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Two-Stroke System (Mechanical Price Action +300 pips per month)

  • #101
  • Sep 18, 2007 8:45am Sep 18, 2007 8:45am
Inflection have you thought about trading 3 different accounts?

1) Take only longs on the pair
2) Take only shorts on the pair
3) Take both longs and shorts

The bet is that one of the three scenarios will be highly profitable. The other 2 might crash and burn.

Thoughts?
  • #102
  • Edited 10:54am Sep 18, 2007 10:53am | Edited 10:54am
Quoting maninjapan
Is there another name for this oscillator? I have been trying to look it up, but not having muhc luck finding anything on it.
It is called the Williams %R oscillator (i.e. %Range). It may be called "%R" or "Wms%R" or "Williams%R" or some variation of that. It depends on what trading platform you are using. Under Tradestation it is called "%R" but I don't use the default analysis tool. I have a pre-programmed paintbar function based on %R that paints my OHLC bars red, green, and yellow based on the relative measure of %R (whether <30%, >70%, or in between).

I got the original idea for that paintbar study from another trader, I think here at FF (ejtrader?). He had a method for trading EURJPY which included this analysis tool. Someone in the discussion here or at another site posted a Tradestation version of the function, which I adopted.

I hope that helps!

fyi:

http://en.wikipedia.org/wiki/Williams_%25R
  • #103
  • Sep 18, 2007 10:58am Sep 18, 2007 10:58am
Quoting Inflection
It is called the Williams %R oscillator (i.e. %Range). It may be called "%R" or "Wms%R" or "Williams%R" or some variation of that. It depends on what trading platform you are using. Under Tradestation it is called "%R" but I don't use the default analysis tool. I have a pre-programmed paintbar function based on %R that paints my OHLC bars red, green, and yellow based on the relative measure of %R (whether <30%, >70%, or in between).

I got the original idea for that paintbar study from another trader, I think here at FF (ejtrader?). He had a method for trading EURJPY which included this analysis tool. Someone in the discussion here or at another site posted a Tradestation version of the function, which I adopted.

I hope that helps!

fyi:

http://en.wikipedia.org/wiki/Williams_%25R

You've asked for help, I've offered my help. Any reflection, inflection?
.
  • #104
  • Sep 18, 2007 11:24am Sep 18, 2007 11:24am
Quoting CronosFX
About your system, there is one thing that bugs me;
you say in post 6 (point 3) that you should "Exit at the CLOSE". This is impossible, since knowledge about the close is a priori, that is, something you know after it has happened. This might not make a whole lot of difference, but it's worth taking into account. In effect, you cannot trade on a bar that is finalized.

Secondly, I am able to program very basic things, so I want to try out your system mechanically in an automated setting both backtesting and also forward testing. For this, however, I need some clear "computerizable" logic. There's one thing that I would like interpreted:
2 questions:
How do I know where it will close (in computer terms)?
How do I determine if I should exit one OR two positions?

With all respect,
Cronos
Hi Cronos -

In computer terms, you would have to consider this rule as "immediately following the close" because the CLOSE will need to be evaluated by the strategy. Alternatively, you could evaluate the current price in real-time relative to the open, close, and trend analysis at any moment prior to the close of the bar. I don't think it matters, since it's a difference of seconds, and the "close" is an arbitrary point in reality. Do whatever is easier for programming.

For starters, we will have two positions. If the TREND signal is true at the CLOSE, we will let one position (or half of the total position, whichever is easier to conceptualize) trail the trend until the signal reverses on the daily. If the HOLD signal is true at the CLOSE, we will not exit our position(s), until the HOLD signal is no longer true (i.e. lower close). Thus, as long as we have one position trailing the trend, we will only enter/exit one position based on the HOLD signal. We will always have two positions in the market.

I hope that helps.
  • #105
  • Sep 18, 2007 11:34am Sep 18, 2007 11:34am
Quoting maninjapan
The entries look pretty straight forward, but I dont think I quite get the exits. if the %R is up then hold one, if close is lower than open then exit..
but what about if close is HIGHER than open but %R is flat?
and does the close is lower than open exit only apply to bar of entry?
And what would be an exit signal with %R? If it just comes goes to flat? or does it need to go to Down?

The answers are probably quite simple, Im jsut a little confused....
Hi maninjapan -

There are two signals, the HOLD signal and the TREND signal. At long as the TREND signal is true on the daily, we let one position trail. Visually speaking, this means either red or green. If it turns yellow (flat) or opposite, then the signal is no good and we exit. As long as the HOLD signal is true, we do not exit the other position(s). If the close of the day cancels the signal (e.g. for LONG position, close lower than open OR close lower than prev close), then we exit.

As long as the HOLD signal is true, we are staying in the market. As long as the TREND signal is true, we are trailing one position.

I hope that helps.
  • #106
  • Sep 18, 2007 11:35am Sep 18, 2007 11:35am
Quoting bullrock
Hi,

I am a quant developer from London and got the exact same idea a couple of weeks ago. The similarity is frightening. If you are interested we can work together to polish this thing but certainly extremely promising stuff... I think we can easily smooth the equity curve and figure out a money management principle that could shoot the profitability well over 50%.

regards
bullrock
Hi bullrock -

Many thanks to you and the others that offered help! I sent you a PM with my email address.
  • #107
  • Sep 18, 2007 11:38am Sep 18, 2007 11:38am
Quoting tdion
Inflection have you thought about trading 3 different accounts?

1) Take only longs on the pair
2) Take only shorts on the pair
3) Take both longs and shorts

The bet is that one of the three scenarios will be highly profitable. The other 2 might crash and burn.

Thoughts?
Hi tdion -

I have absolutely no idea how to think about this, but I'll noodle around with it. Maybe you can clarify a bit what you think the result would be?

Thanks.
  • #108
  • Sep 22, 2007 2:10am Sep 22, 2007 2:10am
Thanks for everyones helping clearing my questions up.

Ok so this is starting to get clearer but what happens if the TREND is true but the HOLD is false. Does this mean we hold one position and exit the other?

And you will only carry both positions over if both TREND and HOLD are true?
  • #109
  • Oct 5, 2007 2:57am Oct 5, 2007 2:57am
hi bull rock i didnt understood what is your system that may promise you this big percentage of wining !!!

Thank you for replying .. my email is [email protected]
  • #110
  • Mar 28, 2008 1:32am Mar 28, 2008 1:32am
BUMP
  • #111
  • Mar 6, 2009 10:19am Mar 6, 2009 10:19am
hi! my first message on the blog which is fantastic!

I was very interested in this discussion and this method... but I believe that the results (more higher closing days / lower closing days and viceversa) depends on the tested period.

In fact, between 2003 and 2007 the mentioned currency pairs have performed exactely according to the results of the test. not only in the direction, but also in the intensity.

It would probably make more sense to test the theory over a period in which the currency pair didn't gain or loose.

I am keen to post this thought, even if the 3ed looks dead, for anyone like me who happens to go through it and maybe wants take a chance to test it for real!

the same thing apply to the other ''Stupid System (200-300 pips per month) ''

I would be glad to hear if there's any update on similar systems.

ciao from italy!!!

puma

p.s. I hope I was clear, if not feel free to reply!
  • #112
  • Jun 29, 2009 2:06pm Jun 29, 2009 2:06pm
Anyway, are the founders of this thread rich or broke?
Guy in Belgium
  • #113
  • Jul 1, 2009 1:45am Jul 1, 2009 1:45am
Certainly not broke. But not financially independent either. Have spent the last year moving from Duesseldorf to Los Angeles to Seattle. But I'm interested in picking up on this again. I've gotten a lot of PM's but have simply had no time to buckle down and put serious thought to automated forex systems. If anyone would like to take the spreadsheets I uploaded and contribute to the conversation, that would be great!
  • #114
  • Jul 1, 2009 5:41am Jul 1, 2009 5:41am
Quoting Inflection
Certainly not broke. But not financially independent either. Have spent the last year moving from Duesseldorf to Los Angeles to Seattle. But I'm interested in picking up on this again. I've gotten a lot of PM's but have simply had no time to buckle down and put serious thought to automated forex systems. If anyone would like to take the spreadsheets I uploaded and contribute to the conversation, that would be great!
interesting..at beginnin i read this post, I dont notice the first post date.

butintersting approach...not sure why the thread stop for quite so long
  • #115
  • Mar 12, 2011 7:38pm Mar 12, 2011 7:38pm
Quoting Inflection
PLEASE NOTE: This is a work in progress. I welcome your comments, criticisms, and improvements!

This approach is ultra simple. It is based only on price action and probabilities. It uses no predictions, no charts, and no discretion. It can be completely automated.

I have run historical studies using this approach from 2003-2007 on ten major pairs and the returns are positive across the board. It is probably applicable to other pairs as well, though I have not done any studies on exotics.

From these historical...
Why the USDCAD? I thought the USDCHF was the anti- EURUSD?

Check the correlations here - http://www.mataf.net/en/tools/01-01-correlation
Canadian by birth Australian by choice
  • #116
  • Mar 12, 2011 8:10pm Mar 12, 2011 8:10pm
Quoting TheSnowman
Why the USDCAD? I thought the USDCHF was the anti- EURUSD?

Check the correlations here - http://www.mataf.net/en/tools/01-01-correlation
This thread is dead. No posts in nearly 2 years means the system no longer works.
  • #117
  • Mar 12, 2011 8:14pm Mar 12, 2011 8:14pm
Quoting Dreamliner
This thread is dead. No posts in nearly 2 years means the system no longer works.
R U stalking me?
Canadian by birth Australian by choice
  • #118
  • Mar 13, 2011 10:17am Mar 13, 2011 10:17am
Quoting TheSnowman
R U stalking me?
Oh no, you made me
  • #119
  • Last Post: Mar 27, 2011 5:51pm Mar 27, 2011 5:51pm
Hmmm this kind of system seems pretty good; not in the implementation mentioned but as the TS said with better strategy attached to it.. could easily think of a few things.. like choosing the entry/exit in combination with S&R, trends etc.
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