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Invictus

  • #1,761
  • Nov 17, 2011 4:01pm Nov 17, 2011 4:01pm
Quoting Dorobantu
As stated earlier the spread is a big factor when it comes to applying this strategy to different kinds of pairs. To have a better view upon how "dem'" spreads affect your overall trading experience with this strategy, here you have some numbers for different spreads.

-for a 1 pip spread you would need a win to loss ratio of 2.(2), that means for every loss you have to win 2.(2) trades to just make up for the loss and be breakeven (~55.(5)% win rate)
-for a 2 pip spread the win to loss ratio should be 2.5...
Why would spread come into it, apart from having to move a bit further to make up for it, but thats always the way it is. If I set a tp of 10 pips then thats how much I go for, regardless of spread.
  • #1,762
  • Nov 17, 2011 4:03pm Nov 17, 2011 4:03pm
Quoting garyfritz
I agree with a previous poster's comment: if any set of pivots works, then the pivot itself is not adding any value to the system. When I get a chance, I'm going to backtest this thing and see if the pivots add value or not.
I'm here totaly agree with you! I therefore give more importance to S/R levels , round numbers and lower to pivots.
  • #1,763
  • Nov 17, 2011 4:06pm Nov 17, 2011 4:06pm
Quoting ohammond
Why would spread come into it, apart from having to move a bit further to make up for it, but thats always the way it is. If I set a tp of 10 pips then thats how much I go for, regardless of spread.
That's because brokers can also live
  • #1,764
  • Nov 17, 2011 4:11pm Nov 17, 2011 4:11pm
Quoting ohammond
Why would spread come into it, apart from having to move a bit further to make up for it, but thats always the way it is. If I set a tp of 10 pips then thats how much I go for, regardless of spread.
Let's say you have a 4 pip spread on eur/usd and you have a short trade opened @ 3450 with a stop loss @ 3470 and a take profit @ 3440. Let's say the price moves to 3440 but your take profit isn't triggered yet because the buy price for eur/usd is 4 pips higher than the sell one and there is no willing buyer yet for your order to be triggered.

Remember that a take profit for a sell order is closed by selling it to a willing buyer at that market price, but the buy price for eur/usd is only 3444 at that moment so your take profit isn't hit, just missed by 4 pips.

For your take profit to be triggered it has to travel all the way down to 3436 because of the spread.

Btw. you shouldn't expect the strategy to yeld an additional 2 pips of your spread is 2 pips, you should cut it down from your actual profits that your 10 pip take profit strategy should yield.

The realistic target for a 2 pip scenario in our case should be a 8 pip take profit.
  • #1,765
  • Nov 17, 2011 4:21pm Nov 17, 2011 4:21pm
Quoting Dorobantu
Let's say you have a 4 pip spread on eur/usd and you have a short trade opened @ 3450 with a stop loss @ 3470 and a take profit @ 3440. Let's say the price moves to 3440 but your take profit isn't triggered yet because of the spread between the sell price and the buy price.

Remember that a take profit for a sell order is closed by selling it to a willing buyer at that market price, but the buy price for eur/usd is only 3444 at that moment so your take profit isn't hit, just missed by 4 pips.

For your take profit to be triggered it has to travel...
That is the same with any strategy out there, it has to travel further obviously because of the spread, thats the cost of doing business, especially if you're scalping like this, it has to be said if you're going to be with a broker with a 4 pip spread on something like EU then change brokers, the smaller obviously the better. Thats what I don't like about a fixed TP like this, very often it would have gone much further than 10 pips which will make up for the losses much easier. Realistically on a 15min chart on the major GU and EU if it can't yield 10 pips whatever the spread, its not much of a strategy.
  • #1,766
  • Nov 17, 2011 4:30pm Nov 17, 2011 4:30pm
Quoting ohammond
That is the same with any strategy out there, it has to travel further obviously because of the spread, thats the cost of doing business, and especially if you're scalping like this it has to be said if you're going to be with a broker with a 4 pip spread on something like EU then change brokers, the smaller obviously the better. Thats what I don't like about a fixed TP like this, very often it would have gone much further than 10 pips which will make up for the losses much easier. Realistically on a 15min chart on the major GU and EU if it can't...
You cannot see the point I am making and I don't even know why I'm taking time off to explain this if you are going to act immature about it. Yes this fact exists in trading so that brokers can make a living out of your trading activity by offering their services to you, my point was just explaining an example and not stating that there would actually be in reality a broker offering a 4 pip spread so I don't see the relevance in the point you're making.
I was just explaining that your nominal 10 pip take profit target is a realistical 10 pip + spread target so it won't get triggered as often as it should be. In the unfortunate scenario that the 10 pip target is hit and bounces off, in reality the strategy would have worked but you took a stop loss because of a stupid reason.
  • #1,767
  • Nov 17, 2011 4:44pm Nov 17, 2011 4:44pm
However, if you do actually get 10 pips at your TP (even if the market has to travel 14 pips to make up for your 4 pip spread), and if you do actually lose -20 pips at your SL (even though the market only has to travel 16 pips to hit your stop, and there might be slippage in addition), then you don't need to hit a higher win% to break even. If you get 10 pip wins and 20 pip losses, you need 66.67% wins to break even. (66.6% * 10 pips - 33.3% * 20 pips = 0.)

The spread doesn't change the win% it takes to break even. The spread just means you have to have more market movement to hit your TP. Or less to avoid hitting your SL. (Which could of course affect your win%.)
  • #1,768
  • Edited 5:19pm Nov 17, 2011 5:04pm | Edited 5:19pm
Quoting garyfritz
The spread just means you have to have more market movement to hit your TP.
This translates into predicting a REAL 14 pip movement and not a 10 pip movement.
The correct approach to this strategy should be: "Hmm if this guy that started the topic and built the foundations of this strategy says he can predict a 10 pip movement then I should set my take profit in such matter that it gets hit, and not try to predict a bigger movement inside the market by going for 14 pips".
  • #1,769
  • Nov 17, 2011 5:33pm Nov 17, 2011 5:33pm
Correct. And/or stick with markets, times, and brokers that give you a better spread.
  • #1,770
  • Nov 17, 2011 5:38pm Nov 17, 2011 5:38pm
Quoting Dorobantu
As stated earlier the spread is a big factor when it comes to applying this strategy to different kinds of pairs. To have a better view upon how "dem'" spreads affect your overall trading experience with this strategy, here you have some numbers for different spreads.

-for a 1 pip spread you would need a win to loss ratio of 2.(2), that means for every loss you have to win 2.(2) trades to just make up for the loss and be breakeven (~55.(5)% win rate)
-for a 2 pip spread the win to loss ratio should be 2.5...
U got it wrong, 1 win 2 losses means you need > 75% win rate to be positive
  • #1,771
  • Nov 17, 2011 5:51pm Nov 17, 2011 5:51pm
Quoting sidhujag
U got it wrong, 1 win 2 losses means you need > 75% win rate to be positive
you all have it wrong im afriad every single one of you, i had over 85% success rate so far.

But i am down and a huge amount too.

Becuase of the early take out of the EA over 80% of my winners are 1-3pips per trade, with the very few left hitting 10 pip ful tp

My calculations are showing nearing over a 95% hit rate to be up 1 pip by end of week, with the EA taking you out early
  • #1,772
  • Nov 17, 2011 5:54pm Nov 17, 2011 5:54pm
Quoting deankenny21
you all have it wrong im afriad every single one of you, i had over 85% success rate so far.

But i am down and a huge amount too.

Becuase of the early take out of the EA over 80% of my winners are 1-3pips per trade, with the very few left hitting 10 pip ful tp

My calculations are showing nearing over a 95% hit rate to be up 1 pip by end of week, with the EA taking you out early
...... My calculations are made strictly for a 10 pip with a spread subtractions, and a 20 pip stop loss. I am mathematically correct whatever you say.
  • #1,773
  • Nov 17, 2011 5:56pm Nov 17, 2011 5:56pm
Quoting Dorobantu
...... My calculations are made strictly for a 10 pip with a spread subtractions, and a 20 pip stop loss. I am mathematically correct whatever you say.
yes, but this system does not trade off a hard 10pip TP and 20pip SL because a trail is involved, so that must be catered for when using this system and % wins etc

and yes i know what you mean, and you are correct, but im only relating it to this method
  • #1,774
  • Nov 17, 2011 5:57pm Nov 17, 2011 5:57pm
Quoting sidhujag
U got it wrong, 1 win 2 losses means you need > 75% win rate to be positive
I was trying to explain how much of a percentage of wins you need to take into account to be breakeven.
I'm not going to argue with you over this as I am sure you cannot understand simple principles.
  • #1,775
  • Nov 17, 2011 6:00pm Nov 17, 2011 6:00pm
Quoting deankenny21
yes, but this system does not trade off a hard 10pip TP and 20pip SL because a trail is involved, so that must be catered for when using this system and % wins etc

and yes i know what you mean, and you are correct, but im only relating it to this method
In my honest opinion taking trailing stops into consideration with such a small movement in mind is not responsible to your account's balance because you may be missing a 10 pip movement when your order may be floating or either raging at a loss for temporary amount of time.
  • #1,776
  • Nov 17, 2011 6:03pm Nov 17, 2011 6:03pm
Another trade on eur/usd minutes ago took profit, I entered at a supply level with a 10 pip profit target in mind, the indicators from this system lined up(except for the ATR)for another short trade of another 10 pips so I extended my take profit by an additional 5 pips.
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  • #1,777
  • Edited 7:09pm Nov 17, 2011 6:44pm | Edited 7:09pm
Quoting fxpreach
thats why im worried.
can we have a separate thread for this EA " X-InvictusEA" perhaps

i guarantee this EA cannot make 1% per day, no public EA has ever ...
How does it prevent you from entering trades during ranging markets?

(please answer in the EA tread as Udine wants to focus on manual trading. Thank you)
  • #1,778
  • Nov 17, 2011 6:44pm Nov 17, 2011 6:44pm
While I don't agree with Dorobantu's abrasive manner, he is correct. The calculations he and I have mentioned are correct, given our clearly-stated assumption of 10 pip wins and 20 pip losses.

If you change the size of the wins and losses, then of course the result changes. The trouble is, there is no way to predict what your average wins and losses will be if you use the trailing stop.

deankenny21, your wins might be small enough that it really does take 95% wins for you to break even. I can understand your frustration. Why is it working so well for Udine and kolesar007 &etc and not for you?

It may be that they're better at filtering out losers than you are, whether that's by pivots or whatever. If by their filtering they manage to reduce the size of their losses, and increase the size of their wins (by trading more often at times when the market quickly moves in their favor), they could end up with a very different average win / average loss than you have.

I will trust this system a lot more when I can follow it for a while -- but more importantly when I can backtest it to see how it performs without the skills of someone that I can't replicate.
  • #1,779
  • Nov 17, 2011 6:46pm Nov 17, 2011 6:46pm
Quoting rac
How does it prevent you from entering trades during ranging markets?
How does it prevent you from entering a trade when news are coming out or when an unexpected event happens, for example a bond downgrade or country downgrade by a rating agency?
  • #1,780
  • Nov 17, 2011 6:51pm Nov 17, 2011 6:51pm
Quoting garyfritz
While I don't agree with Dorobantu's abrasive manner, he is correct. The calculations he and I have mentioned are correct, given our clearly-stated assumption of 10 pip wins and 20 pip losses.

If you change the size of the wins and losses, then of course the result changes. The trouble is, there is no way to predict what your average wins and losses will be if you use the trailing stop.

deankenny21, your wins might be small enough that it really does take 95% wins for you to break even. I can understand your frustration. Why is it working...

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