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Trend Trading All Pairs

  • #6,541
  • May 18, 2010 7:57am May 18, 2010 7:57am
Hi Paulette,
Can you elaborate on your manual back testing methodology that would be helpful. With respect to the ForexTester software here is a quick excerpt from their website:

"Forex Tester is a professional software simulator of the Foreign Exchange Market. It allows you to gain and improve trading skills without risking your money. You do not need to train in real time, waiting for days and weeks to test your trading ideas and strategies, Forex Tester will pack this time in hours and minutes.

This is an excellent forex training software that will help you to:

Study trading on the FOREX market in a fast and convenient way.
Develop and test your own trading strategies without being a programmer.
Test your trading strategies on years of historical data.
Save your money and time."
http://www.forextester.com/

To be able to practice on the weekends and having the above features look quite appealing given the dearth of screen time i have i feel that i should buy this software. It generates tick data on historical charts to simulate the real trading environment. , you can buy sell and it also creates equity graph as well.

Once i try it out i'll definitely post my experience.

In the mean time, given the engagement we all have, lets still keep the ball rolling (though slowly) here by posting developing setups we are watching or have taken I am sure that will keep things interesting.

Right now i am working from my laptop in a commuter train ...going to office. I expect to be able to review the charts in the evening and post here.

Quoting Paulette
Hi MktScape and Others

I saw on another thread, "testing, back-testing, demo, small stakes, large stakes" is the only way to go and I agree, I am still working on going to large stakes, but hey what is large - all part of your perspective again.

Lets try and keep it going...

Trade safe
P
  • #6,542
  • May 18, 2010 8:03am May 18, 2010 8:03am
Hey Custos,
I have talked to the service reps at ForexTester.com and they have confirmed that we can test our multiple timeframe and confluence based strategy on this software just as we can do in MT4; however on historical data. so in the same way we would define the S/R levels, draw fibs, RNs, we can do the same and then go in the smaller time frame to place the order and see how the equity curve is developing based on the strategy we are following and it can cut back a lot of learning time and help refine the entry exits, money & trade management.

I have reached my station .....so gotta go now. I'll be in touch in the evening.

We will keep things rolling.!

adios amigos

Quoting Custos
Well, I was posting several charts recently. But I felt like I am holding up this thread by myself.
About the backtesting, not sure how that program works. But normally you can only backtest systems that are based on indicators and not on PA (except you are one of a kind programmer who can program PA and S/R levels as well). And from my experience any system not based on PA and S/R levels will fail sooner or later. Thus all you can do normally is a manual backtest, which takes a really long time. But this manual backtest will give you the screen-time...
  • #6,543
  • Edited 8:48am May 18, 2010 8:35am | Edited 8:48am
Quoting MktScape
Hi Paulette,
Can you elaborate on your manual back testing methodology that would be helpful.
Hi MrktScape,

I have a bit of a "data history" I guess as in my previous role I was more than involved in Data Warehousing/Business Intelligence where you look for business related & valued trends in data. Unfortunately I cannot give an opinion on the software - first time I heard of it, if you do decide to buy - let us know how you experience it...

I would take my strategy, print out the set of rules (i.e. trend, S/R, Fibo 61 / 50/ 38), RN, CTL, BPC - allowing a compliance rate of say 4 out of 6 as minimum requirement, higher = higher probability, less = no trade; Also remember to include your in-trade rules into this lot, try to trade it as if real time, just click your bars in faster) Discipline in adhering to the set of rules is key, easy when back testing, not so easy when doing it real time as the bars wont click over quick, patience is required.

I would then take a chart (open 2 on the same pair 1 for Setup and 1 for Trigger), set both to manual scroll, work it bar by bar to find a Setup, then similarly once I have id'd a setup, I would go to the trigger and work it bar by bar to see if the trade develops as to my strategy or not, marking out the SL, Entry, TP1, TP2 etc or manually trailing the stop to the next S/R level, or adding to the trade (I am still testing the latter).

Alternatively - if just testing S/R levels, I would just open the chart and start off with the TF's in this order: Week, Day, 4hr and mark out all the S/R levels, then the lower TF's will always fall within.

Eventually these levels and rules start standing out on the chart - but it does take practice and time, lots of time to do this. I used to have a laminated set of rules next to my pc, and draw out on chart how I would like the market to come and play.

As a result of back testing I know that BPC / 1-2-3 has saved my skin plenty plenty a time - especially on LOB setups. It also got me out of the claws of the 5min TF; And I only trade with the predominant trend, else my hit rate gets HIT.

Remember, not every trade is a winner, but you do get the free runners and bar those BE trades are King.

Hope this helps (it convinced me in 2months to rather trade day/4hr/1hr to any shorter TF...) Let me know if I can help some more...

(Edit: in the process I had to learn to apply patience! the discipline part was easier as my rules were more clearly defined and visible)

Keep the faith and trade safe...
  • #6,544
  • May 18, 2010 8:50am May 18, 2010 8:50am
Thanks for the explanation Paulette ..... are you doing this manual testing using MT4 .... also when you play it bar by bar does this include scrolling the chart or is there a way in MT4 to play the historical data bar by bar?

Quoting Paulette
Hi MrktScape,


I would take my strategy, print out the set of rules (i.e. trend, S/R, Fibo 61 / 50/ 38), RN, CTL, BPC - allowing a compliance rate of say 4 out of 6 as minimum requirement, higher = higher probability, less = no trade; Also remember to include your in-trade rules into this lot, try to trade it as if real time, just click your bars in faster) Discipline in adhering to the set of rules is key, easy when back testing, not so easy when doing it real time as the bars wont click over quick, patience is required.

I would then take...
  • #6,545
  • May 18, 2010 9:01am May 18, 2010 9:01am
Quoting MktScape
Thanks for the explanation Paulette ..... are you doing this manual testing using MT4 .... also when you play it bar by bar does this include scrolling the chart or is there a way in MT4 to play the historical data bar by bar?
Yes MT4, I dont know maybe there is a faster way.

I just put the chart to manual scroll, go back 1 month or so and start moving the chart bar by bar (click mouse and slowly move mouse to left, then bars start rolling in) to the left of my screen and keep applying the rules to the right as the bars come in...

I have seen functions to back test but not bothered to try them...
  • #6,546
  • May 18, 2010 9:33am May 18, 2010 9:33am
Quoting Paulette
Yes MT4, I dont know maybe there is a faster way.

I just put the chart to manual scroll, go back 1 month or so and start moving the chart bar by bar (click mouse and slowly move mouse to left, then bars start rolling in) to the left of my screen and keep applying the rules to the right as the bars come in...

I have seen functions to back test but not bothered to try them...
I'll try implementing this ... if i have any questions I'll get back.
  • #6,547
  • May 18, 2010 10:33am May 18, 2010 10:33am
Hi All,

phew - just missed the EJ trade I have been stalking most of this day - confluence @ 61fib, TL, S/R... That also happens...

Maybe I will get another entry a little later, will see....
  • #6,548
  • Edited 11:04am May 18, 2010 10:47am | Edited 11:04am
There could be another pull back for a second entry. Stalk it.

Did you not have a limit order in place?

Quoting Paulette
Hi All,

phew - just missed the EJ trade I have been stalking most of this day - confluence @ 61fib, TL, S/R... That also happens...

Maybe I will get another entry a little later, will see....
  • #6,549
  • May 18, 2010 11:08am May 18, 2010 11:08am
Quoting MktScape
There could be another pull back for a second entry. Stalk it.

Did you not have a limit order in place?
Got it second time round... Trade now at BE - unfortunately already closed my trading platform as little people now demand evening routine...

Not with the volatility as it was today, then I prefer to have a close eye on things, else I like to place my limit orders...

Till tomorrow, trade safe
  • #6,550
  • May 18, 2010 1:39pm May 18, 2010 1:39pm
Is the 0.90 level on AUDCAD about to go bust?

It's been pickled at for half a day now, with lower highs.
  • #6,551
  • May 18, 2010 3:00pm May 18, 2010 3:00pm
Here a level I am watching on eur/usd h1 chart.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd h1 18.5.2010.gif Size: 30 KB
  • #6,552
  • May 18, 2010 5:56pm May 18, 2010 5:56pm
Trade taken today, looked like a 123 pattern. Thanks for the chart post Custos, they are much appreciated.

pipnut
Attached Image (click to enlarge)
Click to Enlarge Name: 05.18.10 gbpusd @100.gif Size: 31 KB
Even a blind squirrel finds a nut sometime.
  • #6,553
  • May 18, 2010 6:43pm May 18, 2010 6:43pm
Hey Guys,
On E/G I've marked the level (yellow line) with 3 confluences RN, Fib, S/R....anyone stalking? I'll placed a sell limit order at this level and see what happens.

Ciao
Attached Image (click to enlarge)
Click to Enlarge Name: EURGBP-H1.jpg Size: 106 KB
  • #6,554
  • May 19, 2010 12:46am May 19, 2010 12:46am
Quoting MktScape
Hey Guys,
On E/G I've marked the level (yellow line) with 3 confluences RN, Fib, S/R....anyone stalking? I'll placed a sell limit order at this level and see what happens.

Ciao
Very good trade. But make sure to take some off soon, we are ranging around right now, which can mean that e/g is more likely to shoot back up again.
  • #6,555
  • May 19, 2010 1:31am May 19, 2010 1:31am
Quoting Custos
Very good trade. But make sure to take some off soon, we are ranging around right now, which can mean that e/g is more likely to shoot back up again.
Hello,
I just couldn't get myself to sleep tonight .... i shouldnt have the coffee late in the evening. Therefore, I decided to take a peek here ....

My first sell limit order got stopped out due to the upthrust/pin bar ....after which i placed a sell stop order below the low of the pin bar ...got into the trade and took half position out and letting the rest of it run.

I was thinking how to avoid stopping out from such trades especially when I am unable to watch them overnight .... in this case i was thinking that if my SL were a bit above the 50% fib then that might have helped ....how would would you deal it ...How about using a larger SL for such positions ...which may result in smaller lots but i would be ok with it.
  • #6,556
  • May 19, 2010 1:44am May 19, 2010 1:44am
Quoting Paulette
Got it second time round... Trade now at BE - unfortunately already closed my trading platform as little people now demand evening routine...

Not with the volatility as it was today, then I prefer to have a close eye on things, else I like to place my limit orders...

Till tomorrow, trade safe

Ok now for the trade details - a bit of "after the fact", but here goes:

EJ Sell @ 114.90 SL @ 115.30 (just above my 61%fib), trailed the stop @ 100pips, trade now complete +240.
  • #6,557
  • May 19, 2010 1:54am May 19, 2010 1:54am
analyzes and GOLD_h4

symmetry-
elliot wave-
pitchefork-
chaneal line-
reciprocal-
fibezone TIME-
Attached Image (click to enlarge)
Click to Enlarge Name: gold.gif Size: 105 KB
  • #6,558
  • May 19, 2010 2:08am May 19, 2010 2:08am
Quoting MktScape
Hello,
I just couldn't get myself to sleep tonight .... i shouldnt have the coffee late in the evening. Therefore, I decided to take a peek here ....

My first sell limit order got stopped out due to the upthrust/pin bar ....after which i placed a sell stop order below the low of the pin bar ...got into the trade and took half position out and letting the rest of it run.

I was thinking how to avoid stopping out from such trades especially when I am unable to watch them overnight .... in this case i was thinking that if my SL were a bit above the...
Attached is the m5 eur/gbp chart. Okay, first of all, you need to find a good level on higher time-frames. The m5 is just for refining the entry. The attached chart is just showing how I refine my entries. Now let's go to the orange rectangle area. It marks the last time price bounced at that area. The high of the bar testing the resistance from below is my entry level (blue dotted line). The red dotted line is the stop level, which I put a few pips above the last time price took a little bit of a breather (it formed a doji of some kind).
Now the bar that got you out would have got me into the market (blue arrow).

Now you have two choices. You can either use my entry method and get a very tight stop but risk getting stopped out only to see it reverse, or you increase your stop loss which might produce a better over all win-loss ratio. I don't know which one is better, I honestly didn't test it through.
For me psychologically, I don't like drawdown. This just gets me emotional and angry, thus I devised this strategy (which I adapted from brv's entry method) to either see it lose or win. I don't get emotional since I am either in the market with an almost instant profit (and stop to b/e) or I am out at an almost instant loss and can look for new opportunities with a rational mind.

No matter which entry method you use, if you get the levels wrong, then you will lose with any of the entry methods. Your biggest concern should be picking the right levels (which you are doing already pretty well). I'd suggest, first pick the right levels to perfection and then try to tighten your stop loss. So in the beginning loosen your stop loss a little bit and enter with smaller lot-size. Once you are proficient in picking the right levels, try tightening your stop loss.

And concerning stop orders (this is just my opinion): With stop orders you are trying to get into the market after a bunch of people already moved price away from the S/R level. But the highest probability for the entry to work out is at the S/R level (limit orders), cause you can always hope for some initial reaction which allows you to put stop to b/e. And finally, I believe most banks use limit orders instead of stop orders (please correct me if I am wrong). So, we as retail traders want to use the same kind of techniques they make money with every day.
This is just an opinion. But could be a great discussion, if somebody has a similar or different opinion.
Attached Image (click to enlarge)
Click to Enlarge Name: eurgbp m5 19.5.2010.gif Size: 29 KB
  • #6,559
  • May 19, 2010 2:35am May 19, 2010 2:35am
Quoting Custos
And concerning stop orders (this is just my opinion): With stop orders you are trying to get into the market after a bunch of people already moved price away from the S/R level. But the highest probability for the entry to work out is at the S/R level (limit orders), cause you can always hope for some initial reaction which allows you to put stop to b/e. And finally, I believe most banks use limit orders instead of stop orders (please correct me if I am wrong). So, we as retail traders want to use the same kind of techniques they make money with...
Hi Custos and others,

I have been watching with intent to see your response the MktScapes question - thanks for your explanation.

I am working on putting my Limit orders in, you gave me a great idea, smaller stakes, bigger stops and then start refining the SL.

again, your input much appreciated

Trade safe
P
  • #6,560
  • May 19, 2010 2:38am May 19, 2010 2:38am
Quoting Paulette
Hi Custos and others,

I have been watching with intent to see your response the MktScapes question - thanks for your explanation.

I am working on putting my Limit orders in, you gave me a great idea, smaller stakes, bigger stops and then start refining the SL.

again, your input much appreciated

Trade safe
P
no problem, glad when I can help.
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