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Sharing a method which has been profitable so far

  • #1
  • First Post: Feb 7, 2008 6:19pm Feb 7, 2008 6:19pm
Hi everyone

I read a great quote which said something like success is giving back more than what you take. As this forum has helped me so much I would like to give back a system which has been profitable for me so far....
It is a system I have devised and think is quite unique.
I have been using it on EUR/USD for about 2 weeks and so far has a profit factor of 1.83 and maximal drawdown of 2.63%. I have attached the statement.
If anyone has any ideas for improvements or an EA that would be great.

THE RULES:

  1. Open positions at midnight GMT (I have been using InterbankFX)
  2. Entry position is yesterdays (high+low)/2 this is the midpoint
  3. Take profit is ATR(14) / 2
  4. Stop loss is ATR(14)/4
  5. Close all open positions at midnight GMT next day

So far I have been using 0.5 lots but am now starting to use 1.0 lots on each position

Any feedback is welcome !
Hope you enjoy it :-)

Attached Image (click to enlarge)
Click to Enlarge Name: DetailedStatement.gif Size: 5 KB
  • #2
  • Feb 7, 2008 6:58pm Feb 7, 2008 6:58pm
perfect!
by look your statement I will backtest your system. later I'll post my results.
congratulations and good trade!
  • #3
  • Feb 7, 2008 8:37pm Feb 7, 2008 8:37pm
Which way do you take the trade.

If you are above the midway point do you go short? and if you are below the midway point do you go long?

Thanks,

Damon
"Keep your eyes on the helpers" - Mr. Rogers
  • #4
  • Feb 8, 2008 1:37am Feb 8, 2008 1:37am
Quoting leeb
Hi everyone

I read a great quote which said something like success is giving back more than what you take. As this forum has helped me so much I would like to give back a system which has been profitable for me so far....
It is a system I have devised and think is quite unique.
I have been using it on EUR/USD for about 2 weeks and so far has a profit factor of 1.83 and maximal drawdown of 2.63%. I have attached the statement.
If anyone has any ideas for improvements or an EA that would be great.

THE RULES:

  1. Open positions at midnight GMT (I have been using InterbankFX)
  2. Entry position is yesterdays (high+low)/2 this is the midpoint
  3. Take profit is ATR(14) / 2
  4. Stop loss is ATR(14)/4
  5. Close all open positions at midnight GMT next day

So far I have been using 0.5 lots but am now starting to use 1.0 lots on each position

Any feedback is welcome !
Hope you enjoy it :-)

Very interesting my friend. Thank you for sharing.
  • #5
  • Edited 4:04am Feb 8, 2008 3:48am | Edited 4:04am
Quoting leeb
Hi everyone

I read a great quote which said something like success is giving back more than what you take. As this forum has helped me so much I would like to give back a system which has been profitable for me so far....
It is a system I have devised and think is quite unique.
I have been using it on EUR/USD for about 2 weeks and so far has a profit factor of 1.83 and maximal drawdown of 2.63%. I have attached the statement.
If anyone has any ideas for improvements or an EA that would be great.

THE RULES:

  1. Open positions at midnight GMT (I have been using InterbankFX)
  2. Entry position is yesterdays (high+low)/2 this is the midpoint
  3. Take profit is ATR(14) / 2
  4. Stop loss is ATR(14)/4
  5. Close all open positions at midnight GMT next day

So far I have been using 0.5 lots but am now starting to use 1.0 lots on each position

Any feedback is welcome !
Hope you enjoy it :-)

Am I correct in assuming that you are opening both a long AND a short at the entry position?

If so, something roughly similar has already been coded by Primajaya and another fellow at TSD, based on an opening time only, rather than time and position. Primajaya's EA was based on his observation of Waddah Attar's system in the trading championship. Another difference is that the TP and SL in the Primajaya/Attar EA are preset and larger than your ATR-adaptive TP and SL. I believe that the Primajaya/Attar EA had some kind of followup trade in the event of some condition at or near the close of the initial orders, but I don't recall what it was.

BTW: I think your entry positioning and adaptive TP & SL are both good ideas for this type of system.

After all that, am I guessing right? Are you opening both a long AND a short?
  • #6
  • Feb 8, 2008 6:16am Feb 8, 2008 6:16am
Hi guys,

Yes you're right to think that both a long and a short are opened at the same time if the midpoint is hit but the trick is that the TP is twice the size of the SL and assuming it has reached the midpoint that price has accumulated some momentum to carry on a move. I don't think this system is like anything out there as I don't think Primajaya's used midpoint or a TP twice the size of SL. I have increased lot size to 1.0 and I will continue to post my results. If you would like to help out there are a couple of things I would appreciate:
1) If you could add to my reputation that'd be great
2) Any backtests would be much appreciated

Enjoy the system ! Also if anyone wants to test on other pairs it should work just as well as the beauty of the system is that it adjusts to the market using ATR.
  • #7
  • Feb 8, 2008 6:23am Feb 8, 2008 6:23am
can anybody please tell me the standard setting up of ADX to be able to predict the meaning when it is 25.
Also on MACD, what is the signal line and where is it located?
  • #8
  • Feb 8, 2008 6:25am Feb 8, 2008 6:25am
Hi

Still I do not get it. As an example yesterday's mid range was 1.4544 for eur/usd, what action should have been taken at close of yesterday's bar? Place a buy order at 1.4544 or a sell order at this level?

I know that mid points may be slightly different depending when your daily bar closes.
Regards
  • #9
  • Feb 8, 2008 6:36am Feb 8, 2008 6:36am
Hi Howard

It really is a very simple system.
The midpoint as I calculated it was: 1.4545 so you enter a pending buy AND sell at this price with the stop loss at a quarter of ATR(14) which works out at 29 pips and the TP at half the ATR(14) which works out at 58 pips.

Hope that helps
Lee
  • #10
  • Feb 8, 2008 6:41am Feb 8, 2008 6:41am
Quoting leeb
Hi Howard

It really is a very simple system.
The midpoint as I calculated it was: 1.4545 so you enter a pending buy AND sell at this price with the stop loss at a quarter of ATR(14) which works out at 29 pips and the TP at half the ATR(14) which works out at 58 pips.

Hope that helps
Lee
Thanks for the reply; however on ECN platforms you cannot have long and short positions at the same time, they cancel out each other unless you add a 2nd account.

I will follow your live trades to see the results, hope you will be posting all the trades.
Regards
  • #11
  • Edited 7:00am Feb 8, 2008 6:45am | Edited 7:00am
Quoting leeb
Hi Howard

It really is a very simple system.
The midpoint as I calculated it was: 1.4545 so you enter a pending buy AND sell at this price with the stop loss at a quarter of ATR(14) which works out at 29 pips and the TP at half the ATR(14) which works out at 58 pips.

Hope that helps
Lee
This might help. I took the liberty of setting up the inputs for the correct values, regardless of what time frame you want to use.
Attached Image (click to enlarge)
Click to Enlarge Name: leeb.gif Size: 13 KB
Attached File(s)
File Type: mq4 #MTF_ATR.mq4   4 KB | 899 downloads
File Type: mq4 #MTF_MovingAverage.mq4   6 KB | 840 downloads
  • #12
  • Feb 8, 2008 6:46am Feb 8, 2008 6:46am
Hi guys, I am not familiar with ATR, can someone give a brief explanation and how to do calculations for this particular trade/
Respect
Tom(uk)
  • #13
  • Feb 8, 2008 6:49am Feb 8, 2008 6:49am
Also noticing charts today, the orders have not hit, so no trade so far, Am i correct there?
Tom(uk)
  • #14
  • Feb 8, 2008 7:48am Feb 8, 2008 7:48am
hi booktimes yes no trade has been entered yet it wont trade everyday. ATR is average true range and available in all charting packages
  • #15
  • Feb 8, 2008 8:03am Feb 8, 2008 8:03am
If the system is based on the momentum carrying through after price has broken the midpoint, why open opposing orders?

For example, if price rises to reach the midpoint and you are assuming it will continue to rise, why not just open a long position at the midpoint, rather than both a long and a short?

Opening both positions increases the cost of the trade in spreads.
  • #16
  • Feb 8, 2008 8:23am Feb 8, 2008 8:23am
Is anybody working on an ea for this system already?
/ ... clarifying decisions ... /
  • #17
  • Edited 1:00pm Feb 8, 2008 12:49pm | Edited 1:00pm
you know, if you waited until the price went to the median and then placed a sell stop entry where your original buy stoploss was and also a buy stop entry where your sell stoploss was, you could save one side of the spread and only have one position open, at a time. This would increase profits by the amount of one spread cost, and not put you at any more risk. It is an instant increase in profit with no increase in risk.

This creates the exact same trade without the need to have a buy and sell open at the same time. It also accomplishes the idea, that you do not know which way the market will go.
  • #18
  • Feb 8, 2008 12:55pm Feb 8, 2008 12:55pm
Quoting smjones
you know, if you waited until the price went to the median and then placed a sell stop entry where your original buy stoploss was and also a buy stop entry where your sell stoploss was, you could save one side of the spread and only have one position open, at a time. This would increase profits by the amount of one spread cost, and not put you at any more risk. It is an instant increase in profit with no increase in risk.
Would you cancel one side once the other was triggered?
  • #19
  • Edited 1:12pm Feb 8, 2008 1:02pm | Edited 1:12pm
Quoting Cmartin371
Would you cancel one side once the other was triggered?
No. The opposite stop entry is your stoploss for the side that is open. If you want to keep this the same EXACT trade as leeb has posted.

Or, you could place stoploss at the ATR/4 level and leave the other Stop entry open incase the market were to double back and go the other way. This gives an extra option that the Buy and Sell at the median does not offer.

I am not offering any advise as to how profitable this idea is. Only that this approach would make it more profitable.
  • #20
  • Feb 8, 2008 1:20pm Feb 8, 2008 1:20pm
Another advantage of this approach is that price does not need to touch the median. It just needs to be above the sell stop entry and below the buy stop entry. So, this gives you a range for price to be "around" the median.
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