Algorithm Trading Concept (ATC)

Well, lets hope this turns into a meaningful and venturous gain to myself and to many.

1. Main Concept = Perpetual Motion

The market is in constant change and motion. If you are waiting around to enter the market at the perfect timing, you are not seeing the market for what it really is. A living, breathing entity in constant motion, movement and change. If we are not with the market every step of that movement/time continum, than what are we doing even trading?

2. Fluidity Concept = Reaction Potential

Because of the highly distinguishable fluidity in the forex market, the only constant that carries any ounce of true weight and truthfullness to traders is our reaction to that constant fluidity. Constant fluidity is however a double edged sword, and one that can cut hard, sharp and deep, when what you just reacted to is the wrong thing to have reacted with. So, knowing that you can react badly or wrongly brings up the concept of how to react rightly and goodly to the current market conditions. This is accomplished no easier than comparing apples to apples. However, most traders out there, continue day after day to compare apples to oranges, all the while mistaken that they are comparing apples to apples.

3. Trading Apples/Oranges = Failed Trading Practices

Believe it or not, this is the trading norm, and involves comparing data from one trading aspect and relating that data to a completely different set of criteria, all the while convincing yourself it is the perfect moment to make that trade you have been waiting for. Only to find, once again, you were wrong and the market was right. Once again showing the world how unprepared you were in both the entering and exiting of your perfect trade. 99.9% of the time this is manefested through the use of indicators on your chart. One indicator tells you one thing and than compare that indicator to price action or some other variable which has no comparrisive representation to your original comparrison. Thus giving you the apples to oranges mentality that has no business in trading. This will only lead to broken trades, badly compared data, resulting in inconsistent results at best.

4. Trading Apples/Apples = Consistent Trading Practices

This statement is all well and good, except one thing. The ability to actually be able to realistically compare apples to apples is a process that will elude you unless you are actually comparing apples to apples. And if you are like 99% of the chartists, you will be unable to accomplish this crucial step to becoming a consistant trader. Why? Because everything you are studying is too wildly inconsistent to proof positive winning and consistent reasults. There is only one way to accomplish this that I have found and it has to do only with the intake and processing of consistent data and compare it to other consistent data, regardless whether it is related or not. Now, in the ability to compare data to data, you are in a sense comparing apples to apples and giving your mindset a much needed transformation during the trading to win process.


5. Raw Data = The Key Success

I am not going to really get into with anyone as to the type of specific data you might feel is the most important to use. The fact is that even in using data, we are all still as likely to be very different traders, and our data will be reflected in the type of data that we collect. In fact, the amount or type of data is really endless and there is no way that you could even begin to collect every piece of data. With that said, I am going to lay down some data guidlines that I feel is important to my style of trading in hopes others will find it useful and I will even learn more than I do today about successful trading. This is no "set-in-stone" thing. I encourage all who see the potential here of really getting into this with me! I look forward to the knowledge we can amass together.

A Little History.......

In July of 2011, I will be startig chemotherapy for Non-Hodgkins Lymphoma of the left testicle, brain and CSF, though thank goodness not all at once. My treatment is very strong and made to kill and the prognosis looks fantastic at this point in time. I will be out for many days at a time, and besides being a full-time nursing student locally, I trade forex. So, with that said, I will stay as dedicated to this thread as I can and hope for lots of feedback from my friends in the forex business.

Okay, I have moved the thread here as here I can actively post. Another victory!

In a few hours i leave to get my next run of chemotherapy and I am quite looking forward to it. I hope to see some of you around to get this thread started and see about attrackting some good people to make this happen

This area I have outlined here is very particularly hard to trade. Yet on a demo account I am slightly under break even do to a few small losses just recently on the 0800 bar of July 26th.

This might not seem overly impressive, but prior to the 1600 bar on the 21st of July I had mass moves across the 8 pairs I trade to the point of banking over 800 pips in profit. Enough so I coukd have easily taken Friday and Monday off, but I am still on the road to gather more data...data....data! Of course, this could change without warning.

So, as you can see there is potential huge upswings here of profit by actively managing trades, being ready and keeping losses small. And I think I have really just exposed the tip of the iceberg here as to potential as there is still much more data to process and talk about and evaluate.

The hardest part right now is the management of the trades, as doing it manual takes considerable time and effirt and errors. The good news is that when the time comes an EA can do it all for us, and that is one of my goals.

So, please feel free to asks questions and I will do the same for you, and lets have a great thread and amass a bunch of knowledge that we can grow from.

Here is a trading chart I am using at the moment showing that particularly had time to trade where I am just under break even. Now I will go and alert the others that I moved the thread. Please don't mind my lines as they are wrong since I will be taking my laptop to the hospital, but I will try later to upload more goodies

GbpUsd stopped out my position by less than 1 pip. Happens sometimes I guess. Man, 3 pairs happened so fast I did not even have time to react. LOL

Well, time to get ready to leave. An EA would not have missed what us humans can... back in a few days

Right Now I am collecting data and pips. Here is how Monday turned out per pair.

If anyone wants to do some programing, let me know. It is all based on price action with no indicators based on 4 HR charts using 1 HR charts to evaluate price action, trading times, day of the week and pip thresholds currently by hand.

Anyone who is interested in the programing side of things I will be happy to go over things in details at the same time with someone serious about this angle on Forex Trading.

Lots need to be done including the evaluation of this data as it gets collected.

Aud/Usd - 41 Pips
Eur/Aud - 106 Pips
Eur/Cad - (65) Pips
Eur/Jpy - (57) Pips
Eur/Nzd - 94 Pips
Eur/Usd - 35 Pips
Gbp/Aud - 108 Pips
Gbp/Cad - (9) Pips
Gbp/Chf - 21 Pips
Gbp/Jpy - 41 Pips
Gbp/Nzd - 130 Pips
Gbp/Usd - 18 Pips
Nzd/Usd - (11) Pips
Usd/Chf - 65 Pips
Usd/Jpy - 41 Pips

The total I came up with was 558 Pips for the day.

There is most likely a bit of error in here. Most likely to either side or both of the pip count due to not quite having spreads exact and human error that I am getting a grasp on. There is also a lot of data that I collect on a 4 HR bases and in between that I am compiling to really be able to go over with a fine tooth comb as more of it compiles on a daily bases.

This really takes a lot of time and with chemo wearing me down and trying to stay ahead for fall classes coming up, I hope you appreciate this effort. I am looking for like minded individuals who are really interested in pursuing this, so lets see where it goes.

I had some pretty nice days last week in profit, including NFP day, though I am also keeping and recoding data just about NFP days as well as specicific times of each day, but I thought I would just start posting starting today and see if anyone wanted to give this a go with me. So, let me know. I am not really intereseted in going fully public with everything I am doing, but will be glad to work with the right people, so stay tuned and have a great night!

This is far from being optimized!

Here is what one of my charts looks like as I collect data, in case you were wondering.

Well, I slept all night and just finishing totals from market open at my charts 0:00 candlestick to the N.Y opem which is happening now.

I will go into details later per pair, but according to my testing with all the pairs listed above we have banked 595 Pips oin profit with just my TP and SL settings I am currently using as a guess befire analyzing the data.

With any luck my goal is at extend the TP target whike leaving the SL target tight and fluent.

1 HR break til I do some entries for N.Y.

Hope you are all enjoying your day!

And that was just today so far on top of the almost 560 calculated yesterday.

What an eventful day. To say that today would not have been another stellar afternoon using stricktly price action would be an understatement. I am a bit tired, so I will post for today and see what happens tomorrow.

AudUsd - 96 Pips
EurAud - 90 Pips
EurCad - 56 Pips
EurJpy - 100 Pips
EurNzd - 126 Pips
EurUsd - 76 Pips
GbpAud - 162 Pips
GbpCad - 25 Pips
GbpChf - 55 Pips
GbpJpy - 135 Pips
GbpNzd - 152 Pips
GbpUsd - 55 Pips
NzdUsd - 133 Pips
UsdChf - 71 Pips
UsdJpy - 32 Pips

Total = 1126 Pips

I can hardly believe that pips can add up that fast! Add that to yesterdays 558 pips and we have a nice 2 day total of 1684 pips give or take some human error.

Despite the crazy rides today we would have made some pips and I found that PA was relatively smooth.

Would love it if someone would take on some programming so I would not have to hire anyone. Let me know if you have some time to get into this and I will answer all questions I can foir anyone who wants more info.

Night!

Hi

Good luck with your treatment,you seem a positive guy I think its the key

On your system just a quickly about practicalities of trading so many pairs

If you risk 1% of your account per trade and you have 20 open trades that a risk of 20% ..not a nice position to be in

If you assume 20 trades a day on average and limit your total exposure to 1% thats 1% divided by 20 per trade ...a 20th of 1% per trade

have you thought about the logistics of actually protecting the account in the case of draw down ?

Cheers

Paulus

Hey Paulus

It is funny you should ask that, because I have not really put a lot of thought into it at this point in time. Though you are right that 1% per pair would not be a good situation to be in. 3% or so per risk for all 15 pairs definitely seems more than adequate I would guess, and it could be that some of the TF's and a pair or two could eventually be elimiinated from the equation as more data gets accumulated.

The system here actually takes much more than 20 trades per day. Some times it will take 1-5 trades per 4 hour bar depending on price action, and other things I am still collecting data on for profitability. The SL is very tight and the TP is currently an arbitrary number I have chosen along with trailing stops that are also pretty tight, so DD can be easily managed, and can be adjusted as the data presents itself. The possibility exists to have a target of nearing 100 pips, but will need to crunch the numbers. I have had trades that could have been set at 300 pips for the target, but there must be some values per pair that wil fill the middle somewhere and make this more profitable, and that is where the data comes into play.

It might be that the best way is to trade with a ratio of 1:1 or something like that, as I do like the idea of diversity of pairs and always have ever since I began trading.

Do you have any thoughts about having an account set to only assume risk if 1:1 like stocks or at least something smaller? Would that help keep the MM in check?

Thanks for your feedback!

Here is a spreadsheet of the data I am collecting on a 4 hour bases. It is really quite detailed information. I have a spread sheet for each pair and each day of the week, as I continue to collect this data.



In this example of of AudUsd, it would have given me 12 trades for the day for the total of 96 accumulated pips. Based on price action of the higher TF bars. And had trades that left to run would have been up 80 pips, 60 pips, 399 pips and 120 pips in profit before coming back to B/E. Where is the median and how many pips do I really go for with each pair? Hopefully the data will be able to help me see that.

It is definitely an interesting concept and one that I am liking more everyday.

Anyway, I am going to get a bit more sleep, but there is more to come. I think it is a good idea to put into code, but it will take some time to add some of the variables that I think are really important for something like this.

I guess for no apparent reason I will just keep uploading the spreadsheet for Aud/Usd daily as it may be helpful for those who are following along.

I will spend some time now getting caught up on price action from last night.

This is really time consuming so if anyone with a programming back ground wants to help get this party started, it would be appreciated.

Please, anyone, feel free to ask anything, and I will answer any questions that you want, and I will be around until I take a break before NY open.



Monday would have also given us 12 trades for a total of 41 pips in profit for Aud/Usd

It was interesting for Tuesday afternoon however when for some pairs I had to go down to the 5M bars to make sure I had entries right based on the determned points for entering the trades. Looks like a bit of the same again this AM.

Do you mean by hedging ? I wouldn't recommend that

keep it in house with the actual trades them selves

You have to find out over a period ie 1 week what the average number of trades per day can be and the average number of positions that can be open per day at any one time

On this average number you will then have to risk no more than 3% as a whole so it would indeed mean dealing in micro lots and letting the account build

With a reassessment of both averages done weekly and the risk altered accordingly

Is there any way of technically placing your TP and SL to give you 2:1 RR

By this I mean are you just saying TP 20 SL 10 or is the SL going in a technical position ie the high of the bar for a short ?

Any trade with a potential negative RR ie 1:2 should be ignored

You need an edge and you need a greater RR than 1:1

What is the entry and exit criteria

Cheers
P

3 questions

What was the greatest draw down on the 12 trades ?

Was you risking more than 41pips from the onset of the trades to get the 41 pips ?

What was the winners losers ratio

P

Another problem arises trading over many currencies at once

IE
2 trades today

1winner at 50 pips
1 loser at 25 pips

On 1st glance it seems I make 25 pips

But the pip/$ value of the loser is 3 time the pip/$ value of the winner so in fact I lost on the whole across the 2 trades

This may well require an additional EA to number crunch each swap to $10 per pip to get even risk across all various swaps ..once that's done you can then risk your 3% across the whole using the averages

P

Right now I am using a 15 Pip Hard stop + spread. When I go to being up 10 pips, I mive the SL to 10 pips. When I get to 18 pips in profit I move to BE+1. Definitely no hedging and can't being from the states anyway I think. But these numbers are realky wiuthout reasoin at the moment until I can tell what would be a better SL/TP target which I am trying to gather through the collection of this data.

By 1:1, in this case I meant more dollars for dollars rather than risk:reward. But yes, the risk:reward should be as high as possible and I am hopiong that is what the data will help us figure out.

Exit strategy I am using for now is in the previous post

Out of the 12 trades, I would have considered 6 were winners and 6 were losers. And I never counted a winner until I reached at least BE +1

On those 12 trades...

If you had kept the SL at 15 and did not move it with TP set to 18 giving greater than 1:1 RR what would your total profit have been and the winners to losers ratio?

Can this be easily checked with the past data you have ?

Unless your looking at 4hr plus time frame market noise can easily bust a great looking trade..leaving a stop loss at its current level gives room for the trade to breath

I never move my SL from its original position..my risk is always 5% my TP always at least 5% max TP is 15%
P

Actually I forgot to nemtion that for now I am just using a 20 Pip TP, but I am hoping that the data will determine that value as I have been uo many many times since yesterday of over 200 - 500 pips depending ion pair.

In the case of a stop out, we simply re-enter if prce action hits the designated point again.

what is the designated point by definition ?

P