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A simple strategy with no indicators

  • #261
  • Aug 13, 2010 6:46am Aug 13, 2010 6:46am
Quoting azzenn
hi guys......i like,this strategy......but what TP and SL should i put when i want enter the market??? Can anybody member here explained??
Hello azzenn,

Welcome to the thread. To answer your question, please read post #1 and search the thread for the words "psycological" and "psych".

You could even read the entire thread -- it is not too big.

Regards
  • #262
  • Aug 13, 2010 7:06am Aug 13, 2010 7:06am
Quoting devogel
Hello azzenn,

Welcome to the thread. To answer your question, please read post #1 and search the thread for the words "psycological" and "psych".

You could even read the entire thread -- it is not too big.

Regards

Thank's devogel...but i confius what mean 50&00 to put TP and SL
can you give me a detail what price should i put on TP and SL with 50&00
  • #263
  • Aug 13, 2010 9:00am Aug 13, 2010 9:00am
Quoting whatfx
i went long on both of these pairs chf/jpy and usd/jpy yesterday. however they are currently running at a loss of - 30 pips and - 21 pips respectively. not sure if things will improve during the day, and iam thinking it could be a good idea to come out early ?

yesterday my daily candles closed at midnight (gmt). i opened the trades at 00.001 i.e. i minute past midnight, effectively the following day.

ia,m still confused as to when to enter trades as each brokers daily candles close at different times.

perhaps ashraf could clarify ?
The strategy is sound but i think you got caught in the volatility caused by bad released data and apprehension about the one to be be released later
If you think you can or cannot do it you are correct
  • #264
  • Aug 14, 2010 5:58am Aug 14, 2010 5:58am
I back-tested this method using the indicator going back on nearly every pair.

This set-up appears to win no more than 50% of the time.
It seems very difficult to make money with this win rate.

Has anyone else back-tested the win rate on this method?
  • #265
  • Aug 14, 2010 9:26am Aug 14, 2010 9:26am
Quoting finally
I back-tested this method using the indicator going back on nearly every pair.

This set-up appears to win no more than 50% of the time.
It seems very difficult to make money with this win rate.

Has anyone else back-tested the win rate on this method?
Yes. I have run many one-year tests using an EA. Some pairs do better than others. The EURUSD is about the worst with 50% wins on both longs and shorts. However, the shorts-only win rate is 78%. These percentages are based on trades with an average RRR of 1:1.

The yen pairs do the best. The GBPJPY is the best pair I have tested so far. If you are not familiar with MT4 tester results data below, the basic info is:

36 trades in one year
shorts win rate = 80%
long win rate = 68%
average win rate = 75%
average RRR = 1 : 1.2

Testing GBPJPY from 2009.07.26 to 2010.07.24
----------
Bars in test 1265
Ticks modelled 23393008
Modelling quality 90.00%
Mismatched charts errors 0

Initial deposit 10000.00
Total net profit 973.14
Gross profit 1363.26
Gross loss -390.12
Profit factor 3.49
Expected payoff 27.03

Absolute drawdown 56.24
Maximal drawdown 162.96 (1.52%)
Relative drawdown 1.52% (162.96)
Total trades 36
Short positions (won %) 20 (80.00%)
Long positions (won %) 16 (68.75%)
Profit trades (% of total) 27 (75.00%)
Loss trades (% of total) 9 (25.00%)
Largest
profit trade 83.79
loss trade -67.72
Average
profit trade 50.49
loss trade -43.35

Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPY_OneYear_TesterGraph.gif Size: 15 KB
  • #266
  • Aug 14, 2010 9:46am Aug 14, 2010 9:46am
Quoting devogel
Yes. I have run many one-year tests using an EA. Some pairs do better than others. The EURUSD is about the worst with 50% wins on both longs and shorts. However, the shorts-only win rate is 78%. These percentages are based on trades with an average RRR of 1:1.

The yen pairs do the best. The GBPJPY is the best pair I have tested so far. If you are not familiar with MT4 tester results data below, the basic info is:

36 trades in one year
shorts win rate = 80%
long win rate = 68%
average win rate = 75%
average RRR = 1 : 1.2

Testing GBPJPY...
Thanks for the statistics.

So basically what you are saying is that the most favorable pair- gbp/jpy-
showed a return of 10% for the entire year from 7/09-7/10.

A profitable return is always good; however, 10% return for an entire year is just not that exciting
unless you are trading with millions.
  • #267
  • Aug 14, 2010 10:01am Aug 14, 2010 10:01am
Hello finally,

I have not yet coded money management into the EA. Consequently, the 36 trades were a fixed lot size of 0.10. However, some profitability conclusions can be projected. The average money management risk for the statistics above is 0.5%, far below the normal trader's risk tolerance. If we use a more typical 2% risk on a $10,000 account and multiply by the profit factor of 3.49, we can project a one year profit of $13,500.

Regards
  • #268
  • Aug 14, 2010 12:25pm Aug 14, 2010 12:25pm
Quoting finally
Thanks for the statistics.

So basically what you are saying is that the most favorable pair- gbp/jpy-
showed a return of 10% for the entire year from 7/09-7/10.

A profitable return is always good; however, 10% return for an entire year is just not that exciting unless you are trading with millions.
I have only tested 3 of 5 yen pairs. GBPJPY shows best so far.

I coded money management risk into the EA, not an activity I prefer on a sunny Sunday morning, but...

One year back test results on GBPJPY, 07/09 to 07/10 with 2% MM risk:

trades = 36
win rate = 75%
profit on $10,000 account = $4300

These tests are conducted using only Ashraf's basic rules, with the following two refinements:

- On the GBPJPY, TP and SL phych levels must be 20 or more pips from entry. If either is closer than 20, that phych is moved to the next psych level.

- Again, on the GBPJPY, TP and SL are shifted 5 pips off psych opposite the direction of the trade. This permits hitting target just before price reaches the psych, and requires price to penetrate psych before taking a loss.

Each pair seems to exhibit its own preference for these two refinements.
  • #269
  • Aug 15, 2010 12:25pm Aug 15, 2010 12:25pm
ok. my chf/jpy and usd/jpy trades of friday.

both pairs went against and i was at a loss of about -70 pips in total. luckily later during the day the markets reversed back and went up. i was able to come out at break even. although both the pairs did go into profit eventually by about 22 pips each. so far so good. overall balance still up.
  • #270
  • Aug 15, 2010 12:27pm Aug 15, 2010 12:27pm
Quoting devogel
Yes. I have run many one-year tests using an EA. Some pairs do better than others. The EURUSD is about the worst with 50% wins on both longs and shorts. However, the shorts-only win rate is 78%. These percentages are based on trades with an average RRR of 1:1.

The yen pairs do the best. The GBPJPY is the best pair I have tested so far. If you are not familiar with MT4 tester results data below, the basic info is:

36 trades in one year
shorts win rate = 80%
long win rate = 68%
average win rate = 75%
average RRR = 1 : 1.2

Testing GBPJPY from...

i feel that with a lower TP and a higher SL, the results can be vastly improved ? you may wish to backtest at a TP of 30 pips and SL of 100 pips and see what you come up with ?

regards
  • #271
  • Aug 15, 2010 3:40pm Aug 15, 2010 3:40pm
Quoting whatfx
i feel that with a lower TP and a higher SL, the results can be vastly improved ? you may wish to backtest at a TP of 30 pips and SL of 100 pips and see what you come up with ?

regards
Thanks for the suggestion. I'll put that on the coding list along with several other things I want to try.

Meanwhile, perhaps you can try manually back testing your suggestion on the GBPJPY to get a sense of whether or not it works.
  • #272
  • Aug 16, 2010 7:52am Aug 16, 2010 7:52am
Quoting whatfx
do you not come out of the trades once your tp is reached ? or do you adjust sl and continue with the trend ? if not, what is your method of taking all of the pips ?
Once you set your tp at the psych level, you stick to it. So if it is hit, you are out of the trade
Make It Simple !
  • #273
  • Aug 16, 2010 7:55am Aug 16, 2010 7:55am
Quoting devogel
Welcome back Ashraf -- and many thanks for creating this great thread.


Thanks. I am just a learner (trying to survive in this jungle)
Make It Simple !
  • #274
  • Aug 16, 2010 8:00am Aug 16, 2010 8:00am
Quoting whatfx
i feel that with a lower TP and a higher SL, the results can be vastly improved ? you may wish to backtest at a TP of 30 pips and SL of 100 pips and see what you come up with ?

regards
whatfx,

Here are your test results using TP 30 and SL 100:

Testing GBPJPY from 2009.07.26 to 2010.07.24
using TP=30, SL=100 and 2% risk of $10,000 account balance
----------
trades = 36 in one year
shorts win rate = 90%
long win rate = 88%
average win rate = 89%
net profit = $1600 (16%)

The win rate looks great, however, the three big losses cost us dearly because the average R/R ratio is 3.3 : 1.

Also, with a fixed TP and SL, we have lost the advantage of support and resistance provided by psych levels.
  • #275
  • Aug 16, 2010 8:42am Aug 16, 2010 8:42am
thanks for the info.

however, for a reversal system, it might not be appropriate to set TP:SL = 3/10.

on the contrary, you should try at least 1:1 something, and did you try this:
set NO TP, and watch the green line's movement (floating equity), you'll be shocked...

Quoting devogel
whatfx,

Here are your test results using TP 30 and SL 100:
  • #276
  • Aug 16, 2010 10:08am Aug 16, 2010 10:08am
Quoting devogel
whatfx,

Here are your test results using TP 30 and SL 100:

Testing GBPJPY from 2009.07.26 to 2010.07.24
using TP=30, SL=100 and 2% risk of $10,000 account balance
----------
trades = 36 in one year
shorts win rate = 90%
long win rate = 88%
average win rate = 89%
net profit = $1600 (16%)

The win rate looks great, however, the three big losses cost us dearly because the average R/R ratio is 3.3 : 1.

Also, with a fixed TP and SL, we have lost the advantage of support and resistance provided by psych levels.
can we not have a EA to test this ? manual testing is laborious and prone to mistakes.

i appreciate your effort for testing this, we get more confidence in the system now
  • #277
  • Aug 16, 2010 10:17am Aug 16, 2010 10:17am
Quoting charvo
thanks for the info.

however, for a reversal system, it might not be appropriate to set TP:SL = 3/10.

on the contrary, you should try at least 1:1 something, and did you try this:
set NO TP, and watch the green line's movement (floating equity), you'll be shocked...

charvo,

Thanks for your suggestions. And back testing proves you're right for the most part.

At the expense of going far off topic, RRR around 1:1 is a definite improvement over 3:1 on the GJ but fails to pull the EU out of the mud.

Your floating equity suggestion back tests truely a winner with Ashraf's candle pattern if a modest SL is imposed. After several trades the candle pattern entries align with the pair and profit about 100% per year. Even with the EU. Good call!

Regards
  • #278
  • Aug 16, 2010 12:12pm Aug 16, 2010 12:12pm
Quoting roundrock
can we not have a EA to test this ? manual testing is laborious and prone to mistakes.

i appreciate your effort for testing this, we get more confidence in the system now
Hello roundrock. Welcome to the discussion. And you are so right: manual testing is laborious and prone to mistakes.

I will gladly post the EA, however, I have some uneasiness.

Accurate back testing with EA has become difficult with MT4 History Center broken since March with huge data gaps. Using History Center data yields false results but does not tell the tester there is a problem.

Some or many people will back test and discover false results because:
- they do not have good price data for EA testing
- their broker is not GMT+3 with daily candles starting at 2100 GMT

People who genuinely know how to use an EA for back testing will understand when I say:
- you must have good M1 data
- must generate daily history from the M1
- must know the Strategy Tester limitations when testing on the daily TF

Also, it is bad to clutter this thread helping people to learn back testing with EA. This EA is for experts who truely know what they are doing. Roundrock, I am hoping you are that valuable person.

Sorry for the long post and thank you for reading my misgivings. Here is the EA next post.
  • #279
  • Aug 16, 2010 12:17pm Aug 16, 2010 12:17pm
I have not yet had time to see if the EA works properly with fractional pip pricing (5-digit brokers). It works fine on 4-digit brokers. Watch your tester log. If you find bugs, please PM me.

Input parameters explained:

- MinimumPsych
minimum pips from entry price for TP & SL psychs; if necessary, psych is moved 50 pips further away from entry

- PsychOffset
pips to offset TP and SL from phych levels; positive value offsets psychs opposite the direction of the trade, negative value offsets with direction of the trade; zero = no offset

- Lots
fixed lot size if Risk input is zero

- Risk
money management risk percent of account balance; 0=ignore and use fixed Lots input; example is 2 = 2%

- BrokerUsesFractionalPips
tells EA whether broker uses fractional- or whole-pip pricing

- PrintRRR
Print each trade's RRR to log and calculate averages

Attached File(s)
File Type: mq4 AshrafDailyCandlesEA_v1.12.mq4   13 KB | 782 downloads
  • #280
  • Aug 16, 2010 3:46pm Aug 16, 2010 3:46pm
Devogel/Charvo

Hi Guys

Can you pls elaborate for a sloe learner what you mean by floating TP?

Thanks Gerard
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