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Simple, pure mechanical H4-System, EA needed

  • #21
  • Jul 9, 2007 8:29pm Jul 9, 2007 8:29pm
Quoting more
@bill: don't know. I haven't test it yet.
@eagle: Everything is written in the rules, so what's your question?
If you came up with a tally of total pips for each month, surely you have a tally of wins/losses and can string together the losses to discover the drawdown? You don't need an EA for this. People need to be more careful with claiming big pip runnups without first understanding pip drawdown. You can't determine lot allocation without fully understanding a system's drawdown.

Anyway, I just spent a few hours looking at this. I don't see how you're coming up with your numbers. Based on the chart you supplied, I deduced you're using a broker with a similar feed to ODL (GMT+0) and 6p spread on GBPJPY. With that in mind, I analyzed May and June based on the rules you presented here.

Here's what I came up with.

June07May07
------- --------
65 -8
73 -22
-20 63
134 -91
116 88
109 -44
171 -81
95 37
-62 -57
81 -116
102 140
69 -87
-4 -42
-112
30
----------------
929 -302

So, I'm seeing a loss of over 300 pips in May as opposed to your gain of just over 100 pips. My number for June is also lower than yours.

In May, there were at least 3 instances where profit could have been captured at 70p before price retraced and led to a large loss. This system leaves too many pips on the table and needs a better method for protecting gains.

Regardless, you might want to double-check your results. Or feel free to post a trade log showing each entry/exit. I mark up MT4 charts with Left/Right arrows for entries/exits which makes it quite easy to spot the trades. If I had more faith in this, and felt like investing even more time than I've already spent, I'd go ahead and post my trade log, etc. However, at this point I'm concluding there's something way off with your trade log accounting.

Anyway, interesting concept. Where did you get it from? Is this straight from DeMark? With a better method of protecting profits, there might be some merit to this. But, as is, it doesn't work as advertised.

Thanks for sharing. I don't mean to sound too negative, but, the devil's in the details with this kind of stuff.

Cheers

Bill
  • #22
  • Jul 9, 2007 8:37pm Jul 9, 2007 8:37pm
See attached chart for example of where 100 pips is let go in favor of a loss of 87 pipts.
Attached Image (click to enlarge)
Click to Enlarge Name: demarkbo_scrnsht1.jpg Size: 29 KB
  • #23
  • Jul 9, 2007 8:49pm Jul 9, 2007 8:49pm
GPB/JPY has been a trending market at all times during this test. Has anybody tried this system in a ranging market mode?
  • #24
  • Edited Jul 10, 2007 8:28am Jul 9, 2007 10:14pm | Edited Jul 10, 2007 8:28am
Actually, just quickly glancing again at the charts, I see I missed at least one additional losing trade in May. So, the actual total negative pips would be greater for that month.


Quoting billworld
If you came up with a tally of total pips for each month, surely you have a tally of wins/losses and can string together the losses to discover the drawdown? You don't need an EA for this. People need to be more careful with claiming big pip runnups without first understanding pip drawdown. You can't determine lot allocation without fully understanding a system's drawdown.

Anyway, I just spent a few hours looking at this. I don't see how you're coming up with your numbers. Based on the chart you supplied, I deduced you're using a broker with a similar feed to ODL (GMT+0) and 6p spread on GBPJPY. With that in mind, I analyzed May and June based on the rules you presented here.

Here's what I came up with.

June07May07
------- --------
65 -8
73 -22
-20 63
134 -91
116 88
109 -44
171 -81
95 37
-62 -57
81 -116
102 140
69 -87
-4 -42
-112
30
----------------
929 -302

So, I'm seeing a loss of over 300 pips in May as opposed to your gain of just over 100 pips. My number for June is also lower than yours.

In May, there were at least 3 instances where profit could have been captured at 70p before price retraced and led to a large loss. This system leaves too many pips on the table and needs a better method for protecting gains.

Regardless, you might want to double-check your results. Or feel free to post a trade log showing each entry/exit. I mark up MT4 charts with Left/Right arrows for entries/exits which makes it quite easy to spot the trades. If I had more faith in this, and felt like investing even more time than I've already spent, I'd go ahead and post my trade log, etc. However, at this point I'm concluding there's something way off with your trade log accounting.

Anyway, interesting concept. Where did you get it from? Is this straight from DeMark? With a better method of protecting profits, there might be some merit to this. But, as is, it doesn't work as advertised.

Thanks for sharing. I don't mean to sound too negative, but, the devil's in the details with this kind of stuff.

Cheers

Bill
  • #25
  • Jul 9, 2007 11:07pm Jul 9, 2007 11:07pm
Looks nice.
{Promotion Removed}
  • #26
  • Edited 12:29am Jul 10, 2007 12:22am | Edited 12:29am
@bill: you are right. I am using Trademonster and they are an introducing broker of ODL. Therefore it's GMT.
You are also right if you say that this system needs a better stop/exit/pip protection. This is what I don't like yet and this is what I want to improve. Because of that I posted the system here to get some ideas from other traders.
I will personally check the performance for May again. It was checked by a fellow trader and obviously he didn't use the mechanical rules but mixed it up with his own ideas without telling me.
I tested January, April and May myself with different parameters (LevDP=6) and my results were:
January=845 pips,
April=315 pips
May= -60 pips
These results you can trust.

He tested the months from January -June with LevDP=2. Like I told you, I will re-check it personally.

If you have any ideas how to protect the gains or improve the stop/exit, please let me know.

The system itself is not from DeMark. It's just the indicator. The trading idea was developed by us.
  • #27
  • Jul 10, 2007 2:36am Jul 10, 2007 2:36am
We have to note that as different brokers have different data feeds and 4 hr bars(start and end), this method will generate different results using charts of different brokers, anyhow I find it a promising method with little monitoring.

I personally would change the colour of the circles to red for shorts and blue for longs, as this is what I am visually used to.
Regards
  • #28
  • Jul 10, 2007 2:56am Jul 10, 2007 2:56am
My trading partner and me had some good ideas for a filter. The strategy itself is still good and profitable but I don't like the fact that after fast moves to less pips are banked and sometimes the stops are too huge. That doesn't fit to my trading style.

We work on it and keep you updated...
  • #29
  • Jul 10, 2007 3:48am Jul 10, 2007 3:48am
I ran a quick backtest applying this system to the dailies, at the GB/JP, setting -50 as stop loss always (I am allergic to large s/l's), and trailing the stop every 50 at the end of the day.
Here are my results:

Number of trades: 18
Winning trades: 8 (1,712 pips)
Losing trades: 9 (-450 pips)
b/e: 1
Net pips: 1,262
Ave. pips pewr trade: 70
Max drawdown: -200
Max win: 730
Max # of losing trades: 4
Max # of winning trades: 2

Note: this test was made starting Dec 6, 2006
Note #2: Sometimes i will tighten my stop a little more if I saw a revrsal pattern in formation at the end of the day (so i didn't trade 100% mechanical. Just did what i'd be doing if i was live)

So maybe a trailing stop might work?
  • #30
  • Jul 10, 2007 4:29am Jul 10, 2007 4:29am
Hi
well you must use fractal it's a easier one which use in NTD system
for look to what I say load templat william from templats and then use fractal on it plus a 3 ma well I will attach the whole NTD system Template...
Long when Acc change to green and cross zero with Ao just change to green is not need to cross up zero and pink line (3ma) cross green and you will entry on broke of the latest fractal and stop may be under blue line or previous down fractal..but it is not the NTD system exactly..
Attached File(s)
File Type: tpl 3rd.tpl   2 KB | 812 downloads
  • #31
  • Edited 10:08am Jul 10, 2007 9:20am | Edited 10:08am
Look at applying Protective Stop Losses in incremental amounts from 50/1 (e.g. on 50p gain move SL to 1p), 60/10, 70/20 thru 120/80 (yes with capturing more pips as unrealized gain is increased). As well, apply a hard and fast 60p SL.

Also, look at ignoring signals in bars in which a SL or PSL or negative TP occurs. Also, look at taking profit at the open of the 3rd bar rather than the open of the 4th bar after receiving the second signal in the same direction.

By applying these filters I've been able to get the May performance up to just over 200p. Without said filters, the month would have lost well over 300 pips.

I may continue looking into other months to se if this approach continues to work.

Quoting more
@bill: you are right. I am using Trademonster and they are an introducing broker of ODL. Therefore it's GMT.
You are also right if you say that this system needs a better stop/exit/pip protection. This is what I don't like yet and this is what I want to improve. Because of that I posted the system here to get some ideas from other traders.
I will personally check the performance for May again. It was checked by a fellow trader and obviously he didn't use the mechanical rules but mixed it up with his own ideas without telling me.
I tested January, April and May myself with different parameters (LevDP=6) and my results were:
January=845 pips,
April=315 pips
May= -60 pips
These results you can trust.

He tested the months from January -June with LevDP=2. Like I told you, I will re-check it personally.

If you have any ideas how to protect the gains or improve the stop/exit, please let me know.

The system itself is not from DeMark. It's just the indicator. The trading idea was developed by us.
  • #32
  • Jul 10, 2007 10:41am Jul 10, 2007 10:41am
Quoting billworld
Look at applying Protective Stop Losses in incremental amounts from 50/1 (e.g. on 50p gain move SL to 1p), 60/10, 70/20 thru 120/80 (yes with capturing more pips as unrealized gain is increased). As well, apply a hard and fast 60p SL.

Also, look at ignoring signals in bars in which a SL or PSL or negative TP occurs. Also, look at taking profit at the open of the 3rd bar rather than the open of the 4th bar after receiving the second signal in the same direction.

By applying these filters I've been able to get the May performance up to just over 200p. Without said filters, the month would have lost well over 300 pips.

I may continue looking into other months to se if this approach continues to work.

Hi Bill,

what is a SL, a PSL and a negative TP?
I am not sure I understand what you mean when you say "taking profit at the open of the 3rd bar.......etc"
Do you mind showing a chart with this?

Thanks.
  • #33
  • Jul 10, 2007 10:48am Jul 10, 2007 10:48am
SL=Stop Loss
PSL=Protective Stop Loss
Negative TP=Exiting at Take Profit location for a loss
TP=exit at open of 3rd bar (or 4th in More's original version) after receiving a second signal in the same direction

Quoting alcastro
Hi Bill,

what is a SL, a PSL and a negative TP?
I am not sure I understand what you mean when you say "taking profit at the open of the 3rd bar.......etc"
Do you mind showing a chart with this?

Thanks.
  • #34
  • Jul 10, 2007 11:49am Jul 10, 2007 11:49am
Forget it...

By applying protective stop losses and some other tricks, I was able to improve the performance in some months which would have been losers. That's in 2007... Going back to 2006, different story. March 2006 yields a -591 pip loss. I can't envision creating enough "filters" to deal with the range that occurs in March 2006 which lead to a long string of losers with this strategy. Give that month a close look before investing too much time elsewhere.
  • #35
  • Jul 12, 2007 11:55pm Jul 12, 2007 11:55pm
Guys, I only wanted to let you know that I am still here and worked on the system. It was highly improved and at the moment I am putting this altogether in a mathematical form that is it easier for our programmer to make an expert advsior.

I come back to you as soon as the EA is ready and post the results here!
  • #36
  • Jul 13, 2007 12:05am Jul 13, 2007 12:05am
Quoting more
Guys, I only wanted to let you know that I am still here and worked on the system. It was highly improved and at the moment I am putting this altogether in a mathematical form that is it easier for our programmer to make an expert advsior.

I come back to you as soon as the EA is ready and post the results here!
expecting from you
  • #37
  • Jul 16, 2007 6:23am Jul 16, 2007 6:23am
Hi Everyone,

Just want to point out some point on how this indicator could or should be used. Find attached a couple of graph of this example. Beside the Demark indicator you can see 3ema´s (35 period exponential on the High, Low and close) This is call the wave and is used by Raghee Horner on her book called "Thirty day of forex trading". This wave act as dynamic support and resistance. Also is helpful on showing the market direction. If the wave is traveling upwards between 12 and two o´clock then the market is in an
uptrend. If the wave is traveling downwards between four and six o´clock
the the market is in a downtrend. This two setups are great for "swing trading". When swing trading what you are looking for bounces or pullbacks. In a dowstrend it´s a bounce and in a uptrend it´s a pullback.

Now there is another type of setup that I like the most and is the Momentum traiding of "breaks" either support or resistance lines. It´s a breakout when it breaks upwards and breakdown the the price break down support. What we are looking for is for certain graph patterns in order to enter. Patterns like triangles and rectangels. The attached files show a breakdown of a trangle patterns. the Demark indictor is a great took when identifing this patterns as it draws them by itself. Please see the attached files for two examples of triangle breakdown that occured last Friday as the market closed. As for today you can see where the price are.

Your friend
Reynold
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurjpy.jpg Size: 93 KB
Click to Enlarge Name: gbpjpy.jpg Size: 96 KB
  • #38
  • Jul 16, 2007 8:24am Jul 16, 2007 8:24am
Hi again,

Please find attached another example of GBPJPY breakout in triangle pattern using 1H chart. The take profit price was set using Fib.

Worth 30 pips. Again stop loss is set at the bottom of the wave at 248.00(psycho level)

thx.
Reynold
Attached Image (click to enlarge)
Click to Enlarge Name: gbpjpyBreakout.jpg Size: 47 KB
Attached Image
  • #39
  • Jul 17, 2007 7:07am Jul 17, 2007 7:07am
Hi guys,

This morning EURJPY broke resistance in a rectangle or channel formation in 1h chart. (7am NY). GPBJPY also broke a Triangle formation but it happens around 3am. Fib was use for take profit point.

I see no reason why we shouldn´t be making 30+ pips a day.

C'ya.

Reynold
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURJPY breakout.jpg Size: 47 KB
Click to Enlarge Name: EURJPY Target Hit.jpg Size: 50 KB
  • #40
  • Jul 17, 2007 7:17am Jul 17, 2007 7:17am
Thanks for sharing, but, these contributions aren't related to the mechanical system this thread is about (other than you're using a feature of the DeMark indicator not used in the mechanical system).

Maybe start up a new thread so as to not have this one get confused?

Quoting rtrevino
Hi guys,

This morning EURJPY broke resistance in a rectangle or channel formation in 1h chart. (7am NY). GPBJPY also broke a Triangle formation but it happens around 3am. Fib was use for take profit point.

I see no reason why we shouldn´t be making 30+ pips a day.

C'ya.

Reynold
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