Balls Of Steel Method

i'm going to backtest a few pairs this weekend starting jan '07 and see how it does. I'm going to concentrate on the USD pairs.

ok, so i backtested GBPUSD starting from JAN 1 '07 to DEC 31 '07:

1075 pips lose vs. 2889 pips won = 1814 pips won. Average 151 pips per month. Not bad!

Similar to "3 bar swing high/low" trading where you wait for a 3 bar swing to form and trade on it. Works very well in a non-whippy market. The exit condition seems very important, I've never figured out a perfect stop loss... but I had very good luck with just using the opposite end of the bar and 2x that as the TP.

Are you just checking to see if both are bull/bear or actually checking for falling/rising highs/lows?

I do the latter and it works very well on EURUSD, AUDUSD, NZDUSD, ... less so on the GBPUSD and horribly on the GBYJPY. The pound tends to be pretty whippy, so it's tends to the "EA killer" over a large enough period of time... ie: 2 or 3 years on a backtest can make scarey drawdown.

I think good pair selection would be crucial.

first of all.....pitty it is moved coz i just wanted some more input from fellow traders and to see if somebody could do a backtest over a longer period of time.

anyway thanks to criss for his backtest!!

like rabid wrote i think i have to look for a more better choise of pairs,nad rabid i just look for bear/bull candles
2 in a row down....sell
2 in a row up....buy

just wanted to add...no trade signals for monday 17-03-08

Are you trading this live or demo?

If this was a live account the thread would be called 'Where's my left one"
Just a commet on the No stops part. But the system does have an interesting piece in that it appears to be an attempt to catch the 3 day swings.

Here is a quick EA I made for this system.

The minimumdistance variable is asking for the minimum distance required of the previous two bars. That can help filter out dojis.

Use a broader SL and enter w/ a risk appropriate trade. I use the low/high of the previous bar with much better results. I also used ATR to filter out small bars (average daily ATR / 3) and had very good results with long trends.

But as has been said before... it's all dependent on the length of the trend. Periods that had long daily trends did very well... more cyclical or smaller trends did rather poorly. I take a 2x rate of return as my TP.

Backtest result:
http://i27.tinypic.com/258qg5c.gif

That's a backtest of this method testing thru '07 (Jan to Dec) of NZDUSD. I suspect better money management, a better scaling system and an improved exit system could cut losses during the lean times and give us a huge advantage in the trending times. Maybe a trailing stop loss could be used to keep from giving back some profits on shorter trends.

All stuff to test I suppose.

Hope You programmed the EA to omit Sunday's candle..
Cos i was thinking if it was really possible????

Here is a version which omits the sunday candle.

It won't open trades on the sunday candle.

RR,

the EA would be nice if it can filter doji candle........ can u write EA to do that.

this is a good idea....but.... no stops! yikes!!!!!!!!!!!!!!! rr should be 2:1 IMO now throw in a semi-martingale position sizing into this EA with a 2:1 RR and you will have a folowing the trend.... good RR and adjusted postion sizing EA which might actually work in any market on any pair....
thaat could be a moley quail for sure....

but 1 months of it working well is NOT backtesting....and backtesting is NOT forward testing....but the idea is valid since its simply folowing a trend with trend being defined as 2 blue daily candles in a row,,,,, following the trend is good...simple and effective

no stops is bad....as it will get u in trouble when u have a hard reversal day or 3 in a row etc.....

semi-martingale position sizing may just be what makes this work REALLY well.....

just my 2 cents

regards


D


PS can someone put these ideas together into an EA AND backtest it?

i would be interested in the real results ....... i would but i know nothing about computers...sorry....

ps there is a semi-martingale ea floating around somewhere let me see if i can post it....


here ya go

http://www.forexfactory.com/attachme...2&d=1205472509

No stoploss or a martingale approach would be deadly on the euro and other pairs that have had strong trends... unless you plan to hold the pair 'til the dollar comes back into strength.

what do u mean?/


i said no stop loss is a bad idea...



semi-martingale as per fx-traderpro style is what i mean....do u know what it is?/

if not please learn it before u comment...


regards

d

OCT 2007 +593
NOV 2007 -941
DEC 2007 +382
JAN 2008 +838
FEB 2007 +244


The drawdown in November is killing!

Will continue with the back test result 2moro

- please explain.

http://www.forexfactory.com/showthread.php?t=43221

Just read the first post - it makes the assumption that eventually u will have a winning trade - only diff is that u are not adding to losers. not a complete waste of time in reading - just not my style. I have learned is is a mistake to always be in the market - and to increase your bet when u are losing is also a mistake. Just my opinion of course...

As described it's an increasing lot size stop and reverse system. SaR systems are all about getting the right TP and SL and not going beyond your risk threshold for a fixed time frame. I would be very concerned about increasing lot size to compensate for previous losses... as a bad period of whipsaw would blow out your money management and leave you very exposed.

A classic example would be a series of "arcs of consolidation" where you have a small down trend, sideways, then an small uptrend, repeated over the course of a few months or more. There's a good example of that on the pair I tested... and that's where we had the worst draw down.

I think the best way to improve this system is to scale in over time so you make the most of winning trades. There might also be a way to adjust the stop loss so as to keep profits and cut small trends short... but I don't have the foggiest clue on what would do that. Maybe start with a 1% risk investment and over time add more... dunno... just spitballing on that.