle. However, I just wanted to know if this was a normal practice for traders. Would stops like this be used on bigger time frames such as daily and weekly?
  • #23
  • Nov 21, 2006 12:17pm Nov 21, 2006 12:17pm
Sometimes stoplosses can be quite detrimental to a system. I and my partner have developed a system that doesn't use a stoploss. Currently we are managing a $600k account and in 13 days of trading we are up $80k+ no stoploss. btw - on a 15 min TF...
  • #24
  • Nov 21, 2006 12:23pm Nov 21, 2006 12:23pm
Quoting vder
Would stops like this be used on bigger time frames such as daily and weekly?
Yes. Generally speaking shorter time frame intraday stops can be 20-50 pips give or take. When you move up to higher intradays, like the 4hr, your stops can be 100 or more. Daily and weekly are even more, and can reach several hundred pips. This isn't a guildline or anything like that, but yes, stops can be much more than 100 pips. Remember someone that uses a 20 pips stop can risk just as much as one who uses 200 pips.
  • #25
  • Nov 21, 2006 12:26pm Nov 21, 2006 12:26pm
I agree that stoplosses are very detremental. Stoplosses should be put where if the price goes, then your prediction about the future is not correct, however most people just choose an arbitrary number like 20 or 40 pips depending on the amount of reward they think they can get or level risk they can stand. But even if stoplosses are put in their correct place, they don't work well, because even if the price just spikes down to the level of the stoploss, your trade closes. But is a spike a true reflection of where the price really is? I belive it a much sounder policy to use other elements, such as ma lines or other indicators crossing at 0 to indicate when a price has moved to far.
  • #26
  • Nov 21, 2006 12:27pm Nov 21, 2006 12:27pm
I'm following hendrick. On a daily chart, a 100 pip stop loss isn't that big. When you're dealing with a day's worth of trading, you really have to allow for the market to move.
So far so good.
  • #27
  • Nov 21, 2006 12:32pm Nov 21, 2006 12:32pm
no stoploss, no indicators, running purely on price action money management.
  • #28
  • Nov 21, 2006 12:33pm Nov 21, 2006 12:33pm
Quoting don_forex
Sometimes stoplosses can be quite detrimental to a system. I and my partner have developed a system that doesn't use a stoploss. Currently we are managing a $600k account and in 13 days of trading we are up $80k+ no stoploss. btw - on a 15 min TF...
very true
Egyptian and proud of it!
  • #29
  • Nov 21, 2006 1:13pm Nov 21, 2006 1:13pm
  •  iya
  • | Joined Oct 2006 | Status: always protect yourself | 129 Posts
Some don't use any SL at all (sashken). I think the shorter the contest, the more it'll be like gambling.

It's also interesting to look at the average performance, only the first 50 of >250 are profitable at all.

On a related note: Did somebody enter the FxSol contest? It was only one week, and I turned the $10,000 into $16,229 so I can't wait for the winners!
  • #30
  • Nov 21, 2006 1:21pm Nov 21, 2006 1:21pm
In the bad old days of 20+ years ago, I did not know about using stop losses. Oh, I knew they existed but it never occurred to me to use them.And actually I did very well. In fact, I did far better using paper and pencil (price action) with no computers and no indicators to speak of AND NO STOP LOSSES than I have recently. I have recently returned to forex and decided to try all the new things available.

I evaluated the results of my trading, which were very poor, and decided to find out why. The conclusion I came to a few weeks ago is that if I put almost any kind of a reasonable stop loss, unless it was over 100 pips, I got kicked out of many trades which were sound and subsequently to hitting my stop loss then proceeded to turn around and would have provided me a splendid profit in most cases.

The moraol of the story is that I have simplified my trading and done away with stop losses--even when I am away from my computer. The results of my trading have improved miraculously, although I will admit to sometimes having impressive drawdown.

The onoy time I am now using stop losses is to protect my profits when I have already earned enough pips to satisfy me. More would be better but I would be satisfied with the amount at the spot I put the stop loss. If my stop is hit, I can reenter the trade if I still think it is viable, and usually at a better entry than where my stop was hit.

As long as you are trading with the trend, or if you are trading in the middle of the range in a range bound market, there is very little risk as long as you have sufficient margin and sometimes a great deal of patience. It also helps if you are trading with a positive rollover, just in case you have to hold the pair for a while, which sometimes happens.

In fact, if your stops are hit in quite a few trades, this is far more damaging to your account than having no stop loss (or a ridiculously large one). Even small losses from stops being hit mount up and become serous money losses. Other than not having sufficient margin (or patience) the only real risk is getting caught on the wrong side of a trend turnaround. But, honestly these do not occur very often and usually we have been expecting it to occur for a long time before it occurs, so we should be exercising caution under those circumstances.

I am an extremely cautious person and rarely jump without checking what I am getting into several time. Despite this, I have decided that stop losses are the creation of the brokers in order to assure themselves of a steady flow of income.
  • #31
  • Nov 21, 2006 1:31pm Nov 21, 2006 1:31pm
  •  iya
  • | Joined Oct 2006 | Status: always protect yourself | 129 Posts
Moonchild, if you don't use a stoploss, when do you exit a loosing trade?

There is a difference between not using a stoploss and letting loosers run infinetely.

Almost all the mechanical eperts I have programmed worked best without any SL. Then again, one of the first ones almost blew my account, when hitting a long trend in the wrong direction.
  • #32
  • Nov 21, 2006 1:59pm Nov 21, 2006 1:59pm
Just wanted to say thank you to Hendrick for posting the ea he is using in the contest

Keep up the good work.....
Same Whore .... Different Dress
  • #33
  • Nov 21, 2006 2:24pm Nov 21, 2006 2:24pm
Quoting don_forex
Sometimes stoplosses can be quite detrimental to a system. I and my partner have developed a system that doesn't use a stoploss. Currently we are managing a $600k account and in 13 days of trading we are up $80k+ no stoploss. btw - on a 15 min TF...
thanks for sharing - i suppose you are watching trades all the time?

its too boring 4 me but cable can spike 40-60 pips in a minute and then be back... and yes its true SL more often than not work against me in such a situation

BTW congrats... over 10% live on a large account in 13 days.. hats off...

have a great day..
Quidquid latine dictum sit altum viditur
  • #34
  • Edited 7:34pm Nov 21, 2006 2:36pm | Edited 7:34pm
Quoting iya
Some don't use any SL at all (sashken). I think the shorter the contest, the more it'll be like gambling.

It's also interesting to look at the average performance, only the first 50 of >250 are profitable at all.

On a related note: Did somebody enter the FxSol contest? It was only one week, and I turned the $10,000 into $16,229 so I can't wait for the winners!
did you see that one guy who did over 800% in one week. so he started with $10,000 he turn that into $91,000 in a week.
If I Go Broke Trying Then I Will die happy.
  • #35
  • Nov 21, 2006 3:21pm Nov 21, 2006 3:21pm
Quoting iya
Moonchild, if you don't use a stoploss, when do you exit a loosing trade?

There is a difference between not using a stoploss and letting loosers run infinetely.

Almost all the mechanical eperts I have programmed worked best without any SL. Then again, one of the first ones almost blew my account, when hitting a long trend in the wrong direction.
The first question is: What constitutes a losing trade? By my definition, the only losing trade is one which is going against a momentum change. Otherwise I believe in exercising patience and my margin, which sometimes gets quite a workout.

You can define a losing trade as one which is -10 pips or -100 or -200. It is all in the definition of the term "losing trade." It all really comes down to how much patience you have and how much drawdown you are willing to accept. Honestly, I have almost never ended up in a trade where it did not turn my way within 200 pips, although sometimes due to stop losses I was no longer im the trade due to my stop loss getting hit.

My back testing, basically looking at my lost trades, has showed me that my losses were directly the result of my having used stop losses. I would have had one losing trade if I had not used stop losses and it would have cost me 200 pips+, although I would have gotten out at that point because I would have realized by then that the trend had turned around. As it is, I lost FAR more than pips than that, the only difference being that instead of being in one large lump it was in a large number of small packets. I will not admit how many losing trades I had and at 20 tp 30 pips stop losses each, you can just guess how much I lost.
  • #36
  • Nov 21, 2006 3:29pm Nov 21, 2006 3:29pm
Quoting moonchild


The first question is: What constitutes a losing trade? By my definition, the only losing trade is one which is going against a momentum change. Otherwise I believe in exercising patience and my margin, which sometimes gets quite a workout.

You can define a losing trade as one which is -10 pips or -100 or -200. It is all in the definition of the term "losing trade." It all really comes down to how much patience you have and how much drawdown you are willing to accept. Honestly, I have almost never ended up in a trade where it did not turn my way within 200 pips, although sometimes due to stop losses I was no longer im the trade due to my stop loss getting hit.

My back testing, basically looking at my lost trades, has showed me that my losses were directly the result of my having used stop losses. I would have had one losing trade if I had not used stop losses and it would have cost me 200 pips+, although I would have gotten out at that point because I would have realized by then that the trend had turned around. As it is, I lost FAR more than pips than that, the only difference being that instead of being in one large lump it was in a large number of small packets. I will not admit how many losing trades I had and at 20 tp 30 pips stop losses each, you can just guess how much I lost.
so do u not use stop losses any more? if not how long are u in bad trades meaning that the pips are negative ? on average how long do u wait?
Ghost Swoopen in for my pips while no one is lookin !!
  • #37
  • Nov 21, 2006 4:32pm Nov 21, 2006 4:32pm
No, I am basically no longer using stop losses. I limit stop losses to protecting profits I alteady have on the platform.

I look at parallel and opposite pairs to help me determine when a trend change has occurred, although they are rare. Mostly I use price, patterns, minimal use of indicators, such as slow stochastic and BB sometimes, if price alone is not sufficient. Some common sense and logic is also extremely helpful. Often I will indulge in bidirectional trading which works incredibly well when you have high volatility. It even works well, if more slowly, when there is low volatility but no strong trend.

As I said, the reason I stopped using them was because my back testing of my losing trades showed that they would have all been profitable, except 1 of them, with a drawdown of less than 200 pips. Most of them had drawdown of less than 100 pips. My 1 losing trade would have been a short of the Kiwi last spring when it reversed its downtrend into the uptrend it has been in since.

Believe me when I say that even if I had held it for a 200 pip loss it would have been a lot less than the total of all the stop losses I lost. 20 or 30 pips at a time do not sound like much but it mounts up to very large numbers very quickly when you get stopped out over and over. My account is a graphic example of that. Now that I am again trading without stop losses, my account is building up again at a very rapid rate. My experience of stop losses is that they are the fast route to the poorhouse.
  • #38
  • Nov 21, 2006 5:03pm Nov 21, 2006 5:03pm
Ironically, I am a truck driver by profession. So, no, I do not get to watch trades all the time, yet... That is why my partner and I created an EA. Keeps everything automated, mechanical and emotionless.

We LOVE seeing big spikes like that! Nothing like making 5-10k in a matter of a minute.



Quoting dottore
thanks for sharing - i suppose you are watching trades all the time?

its too boring 4 me but cable can spike 40-60 pips in a minute and then be back... and yes its true SL more often than not work against me in such a situation

BTW congrats... over 10% live on a large account in 13 days.. hats off...

have a great day..
  • #39
  • Nov 21, 2006 5:52pm Nov 21, 2006 5:52pm
Quoting Moe
did you see that one gut who did over 800% in one week. so he started with $1,000 he turn that into $81,000 in a week.
Moe you've got a typo in there somewhere... either you forgot a 0 or you have an extra one. $81k would be an 8000% return.
  • #40
  • Nov 21, 2006 7:30pm Nov 21, 2006 7:30pm
Quoting ycomp
Moe you've got a typo in there somewhere... either you forgot a 0 or you have an extra one. $81k would be an 8000% return.
should of been $10,000
If I Go Broke Trying Then I Will die happy.
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