Weekly 80/20 Setups

Quoting elmster

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Fly, I'm still following your signals, keep up the great work.

Thanks,elmster

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Quoting Flyjetz

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I was beginning to wonder if anyone was still out there!

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Quoting Flyjetz

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I was beginning to wonder if anyone was still out there!

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Quoting Flyjetz

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This system has now lost five in a row, and six of the last seven. This is starting to hurt the statistics a bit, but I have not lost faith in the system. I have to remind myself that I've only been doing this live for four to five months now and I will continue to monitor how the system progresses over time.

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Quoting 6pack

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Sorry for these losses. The forex markets may be experiencing major reversals now, and your system is after all trend-following. I have two suggestions that I've been thinking about for a while now:

1. There is a very important piece of data that you're leaving out: the weekly open. It's not hard to think of creative ways to integrate it in your system [e.g. multilinear regression]. Although it would obviously complicate matters, it may give rise to better entries and targets.
2. A third screen: your system is based on "the trend is your friend" and the "buy the dips [in an uptrend], sell the rallies [in a downtrend]" concepts. A component which may be missing [from what Dr Elder calls the "triple screen"] is the last, smallest time-frame screen, which amounts to making sure your market is indeed starting to move again in the direction of the trend. For example, if USD/JPY is in a downtrend, but has rallied [thus you buy at 105.25], before you place your order verify somehow that the downtrend is being renewed. I know that you value simplicity and a hands-off approach, and I'm not sure how to implement this concept. A relatively simple solution may be to issue a stop order instead of a limit order, when price reaches a certain level: for example, if USD/JPY reaches say 90% of its expected weekly range, only then set a sell-stop order at the 70%. I hope this makes sense.

I am sorry I don't have the time to test these ideas myself - I decided it would be better to throw them here in the open, rather than waiting for when I do have time and coming up with more tested results.
I have been following your thread, but have not been following your system per se: I only use your system for bias, for example now I just sold JPY/USD...
Good luck!

p.s. I still think your system is great as is, and in the long term will continue be profitable. I am just offering what in my opinion may improve the performance further.

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Quoting Flyjetz

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I completely understand your second point and have considered this approach myself. I thought about not placing an entry at 80 or 20 unless the price first hit the 100 or 0 level. Frankly, the system as is, is taking up a lot of my time right now, and I'd love to have someone else test that idea if they are interested.

Can you expand what you mean in your first point? I'm not sure I'm getting it.

Also, thanks for the kind words. I too believe this is a profitable system. You're absolutely right, some of the major currencies are going through what appears to me to be a period of indecision. Despite the string of losses, at least the losses are for smaller pip amounts than the wins.

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Quoting 6pack

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I'm not sure exactly how to do this. Right now your calculations only include data from previous weeks. I think if you could somehow integrate the current week's open in the calculation, you might be projecting the weekly candle more correctly. You could, for example, see where the weekly opens have been for the last 20 weeks, and see how far off the actual weekly open is, relative to where it's "supposed to" be. If for example GJ opened 200 points lower than where you expected, adjust your entries and tp accordingly. Again, I'm not sure exactly how to do this, but I do think the first price of the week could give valuable information.

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Quoting drummer486

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Flyjetz,

First off, I have been following your system in the past few weeks, and while there certainly have been some losses due to reversals and such, it is good to see that the losses are occurring in a controlled fashion. Hopefully the market will reach a trending state soon, or if not, perhaps we can figure out a way to customize this system for a ranging market state.

Second, I wonder whether you've backtested this system on historical data. Have you tried it? It may be that optimizing the formula in meaningful ways could lead to somewhat better performance.

Drummer

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