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The "Weighted Taylor" Method

  • #21
  • Jul 23, 2007 7:02pm Jul 23, 2007 7:02pm
Hey Brendan,

First of all, thank you for your well thought out system. As someone who has been in your shoes several times(releasing a new method to the scrutiny of Forex Factory), I would care to caution you on relying entirely on what you've seen in the past.

This means backtests.

The markets now are more interesting than ever as the economies around the world are reaching levels never seen before, and I, much like you, thought that many of my methods would work based on backtests, but in reality, they only acheived mild success.

I am in no way questioning the integrity or quality of your method, as I've yet to try it myself, just giving you a tip from someone who's been there. Try it live as soon as you can: this is the only REAL indication it will be a winner.

Best of luck throughout your trading journey,

Kevin
  • #22
  • Jul 24, 2007 5:39am Jul 24, 2007 5:39am
Kevin,

Its great to see that total strangers share their experiences and thoughts. Thank you.

When i developed this strategy i used back testing to iron out problem areas like where to enter and exit. And i totally agree with you on taking this strategy live. I have done so, and as i type this i have been using my strategy for the last week. So far i have completed 2 success full trades each pulling in over $120 profit. There is no better way of testing a strategy than using it live.

As soon as i have completed 5 more trades ill gladly post a picture of my trade history for all to see.

Thanks
Brendan
  • #23
  • Jul 25, 2007 9:37am Jul 25, 2007 9:37am
Below is a picture of my trade history, it contains all the trades that i have completed before i knew anything to the trades that i have used my strategy with. Im really happy with the results and i hope you are as well. The profit is in dollars.

Brendan
Attached Image
  • #24
  • Jul 26, 2007 3:39pm Jul 26, 2007 3:39pm
Quoting BrendanT
Below is a picture of my trade history, it contains all the trades that i have completed before i knew anything to the trades that i have used my strategy with. Im really happy with the results and i hope you are as well. The profit is in dollars.

Brendan

Im sorry I dont understand exactly what trades on this report are based off of the weighted taylor method?
  • #25
  • Jul 26, 2007 5:21pm Jul 26, 2007 5:21pm
mcmep11,

sorry about the confusion and I should have indicated which trades were done using the my strategy. Looking at the first coloum, time, the trades done before 2007/07/18 were trades I did whilst learning and experiementing with other strategies. All trades done from the 18th were traded using the weighted taylor method.

PLEASE NOTE:
The below template is what I am currently using to do my trades -

Hope this helps,
Brendan
Attached File(s)
File Type: tpl weighted taylor.tpl   2 KB | 399 downloads
  • #26
  • Jul 26, 2007 10:37pm Jul 26, 2007 10:37pm
So I am trying to make sure I understand the method. You shorted the $yen pair on the 23rd, and then again on the 24th. Now if I understand correctly, you made the first trade because the blue is on bottom, orange clearly above it, yellow clearly above the orange, and for the first time, the yellow is below the pink. the macd and rsi gave their signal on the 22nd. So that should be a good solid 3 point signal.

So my if that is a correct understanding, then my next question, is: what logic did you use to make the $yen trade on the 24th roughly 18 hours after closing the previous trade? Strictly following the rules you should still be open on the 1st trade by the rsi and macd signals right? (unless its just a Im happy with 120 pips in 24 hours kind of decision)

Also, Ive adjust the levels for the macd on my yen pairs to .40 and -.40, seems to give similar results as the .005 on other pairs.

Thanks for sharing and answering bone headed questions like mine!
  • #27
  • Jul 27, 2007 4:10pm Jul 27, 2007 4:10pm
mcmep11,

Firstly, thank you for the values on the $yen, the 0.40 and -0.40 seem to work well. As for why i closed the position, i was trying to see how much profit i could take in one day. You are correct, following my strategy and looking at the $yen chart, the trade i opened on the 23rd should still be open with profits over 150pips.

Hope this helps,
Brendan
  • #28
  • Jul 28, 2007 12:09am Jul 28, 2007 12:09am
Great, Now I believe I am finally understanding this method. Thank you.

Quoting BrendanT
mcmep11,

Firstly, thank you for the values on the $yen, the 0.40 and -0.40 seem to work well. As for why i closed the position, i was trying to see how much profit i could take in one day. You are correct, following my strategy and looking at the $yen chart, the trade i opened on the 23rd should still be open with profits over 150pips.

Hope this helps,
Brendan
  • #29
  • Jul 28, 2007 10:38am Jul 28, 2007 10:38am
Quoting BrendanT
Below is a picture of my trade history, it contains all the trades that i have completed before i knew anything to the trades that i have used my strategy with. Im really happy with the results and i hope you are as well. The profit is in dollars.

Brendan
I don't see why you took the 7/18 EURUSD trade at 1.3803. The RSI was well above 60. ?
  • #30
  • Jul 28, 2007 10:41am Jul 28, 2007 10:41am
The concept looks very good Brendan. As someone else said, it is based on the same principles as the GMMA system, which is not a buy/sell-based indicator system, but which uses multiple moving averages, and it does not rely on crossovers for signals, but rather the relationship between the two sets of MMAs to indicate trend strength, market conditions, etc. Perhaps the RSI and MACD could be used along with the GMMA for confirmation...

Anyway, didn't mean to hijack your thread. :-)
  • #31
  • Jul 30, 2007 2:34pm Jul 30, 2007 2:34pm
JoshDance,

It's good to see people pull my system apart and ask questions - and yours is rather valid. The 18th was the start of me putting my strategy to the test. And the trade you are talking about was practically my first trade using the "Weighted Taylor" Method.
The reason was i took the trade was that I was trying to use other information which included the price being at its highest (1.3850) on the 24th. Which is the highest its been for years. I have to admit that i took a chance at this trade, as i thought it would come down.
Also, i have to admit that i was to impatient to get more trades in, so even though the RSI and MACD was above their redlines, i knew that in the future (i didnt know how long) they would drop. It paid off, but not without abit of stress and hair pulling.
Since then i have to been taking steps to try discipline myself and keep myself out of bad trades.

I have to ask - where can i find out more information about the GMMA system you mentioned.

Hope this helps,
Brendan
  • #32
  • Jul 30, 2007 7:43pm Jul 30, 2007 7:43pm
Quoting BrendanT
JoshDance,

It's good to see people pull my system apart and ask questions - and yours is rather valid. The 18th was the start of me putting my strategy to the test. And the trade you are talking about was practically my first trade using the "Weighted Taylor" Method.
The reason was i took the trade was that I was trying to use other information which included the price being at its highest (1.3850) on the 24th. Which is the highest its been for years. I have to admit that i took a chance at this trade, as i thought it would come down.
Also, i have to admit that i was to impatient to get more trades in, so even though the RSI and MACD was above their redlines, i knew that in the future (i didnt know how long) they would drop. It paid off, but not without abit of stress and hair pulling.
Since then i have to been taking steps to try discipline myself and keep myself out of bad trades.

I have to ask - where can i find out more information about the GMMA system you mentioned.

Hope this helps,
Brendan
Brendan, you can search FF or google for GMMA or "guppy multiple moving average" ... that should give you all you need to know.

Again, this is not meant to be specific to your system at all, but I'd like to voice some things I've found in my brief trading experience. The thing I have found with ALL moving average-based systems, EVEN the GMMA system, is that they work fantastic when a trend is developing, and work poorly when a pair/stock/whatever is ranging or oscillating. Especially with a MA crossover system, when price decides to jump back and forth, MAs will do you no good, and my concern is that following a strict system when this is happening will cause you to lose much if not more than what you have earned during the nice trending times. I suppose that if you get a pair that has long-range trending tendencies, then you could weather the ranging periods, but those might last a LONG time.

Again, I expect that your system will do very well when your pairs are trending, and probably suffer losses when they are not. It's not to not have faith in your system, but it's just that the logic behind why MAs work means that this will happen. I suppose RSI and MACD will filter out some bad trades, but my guess is that they may also filter out some good ones.
  • #33
  • Jul 31, 2007 11:52pm Jul 31, 2007 11:52pm
Hi Brendan

Thanks for sharing. I've read your very well-written Word doc and, for whatever my opinion is worth, you've developed a very solid trend following system.

There are pros and cons of trading a longer timeframe. The major benefits are that prices tend to trend better, as they tend to follow the economic trends and the moves of the banks and large institutions. Also transaction costs are relatively less, i.e. a 5 pip spread across a 200 pip move puts you at a 2.5% handicap every time you trade, while (for an intraday trader) a 5 pip spread across a 20 pip move is a 25% handicap.

Perhaps the biggest drawback is that it takes such a long time to assemble enough of a track record to determine whether or not your system is going to be profitable in the long term. The point Josh makes (see the quote below) is extremely valid, IMHO.

In terms of timeframe, Daemien discusses some of these pros and cons in more detail here:
http://www.forexfactory.com/showthread.php?t=24242

IMHO adding more technical indicators to the same timeframe chart doesn't necessarily provide independent confirmation, because all indicators are ultimately derived from the same OHLC data, and ultimately the best they can do is have us enter (and exit) on an earlier or later price bar in the emerging trend.

I wish you all the best with your system.

Thanks again
David
________________________________

Quoting JoshDance
Again, this is not meant to be specific to your system at all, but I'd like to voice some things I've found in my brief trading experience. The thing I have found with ALL moving average-based systems, EVEN the GMMA system, is that they work fantastic when a trend is developing, and work poorly when a pair/stock/whatever is ranging or oscillating. Especially with a MA crossover system, when price decides to jump back and forth, MAs will do you no good, and my concern is that following a strict system when this is happening will cause you to lose much if not more than what you have earned during the nice trending times.
Josh, excellent comment, I have reached exactly the same conclusion after testing many trend following systems.

David
  • #34
  • Jan 10, 2008 5:38am Jan 10, 2008 5:38am
Hi Brendan,

How has your system been doing the last months? Any changes?

Thanks

Forex37
  • #35
  • Last Post: Jan 21, 2008 9:35am Jan 21, 2008 9:35am
Hi Brendan,
Send us your last statment

Best Regards,

Marcelo Marques
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