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The psychologist's chair

The wide spreads today have resulted in the backtests showing a negative return both with my actual strategy and the one that I'm testing, so I will have to test again when the spreads are more normal, which hopefully will be by next Monday.

I've also added some more code to my existing strategy to not take trades when the liquidity isn't good, which should save me having to switch on or off my EA, so I can leave it on all the time.
Good judgement comes from experience. Experience comes from bad judgement.
Thanks for the information - session breakouts are cool. I think the first one I saw here was Daily95Pips. If my memory serves it had 30 pips stops. Don't you think the 10 pips here might be too tight? We like it tight but not THAT tight, LOL. Someone farts in Frankfurt and look EURUSD fell 50 points, whoosh, that was your stop.

What makes you think it's a good idea to up the ante to 2% before you have finalised the EA?

Quoting Reactor
I've not seen anyone work on this EA but there are similar variations on the same theme which are profitable too.

Here is the webpage if you are interested: http://codebase.mql4.com/6243
forget about tomorrow, just steal away into the night
Quoting spekitox
Thanks for the information - session breakouts are cool. I think the first one I saw here was Daily95Pips. If my memory serves it had 30 pips stops. Don't you think the 10 pips here might be too tight? We like it tight but not THAT tight, LOL. Someone farts in Frankfurt and look EURUSD fell 50 points, whoosh, that was your stop.

What makes you think it's a good idea to up the ante to 2% before you have finalised the EA?
The VaR per trade for the current system is at 1% of equity and it's this system that I had considered changing the VaR to 2% of equity, more because I was thinking I wasn't taking enough risk as my 34% return could have been 68% with only a drawdown of 16% vs the 8% I endured earlier on this year. If I implement the strategy that I'm testing with my current then the VaR per trade will change to 0.5%.

In regards to having a 10 pip stop, I remember doing the backtests for a 20 pips stop-loss with a take-profit of 40 pips, but the profitability was lower. Intuitively, I think the more pips you expect, the less likely it is to happen. I've also noticed a linear relationship between probability of winning and R:R with this system when I use a risk of 10 pips. If the R:R is 1:2 then the probability of winning is about 50% if the R:R is 1:3 the probability of winning is about 33% and if the R:R is 1:10 then the probability of winning is about 10%. If you work out the expected return, the system with a R:R of 1:2 has the highest expected return.

The only weakness I can think of, apart from the system ceasing to work, is that I'm fitting the system to the risk I'm willing to take and the reward I'm willing to accept.

I understand where you are coming from in regards to sharp moves triggering my SL which could be more than the SL, resulting in a loss larger than expected. I will revaluate the strategy when I see it happen as I haven't at the moment.

What I've noticed on 2 occasions is that my order levels are hit and opened, just before an economic release and then the spread widens, resulting in an almost instant loss. The first time it happened to me, it made me realise 5 pips for a stop was too tight. The second time, it was just unfortunate and the nature of the game as there have been times when my levels have been hit just before an economic release and then have gone my way, which of course I happily accept.
Good judgement comes from experience. Experience comes from bad judgement.
I backtested my new strategy yesterday and although it was profitable, it's not as profitable as my current strategy and the consecutive losses are more than double.

It's back to the dream factory for now as I look for other profitable strategies.
Good judgement comes from experience. Experience comes from bad judgement.
I think you're moving too fast.
Fact: you are making money. Seventy-something trades, half of them winners, R:R out of the manual, what else do you want? Many of the SABs would be happy with these results. 4 months, 10 % profit, if that's not good, I don't know what is.

Numbers ... so many of them ... I envy you quants ... I only get headaches from numbers.

Quoting Reactor
1% 2% 34% 68% 16% 8% 0.5% 10 20 40 10 1:2 50% 1:3 33% 1:10 10% 1:2 2 5
forget about tomorrow, just steal away into the night
Quoting spekitox
I think you're moving too fast.
Fact: you are making money. Seventy-something trades, half of them winners, R:R out of the manual, what else do you want? Many of the SABs would be happy with these results. 4 months, 10 % profit, if that's not good, I don't know what is.

Numbers ... so many of them ... I envy you quants ... I only get headaches from numbers.
I just want to point out that I have been with Oanda longer than my account shows. Before late August my account was linked to their U.S. branch and then they transferred me to their European branch by closing my U.S. account and creating a new account at their European branch.

My return for my first £10k was 34% for the year until I added another £10k, which in effect resets the returns to zero, of which I'm down 2%.

I plan on being around on this forum, so hopefully in just over a year's time my return's will be reported more accurately, though yesterday I looked at the top 10 on the trading league and it was completely different to the previous day, which makes me think the criteria has changed to be on the league. I'm only looking at yearly ranking which could be the reason, but if anyone can shed any light on this, I'd be grateful.
Good judgement comes from experience. Experience comes from bad judgement.
European branch? Ah, you mean the UK branch. I decided to stay with the US office because of PayPal. My favourite way of paying for Ebay items and other stuff.

Do you have full hedging with the UK account? Like long and short same pair same time? Can you try it with 1 unit for me?
And what's the margin requirement for gold?

The top 10 ... yeah ... I guess it's those proverbial 15 minutes of fame. I don't bother remembering names anymore, they're changing like the weather.

Quoting Reactor
I just want to point out that I have been with Oanda longer than my account shows. Before late August my account was linked to their U.S. branch and then they transferred me to their European branch by closing my U.S. account and creating a new account at their European branch.

My return for my first £10k was 34% for the year until I added another £10k, which in effect resets the returns to zero, of which I'm down 2%.

I plan on being around on this forum, so hopefully in just over a year's time my return's will be reported more accurately, though...
forget about tomorrow, just steal away into the night
Quoting spekitox
European branch? Ah, you mean the UK branch. I decided to stay with the US office because of PayPal. My favourite way of paying for Ebay items and other stuff.

Do you have full hedging with the UK account? Like long and short same pair same time? Can you try it with 1 unit for me?
And what's the margin requirement for gold?

The top 10 ... yeah ... I guess it's those proverbial 15 minutes of fame. I don't bother remembering names anymore, they're changing like the weather.
You can't hedge on Oanda as it just nets off your deal with any existing positions.

You can trade gold on margin though.
Good judgement comes from experience. Experience comes from bad judgement.
Happy New Year!

I want to ponder on some thoughts I have experienced with my trading. I'm still mesmerized when I enter a trade and feel the emotions of hope, greed and fear. I am completely sucked in by the price action, hoping that the fear of my stop-loss being hit will be short lived and at the same time hoping my take-profit gets hit. I was never like this, especially at the beginning of my career.

I've become emotionally attached and know it is bad. The time spent just watching price action can be spent more productively doing other things, like testing out strategies and dreaming up newer ones, which is what I've been doing. I've just let my EA run in the background and only occasionally checking that it is running smoothly, though whenever I see I'm in a trade, I always watch and wait to see what happens. It's so difficult to look away and start doing something else.

The seduction of the price action is very strong that I've now removed everything from my charts, so I just have the axis on a blank screen and can't be sucked in so easily.

I've also had the idea that I want to build my own applications to run back-tests and send orders, as currently I'm running MT4 on a MacBook and so have to use a few software fixes to get it to work. I just need a back-tester and execution platform and to build this I need to learn about programming, which I've started.

One thing I was messing around with was finding all the prime numbers between 0 and 1,000,000 and can tell you the last one in the sequence is 999,983.

Back to learning about programming!
Good judgement comes from experience. Experience comes from bad judgement.
Well as you can see, January brought fierce competition among traders and their journals - I think you should set some really big, kick ass (and surreal) goals like you'll show how to make 5k pips every month or never lose a single trade or pretend you're a 18 yo virgin, put some titties in your avatar - a dozen chatmates guaranteed. :lol:

I'm not sure what worked for me might work for you too but if you find the market to be a vampire of your emotions, then halve those possie sizes. And again if necessary. You can raise the stakes again if you feel comfortable. No hurry.

Good luck with the programming. Instincts tell me you'll keep yourself occupied with that for the next couple of months. A program of that magnitude is often a complete thesis work, far more than a hobby project.
But don't let yourself get discouraged by this bitter old naysayer - so many successful programs started as a hobby project.

The prime numbers, LOL. I tried to explain to my 85 yo granny what they were. I gave up after, pff, 15 minutes. Then I realised ... f...ing hell, if she grew old w/o knowing wtf they are, do I need to care about them at all? :lol:

laters!
forget about tomorrow, just steal away into the night
Quoting spekitox
Well as you can see, January brought fierce competition among traders and their journals - I think you should set some really big, kick ass (and surreal) goals like you'll show how to make 5k pips every month or never lose a single trade or pretend you're a 18 yo virgin, put some titties in your avatar - a dozen chatmates guaranteed. :lol:

I'm not sure what worked for me might work for you too but if you find the market to be a vampire of your emotions, then halve those possie sizes. And again if necessary. You can raise the stakes...
I'm not a sales person, so I'm not going to make claims I can't back up just to win some internet friends, but thanks for the concern.

I guess this journal is just going to be not as exciting as all the others.
Good judgement comes from experience. Experience comes from bad judgement.
..how did you find these numbers? Are there new tools in the factoring field? In the old days, we had those simple divisibility tests, based on digits / sums of digits ... and there was brute forcing, up to the square root. and the sieves ... they were too complicated for us to put them into a program.

I remember we had this funny thought ... what if there is an alternate representation of a number that would make factoring effortless?
To put this into perspective, take 30. It's 2 x 3 x 5. Or 3 x 10 ^ 1 + 0 x 10 ^ 0. But if we put prime factors instead of decimal places, we could write 30 as "1-1-1-0", that is 5 x 3 x 2 ... 8 would be "3-0", 9 would be "2-0-0", 49 would be "2-0-0-0-0", you catch my drift...

Quoting Reactor
One thing I was messing around with was finding all the prime numbers between 0 and 1,000,000 and can tell you the last one in the sequence is 999,983.
forget about tomorrow, just steal away into the night
Quoting spekitox
..how did you find these numbers? Are there new tools in the factoring field? In the old days, we had those simple divisibility tests, based on digits / sums of digits ... and there was brute forcing, up to the square root. and the sieves ... they were too complicated for us to put them into a program.

I remember we had this funny thought ... what if there is an alternate representation of a number that would make factoring effortless?
To put this into perspective, take 30. It's 2 x 3 x 5. Or 3 x 10 ^ 1 + 0 x 10 ^ 0. But if we put prime...
And 3-0-0 is 343. It's just using the primes as the base of your counting system, like an abacus.

I used brute force and let my mac work out the primes for me. It took about an hour to work them all out. There is no formula to creating them, so they need to be found, with the effort required in finding them getting exponentially more time consuming, the larger the prime.
Good judgement comes from experience. Experience comes from bad judgement.
I thought I'd update my journal today. My initial thoughts are: "one step forwards, two steps back". It seems growth of my account is slow and I've been pondering when I'd add more money to my account and if I should increase my R:R to 2%:4%.

For now I've decided I will add more money to my account at the end of March, if this quarter is profitable. My initial thought is another £10k. At the same time this strategy is the riskier part of my portfolio, so I'm thinking I should crank it up and adjust it so I'm on target to make 100% a year.

As I have another 2 and a bit months before I do anything, I think I'll just think it over some more, as well as exploring other strategies and continuing to learn C++.
Good judgement comes from experience. Experience comes from bad judgement.
I've decided the other day to increase my risk on each trade to 2% and my reward to 4%.

My timing for this change was bad as the next trade was a loser at 2%, but statistically, I have only experienced a maximum of 5 in a row, so only one more to go before an up-trade.

Although I was disappointed with the loss, I did not feel as disappointed as I thought I would. I guess this is down to having thought over the worst case scenario enough times that I was comfortable with it. Still, I have to experience a longer drawdown and recover from it before I can say I feel comfortable with the new risk parameters.
Good judgement comes from experience. Experience comes from bad judgement.
They say you have to taste the sour so you will appreciate the sweet ... any ideas about filtering out bad trades? Like, restrict trading to EO / LO, only take trades in the direction of the bigger trend, or adjust SL / TP distance based on recent ATR ... Not sure ATR would help here.
forget about tomorrow, just steal away into the night
Quoting spekitox
They say you have to taste the sour so you will appreciate the sweet ... any ideas about filtering out bad trades? Like, restrict trading to EO / LO, only take trades in the direction of the bigger trend, or adjust SL / TP distance based on recent ATR ... Not sure ATR would help here.
You can test to see if it makes a difference if you use the EO rather than the LO. I think of the Hans123 system and all the others that relied on the EO or LO, which worked during the boom years, but definitely not now. I'll let you know now that it was the central Bank of China that triggered all those moves as they called up every single bank in the city buying up everything.

In regards to taking a trade in the direction of the trend, it might work, but not for the system I use. I tested the idea and it didn't remove enough bad trades to make a difference as it also removed a few good ones. What I do know is if a filter or indicator has any predictive value, you can use it by itself to trade and you don't need to combine it with another.

Adjusting SL and TP has a bigger effect on my system, but there are limitations on what can be tweaked. Just because I have a R:R of 1:2 doesn't mean that for any value of risk (in terms of pips), I can still have the same reward of 2 at the same winning probability.

You can experiment with ATR on the SL and TP, but I don't think it has much predictive value.

As I have already defined the risk parameters, my focus is on tweaking the entries. I'm not looking at any indicators but instead identifyng levels and I'm currently experimenting with a pullback method to see if it is any better.

One more thing I want to mention in this post is that I'm going back to risking only 1% on each trade. I did some Monte Carlo simulations on the weekend at 2% and didn't like the look of some draw-down scenarios.
Good judgement comes from experience. Experience comes from bad judgement.
Five in a row! I'm excited to see if the next trade is a winner or if I'll be making it six in a row.
Good judgement comes from experience. Experience comes from bad judgement.
Looks like I've set a new record with 6 consecutive losses. I feel lucky and a sense of relief that the next trade was a winner, as I was beginning to wonder how long this streak would last.

I have built and tested a pullback strategy, but it doesn't look as profitable as my current strategy. Back to the dream factory for me and learning some more C++.
Good judgement comes from experience. Experience comes from bad judgement.
Hi Reactor, are you taking your entries via robot/EA, indicator or PA? Just wondering so maybe I can weigh in my two cents.
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