Trading Based on Reversing Theory....Testing ON

Hello All

While trying to find more about the reversing theory ...
i.e Reversing the bad trades of a bad EA (or even"Manual,NO-discretion Strategy")
i tried to find out many reasons why it is also been discarded by many saying..it also doesnt work..and a loser in the end !

The main reasons put forward were :
1) If its a Scalping ea, difficult reversing trades due to difference in copying and reversing trades and trading them in a new account. Time taken can have market difference in price .
2) Same for high Frequency Trading EA
3) Loosing ea's also sometimes have a series of very good trades and that can cause panic and ofcourse problems if they come during the start of testing/live trading whatever!
4) Its difficult to Find a Consistently loosing EA, which can be reversed
5) Markets change and even a losing strategy will sooner or later may become profitable and stuff is all random.
6) One is Still a loser (as a trader), if he is trying to reverse his bad ea/strategy.
7)Firstly, tell us what reversing u r talking about ?
Real Reversing
E.g. Reversing BUY EU 1.4500 SL 1.4480 TP 1.4540 ( SL:TP:: 1:2) to
SELL EU 1.4500 SL 1.4540 TP 1.4480 ( SL:TP:: 2:1)
or
Pseudo Reversing
E.g Reversing BUY EU 1.4500 SL 1.4480 TP 1.4550 ( SL:TP:: 1:2) to
SELL EU 1.4500 SL 1.4520 TP 1.4460 ( SL:TP:: 1:2)
(Pseudo Reversing is not useful as IMO its almost a new strategy)



Well i think its right about the "high frequency" trading and scalping being very difficult to take advantage by reversing
Yes the losing Eas too can have a streak of good trades making things difficult ( and emotions making us think that we shd better have used it normal way )

But i think if we have a Consistently losing EA, which has settings which are to be changed with market parameters with time and stil it loses consistently..then reversing Such trades ( with PURE Reversing) is useful for sure.

I even talked to 2 people (FF and non FF members), who though didn't help with original strategy they are using (so that i can use their reverse trades and check), but agreed fully abt reversing trades and making money with it consistently. true r not.. Dont know..but they were pretty old members (with less posts)

While experimenting with this, I Stuck upon an EA (Not on FF as of yet)
Which is a kind of
Trend based EA,
Not scalper,
Opens some 15-20trades a day
Has Fixed SL and TP (99% times)
Runs 24*6
i checked it on EURJPY only as yet
It needs Weekly optimization for its new settings at weekend from last weeks data(takes whopping 4 hours on my high end server) yes, still loses

It has been about 2 weeks i started it on a new demo account on my server(infact i have been testing before this for a month on old demo acc)
for properly testing it and its down (or up as reversed) some 730pips
I am attaching the full statement alongwith (Ea's Trades)

Since i dont have access to any reverse trady copy script..( i would request some one to providee me, if one has, for testing purposes only, if they can)
I am still using Zulutrades reverse function to test it as a Demo user and Demo signal provider myself and accordingly the user account is in profits by approx same pips

The purpose of this thread is to Know your views abt Reversing and Share Any good info you have about this.
Further if this testing goes on and bears some good results.. i will post the account details here with investor password and soon after that ea and settings . So that they can be helpful to others, if they really are.

Thanks

Hi Forex Saint,

I think a lot of traders have thought about this idea, and it is one that I think 'may' work given significant testing.
But, I think that reversing the signals from a losing EA will eventually fail too.
Unless you can test the reversal strategy on a large data set, for example, if you were to invent an ea today that trades the euro, it would have to be tested since the eur/usd started trading otherwise your results would be incomplete. In other words one that works now, may fail in previous years as the markets have since changed.
This testing would stage would take a long time to find the right tp and sl as you would have to use all the previous years data and you may eventually give up as a result.
So, this is why I think the reversal theory will only work on manual input of trades.

Since 95% of traders lose, we have to think why ?
I have been researching trading methods for appoximately two years and have come to the conclusion that although some retail traders will find some method that works for them, most will fail, why because either they don't have the time to commit to trading or simply they don't have the information that the professionals use.

So I did some a small test on a demo account, I removed all indicators from the screen then changed the price bars colour to match the background of the screen. So essentially you have a completely white screen and the only thing you can see is the ticker line, since the bars and screen are now white, the chart is invisible.
Why did I do this, because if we can see the chart it influences our decision making and this is what I wanted to get away from.

The point was that I wanted to see if it was EASIER to lose, the logic being that if it was, then I could use trade copy to reverse the trades.

I ran the test for one week taking completely random entries and exits.
I opened a DEMO and tested this live, I managed to lose 3,400 pounds on a 5,000 pound demo. One thing to note is that I traded intraday and made sure the trades went at least 15 pips against before closing or reversing.
If you add martingaling to this then most would agree that the demo account will go to zero, if we can then reverse these trades our real account will collect what the demo loses, minus spread cost, transaction and slippage etc.
It's an interesting idea but would need someone to test it on two demo accounts with 'trade copy' software for at least a few months.

If your software allows you to 'reverse' trades then try what I have explained and let me know your results?

Cheers J

Thanks for replying

Well I dont get the idea of Testing all data that is available and use its same settings for all future time..!
Simple that would be like using a Strategy with same settings for all types of markets and of course thats like with winning times and loosing periods too !

So i think a consistently losing ea should have parameters based on current market conditions or say settings from latest backtests.
If still that ea loses consistently with those settings... then it may hold some promise! bcoz it will be changing with time and will not be something like simple strategies which say work in trending markets and lose in ranging ones , etc etc (bcoz of which reversing those simple static strategies is not useful bcoz they can get profitable anytime)

This ea which i am testing changes its settings every weekend as optimizated settings, which infact shd make it a winner (but optimized settings appear to be the cause of it being consistently losing than losing all trades ...just a weird thought may be)

As regarding Reversing trades using an Ea/software ..i have been really not able to find any reversing solution ..non commercial as of yet.
I tried a lot of things posted here and there. like THIS..but none worked..and no more replies came!
So as of now i am checking zulutrades option only! may be if this reversing thingy works for more time..i would shift to a live account and then buy the commercial solutions.

and oops!.. sorry i forgot to post the zulutrade providers history, which is completely trading this ea signals ..
https://zulutrade.com/TradeHistoryIn....aspx?pid=6565
you can track its latest trades there... or can even open a demo account and test the trades by using the "REVERSE" function of zulu.
CAUTION : Plz DO NOT trade these signals live ...PLEASE! This is just planned proper testing as of now. NOTHING MORE !
EDIT : Discard the first 3 losing trades on this, as they were not appropriately sized and were for testing only !

Any how i will be updating logs at every weekend .
Regards

Very interesting theory. I will looking for the worst ever EA which is available on the internet! LoL But I think creating an always losing robot is not easier at all than creating an always winning one.

with minimum MQ4 skills you may have reverse BUY and SELL signals... if you have a code of course of that EA...

Quote:
But I think creating an always losing robot is not easier at all than creating an always winning one.

Exactly.. I think that any winning ea created today given enough time will eventually fail, if you keep the parameters the same , and the losing ea will eventually profit. How long, who knows...but I have no evidence to back this up and it is just my opinion.

It is the constant optimisation of the ea which keeps it profitable, and that requires skill and knowledge of the market.

- that is why I think my strategy outlined above may be more realistic attempt at reversal theory, random trades with no logic or discretion and martingale style lot sizes is bound to fail, so we just reverse all the trades!!

Cheers J

what is the difference? U always try to find a winner strategy!


Lubo.

Hi there, just came to my mind I purchased the so called FAPturbo trading robot 7months ago, but after a few weeks of testing I gave it up cause it didn't do its job as expected. Now I downloaded the newest version and attached it to my just opened 10K demo acc. I altered some default settings in it to make sure it will definitely loose.
And guess what... It is loosing like hell.
In one hour the robot managed to loose $473.

I keep testing this.

Its not just a case of using those "minimum "Skills and changing buy to sell and sell to buy.That will be Pseudo Reversing as SL and TP ratio will just be like normal ea, which infact , as said before, is kind of a new strategy and not real reversing to get real Reversed results !
Further the ea i m using uses variable Tp and Sl based on trend of market... SO its not just few edits... !

Some more things have to be looked into it for SL and TP.. ! I am still learning mql4 !

happy to see all the wok you are puttig in ForExSAint.

I looked at the results you tested. Good, but hat is just the surface.Just try the following and see, the difference it makes.

#1 Your EA's profit Factor = 67.43/1407.62 = 0.48
Suggestion : get it to below 30%

#2 #Wins/#Losses = 23/48 (of 70) = 0.48
Suggestion : get it to below 30%
- for goon measure an testing period that produces at least 100 total trades will be more helpful

#3 Expected Pay Off = -10.28
Suggestion : get it to below -$ 30.00 ( if you reach below - $50.00 you will be pleasantly surprised)

#4 Average consecutive Wins/losses = 2/3 = 0.67
Suggestion : get it to below 20%, well this is debatable. my preference is for less than 10%

5# The expectancy based on the settings used is at - 0.52
Suggestion : get it to below -0.75%

It is difficult at first to get all, these exactly on the same EXper settings butt, with patience and effort, the suggestions can be attained. You are 35-45% there, So do continue. Trust me it is worth it.

Your current EA may not be the one to give you these results. If it does not, don't be afraid to move on to another EA.

Please remember as well making it is merely one third of the battle. There is (a) Making/Capturing the Pips (b) Keeping the pips, consistently (c) the Growth phase. That is repeatedly capturing and repeating as and when the opportunities arise.

It does not matter how or where we do it, just that we share the knowledge, as indeed it is more blessed to Give Than To Receive.

Bless!

u know im thinking of this as well

i found an ea which looses 75% wins 25
avg win 15

avg loss 10

i calculated with the spread and it comes down to 60 % win rate in reversal,with a change in sl we can set it up to 70%

heres the crazy ea
in 3 months with 0.1 lot

can someone reverse this ea?

Probably, if you share the EA Someone Just might. What are the settings you used? Lot size and stops has to be that what is causing the descending ramp/wedge is not the leeching effect of spreads & commissions, if that is taken care of, you could be onto something.

Remember, giving and receiving are complementary with respect to which side of the gift you are on. One cannot occur without the other.

As always it is more blessed to give than to receive.

Bless!

i calculated on paper and if we include spread (in present loss,reverse profit) it goes about 60% profitable

the present gain goes upto 50-150 pips,we can (reverse) cut that to sl of 20-30
so we are back to around 70% gain

heres the statement
with the ea in the zip

i reckon this would be very proftable if someone can work it out to do the reverse,
but of course we need a good programmer for this
otherwise its not gonna work

if u choose the right broker that has low spreads around avg of 1.5 and no commission u could go pretty well
u can choose go markets and vantagefx,they offer no minimum deposit and low spreads:0.5-2 eurusd spread

alpari too 1.6 spread min 200$ min deposit
i wouldnt prefer fxcm as they have 2.3 spread,

most importantly good execution is needed

Maybe I'm not understanding this thinking, but the market is designed to stop out certain participants that trade without understanding what's going on. Simply reversing a losing EA (or any mechanical strategy) will still make a loser. Has anyone thought of trying to take two consistent losing strategies to make a winner? Like a 'Parrondo's Parradox'?

btw "loose" means something totally different than "lose"!

man this ea does not stop out,it just closes

it makes a few big profits
which we can limit to 30 lets say
and all the ea's profit is gone

but imagine this is reverse

I think you're right on.

One of the biggest problem with consistently losing traders, in my opinion, is not bad trading psychology or a bad strategy, but a lack of understanding how the market moves and works.

I bet you will find that a decent percentage of losing traders often pick the correct position at the start of the day (long or short) but can still manage to turn out two or even three losing trades without capitalizing (because of the dynamics of the market). It's pretty awesome, actually, if you think about it

Rather than spend the time trying to get the EA to be a loser, spend the same amount time trying to make it into a winner. It will be just as difficult and the results will probably be the same.


I have written more than 20 EAs and only one was consistently profitable. The others were marginally profitable or marginally losers. If I changed the Risk/Reward ratio, the win/loss ratio would move correspondingly resulting in very little overall profitability changes.


I truly believe that writing a consistently losing EA (not marginal) is just as difficult as writing one that is consistently winning (not marginal).

Market needs liquidity and its damn good at finding it

why do marketmakers make so much money,because we loose all the time,
and this ea does the same thing,what if we take postions like the marketmaker does,and we do the opposite on what we are supposed to do when we loose

think about it people
even a min 55% of winners is good,but its mostly gonna be 60-70%