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  • #9,961
  • Feb 3, 2011 8:58am Feb 3, 2011 8:58am
Quoting Razor_trader
Well the best thing to do would be to do a backtest and test the reliability. You have a basic formulae to lay the ground rules and since it is a 1 bar per week setup the testing for say 5 years should take you no longer than a few days of hardcore charting or a few weeks of doing bits here and there. Best of luck, if you think there is an edge in just taking the 1 bar per week and you can formulate it then you will have a very simple task with trading. Wait for the signal and take it.

Best of luck, I love new ideas moving forward

RT
Here's an idea. When backtesting, set a fix no. of days to exit the trade. Do not put any stoploss, gather data to see what is the maximum pips each trade retraced and what is the maximum pips at one time the trade has. That is the MAE and MFE respectively. Normalise both by dividing against the entry ATR of past x no. of days. You will get the MAE and MFE result as how many multiples of ATR.

Then compare the MAE and MFE of the profitable trades with the unprofitable ones.
From there you can gather a lot of information.
  • #9,962
  • Feb 3, 2011 9:31am Feb 3, 2011 9:31am
Quoting ash234
Here's an idea. When backtesting, set a fix no. of days to exit the trade. Do not put any stoploss, gather data to see what is the maximum pips each trade retraced and what is the maximum pips at one time the trade has. That is the MAE and MFE respectively. Normalise both by dividing against the entry ATR of past x no. of days. You will get the MAE and MFE result as how many multiples of ATR.

Then compare the MAE and MFE of the profitable trades with the unprofitable ones.
From there you can gather a lot of information.
Thanks both for your input. Appreciate it.

I havent yet done extensive system testing (all manually by F12!) with parameters other than P/L (in terms of pips and in terms of R) - So this took me a while to understand this.

Assume the following numbers for the sake of understanding this better:
If Average (MFE) = 200 pips & Average (MAE) = -100 pips for profitable trades and Average (MFE) = 150 pips & Average (MAE) = -300 pips for non profitable trades - How would you suggest I use this information? Setting better stop and take profit levels?
  • #9,963
  • Feb 3, 2011 11:23am Feb 3, 2011 11:23am
Quoting ksganesh100
Thanks both for your input. Appreciate it.

I havent yet done extensive system testing (all manually by F12!) with parameters other than P/L (in terms of pips and in terms of R) - So this took me a while to understand this....
You are right, its for the TP and stops.

Average as in the "mean" of the distribution is not reflective as the distribution of profit and losses will be skewed.
For example if you had 5 profitable trades. 2 trades >20 MFE/ATR, 4 trades 10-19 MFE/ATR, 8 trades 5-9 MFE/ATR
"mean" approximately would be (20x2)+(4x10)+(5x8) total divide by 14 trades = 120/14 = 8.57. Is that accurate??

I would suggest you have a good risk:reward ratio in mind so that you could set a logical stop to have a good R:R ratio but set the stop far enough prevent yourself from getting stopped out from the trades with profit potential.
  • #9,964
  • Feb 3, 2011 11:42am Feb 3, 2011 11:42am
Quoting ash234
You are right, its for the TP and stops.

Average as in the "mean" of the distribution is not reflective as the distribution of profit and losses will be skewed.
For example if you had 5 profitable trades. 2 trades >20 MFE/ATR, 4 trades 10-19 MFE/ATR, 8 trades 5-9 MFE/ATR
"mean" approximately would be (20x2)+(4x10)+(5x8) total divide by 14 trades = 120/14 = 8.57. Is that accurate??
Makes a lot of sense, if i understand this right, a 'median' would provide a better reflection of the profit and the stop loss.

And if you wanted to be really pedantic, and if you had a large enough distribution, you could go crazy plotting histograms to analyse the data.

Thanks again, appreciate it!

Cheers
ksganesh100
  • #9,965
  • Feb 6, 2011 6:08pm Feb 6, 2011 6:08pm
For anyone who was following Joels blog at the below address this was updated in December and all I can say is WOW, WOW WOW WOW.

http://infiniteyieldforex.blogspot.com/
  • #9,966
  • Feb 7, 2011 12:51am Feb 7, 2011 12:51am
The only real issue I have is that he arbitarrily added silver to his portfolio - not sure if it was based FSP either

I have been trying to break out the FX returns by them selves, I think it is about 10K which, from 500 bucks is still amazing



Quoting Razor_trader
For anyone who was following Joels blog at the below address this was updated in December and all I can say is WOW, WOW WOW WOW.

http://infiniteyieldforex.blogspot.com/
  • #9,967
  • Feb 7, 2011 1:17am Feb 7, 2011 1:17am
Quoting razorboy
The only real issue I have is that he arbitarrily added silver to his portfolio - not sure if it was based FSP either

I have been trying to break out the FX returns by them selves, I think it is about 10K which, from 500 bucks is still amazing
True with the silver postions, they infact based on his 1000 units account for over $18000 at the time of December 31 so the FX gains have been around the $8000 mark which is still phenomenal by any standards, there would be limited numbers who could trade for that period of time with those numbers. Sure there are those who magically make multiply there accounts but they dwindle off into bust land sooner than later.

Its hard to imagine silver ever being close to 12.59 again considering it is now above the $20 mark and looks comfortable there. I would say that provided he holds those silver positions he will reach the 150k mark in the very near future. Just a great read and a pretty great talent really.

RT
  • #9,968
  • Feb 8, 2011 4:18am Feb 8, 2011 4:18am
Quoting Razor_trader
Peter (or Joel not sure exactly) once said that the best breakouts occur immediately and they dont look back..
Yes. Early on PC mentioned the "hot hand". It doesn't take much imagination to know what he means. You don't play poor hands in Forex. The H1 break out trades are relatively rare when part of a strongly moving market. Back testers should take note of this.
Gone to a better place
  • #9,969
  • Feb 9, 2011 4:47am Feb 9, 2011 4:47am
Been following his blog as well. He does add discretion to his FSP method too and I believe these nuances really contribute to his outsized returns.
  • #9,970
  • Feb 9, 2011 8:40pm Feb 9, 2011 8:40pm
There were two trades yesterday. EU got stopped without getting to BE. GU would have been BE. Can anyone experienced with the system please verify if they were valid trades?
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eu.jpg Size: 62 KB
Click to Enlarge Name: gu.jpg Size: 57 KB
Making money is easy- Just dont take losing trades
  • #9,971
  • Feb 10, 2011 3:44am Feb 10, 2011 3:44am
Quoting Survivor
There were two trades yesterday. EU got stopped without getting to BE. GU would have been BE. Can anyone experienced with the system please verify if they were valid trades?
I don't think there have been many good trades this year. Those you have posted don't look very appealing.

EUR/USD: Within the range of the previous day? Spanning the range of the previous 4 - 5 bars? It's a big inside bar so it doesn't have that compression factor. Your ma's show it's counter trend and also the ma's are very close to the price which, for me indicates consolidation. Not a good trade imho.

GBP/USD: Similar reasons really.

Try looking at strong daily trends and then look at the H1 break outs there. There aren't many but they are the ones you want. I'm posting this because you took a lot of effort to post those charts and I make all the same mistakes, but less often, now.
Gone to a better place
  • #9,972
  • Feb 10, 2011 7:48am Feb 10, 2011 7:48am
This is what we should be looking for:

Attached Image (click to enlarge)
Click to Enlarge Name: usdchf110210h1.jpg Size: 92 KB
Gone to a better place
  • #9,973
  • Feb 10, 2011 10:29am Feb 10, 2011 10:29am
Quoting smikester
I don't think there have been many good trades this year. Those you have posted don't look very appealing.

EUR/USD: Within the range of the previous day? Spanning the range of the previous 4 - 5 bars? It's a big inside bar so it doesn't have that compression factor. Your ma's show it's counter trend and also the ma's are very close to the price which, for me indicates consolidation. Not a good trade imho.

GBP/USD: Similar reasons really.

Try looking at strong daily trends and then look at the H1 break outs there. There aren't many but they are...
Thanks a lot smikester.

As i rule when i am a newbie to the system i try to be concise and clear in asking questions because i am very much thankful to contributors. Hence clear charts.

Even i was thinking along same line as to why these setups failed. But in my experience, asking is better than losing hard earned money and there is always someone kind enough and willing to help.

Appreciate greatly your input. I like the system and would like to trade it whenever opportunity comes.
Making money is easy- Just dont take losing trades
  • #9,974
  • Feb 10, 2011 2:35pm Feb 10, 2011 2:35pm
Quoting Survivor
Hence clear charts.
If you are prepared to do the input, as you clearly are, then you will succeed. Just don't let the market affect you when you know you made a good probability trade that fails. These H1 trades often fail, but if you choose well, then the winners (runners) will more than make up for it. I want you to know that I posted that trade as it was taking place, then deleted the post, just in case it failed. Luckily it has gone well and there was an even better one on this pair a bit later in the day. Appreciate your thank you, as well.
Gone to a better place
  • #9,975
  • Feb 10, 2011 2:54pm Feb 10, 2011 2:54pm
I am working my way through this long thread.

Obviously I prefer EUR/USD with a 1 pip spread and GBP/USD with a spread of 2.

Regarding the add 1 pip plus the spread, if say trading USD/CAD which is a spread of 4 on my platform do you add 4 plus the 1 or only on the ask/long?
  • #9,976
  • Feb 10, 2011 4:11pm Feb 10, 2011 4:11pm
I didnt post for a while (kinda rusty)

what 2 Trade? well PC always stressed on trading the "hot hand" or the markets that are moving

now there are many ways to know which markets are moving

>here's one very simple i use to know which markets are moving

now let me give an example of this week

1) the EURO is inside last weeks range .... therefore not a h0t market
2)GBp is inside last weeks range.... therefore not a hot market
3)USD/JPY is up and moving ....hot market

now i buyed that market and highlighted my entry points
4)USD/CHF is up and aslo moving ..hot market
same action reference to chart
(SIMPLE WORKS)
Hope that clears some confusion
Attached Image(s) (click to enlarge)
Click to Enlarge Name: euro.gif Size: 21 KB
Click to Enlarge Name: gbp.gif Size: 24 KB
Click to Enlarge Name: chf.gif Size: 22 KB
Click to Enlarge Name: jpy.gif Size: 20 KB
  • #9,977
  • Feb 11, 2011 12:41am Feb 11, 2011 12:41am
Quoting ezz
I didnt post for a while (kinda rusty)

what 2 Trade? well PC always stressed on trading the "hot hand" or the markets that are moving
(SIMPLE WORKS)
Hope that clears some confusion
Yep! That will work...
Gone to a better place
  • #9,978
  • Feb 11, 2011 1:09am Feb 11, 2011 1:09am
Quoting ezz
I didnt post for a while (kinda rusty)

what 2 Trade? well PC always stressed on trading the "hot hand" or the markets that are moving

now there are many ways to know which markets are moving

>here's one very simple i use to know which markets are moving

now let me give an example of this week

1) the EURO is inside last weeks range .... therefore not a h0t market
2)GBp is inside last weeks range.... therefore not a hot market
3)USD/JPY is up and moving ....hot market

now i buyed that market and highlighted my entry points
4)USD/CHF...

Very clear and nicely explained. Thanks for the effort
Making money is easy- Just dont take losing trades
  • #9,979
  • Feb 11, 2011 1:57am Feb 11, 2011 1:57am
Quoting normtold
I am working my way through this long thread.

Obviously I prefer EUR/USD with a 1 pip spread and GBP/USD with a spread of 2.

Regarding the add 1 pip plus the spread, if say trading USD/CAD which is a spread of 4 on my platform do you add 4 plus the 1 or only on the ask/long?
Personally, I get in as close to the price as possible, usually with a stop order. I don't care to a pip or three, I'm not sure if that's right or wrong, and I don't really care about that either, until someone proves me wrong. Having said that, USD/CAD is my least favourite at the moment for the reasons Ezz has generously pointed out, above
Gone to a better place
  • #9,980
  • Feb 12, 2011 2:59pm Feb 12, 2011 2:59pm
Thanks for the reply smikester,

I do like this technique, just trying to hone it a bit.

I always set a buy order if the price is above the daily open and vice versa but the thing I have found is sometimes price will hit my buy or sell order go a couple of pips and then go the other way, which is annoying.
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