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4H 5EMA System

  • #1,441
  • Nov 23, 2008 7:27am Nov 23, 2008 7:27am
Quoting PowerBySol
I'll all for progress ;-}

I know EA's aren't 100 %, but I was hoping they would be a better indicator of performance. Manual backtesting makes my shoulders stiff...

Ziko - if it helps any, here is a screen shot that I just watched in the visual back test -
http://i37.tinypic.com/anlh1x.jpg

Buy stop should have been at 1.9450, 8 pips over Jan 22 00:00 bar's high of 1.9442 but it missed. Instead it triggered at 1.9507, relevent journal entries follow -

2008.11.22 20:48:29 2008.01.18 00:00 5EMA GBPUSD,H4: open #21 buy stop 0.10...
you have to run the test using M1 , the EA is built this way,
you have to set the PERIOD in the strategy tester to "M1", setting it to anything other "M1" will not work, I said this already when I posted the EA
  • #1,442
  • Nov 23, 2008 8:25am Nov 23, 2008 8:25am
Quoting stersuhr
Thats exactly the problem with EA's they can have very deceptive backtesting results. They can take what is a very profitable and make it not as profitable. -Sterling

the EA has to be CODED correctly and has to be TESTED correctly,
you can't just take an EA that was built to run against M1 chart and run it against M15 or H4 chart and expect the EA to work correctly.
  • #1,443
  • Nov 23, 2008 10:15am Nov 23, 2008 10:15am
A ha ;-}

I thought the comment about 1min time frame was about setting the testing level to Every Tick. I set the time frame to 4 hours since it's a 4 hour strat. I guess I had spent too much time reading threads to be sharp reading yours. I'll try agian. After running the visiual all night I've only gotten to March, someday I'll have to upgrade my 1ghz computer ;-}
  • #1,444
  • Nov 23, 2008 1:02pm Nov 23, 2008 1:02pm
Quoting PowerBySol
A ha ;-}

I thought the comment about 1min time frame was about setting the testing level to Every Tick. I set the time frame to 4 hours since it's a 4 hour strat. I guess I had spent too much time reading threads to be sharp reading yours. I'll try agian. After running the visiual all night I've only gotten to March, someday I'll have to upgrade my 1ghz computer ;-}
. Maybe you could make some money. Say 1500 pips in 3 months at 2$/pip that is 3000 $ and you can buy a decent trading station.
.
  • #1,445
  • Nov 23, 2008 1:41pm Nov 23, 2008 1:41pm
Yea - it's a wee bit outdated ;-} I don't want to work though, so the new computer will have to wait until I hit my targets or sell my rentals.

On the back test, I ran a test from jan again and got 17 trades. Set to model every tick on the M1 period with stock settings on the EA. It seems strange to set a 4H strat on 1M but I'm sure you know more about this than I.

I know that back testing is not reliable, though I figured that it would be at least useful if someone spent the time to add the feature to the program. I think it would sure be useful to apply subtle changes to the system and test other pairs or timeframes. I'm very happy with it the way it is, and if it can be put to more uses all the better.

Ziko, you posted a 625 pip test for Oct. What about for the year?
  • #1,446
  • Nov 23, 2008 2:07pm Nov 23, 2008 2:07pm
Quoting PowerBySol
I know that back testing is not reliable,

Ziko, you posted a 625 pip test for Oct. What about for the year?
back testing is reliable using the m1,
you can check the EA trades to see if they follow the system rules or not,
the 625 pips was for Nov
  • #1,447
  • Nov 23, 2008 2:41pm Nov 23, 2008 2:41pm
Quoting ziko123
back testing is reliable using the m1,
you can check the EA trades to see if they follow the system rules or not,
the 625 pips was for Nov
So I can run the EA on the 1M and check the rules? I dont know EA's.

-Sterling
Founder of Day Trading Forex Live
  • #1,448
  • Nov 23, 2008 3:19pm Nov 23, 2008 3:19pm
Quoting stersuhr
So I can run the EA on the 1M and check the rules? I dont know EA's.

-Sterling
say you want to test Sep:
- make sure you have 1minute data for sep
- run EA and set the start and end dates in startegy tester to sep1st, sep 30th
- check every trade placed by the EA to make sure it follows rules

note that the EA doesn't handle the friday and the 50% rules
  • #1,449
  • Nov 23, 2008 3:33pm Nov 23, 2008 3:33pm
Quoting ziko123
you can't just take an EA that was built to run against M1 chart and run it against M15 or H4 chart and expect the EA to work correctly.
I beg to differ ... but yes you can. EA's are coded (or at least SHOULD be coded) to follow a set of rules. If the rules don't work on an M15 then that is not a fault with the EA. It just means the system the EA is following is not designed to work on that time frame.
  • #1,450
  • Nov 23, 2008 4:04pm Nov 23, 2008 4:04pm
Quoting the Guru
I beg to differ ... but yes you can. EA's are coded (or at least SHOULD be coded) to follow a set of rules. If the rules don't work on an M15 then that is not a fault with the EA. It just means the system the EA is following is not designed to work on that time frame.

there is many different ways to code a system as EA, for rxample the 5EMA system I coded it to use market orders to enter into the trade and stop orders for reverse, some one else can code it to use stop orders for both entry and reverse, both EAs can have identical results,
what I'm saying is that my EA has to run against the M1 chart, but you can set the timeframe in the system to whatever you wish, the 5EMA system by default is using the H4, but you can set the timeframe parameter in the EA to H1 or M30 or M15 or daily but the EA has to be forward or backward tested against the M1 chart.

so we have 2 things
1)EA has to run against the M1 chart
2)timeframe parameter in the EA can be set to whatever you wish, default is 240(H4)
  • #1,451
  • Nov 23, 2008 6:30pm Nov 23, 2008 6:30pm
what I'm saying is that my EA has to run against the M1 chart, but you can set the timeframe in the system to whatever you wish, the 5EMA system by default is using the H4, but you can set the timeframe parameter in the EA to H1 or M30 or M15 or daily but the EA has to be forward or backward tested against the M1 chart.[/quote]

Ok - so that's important. I have no intention to trade this live yet since you said your not comfortable doing so, but to run it live on a demo it must be set on a 1M chart instead of a 4H chart. if we jump back and forth between a 1M and 4H will it mess with the EA? I'd rather check it's performance on the chart it running than open a second.
  • #1,452
  • Nov 23, 2008 7:20pm Nov 23, 2008 7:20pm
Hi, sorry for interrupting.. can we go back and discuss like 'old days' rather than using 3 page just to chit chat and pondering about this EA thing

I'm sure not everyone visiting this thread is 'the veteran' who followed from the very start of the thread. Some of them are newbies who wants to know the system better and cross checked whether they've followed the system as per rule..

In my humble opinion, till the EA sterling refer to is released, just stick to manual trade to make money,
and don't confuse newcomers in any ways..

If you guys want to talk about more technical things, i suggest we open another thread focusing on EA only.
  • #1,453
  • Nov 23, 2008 7:43pm Nov 23, 2008 7:43pm
Quoting ivonivon
Hi, sorry for interrupting.. can we go back and discuss like 'old days' rather than using 3 page just to chit chat and pondering about this EA thing

I'm sure not everyone visiting this thread is 'the veteran' who followed from the very start of the thread. Some of them are newbies who wants to know the system better and cross checked whether they've followed the system as per rule..

In my humble opinion, till the EA sterling refer to is released, just stick to manual trade to make money,
and don't confuse newcomers in any ways..

If you guys...
I second ivonivon's suggestion.

Since this is my first post I want to thank sterling for creating this very promising thread and all the people who contribute to it.

BTW, I found this thread because petersurrey mentioned it favorably on the fxreview site. Thanks Peter
  • #1,454
  • Nov 23, 2008 7:53pm Nov 23, 2008 7:53pm
Hi Sterling and everyone,

According to the rules, we only put in an order to go the opposite direction after the reversal bar has closed. But when must we put in the stop for this reversal trade? Cos there may be a case whereby the trade to go the opposite direction occurs in the current bar and we need to put a stop. I guess that when I adjust the trade every 4 hours, I check what is the highest high that has been formed since the original trade (not the reverse trade) triggered and move the stop to the most recent candle with the highest high. Is this correct?

Thanks!
  • #1,455
  • Nov 23, 2008 7:56pm Nov 23, 2008 7:56pm
Quoting ivonivon
Hi, sorry for interrupting.. can we go back and discuss like 'old days' rather than using 3 page just to chit chat and pondering about this EA thing

I'm sure not everyone visiting this thread is 'the veteran' who followed from the very start of the thread. Some of them are newbies who wants to know the system better and cross checked whether they've followed the system as per rule..

In my humble opinion, till the EA sterling refer to is released, just stick to manual trade to make money,
and don't confuse newcomers in any ways..

If you guys...
I cant really stop anyone from making another thread about the EA for this system, but im going to ask you not to. If the time comes when its needed I will do that. The reason I say this is because I think it will confuse people and take away from educating people to the actual mechanics of this system. If Ziko or Duncan wants there EA tested I can do that and let the people I know test the system. They already have a great understanding of the system and are in a great position to test and EA (tonirai, howard, alllivemind). Others too, I just need to know that you know the system. If you dont there is no point in having and testing an EA. I hope people understand. If you have any suggestions about this im open to them.

-Sterling
Founder of Day Trading Forex Live
  • #1,456
  • Nov 23, 2008 8:01pm Nov 23, 2008 8:01pm
Quoting piptrees
Hi Sterling and everyone,

According to the rules, we only put in an order to go the opposite direction after the reversal bar has closed. But when must we put in the stop for this reversal trade? Cos there may be a case whereby the trade to go the opposite direction occurs in the current bar and we need to put a stop. I guess that when I adjust the trade every 4 hours, I check what is the highest high that has been formed since the original trade (not the reverse trade) triggered and move the stop to the most recent candle with the highest high....
It the same thing with a normal setup and reversal. In the case of a long price may go make a lower low and then trigger the buy. You still have your stop at the low of the reversal bar and then when you see this has happened you just adjust the stop when you look at the market at the next 4H time. So the same is true for a reversal order. Lets say it was a buy and went up and was 100 pips in your favor and the reversal bar closes. So at the close you put the reversal order in and the stop for that 5 pips above the high since youve been in the buy. So if price makes a higher high during that next bar and triggers the sell you just readjust the stop for the reversal order at the next 4H adjustment time. I hope this makes sense.

-Sterling
Founder of Day Trading Forex Live
  • #1,457
  • Nov 23, 2008 9:11pm Nov 23, 2008 9:11pm
Hi, we're long right now, right?
  • #1,458
  • Nov 23, 2008 9:15pm Nov 23, 2008 9:15pm
Quoting stersuhr
It the same thing with a normal setup and reversal. In the case of a long price may go make a lower low and then trigger the buy. You still have your stop at the low of the reversal bar and then when you see this has happened you just adjust the stop when you look at the market at the next 4H time. So the same is true for a reversal order. Lets say it was a buy and went up and was 100 pips in your favor and the reversal bar closes. So at the close you put the reversal order in and the stop for that 5 pips above the high since youve been in the buy....
Hi Sterling,

Thanks for taking the time to explain the above, its very clear now. Let's take it 1 step further regarding the above situation. It was a long and I have placed the reversal order to go the opposite direction and its stop in place as you have kindly explained above.

The price goes up for a few bars and poked through the high EMA by more than 5 pips which means it is a potential set up bar. We then make the necessary adjustments by putting in the stop lossl order for the inital long at 5 pips below the latest candle. At the same time we also put in a new order for a short and also the stop for this short at high of set up bar + 8 pips.

Do we at this point cancel the reverse order to go the opposite direction for the existing long position because since now we have a potential set up bar and the following bar could very well be a reversal bar and it will trigger a new short position. And price will definitely have to come down to trigger the new short position before reaching the reverse order to go the opposite direction for the existing long position.

Thanks for your help again.
  • #1,459
  • Nov 23, 2008 9:32pm Nov 23, 2008 9:32pm
Quoting ivonivon
Hi, we're long right now, right?
Hi Ivon,

I am also in the long now. Didnt take the signal to go short becos i think that the set up bar(with red arrow over it) may not have been intended to be used as a set up bar cos it is essentially only a 1 hr bar. So when the candle opened on Sunday, I just did a long as per the rules and stuck to it until now.

Any one any ideas on this?
Attached Image (click to enlarge)
Click to Enlarge Name: mon.gif Size: 17 KB
  • #1,460
  • Nov 23, 2008 10:31pm Nov 23, 2008 10:31pm
Quoting ivonivon
Hi, we're long right now, right?

ivonivon, yeah we are long from the open of today at 1.4957. I did not get in until 1.4965 because my platform did not open quick enough.
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