My fxStairs expert

Greetings to all visitors of this website. As for myself, I am 67 years old, I live in Hungary, and I enjoy challenges. If it's not a problem, I would like to open a forum to present my own trading system. I trust that sharing my perspective and experience can be beneficial to others... If it's possible, please allow it. Article writing is an ongoing process as time allows. Thank you for your understanding.

I would like to write about two of my experts here. One is an expert that helps with manual trading, and the other is a continuously running expert that uses a Gann indicator. I would like to put up a version of the latter that others can try if possible. Of course, I cannot release the source code as it took a lot of time and effort to develop, but anyone will be able to use it based on the instructions, whether on a live or demo account. I still have a lot of work to do, but I will try to find time to maintain and update my forum.

Regards, Yesicoster

Legal statement: I am not a financial advisor, and the content in the article does not appear as financial advice. The information provided in this blog post, as well as in other posts written by me and related materials, is for informational purposes only. It cannot be considered as any financial or investment advice. You should consult a financial or investment professional to determine what is best for your individual needs. Everything you read here is just my opinion, do whatever you want with it. What does this mean? This means that it is not advice or a recommendation to buy or sell anything! It is solely for informational or entertainment purposes.

I started dealing with the stock market about five years ago. In the first six months, I constantly sat in front of the computer and studied various methods, indicators, and models. At first, I traded with various currency pairs, but then I realized that trading with indexes is closer to me. Since I worked full-time, I wanted to create a trading expert that would assist me in my manual trades due to time constraints. Everything I'm going to write here is the result of my own experience. It should be known that we are playing with probabilities on the stock market. The stock market chart is the only objective reality that different people can have different opinions about. This is the freedom of opinions, where thoughts and explanations can develop depending on the point of view, which reflects the thinking of the person concerned, and these must be respected, and opinions should not lead to arguments.

The following year was spent on designing, writing, and testing various procedures for the expert. It was a rough period because the machines were running 24/7, and I had to perform countless analyses on the results, discarding unsuccessful or unusable procedures, models, and ideas. I suppose everyone knows the feeling that time just passes by and runs away - usable results are nowhere to be found. Nonetheless, this period was very instructive for me because I found out that if I don't want to sit in front of the computer all the time in the future, the best results can be achieved through range trading techniques on Renko charts and indices. To do this, all I need to do is check the chart a few times a day, manually adjust and install the expert at the given channels of my used indicators, and then I don't have to deal with it anymore, as it can operate independently until the closing time. As an interesting fact, although this expert is capable of continuous trading with various procedures, I myself prefer to see when I start a trading procedure. Generally, 9 charts are open, and I trade on them (SP500 index). I don't believe in money-making machines; I think it's important for a person to be able to see and understand the system they use and decide whether the given technical signals are suitable for opening a trade.

Just for the sake of interest, I'm posting here some screenshots that show how the expert is capable of trading independently. This time, the envelopes indicator is used to open trades. This trading runs on a renko chart, and the optimal envelopes period, channel size, TP distance, and multiplier (their ratio) are crucial to profitability. Together, they determine when and how profitable a single trading period will be. These settings were only found through extensive testing. In each trading period, one or more trades may be possible, and the result is closed with a profit. The expert uses a stop loss for every trade! It is important to have sufficient capital available to ensure the necessary margin. This setting works with a 1:20 leverage, but for safer and more profitable trading, it is best to run it with a 1:200 or 1:500 leverage, where the margin requirement is much lower. On the full chart, you can see the performance of the SP500 index over the last five years, with a leverage of 1:20. The number of trading periods is not high, and the timeframe is equivalent to the H4 timeframe. On the panel on the left side of the chart and in the statistical column below, all necessary information can be found, which may be important during trading.

There's no holy grail! During a single trading period, one or more trades are executed until the period is closed with a profit. Within that, there can be both losing and winning trades! The essence is that the result of winning trades exceeds the result of losing trades. The difference is the profit.

The foreign exchange market is an unregulated market, therefore the depiction of candlesticks on the charts provided by forex brokers may differ to a greater or lesser extent even for the same instrument (EURUSD, SP500, etc.). This means that when trading or testing a particular robot on the same instrument, different users may obtain different results.

I consider it important to note that there are numerous robots and I have great respect for those who design, create, and trade with various types of robots. For me, the primary goal of my expert function is to preserve capital and, if possible, to open trades in a way that increases the amount of capital. There are a thousand different solutions, countless robots exist, and my expert - in continuous robot mode - is not even the best or most profitable, but it provides a calm, balanced, and secure trading opportunity. However, I prefer to manually adjust my trades and only entrust the execution to the expert. I do not use the fully automatic robot function.

The following image shows the continuous automated trading of the SP500 index between April 25, 2018, and March 5, 2021. The trading is consistent and depends on the settings ratio, which I found only after testing it thousands of times. I am presenting this feature only as an example to show that the expert is capable of independent trading based on an indicator, generating profits with low risk, but I don't use this function. I only use the expert to manually set it up and start it based on signals from other indicators, and then leave it alone until it closes with a profit. This way, I can open many more trades and earn much more.

The following image shows the continuous robot trading of the SP500 index between April 25, 2018 and December 31, 2022, using the envelopes indicator as an example. The trading is consistent and depends on the settings ratios, which I only found after testing thousands of options. This is just an example that it is possible to create robots that can achieve consistent results on a selected instrument (not just the SP500 index). It is important to remember that the foundation of forex trading is learning, monitoring processes, technical analysis, and last but not least, proper money and risk management, taking into account capital and margin requirements. In my opinion :-)

In this case, the starting capital is 5000 EUR, the starting trade size is 0.10 lot, and the largest lot size encountered is 1.10 lot. The net profit is 751.47 EUR. The maximum drawdown is 67.90 EUR. The sum of the largest drawdown and the largest margin requirement is 280.93 EUR. In each trading period, the trade becomes profitable after opening the seventh trade at the latest (in only 4 out of 163 cases), with an average closing level of 2.33 trades, meaning that a total of 381 trades were opened in 163 trading periods. As you can see, this trade did not require a capital of 5000 EUR, only a maximum of 500 would have been sufficient, and even that would have easily covered the required deposits and drawdowns.

After this brief robotic detour, I will continue by saying that since I worked full-time, I wanted to create a trading expert that would assist me in my manual trades due to time constraints. I was able to accomplish this, so soon I will discuss how to effectively use it in everyday life.

A few lines from something I read came to mind...

A few years ago, I read the following somewhere: "Who cares if the average Joe doesn't know how to trade on the stock market? People also gamble in casinos and they know that the odds are against them. People don't lose money in forex because it's too complicated, but because most people don't want to learn boring math and statistics to understand money and risk management. They just want excitement and to get rich quick, they have the wrong attitude, that's why they fail. No one asks them why financial institutions and banks employ people with advanced degrees in mathematics, finance, and computer science for their trading systems if trading is so simple. Trading is not rocket science, anyone can learn it, but they have to be willing to learn! And many people are not willing to do so."

SP500 index - START

To have something current to talk about, based on the signals, it seems worthwhile for me to set up a trade on the SP500 chart and let it run. This is a manually set up and started trade! Normally, I will close the trade at twice the channel size, but if I happen to be in front of the computer and see that there is a chance for more profit than the initial target, then I will simply adjust the TP line in the appropriate direction. I never sit in front of the computer, but if I happen to be here and see that there is more profit to be made, I don't skip it.

This live account is denominated in Hungarian forints (HUF), but it is perfectly suitable for demonstrating a trading process. Since this is a renko chart, it is not possible to know in advance how long this trade will take to complete, but the buy/sell lines have now been added to the chart, and the expert will take care of the rest. On the HUF account, the leverage is 1:20, while on the EUR/USD account with leverage of 1:200 or 1:500, significant profits can be achieved with lower margin. Let's see how it goes... (H4 periods, Renko chart)

1. pictures 2023.04.03,

2. picture 2023.04.10,

3. picture 2023.04.10, 14:35

4. picture 2023.04.11, 07:53

I like it. Thanks, and please keep going on.

Looking on with interest, good luck

SP500 index - As I see it, we need to be patient as we haven't reached the end yet. We started with 0.10 lots on April 3rd, 2023. As you know, there can be multiple trades in each trading cycle before we close with a profit. This trading cycle is currently at the 5th trade, with 0.5 lots. I think we're on the edge, as it only needs to go twice the height of the channel to become profitable. If it goes up or down further, I can increase the profit level by moving the TP line. If I'm sitting in front of the computer... So far, I've closed with a profit at most on the seventh trade in a trading cycle, but even if it goes beyond that, it's not a problem because there is enough money in there. The dashed yellow line indicates the price level where the trade becomes neutral. The red or green number in the bottom right corner shows the total balance of the trades currently running on the chart. Let's see how it goes.

4. picture 2023.04.13, 16:12 (This trading cycle is currently at the 5th trade, with 0.5 lots.)

5. picture 2023.04.14, 16:15 (This trading cycle is currently at the 6th trade, with 0.7 lots.)

Yesicoster,

Congratulations for your achievement!!

Indeed, you made a nice integration of reliable components, which could be done only by researching, observing, studying, testing, learning and most importantly "by using common sense". Very well done!!
Which are your favorite time frames? H1 and H4 only?
Are you using the Donchian channel (white color on the chart)?

Success and green pips to you!

SP500 index - The trading cycle is still ongoing. However, one of the nightmares of traders happened to me that has never happened before. My laptop, which runs the trades, simply froze due to a Windows update. I waited for hours hoping it would recover on its own, but it didn't! I had no choice but to restart the computer and reconfigure the previous trade. I don't understand why this could happen since the computer has been running for five days a week for two years without any problems. But since this has happened to others, I suspect that there might have been something wrong with the update. After all, it's not worth worrying about it because it's just part of the risk. Just like the internet can go down for hours, I assume it has happened to others as well... So now I have reconfigured the same settings again. Six trades have already been opened in the current trading cycle, and I'm curious to see when it will end...

I'm not continuing this new setting with 0.7 lots because I'm afraid of another freeze (I will reinstall Windows at the end of the week), but only with 0.2 Lot. The main thing is whether it will close with a profit at the 7th trade or not? There are two possibilities. The trade will close at either 4200 or 4050. Of course, if I am in front of the computer and see the opportunity for greater profit, I will manually move the TP line.

6. picture 2023.04.20, 20:56 (This trading cycle is currently at the 6th trade, with 0.7 lots.)

Thank you for your opinion. Due to Renko, I trade on the H4 timeframe. I should note that I think about profits in forex differently than usual, as if I were putting my money in the bank at x % interest. This way, trading can be done calmly and safely. Using this approach, the capital used for trading can generate a minimum of 100% profit annually. For each trade, I only risk the amount of capital that covers the statistically necessary margin and drawdown. I do not recommend this mindset to anyone, as it requires a high level of discipline during trades. Not everyone can tolerate this psychologically.

SP500 index - On this day, as I had anticipated, the closing took place, and I was able to close with a profit at the seventh trade at most within one trading cycle. Despite encountering some issues due to a Windows freeze during this trading cycle, the trading process was still visible.

7. picture 2023.04.26, 23:06 (This trading cycle is currently at the 6th trade, with 0.3 lots.)

Hi yesicoster, what is your next step? I try to understand your path of thinking. Thanks, great work.

I was on vacation so I couldn't write here. As for the continuation? It depends on who likes what. I open trades on channels where I receive support and resistance signals, or where I see envelope crossovers within the channel. Right now, for example, I placed the channel buy line at the 4110 price level and the channel sell line at the 4080 price level.