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The Bat...a strategy by Team Aphid

  • #81
  • Jan 17, 2007 3:37am Jan 17, 2007 3:37am
Apologies in advance for my many posts... this is a question on "BAT Range Trade" On page 8 of the PDF file it states:

Quote

This re entry can only take place if price stays within the boundary set by the 161.8 level. Once price hits the 161.8 level then this type of trade can no longer be valid. A trend is either in place or else if price returns to the trade pick up areas of 61.8 and 38.2 then a probable change of trend is occurring and it will break the BAT line and result in losses.

My confusion is the language of the "161.8 level". If i draw a fibo with the "Entry" 100% level set at the red line and the "Swing" 0% level up at the recent high before the short entry at the 1.9740ish level, then the 161.8 level should be south of my short entry? Then why is the trade no longer valid when it reaches the 161.8 level? If i've drawn my fibo correctly it would be well in profit and be categorized as a "Full Monty" trade??

What am i misinterpreting?

Thanks in advance for any clarification...hey it's 1:30 am Pacific and i've been up since this morning so i'm a bit sleepy. But i'm in profit w/pips locked in so i'll sleep well !

Cheers,
Thom
  • #82
  • Jan 17, 2007 3:56am Jan 17, 2007 3:56am
Hi TeamAphid,
Thanks very much!

  1. You write

“The ‘Full Monty’ Bat Trade.
…………………………
Exits for trades 2,3 and 4 are placed at the same time as the pending orders are placed and the targets
are the original entry level which is 9337.”

Why you exit for trades 2,3 and 4 is on the original entry level??? You are on correct side for long trade and can get a big profit with trades 2,3,4. But you kill your potential profit. Why???
May be do you want to get break even and small profit for trade1? But if it’s true – you can close 1 or 2 lots and get it.
Or is it for range market???
Can you explain?

2.If I’m right in my first question (if it’s for range market) can we add lots above “trade1” but below 161.8?

3.What about 4 Hour Charts. I’m using 4 Hour Charts for my systems. Can you advise The BAT parameters for 4H.

4.What about MM???
When we open “trade 1” we must to know how many lots should we take.
If price is going down (for long) we have loss for our deposit and we can’t buy more lots.
Or we must to do this: if for “trade 1” we can buy 8 lots we buy only 2 (8/4=2)Can you explain?

5.What about MM method?
I believe if we use ATR we should use ATR for our MM:
Volatility = Average(Range, Period),
Number of lots = % volatility * Capital / Asset_volatility
For instance, we have a capital of $ 100000 and wish to buy AAA stocks. The average true range for several days was $0.1 or $10 per lot. If we limit the volatility of our account to 10%, then we can buy a maximum of 1000 lots. Thus we can control the possible fluctuations of every element of the portfolio

I only want to understand it better!
Thanks!
Max

  • #83
  • Jan 17, 2007 3:56am Jan 17, 2007 3:56am
Hi TeamAphid,

Thanks for the reply. I've attached the current GBPUSD 1 hour chart. The second last bar touched and broke the the red (bearish) Bat line which takes us out of the short trade we were in (please correct me at any point). Price retraced and closed below the Bat line however and no blue (bullish) bat line has been drawn (as yet) on the new bar. Now, we're out of the short trade and presumably opened a long trade. The fact that the price retraced however worries me about going long at this point (not-withstanding the GBP news announcement at this time). In other words, has that short trade been totally invalidated?

So, I suppose the question in all of this is what happens if price should now head south in a major way (which is possible if this last swing up was just a retrace)? As I understand it, this system wouldn't get us back in on the short side until a blue line appears and that could be quite a ways down looking back at what happened historically on the chart. Just thinking out loud now, but zooming out and looking at the bigger picture for e.g. trend and price action might be helpful to filter out trades with low potential.

Sorry for rambling a bit, but intuitively it feels likes there's some sort of filtering missing although I understand your past results are excellent. Any insights would be much appreciated,

BM
Attached Image
  • #84
  • Jan 17, 2007 4:07am Jan 17, 2007 4:07am
Thanks for your posts, Thom. First, you are correct in stating that for short entries, 161.8 level will be south of the entry level. If price hits 161.8 level and then starts retracing back to 61.8 and 38.2 levels, we observed that the price generally hits the opposite BAT line and we lose many pips. So it is a kind of trailing rule; if 161.8 level is hit, then cancel your 61.8 and 38.2 level limit orders.

Therefore, when 161.8 level is hit and your pending limit orders are cancelled, then there is no possibility that you will have a Full Monty trade (because you can't have 4 lots anymore). To have Full Mothy trade, you need to close all 4 lots in profit. So it depends on when 161.8 level will be hit, before 61.8 and 38.2 hit (then no possibility for Full Monty trade) or after 61.8 and 38.2 hit (then it is quite possible that you will have a Full Monty trade.



Quoting accrete
Apologies in advance for my many posts... this is a question on "BAT Range Trade" On page 8 of the PDF file it states:

My confusion is the language of the "161.8 level". If i draw a fibo with the "Entry" 100% level set at the red line and the "Swing" 0% level up at the recent high before the short entry at the 1.9740ish level, then the 161.8 level should be south of my short entry? Then why is the trade no longer valid when it reaches the 161.8 level? If i've drawn my fibo correctly it would be well in profit and be categorized as a "Full Monty" trade??

What am i misinterpreting?

Thanks in advance for any clarification...hey it's 1:30 am Pacific and i've been up since this morning so i'm a bit sleepy. But i'm in profit w/pips locked in so i'll sleep well !

Cheers,
Thom
  • #85
  • Jan 17, 2007 4:25am Jan 17, 2007 4:25am
It will be easier if we put answers between the lines with blue font.

Quoting maximus
Hi TeamAphid,
Thanks very much!

 

  1. You write

“The ‘Full Monty’ Bat Trade.
…………………………
Exits for trades 2,3 and 4 are placed at the same time as the pending orders are placed and the targets
are the original entry level which is 9337.”

Why you exit for trades 2,3 and 4 is on the original entry level??? To book profits as soon as possible. You are on correct side for long trade and can get a big profit with trades 2,3,4. But you kill your potential profit. Why??? But at that stage, you don't know if you are on correct side, what if you are not? Then you will lose many pips with 4 lots.
May be do you want to get break even and small profit for trade1? But if it’s true – you can close 1 or 2 lots and get it.
Or is it for range market??? Yes, trades 2,3, and 4 are mostly for ranging markets. But you can change number of lots such as buy two lots for trade # 1 and 1 lot for 61.8 and 2 lots for 38.2. We are also using this technique.
Can you explain?

2.If I’m right in my first question (if it’s for range market) can we add lots above “trade1” but below 161.8? See my last sentence, you can buy two lots for trade # 1.

3.What about 4 Hour Charts. I’m using 4 Hour Charts for my systems. Can you advise The BAT parameters for 4H. Bigger the timeframe, bigger the gains, bigger the losses. We still prefer 1hr.

4.What about MM???
When we open “trade 1” we must to know how many lots should we take.
If price is going down (for long) we have loss for our deposit and we can’t buy more lots.
Or we must to do this: if for “trade 1” we can buy 8 lots we buy only 2 (8/4=2)Can you explain? That's why we limited ourselves with 4 lots (or 5 lots as explained above), depending on your account balance, you will decide yourself how many lots you can handle.

5.What about MM method?
I believe if we use ATR we should use ATR for our MM:
Volatility = Average(Range, Period),
Number of lots = % volatility * Capital / Asset_volatility
For instance, we have a capital of $ 100000 and wish to buy AAA stocks. The average true range for several days was $0.1 or $10 per lot. If we limit the volatility of our account to 10%, then we can buy a maximum of 1000 lots. Thus we can control the possible fluctuations of every element of the portfolio That will again depends on your account balance, your risk profile etc.

I only want to understand it better!
Thanks!
Max

  • #86
  • Jan 17, 2007 4:38am Jan 17, 2007 4:38am
This is a completely mechanical system. So, short trade has been completely invalidated today at 8:00 bar (Alpari time). As you can see, blue BAT line has formed and it is horizontal now at 1.9576 and it will never drop below that level so your risk is defined. If price heads south now, you will buy 1 lot at 61.8 level and 2 lots at 38.2 level. If price hits 1.9576, then you will reverse your position and go short with 1 lot. You have to wait next 1hr bar after price hits BAT line to see the opposite BAT line.

You are right that this system wouldn't get you back in on the short side until a blue line appears, but it always appears with next hourly bar and we have never met such a case that price dropped like a stone just after touching red BAT line.

Quoting bluemeasure
Hi TeamAphid,

Thanks for the reply. I've attached the current GBPUSD 1 hour chart. The second last bar touched and broke the the red (bearish) Bat line which takes us out of the short trade we were in (please correct me at any point). Price retraced and closed below the Bat line however and no blue (bullish) bat line has been drawn (as yet) on the new bar. Now, we're out of the short trade and presumably opened a long trade. The fact that the price retraced however worries me about going long at this point (not-withstanding the GBP news announcement at this time). In other words, has that short trade been totally invalidated?

So, I suppose the question in all of this is what happens if price should now head south in a major way (which is possible if this last swing up was just a retrace)? As I understand it, this system wouldn't get us back in on the short side until a blue line appears and that could be quite a ways down looking back at what happened historically on the chart. Just thinking out loud now, but zooming out and looking at the bigger picture for e.g. trend and price action might be helpful to filter out trades with low potential.

Sorry for rambling a bit, but intuitively it feels likes there's some sort of filtering missing although I understand your past results are excellent. Any insights would be much appreciated,

BM
  • #87
  • Jan 17, 2007 5:00am Jan 17, 2007 5:00am
Quoting TeamAphid
We are attaching Feb 2006 backtest results so that you can compare.
TA. I cannot match your entries and exits using ATR 5 and factor 4. Your results seem to be using a tighter BAT line. If I use ATR 5 and factor 3 then the results are a lot closer to yours. So my question then is, what ATR and factor were you using to get those results?

Thanks in advance, Wiz.
  • #88
  • Jan 17, 2007 5:05am Jan 17, 2007 5:05am
Thanks for your answers!!!
  • #89
  • Edited 5:16am Jan 17, 2007 5:10am | Edited 5:16am
Hi Team Aphid and all,

I've been absorbing great mountains of information for several months now, and been following some of the systems that have developed over that time. I really like the look of this, totally mechanical and seems to make sense to me. Thanks TA for sharing this!

I've attached a chart showing entries according to my understanding of the rules. I just wanted to check that they are correct. I know I've highlighted a bad run, but looking back quickly there seems to be some very sweet runs also.

This is my first go at posting a chart so apologies if it doesn't work out...

PS Just noticed I drew in the S/L for the 4 lots in the wrong spot, should be last low -10 pips, oops. But the result is the same. Also its not that clear perhaps (still learning) but I was trying to indicate the 4 long positions being stopped out.
Attached Image
  • #90
  • Jan 17, 2007 5:21am Jan 17, 2007 5:21am
I just deleted my stupid question.
Great effort.
Who is going to start the new Bat Challenge?
And I thought since I had left the PF I would miss out on anything you may offer in the future, man am I relieved.
Patience and fortitude conquer all things. Ralph Waldo Emerson
  • #91
  • Jan 17, 2007 5:31am Jan 17, 2007 5:31am
Quoting The Wizard of Oz
TA. I cannot match your entries and exits using ATR 5 and factor 4. Your results seem to be using a tighter BAT line. If I use ATR 5 and factor 3 then the results are a lot closer to yours. So my question then is, what ATR and factor were you using to get those results?

Thanks in advance, Wiz.
Hi Wiz
Different MT4 platforms will in fact produce very different results in this method.
The settings we are using are ATR Period 5 and Factor 4 on Alpari data.
Who are you using for data?
  • #92
  • Jan 17, 2007 5:35am Jan 17, 2007 5:35am
Quoting TeamAphid
This is a completely mechanical system.
Yes, I suppose it's a matter of trusting the system - not easy to do initially when it's not yours. Sorry if my questions seemed to doubt the validity of the Bat strategy.

Quoting TeamAphid
...As you can see, blue BAT line has formed and it is horizontal now at 1.9576 ...
I'm showing the blue line at 1.9548 with a factor of 4. Reducing the factor to 3.5 puts the line at 1.9578. Could you please confirm that the factor should indeed be 4 as outlined in the pdf?

Thanks,
BM
  • #93
  • Jan 17, 2007 5:36am Jan 17, 2007 5:36am
Works amazingly nice. let's start mass back and forward testing! As it is a purely mechanical system, it would not be hard to make an EA from it.

Many thanks, TeamAphid, for sharing your ideas.

Best regards,
Piccolo

PS - a full monty sample attached.. chart is up to this moment.
Attached Image
  • #94
  • Jan 17, 2007 5:48am Jan 17, 2007 5:48am
Quoting grrowler
Hi Team Aphid and all,

I've been absorbing great mountains of information for several months now, and been following some of the systems that have developed over that time. I really like the look of this, totally mechanical and seems to make sense to me. Thanks TA for sharing this!

I've attached a chart showing entries according to my understanding of the rules. I just wanted to check that they are correct. I know I've highlighted a bad run, but looking back quickly there seems to be some very sweet runs also.

This is my first go at posting a chart so apologies if it doesn't work out...

PS Just noticed I drew in the S/L for the 4 lots in the wrong spot, should be last low -10 pips, oops. But the result is the same. Also its not that clear perhaps (still learning) but I was trying to indicate the 4 long positions being stopped out.
Hi Grrowler
You are right, this is a fine example of being stopped out on what eventuated in a nice long trade. We have come across this a few times and we are looking into a system of re entry.
One example is that once we are stopped out of all four trades and price returns to the swing line of 9341 we could pick up trades again...recover our losses from the previous losing trade and still have a trade ( or two) left to go long.
What do you think?
Attached Image
  • #95
  • Jan 17, 2007 5:53am Jan 17, 2007 5:53am
Quoting bluemeasure
Yes, I suppose it's a matter of trusting the system - not easy to do initially when it's not yours. Sorry if my questions seemed to doubt the validity of the Bat strategy.Not at all!!!



I'm showing the blue line at 1.9548 with a factor of 4. Reducing the factor to 3.5 puts the line at 1.9578. Could you please confirm that the factor should indeed be 4 as outlined in the pdf? We are using ATR Period 5 and Factor 4 on ALPARI data feed. Are you using the same platform and data...if not then you will have different figures.



Thanks,
BM
Hope this helps
  • #96
  • Jan 17, 2007 5:53am Jan 17, 2007 5:53am
Quoting TeamAphid
Hi Wiz
Different MT4 platforms will in fact produce very different results in this method.
The settings we are using are ATR Period 5 and Factor 4 on Alpari data.
Who are you using for data?
IBFX
  • #97
  • Jan 17, 2007 6:01am Jan 17, 2007 6:01am
lol, by mistake I made the same trade profitable as your discussed loss and re-entry. my mistake was that I drew the fibo line to the low point but not the most recent low.. making more breathing room for the trade that would have resulted in a full monty trade. My mistake.

Quoting piccolo
Works amazingly nice. let's start mass back and forward testing! As it is a purely mechanical system, it would not be hard to make an EA from it.

Many thanks, TeamAphid, for sharing your ideas.

Best regards,
Piccolo

PS - a full monty sample attached.. chart is up to this moment.
  • #98
  • Jan 17, 2007 6:08am Jan 17, 2007 6:08am
Quoting piccolo
lol, by mistake a made the same trade profitable as the discussed loss and re-entry. my mistake was that I drew the fibo line to the low point but not the most recent low.. making more breathing room for the trade that would have resulted in a full monty trade.
I found it quite hard to read your chart.
It does take a bit of patience and practice to get the hang of this system and nothing beats watching it in real time and demo trading.
Here is my chart of the current BAT trade on GBPUSD on ALPARI data.
See how the blue line waits an hour before it starts to form?
Attached Image
  • #99
  • Jan 17, 2007 6:11am Jan 17, 2007 6:11am
Quoting The Wizard of Oz
IBFX
In that case your settings will never match ours.
Either switch to Alpari or be aware that yours will always differ.
  • #100
  • Jan 17, 2007 6:14am Jan 17, 2007 6:14am
Quoting The Wizard of Oz
IBFX
I'm on IBFX also, and my blue bat line is @ 1.9607. using the settings per the instructions.

TA says Alpari shows 1.9576.

We're going to quite different entry and exit points, it seems.

Or would it be beneficial to open a demo with Alpari and trade from that?
Is your SL my TP?
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