Re-igniting Dancingphil's ZigZag strategy

From your stats here's where my attention goes:


So basically when you open a trade:

1. If it was a winner you would measure on average a drawdown of 4.1
2. If it was a loser you would measure on average a drawdown of 8.4

But the most interesting thing: losers on average runup 5 pips. So here's come my question, could you post statistics for a strategy that:

1. Set buy limit 5 pips above donchian upper channel / sell limit 5 pips below donchian lower channel
2. Trailing stop 5 (4.1 is more precise but I'm accoutning for some deviation) pips (hope you see the reason behind the use a trailing stop: it's like using new donchian breaks as reference point for calculating if the new break will be a loss or win. Sorry if that does not makes sense, I can try to explain better).
3. Obviously, never 2 trades opened at the same time.

You created a strategy for the sake of collecting statistics regarding zig-zag, this suggestion of mine is a strategy that uses those statistics and take/manage trades in logic like: "new donchian break: will it be a winner or loser? If price rise 5 pips witout decreasing more than 4 pips, then likely a winner with a potential win of 27 pips. If price rise more than 5 pips I open trade. Trade opened 10 mintues ago (example) price is consolidating but it did not went more than 5 pips on the opposite side. Now price creates a new donchian break, I'm still on the trade but it's like I'm inside a new signal/trade so, again, if trade goes 5 pips opposite direction from new donchian then most likely I'm inside a loser trade, so rise/lower the stop 5 pips below/above donchian max/min."

I know I typed two times the same thing, I'm a bit in a hurry + eniglish isn't my main language. Just wanted to make things clear

Let me know if you find this interesting enough to code it.

... on a side note, why you're still on windows 98 ?

Regarding the nested ZigZag setup: It's important to trade only the first 1-2-3 trade of the inner ZigZag. The win rate of the first 1-2-3 pattern is significantly higher than the rate of consecutive patterns. In other words: if you trade a consecutive pattern you essentially trade the same signals as OptoJay did with his 1-2-3 EA, with the known results. You may have luck or you may not.

Calculate your lotsize accordingly so size of the breakout pattern doesn't matter: same PL no matter the size of the pattern.

Currently I'm working on something very similar to your proposal.

My intention for the ZigZag EA was a bit different. I was aware that an "always in the market" setup can't be profitable. But I can see an interesting pattern: Whenever ZigZag produces some losers in a row, it's only a question of time until the next breakout extends exactly to the size of the formerly made losses, and maybe a little further. So I tried to find out whether waiting for 3 losers and trading the inevitable breakout with a clear target (the before lost pips) makes sense. And indeed, it can be done. However, automation is difficult. For automation in general it holds: the more simple the better/more robust.

I'm on Window 7 (local) and Windows Server 2008 R2 (remote VM) and it will stay like that as long as possible. Even this post I'm writing from a virtual machine on Win7

I've tried the logic of excluding signal based on ea performance but in the long run everything does not work. The point is that: if you take random samples from a pseudo-normal distribution, you still get a pseudo-normal distribution; i.e. just from a purely theoretical standpoint taking trades after 2-3 losses wont make a unprofitable strategy into a profitable one because the underlying signal is unprofitable.

Let me know what you think. Have a great day

Regards

Hi guys,
we can probably use also sentiment. Because most people are always wrong. Check myfxbook sentiment for experiment. When we are low (I mean oversold) on chart and people start selling you can go buy, vice versa. However if we are overbought, and people start selling, we can go with them. It can help a lot probably. In this particular example price will start falling and people will change positions to buy. We'll however stick to selling.

It can be used as filter. Probably can be automated or added into the EA but sentiment on myfxbook is paid, so. The one on the web is updated once per hour. Might miss a lot of moves. And you'll miss it. Trust me. Once tried paid vs free and it was like Volkswagen vs Mercedes.

Check red arrow. They teach us we should go against majority all the time. But it's nonsense. Majority is sometimes right with their opinion. And this happens when trend is changing.


When this starts happening we will check what majority is doing
When they start changing opinions, we'll stick with positions we opened before.
We will enjoy easy profit.

One can probably build easily equity with this. I wonder how is it possible no one noticed this before. Why I am even writing it...

With Enjoy. Hope it's helpful for someone.

P.S I will not explain how I mean we are oversold or overbought. That would be too easy. Picture should tell you more then enough. No spoon-feeding here. Who will want learn it, will do it. I have trust in you, friends. Check my ideas if you want to know how I make resistance or support. And as always, don't forget to look at "50%". It can be literally seen on a chart. (Market Profile can help understand this)

Also little help needed. Whoever works with TradingView, and can write me an easy indicator (work for 5 minutes) let me know please in PM. I have MT4 code and can't do it on phone. Sadly I lost my PC and I'm unable to do anything to convert it on a phone because TradingView just can't code on a damn phone..

One more thing. EUR/USD looks by looking at sentiment like easy buy. Just look if sell positions starts going up. Then it's literally confirmed. Even better. Just checked 15m. Buy positions appears. So I opened too, just to prove my point.


Trade before also by sentiment =


How is it going...