Steve Hopwood's Fib Target-level retracement auto-trader: compliments Simone

SERIOUS WARNING

1. Most Forex traders lose all their money.
2. Using the robots posted here in trading Forex does not guarantee success.
3. Trading these robots could lead to serious financial loss.
4. Trading these robots without understanding their underlying trading strategies guarantees traders will lose their money.
5. A trading robot is a maximum of 90% as good as the manual strategy it trades:
   1. just because the manual strategy is profitable does not guarantee the robot will replicate this success.
   2. if the trading strategy is rubbish, so is the robot.
      

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Welcome to Steve Hopwood's Fib Target-level retracement auto-trader. This robot complements Simone. Read about her at http://www.forexfactory.com/showthre...79#post3779479 New traders can also download a useful pdf called 'Basic stuff.pdf'. The Real Simone's use of the 138 and -38 (T1) as take profit targets set me thinking.


At the start of each new candle, the robot draws a fib from the high to the low of the previous candle.


These give four Long and four Short target-levels – T1, T2, T3, & T4.


Here is the trading theory:

 

1. T1 is the level at which many traders place their take profit stops. Once the market reaches T1, it is ready to retrace, so send a pending trade in the direction of the anticipated retrace, at x pips distance.

In theory, the higher the time frame being traded, the stronger are the Fib extension target-levels at T1/T2. D1 is powerful; W1 is overwhelming; MN1 is awesome. Subsequent testing by hiredwhip showed that D1 is the most effective time frame for this system, and most of us have adopted this.


There is one proviso to the success I have enjoyed on demo and with backtesting. DireEmergencyStopLossPips must be regarded as protection against cataclysmic events putting the account in danger. The robot sets a stop at T4 +- this setting (5 digit crim, but the robot makes necessary adjustments for 4 digit crims). Setting a stop loss calculated on more normal calculations kills the profitability in backtesting, so I guess there must be trades that need a lot of space to breathe.

DireEmergencyStopLossPips defaults to 0, which tells the robot not to send a stop loss at all. I am live-trading with this setting, using tiny lot sizes to protect the account.

A new trading system has come on line since I coded the earliest versions of this robot, introducing us to the concept of multi-level recovery trades when a trade moves against us. Multi-level Recovery does away with the need for any stop loss save for a far-distant one to guard against cataclysmic world events sending the markets into meltdown against our trades.

I am not going to describe Multi-level Recovery here. Instead, I want you to go to the thread that introduced the rest of us to this concept. You will find it at http://www.forexfactory.com/showthread.php?t=246113. Read page 1 5 times; then read the documentation in the zip files 5 times; then read the first 20 and last 20 or so pages of the tread to: see some examples of trading setups and triggers; catch up with latest developments.

Stick with Bob's trading methodology for a few weeks and you will fully understand Multi-level Recovery. Ftlr incorporates this recovery system and you need to understand it in order to fully understand what this robot does.


The Scoobs filter
It is beginning to look as though this is an essential safety feature. Please read the post at http://www.forexfactory.com/showpost...&postcount=961 for jcs's conclusions and results.


Robot closing trades
The robot will close/delete trades under these circumstances:

 

1. unfilled pendings at the start of a new candle.
2. W1 and MN1 time-frames: all open trades at the start of a new candle. The assumption here is that the new fib will be so far from the old that open trades were based on outdated information. I am finding it better to leave open trades on any tf lower than W1.

The robot is up, running and bug-free so far as I can tell. I may add tweaks in the future, but we shall see.

Most of the robot inputs are self-explanatory. Here are a few notes:

 

1. Any inputs requiring pips are coded for 5 digit wally-plonker-dipstick-pillock criminals. The robot automatically adjusts for normal 4 digit crims, so holders of these accounts need to multiply their normal inputs by 10.
2. PendingPipsDistance is the distance from the market price to fill the pending order.
3. Trading hours are only relevant to trading time-frames below W1. If trading the weekly or monthly charts, set these to 0, 12, 12, 24 to ensure 24 hour trading.
4. AutoCalcTradeTriggerLine: tells the robot to use Atr to calculate the appropriate trigger line.If you know how to use Atr then the inputs do not need explanation. If you do not, then simply leave the defaults in place.
5. MinTakeProfitPips: ftlr will not take trades if the distance between the fill price and the take profit is less than this figure.
6. Hedging: there are three hedging methods:
   1. standard: treats each trade as a separate entity and hedges it at HedgeAtLossPips
   2. Atr hedging: works as 1) but uses Atr to determine the hedge level.
   3. Pipstrumpf's method: hedges the total of all open trades once the price moves beyond the re-entry line and Recovery is at L4 i.e. L5. From here, the trades are effectively out of the market and awaiting manual intervention. Read Pipstrumph's post about this at http://www.forexfactory.com/showpost.php?p=4339931&postcount=971

Trade direction finding module
You can tell the robot to look for trades only in one direction. I have attached the modified indicators and a template in the zip file. You do not actually need the template, or the indicators as the robot works entirely independently of your installed indi's; it is just nice to have the visual confirmation.

The tdf module looks to trade the retrace/counter trend after a strong move in one direction. It works like this:

 

1. Sixths indi takes the high/low of the previous BarCount bars and divides this figure into sixths. The zone in between the green lines is a no-trade zone.
2. Market must be above the top green line for short trading and below the bottom green line for long trading.
3. Bollinger Bands (25) top line must be above the top green line for short trading and below the bottom green line for long trading.
4. Stochastic blue line must be >= 85 for short trading and <= 15 for long trading.
5. MACD red line must be >= 85 for short trading and <= 15 for long trading.

squalou took the module and turned it into an indicator that paints an arrow on the screen when all the tdf requirements are met. You could probably trade off that alone, but nanningbob's setup has a couple of extra sophistications not needed here, so some trades will go wrong. It might be worth trying, even so.

The picture shows how your screen will look if you use my template.

It should now be possible to safely trade lower time frames.

I could not have created this module without the invaluable contributions by squalou, to whom we give an inter-galactic sized round of applause.

Invalid stop errors in your Expert's tab
You will see shed-loads of these. Each criminal has a minimum distance in between the price and the stop loss and take profit. If the candle that ftlr is using to calculate its trades is small, then the take profit will be too close to the pending price to allow the trade to be sent. ftlr does not know this, and so carried on trying to send the trade. One day, I might add code to stop this, but it does not bother me so this is not a priority.

Coders: The tdf module used by this robot is a modified version of the full thing. The full module is also attached here. You will see how easy it is to adapt to your own needs.

I have also added the Sunday candle filter.

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Traders familiar with my work need read no further.

Cheers. Have fun. Fibs rock.


Useful utilities/EA's/scripts

 

1. MaryJane has posted a fabulous utility to allow us to resize EA input windows: http://www.forexfactory.com/showthread.php?t=299017
2. Multi purpose trade manager: http://www.forexfactory.com/showthread.php?t=89371

Posting restrictions
I have restricted the ability to post in this thread to: traders with at least 1 voucher; and traders on my 'buddy' list. I have done this because I do not want the thread cluttered with 'newbie' questions about the basics. New/inexperienced traders, this is not intended as a direct insult. What I want here is discussion with traders who fully understand what it is they are doing; when you newbs have been around a while, you will come to understand what a difference experience makes to the posts a member writes and shudder at the recollection of some of the questions you asked. I do. http://cdn.forexfactory.com/images/s..._the_floor.gif Go to your profile page; there is a link to the FF page that describes the voucher process.

Do not attempt to get around this by sending me pm's asking for help with your basic problems. Doing so will earn you an automatic ban from all of my threads.

Traders with experience who have not yet been vouched for, can get around this restriction be being added to my 'buddy' list; all you have to do is pm me to ask me to do this.

For new/confused traders, I have set up a partner thread to this one where you can ask your questions -

http://www.forexfactory.com/showthre...89#post3727389

I started this for Epsilon Megastar contributors, so we can adopt it here.

I have been trading this way for quite some time, I believe this has a lot of potential. Looking forward to seeing the EA succeed and contributing where I can.

Hi Steve....
Really looking forward to this one ....Love the long TF's......Just set up a set of weekly charts.....This will be a great yard to play in.....

Have a great weekend......

whip

How do you handle the losers?

I think your T2 level is the 161.8 extension.
This for me is the last stand. If it gets to the 200 extension (especially with a candle close past this level) more often than not, I have found that it is going to continue on its path.
Therefore for me the 200 extension is the final SL.

Hope this helps.

Thank you Steve for this new creation

I will place it on a chart this week, to watch to see what happens

Steve, have you considered the retrace from the 0/100 fibs to the 38.2/50 and 61.8 ?

This is primarily how I trade within the inner Fib levels.
I'm trading off M15 with the previous days candle being fibbed.

Thank you Steve. Your work just keeps progressing and refining.

Remarkable!

I look forward to trying out your latest creation.

Steve it only seems to open the initial trade on backtest.

Please see the updates section in post 1. I have acted on a part of this.

Look out for the FX Compass Fib Inner Level auto trader coming soon.

Please supply full details of your methodology; the more I have, the fewer will be the updates.

Tis ok. I get them. The code is working fine.

Out of curiosity, I decided to add Simone's Rsi trend filter. The difference it makes in back testing is colossal.

Available from post 1.

Gladly Steve,

1. Fib the previous days high to low as you do.
2. Price through 0 or 100 Fib, enter trade with 138.2 Fib as target.
3. If price reverses back into the inner Fibs and hits the 23.6 or 78.6 then first trade is closed and a reverse trade is triggered with the 50 Fib as the target. Rince and Repeat each day each pair.
4. If first trade completes and price continues to the 200 Fib (especially with a candle close beyond the level) cancel all orders = continuation of trend. Start again tomorrow.

In its simplest form,
Strikes on 0 and 100 trigger targets of 138 extension with the SL being a reverse trade at 23.6 or 78.6 with the 50 as the target.
The EA needs to get ready when price enters the 0 to 23.6 area or the 100 to 78.6 area for a trade in either direction according to the next trigger.

Ranging markets can do some damage, but I have found the success rate over 75% and the RR is excellent as the recovery trade kicks in if the initial trade fails.

Hope this helps.

Looks like a good system here. Where would you place your SL for the reversal trade?

Sure does. You now have your own folder within my Experiments/Experts mt4 platform - stage 1 in my coding a robot based on someone else's system. I have a busy couple of days coming up with my day job, but will get onto coding this on Wednesday.

Cheers

Each time price finds its way into the zones between 0 and 23.6 and 100 and 78.6 it has entered a significant support resistance zone.

No stop loss is used because a trade is triggered in either direction depending on whether it breaks up or down with take profit targets specified as above.

Therefore we are effectively trading a breakout of these zones depending on which way price breaks with one trade cancelled as the other trade is opened (if required).

Thanks Steve, the RSI would be a good addition to this EA as well.
In other words the EA basis its final decision to enter based on the RSI value.
Not quite sure how the RSI filter works, is it only sell if RSI above 50 and only Buy if RSI below 50 ?
Seems to have vastly improved the original EA results to date.

One small thing, can the EA be made to Fib the previous daily high low, whilst the trader has it loaded to a smaller time frame ?

Because of the Fib ratios, a losing trade is compensated by a bigger winner opposing it. Enjoy....

Thanks and very interesting. Do you have any specific time of the day to implement this strategy and what pairs you generally use this on?