Inside Bar Trading Revisited

Thanks Gustav for the IB thread on BabyPips. I'll read this and compare it to the Pure IB technique. The stochastic mention has already interested me as it's not readily discussed in the pure IB forum.

Scraped a win on this one. Would have lost if I was using the full ATR before taking profit. 4 for 4.

So to recap.

The EA does not check whether an IB is valid or not. I'm currently trying to see what effect various settings have on the win ratio, maintaining profit will come later as we try to reduce losing trades.

Taken individually, then:

1. Timeframe doesn't seem to matter.
2. IB Size doesn't seem to matter.
3. TP setting does matter, an initial TP at 1/2 ATR gets more consistent wins.

I'll investigate trading at low volume and seeing if an IB breakout 2 bars in is different to one later on.

The hard part is trying to determine if any of the above have adverse effects upon each other.

And only then will I look at setting rules to try and pick the best trades.

here was the last ib I took on the 30 min euru/usd thinkpip and 1ka. the yellow dot is the ib indicator built in to my tradestation charts

try this

Another EA win or EURJPY. 5 wins for 5 trades.

Scraped a win on this.

Lost this one. EA suckered by small break on IB. 6 wins on 7 trades.

It is good to see your EA working succesfully so far . Thanks 1ka for the work to develop it . I just put the EA on the chart & do not know if it works , if it need any indicator to work ?
Thanks , I just found this IB in "The DIBS method " thread & applied at the first sight with positive result & now trying to read more in the threads related.

fontu

Are you using the default settings on EA for the trades you posted?

I have been running several back test on EUR/USD and had to set Min volume at 100 in order to pick up more trades. Using a HMA indicator set at 80 on a 4 hr chart but running EA on a 1/2 hr chart. Making only long trades when HMA is moving up and short trades when it is moving down.

Winning % without indicator Short 63% long 78% Profit 147.40
12/08/08 to 1/12/09

Winning % with indicator Short 81% long 77% Profit 195.71
Short only 12/8/08 to 12/23/08 Long only 12/23/08 to 1/12/09

Fontu, just be careful with the EA - it is dumb, it does no analysis to see if the trade will be good or not. Don't use it on a live account, it WILL lose you money as the Risk/Reward is about 4:1 or more. You might have many winners, but the losers will break the bank.

The EA uses no indicators. The version I posted can be put on any timeframe but will use 30M regardless. I think that version is also using the value of SL as it's TP point.

Keep watching the thread. I'm planning to see if we can reduce the losing trades and this improve the Risk/Reward.

hanks 1ka for the information , yes I placed it on demo only now . Hope it will come up with success , if can avoid false breaks it should be positive for every trade. Only 1 pip certainity can do a great EA.
manualy I traded many trades all with positive result at random without any time factor ,for any insider bar I see when have time to follow it.great system no doubt.

Thanks ,
fontu

I'm pleased people are interested in this. Attached is the latest version - please don't use it on a live account it will lose money

I've recompiled the EA so that the defaults are the ones that have proven to be best during testing so far.

The EA properties are as follows:

Debug_Mode = true; // Print the programs debug comments.
LotSize =0.02; // The lot size used in each trade.
MaxBars = 4; // The maximum number of bars that we will look back to find a recent IB
MaxIBSize = 6000; // The maximum size of IB bar.
MaxStart* = 100; // The maximum deviation allowed when we open an order
TPFactor = 1; // The TP profit factor. If this is 2, then the TP will be doubled, etc.
MinVolume = 6; // The minimum volume required for us to trade.
BarOffset* = 30; // The number of PIPs that our InsideBars are offset from trigger IB.
TrailTrends = false; // Do we want to follow trends or just fixed TP.
MinATR = 10; // The minimum value that the ATR should return;



Note that no other indicators are required for this EA to run. This version will use the timeframe of the chart it is placed upon. It uses the ATR to get profit and with a TPFactor of 1 will take 1/2 lot size at 1/2 ATR and the remainder at full ATR. Also, I use Alpari which has a 5 digit point size. If you are on 4 digit points, then divide the asterisked (*) parameters by 10.

It's a work in progress, it's unsupported, it has bugs, it doesn't handle trade context errors at all! Did I say it will lose you money?

Comments about the trades it takes are welcome, especially if you have any ideas about what it could have done to improve/avoid any problems. (Pictures are good at this point). Note that we're following the Inside Bar trading method, so any suggestions need to work with this.

I have absolutely no intention of selling this so any help you give helps everyone. Ultimately, if it works, then great, I'm using it to make money trading, why would I sell it? - Actually, ask yourself this about any EA - If they work, why are they being sold at all? The author should be trading and making money, not needing to sell it!

Whilst it's in development I'm keeping the source to myself. I may release it if I'm happy with it, or if I cannot develop it further.

Will the EA need a magic number in order to work on more than 1 currency at a time?

Good question. The EA uses a magic number internally and only handles orders on its own chart currency. So running on multiple currencies is fine.

However, if you run it on two charts using the same currency, say you want to do 30M and 1H at the same time with the same currency, then they WILL interfere. So don't do it, it may cause an explosion in the quantum combobulator (and we don't want that).

Another suckered trade on EURJPY. 6 Wins on 8 Trades.

Actually, this looks like it may have been avoided as it appears to have incorrectly taken spread into account. The High doesn't seem to hit the IB. I need to check this.

I'll keep posting these trades on a one by one basis for today only, I'll summarise them daily from tomorrow onwards.

hi 1ka,

Why don't you check the value of the 89 MA as part of the decision to take a trade or not ?

checking this value is simple. once you it, you place Buy/Sell PO according to it. further more, you can add a filter for eliminating trades too close to the 89 MA line.

I have some basic coding skills, and can assist if needed.

BR

Dani M.

Thanks Dani, I'm currently at the stage of checking to see what effect physical things such as volume, IB size, TP point, etc. have on the profit/loss ratio. When I've got a feel for those, then I can start to try and identify losing trades via indicators. Things like SMA and RSI are very useful. I'll run some back tests at a later stage and see how they all work individually and together (might take a while :-) )

In the meantime, I'm running the EA with the optimal settings found so far to see if the forward testing matches back testing. Back testing in MetaTrader is always a bit suspect and there's nothing as accurate as forward testing. Also, it's a bit of fun!

If you have anymore indicator ideas that have helped you in real trading then please post, it's all useful to me and everyone else here.

Having been suckered on the Long, it drops through and wins on the short :lol:

7 wins on 9 trades.

Eventually got something from this one. Lucky again I think. (actually I jumped the gun, 1/2 is still in, but BE means it won't lose)

8 from 10.