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Attachments: DHR - Daily Half Range Strategy
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DHR - Daily Half Range Strategy

  • #41
  • May 12, 2023 5:43pm May 12, 2023 5:43pm
Hello All,

I'm trying to learn this strategy. Thank you @ronin, @erebus and @cpfleger for all the inputs.

I'm trying to run this indicator on backtest and it's little different to what you guys have on chart.

Is this the right way to do it.

Thank you for your help! much appreciated
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  • #42
  • May 12, 2023 6:42pm May 12, 2023 6:42pm
Quoting mohsheen
Hello All, I'm trying to learn this strategy. Thank you @ronin, @erebus and @cpfleger for all the inputs. I'm trying to run this indicator on backtest and it's little different to what you guys have on chart. Is this the right way to do it. Thank you for your help! much appreciated {image}
Every tick + visual mode = you will be there all day

Use the close

It's not an EA is it?

Be just as easy to scroll back and visually check this last week

I set up the Fibonacci Tool to do the measurement; here is AUDUSD on Friday

Broke below Thursday low, and we know the NZD was getting whacked.

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It takes a lot for me to IGNORE you, but you can try.
  • #43
  • May 12, 2023 8:18pm May 12, 2023 8:18pm
Updated DHR Line indicator v5

As requested ATR target is percentage of daily ATR(10). Obviously the target must be more than 50% ATR.
Attached File(s)
File Type: ex4 Daily Range Half Line v5.ex4   28 KB | 373 downloads
  • #44
  • Edited May 13, 2023 8:43am May 12, 2023 8:41pm | Edited May 13, 2023 8:43am
Simple DHR Scanner. However this is not part of the method. The method is NOT to chase pips; like a dog chasing cars.

In this method every part is rule based even the take profit.

The scanner will not be developed further, it was coded in kind by me.

Attached File(s)
File Type: ex4 DHR Scanner v1.ex4   10 KB | 345 downloads
  • #45
  • May 12, 2023 9:46pm May 12, 2023 9:46pm
Quoting Erebus
{quote} Every tick + visual mode = you will be there all day Use the close It's not an EA is it? Be just as easy to scroll back and visually check this last week I set up the Fibonacci Tool to do the measurement; here is AUDUSD on Friday Broke below Thursday low, and we know the NZD was getting whacked. {image}
Thanks mate !

yeah not an EA using it as an indicator for back testing.
  • #46
  • May 12, 2023 9:52pm May 12, 2023 9:52pm
Quoting mohsheen
{quote} Thanks mate ! yeah not an EA using it as an indicator for back testing.
Only indicator at present time please. The markets are currently on the move so everything looks great and profitable if positioned correctly.

Need to wait and see what happens when volatility decreases and price confined to narrow range. Then the methods value will be known.
  • #47
  • May 13, 2023 9:48am May 13, 2023 9:48am
Quoting Ronin-
Updated DHR Line indicator v5 As requested ATR target is percentage of daily ATR(10). Obviously the target must be more than 50% ATR.{file}
Price is moving upward and below price we have formed a temporary daily low.
Now price moved half of ATR(10) from above low of the day.
We enter a buy.
Price reverses after the entry.
It hits our SL and form a new daily low.
We wait for next day.

If TP was 5 pips and SL was 30 pips than we lost 6% of account.
Am I interpreting correctly you strategy?
Thanks
  • #48
  • Edited 2:08pm May 13, 2023 11:06am | Edited 2:08pm
Quoting Merka
{quote} Price is moving upward and below price we have formed a temporary daily low. Now price moved half of ATR(10) from above low of the day. We enter a buy. Price reverses after the entry. It hits our SL and form a new daily low. We wait for next day. If TP was 5 pips and SL was 30 pips than we lost 6% of account. Am I interpreting correctly you strategy? Thanks
Thanks for the feedback Merka.

Yes. There are two ways of trading to my knowledge, but probably others:

1) A good risk to reward ratio for each trade. e.g. SL = 5 pips, TP = 10 pips. This requires finding an entry point where this ratio is possible. This can be difficult to find, otherwise we would all be on the beach by now.

2) Find an entry point where TP is reached significantly more times than SL and use trade management for losses.
For example: https://www.forexfactory.com/thread/...o-trade-simple , where an SL is not used.

For this method I use a TP of 20 pips, so takes 4 trades to recover; without trade management. The TP and SL will need to be emperically determined for each. At the moment I have only focused on EURUSD.

Trades hitting SL are limited using time restrictions, like only trade between 9am - 4pm for example and now potentially price relative to previous day high and low.

My experience with this method trading live is that their is only ever one trade reaching SL in a row and that significant more trades reach TP. Out of 63 trades, SL was reached 7 times (10%) as seen in graph below. After the trade reaching SL, I have doubled the lots on the next trade. I don't particularly like trading this way, for obvious reasons, but the evidence suggests it is feasible; so far only ever one losing trade in a row (this may change in the future). This method recovers SL trade in two trades.

I think there are further improvements to be made.... I hope that answers your question.

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  • #49
  • Edited 11:35am May 13, 2023 11:19am | Edited 11:35am
Quoting Ronin-
{quote} Thanks for the feedback Merka. Yes. There are two ways of trading: 1) A good risk to reward ratio for each trade. e.g. SL = 5 pips, TP = 10 pips. This requires finding an entry point where this ratio is possible. This can be difficult to find, otherwise we would all be on the beach by now. 2) Find an entry point where TP is reached significantly more times than SL and use trade management for losses. For example: https://www.forexfactory.com/thread/...o-trade-simple , where an SL is not used....
Thanks
guess you have an EA for your strategy.
Did you managed to backtest over 5 or 10 years of data?
You said 1 SL in a raw but do you know on average how many TPs in a raw?
  • #50
  • Edited 2:21pm May 13, 2023 1:11pm | Edited 2:21pm
My preference is for rule based methods that remove human emotion and intuition, therefore can be measured, henced expert advisors.
Yes I will find the results. On live trading it is 17 consecutive wins, 1 consecutive loss in a row. The average consecutive TP Trades is ~3-5.

The main reasons for losing trades are:
1) Pullback in trend too deep and hits SL
2) Decreasing Daily ADR and therefore 50% ADR is just at the limit of the potential current days ADR, price goes just beyond 50% ADR and than retreats.
3) Price goes just beyond 50% ADR, hits resistance and retreats.
3) Spikes in price due to random events / news etc..
4) Time filter causes trade to occur at less favourable price and reaches Sl first.

Given the reasons for SL trades is mostly known (maybe other random causes), these events can potential be addressed by filtering in some cases to improve trades reaching TP.

Currently looking at Previous day high and low for example.

The EA will potentially be shared once some of the issues are resolved.
  • #51
  • May 13, 2023 4:08pm May 13, 2023 4:08pm
Hi Ronin,

interesting strategy in intraday...
why not to take profit and stop loss based on adr ?
like you entry on 50% of adr from high or low current session, why not to definite 55% of adr (an example) and 25% of adr (another example) like stop loss. In this case you will get TP and SL movable from situation of the market.
  • #52
  • May 13, 2023 4:33pm May 13, 2023 4:33pm
Quoting js497
Hi Ronin, interesting strategy in intraday... why not to take profit and stop loss based on adr ? like you entry on 50% of adr from high or low current session, why not to definite 55% of adr (an example) and 25% of adr (another example) like stop loss. In this case you will get TP and SL movable from situation of the market.
Ronin has explained his strategy quite well in the thread and has been very accommodating with suggestions to improve the indicator.

He did in fact add adjustable Profit Targets based on ADR percentage in the latest indicator update, in case you missed it -

https://www.forexfactory.com/thread/...7#post14424817

As for Stop Loss, risk management is up to each trader, use whatever suits you.

It's an indicator not an EA so specifying a SL is getting ahead of the game right now.

Good Luck
It takes a lot for me to IGNORE you, but you can try.
  • #53
  • May 13, 2023 5:06pm May 13, 2023 5:06pm
Quoting Erebus
{quote} Ronin has explained his strategy quite well in the thread and has been very accommodating with suggestions to improve the indicator. He did in fact add adjustable Profit Targets based on ADR percentage in the latest indicator update, in case you missed it - https://www.forexfactory.com/thread/...7#post14424817 As for Stop Loss, risk management is up to each trader, use whatever suits you. It's an indicator not an EA so specifying a SL is getting ahead of the game right now. Good Luck
Oh i see, it was a suggestion from myself, and like im using my own on another platform, so i havent checked the mt4 version. Sorry :-) .
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  • #54
  • Edited 6:36pm May 13, 2023 5:46pm | Edited 6:36pm
Quoting js497
{quote} Oh i see, it was a suggestion from myself, and like im using my own on another platform, so i havent checked the mt4 version. Sorry :-) . {image}
Agree TP and SL are up to the trader. I can only state my findings from back testing and live testing.

The picture provided is of interest as it demonstrates my point about the 5 pip target. On the 10 mia (May), it can been seen price drops below the 50% ADR mark than met resistance at previous day low and price did a u-turn. The 5 pip target was reached.

On 11 mia (May), there was room between 50% ADR and the previous day low. Price had room to move. The 5 pip target was reached.

On 12 mia (May), the 50% ADR was approximately at the previous day low and price initial met resistance and was able to over come the resistance. I traded this move as documents in the thread. The 5 pip target was reached.

The above demonstrates price may be rejected at the previous day low or might be able to over come it. This is why testing has shown a 5 pip target is the less stressful option in my opinion.

At present the markets are on the move, which makes the DHR method look good. Experience has taught me that next week may be a different story.
  • #55
  • Edited 8:22pm May 13, 2023 7:58pm | Edited 8:22pm
There are continuing questions around ADR percentage choice. So lets take a pause from DHR line trading for a moment.

Given the purpose of this forum is to crowd peer review a method lets test which ADR percentage level and time restriction is best for trades.

Please restrict your testing to eurusd 15M and post results with setting so we can decide.

Find attach an expert advisor with the option to choose the ADR % level the trade is taken at for buy and sell trades.

Normal TP and SL criteria apply in this first version with no added trade managment. Time restriction is provided as used in DHR line trading

Please use the TP(5) and SL(20) of the DHR method for testing so we can compare results in the first round.

The ADR is Daily ADR(10) as per the DHR method.

This expert advisor is provided for testing purpose only using MT4 backtester and NOT demo and/or live trading. That would be very very foolish!

Attached File(s)
File Type: ex4 Percentage Daily ADR EA v1.ex4   119 KB | 269 downloads
  • #56
  • May 13, 2023 8:29pm May 13, 2023 8:29pm
Inital testing:
EURUSD 15M Chart
TP (5) SL (20)
No time restrictions
Suggests a sweet spot around 65% ADR.
Tested for this year only.


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Please post your results as shown above. Thank you.

Not surprised, as just past 50% ADR mark which tends to be the previous day low / high and S&R.
  • #57
  • May 13, 2023 9:37pm May 13, 2023 9:37pm
Inital testing:
EURUSD 15M Chart
TP (5) SL (20)
No time restrictions

Tested from 1st January 2021 till date
Account blows as on 16th December 2022

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.
  • #58
  • Edited 7:16am May 14, 2023 1:52am | Edited 7:16am
Quoting max pain
Inital testing: EURUSD 15M Chart TP (5) SL (20) No time restrictions Tested from 1st January 2021 till date Account blows as on 16th December 2022 {image} {image}
Thanks for the contribution.

Please see article in link to understand why this back test is not valid. https://www.mql5.com/en/blogs/post/747844

For example: https://www.forexfactory.com/thread/...g-inaccuracies

This is not to say the same result would not occur on accurate data.

The data needs to be at a minimum 90% accurate in my experience. However most testers require the data quality to be 99.9%.

I don't believe in 10 years of back testing as the market can change shape so much. Would anyone just leave an EA running for 10 years without altering its design???? Some traders optimize there EAs monthly etc so they stay relevant. Not saying I want to do that.

I prefer 1-5 years back testing and then live testing. This is my preference. The crowd may not agree.

Please find articles online to understand how to accurately test strategy with mt4 tester.

Also note the below from IG Broker for example:

The risks of backtesting

  1. Past data isn’t necessarily a good predictor of future market behaviour, so no strategy can guarantee accuracy
  2. You may be tempted to refine a model so that it best fits historical data, without accounting for the fact that future conditions may be different
  3. Past datasets may be skewed due to an adverse market event or uncharacteristically positive sentiment
  4. Insufficient datasets will likely produce models that do not account for a wide variety of market conditions
  5. A trading strategy that works well on several datasets from one market (eg forex) may not work well in another market (eg shares)
  6. Strategies that tested well in a bullish market may not perform in a bearish environment, and vice versa

Back testing is a huge topic and is not the purpose of this thread

  • #59
  • May 14, 2023 7:21am May 14, 2023 7:21am
Quoting Ronin-
{quote} Thanks for the contribution. Please see article in link to understand why this back test is not valid. https://www.mql5.com/en/blogs/post/747844 For example: https://www.forexfactory.com/thread/...g-inaccuracies This is not to say the same result would not occur on accurate data. The data needs to be at a minimum 90% accurate in my experience. However most testers require the data quality to be 99.9%. I don't believe in 10 years of back testing as the market can change shape so much. Would anyone...
Point taken... will do the needful to see if the result changes
.
  • #60
  • Edited May 15, 2023 7:17am May 14, 2023 7:29am | Edited May 15, 2023 7:17am
Quoting max pain
{quote} Point taken... will do the needful to see if the result changes
No worries. Trading is a very complex subject and we are all trying to be a Doctor of Philosophy (PhD), of the subject. I'm still learning; otherwise I would be on the beach or doing something else by now!

Try eyeballing the test results. On a number of occassions I found the trade on the tester was not taken at the correct place according to live data. On one day the daily low from the tester was something like 1.06440 and the actual daily low was 1.06873. The data quality was above 90%. And sometimes when the test is re-run a different result is obtained.

So I do not put too much faith in back testing. It is complex and time consuming to get 99.9% data quality in mt4 tester. Some traders prefer forward testing only by demo account and live trading.

I added the expert advisor so some testing can be undertaken without distracting from the method presented in this thread. This year the DHR line method based on the rules has been profitable so far..

However as always this thread is for educational purposes only and is not a recommendation / endorsement etc..... to trade the method presented.
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