Eat the elephant in small bites | Forex Factory

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Eat the elephant in small bites

  • #1
  • First Post: Edited Aug 13, 2012 9:47am Aug 5, 2012 8:36am | Edited Aug 13, 2012 9:47am
Hello all

First of all, I would like to thank FF and all the positive contributors on this forum for many stimulating and creative posts I have read over the past number of months. I am new to this and found FF a great help in learning some basics about FX (I still have a long way to go!).

I have a crazy idea I would like some help with please. More often than not a bar opens at a given price, then the price moves one way then the other (it has to go somewhere although we can't predict it). My idea is this. If we were able to place a buy and sell order at the bar open with a small TP and an emergency SL we could catch very small gains on a regular basis.


For example if we look at the houly chart

  1. place a buy and sell order at the open of each bar (if the spread is less than 2 pips)
  2. TP of 2 pips, SL 10 pips
  3. in theory, 2 pips x 2 orders x 24 hours = 96 pips per day per pair

I know this goes against the established Risk Reward, MM advice etc. but I think it might be worth a try. Any coders out there willing to put an EA together to do this I would really appreciate it. Your thoughts welcome.

AndyG

UPDATE
Go to page 4 #49. Change of timeframe to Daily with SL 5, TP 25.

  • #2
  • Aug 5, 2012 9:32am Aug 5, 2012 9:32am
IT WON'T WORK!!!
Iam just A pips on the rode :nerd:
  • #3
  • Aug 5, 2012 9:38am Aug 5, 2012 9:38am
sorry, just wanna say ... wake up dude and be real ......
not euphoria follower
  • #4
  • Aug 5, 2012 9:58am Aug 5, 2012 9:58am
Quoting -er-
IT WON'T WORK!!!
Hello -er-
I appreciate your response.
AndyG
  • #5
  • Aug 5, 2012 10:00am Aug 5, 2012 10:00am
Quoting iqyu5an
sorry, just wanna say ... wake up dude and be real ......
Hello iqyu5an, thanks for you reply - you are probably right - I thought it might be worth a shot.
AndyG
  • #6
  • Aug 5, 2012 10:07am Aug 5, 2012 10:07am
Please see the attached historical data for 1hr EURUSD (May-July 2012). I made a slight adustment to the first post i.e. SL5 with TP2. I took the difference in the open price of each bar and it's high and low - if these were grater than 2 pips then 2 pip gain otherwise 5 pip loss.
Attached File(s)
File Type: xlsx 1hr DATA.xlsx   129 KB | 1,003 downloads


AndyG
  • #7
  • Aug 5, 2012 10:48am Aug 5, 2012 10:48am
Quoting AndyG
Please see the attached historical data for 1hr EURUSD (May-July 2012). I made a slight adustment to the first post i.e. SL5 with TP2. I took the difference in the open price of each bar and it's high and low - if these were grater than 2 pips then 2 pip gain otherwise 5 pip loss.
Attachment

AndyG
AndyG

everyone that gets started trading thinks of these types of strategies...thinking that it is possible to just place orders in like a robot and just make pips week in and week out...but they NEVER work!

problems with your excel sheet:
1. not including spread! so for EURUSD 1.2 pip spread @ oanda most of the day....so you would need a 3.2 move to capture your 2 pip TP and only a 3.8 pip move against you for your 5 pip stop to trigger.
2. you don't know if the price touched your order then went up 3.8 pips before falling again to a new low price in the same hourly candle (so on your sheet it shows profit but in the real world it will be a loss)...so your data is NOT useful.

good luck with your trading
  • #8
  • Aug 5, 2012 11:46am Aug 5, 2012 11:46am
Actually AndyG, you're on the right track. Thats how a lot of the successful EA's that actually make lots of money, work. They take little bites out of the elephant. They have a huge stop loss, and tiny take profit, but they are certain on the direction first. for a simple example, they will only trade in the direction of MACD on the H4 chart, and aim for a 2 pip profit, guess what, they are almost 100% sure to get it! Multiply that by 30 or so currency pairs, and you've got yourself a very profitable EA.
  • #9
  • Aug 5, 2012 12:08pm Aug 5, 2012 12:08pm
Quoting Madness
AndyG

everyone that gets started trading thinks of these types of strategies...thinking that it is possible to just place orders in like a robot and just make pips week in and week out...but they NEVER work!

problems with your excel sheet:
1. not including spread! so for EURUSD 1.2 pip spread @ oanda most of the day....so you would need a 3.2 move to capture your 2 pip TP and only a 3.8 pip move against you for your 5 pip stop to trigger.
2. you don't know if the price touched your order then went up 3.8 pips before falling again to a new low...
Hello Madness
thank you for your comments. I have done the spreadsheet again including spread and the pips are positive. Your second point is of course correct but I thought if I had an EA to test the theory then I could either work on it or try something else.
What method or system do you use to make it in this business?
AndyG
  • #10
  • Aug 5, 2012 12:10pm Aug 5, 2012 12:10pm
Quoting Timo7
Actually AndyG, you're on the right track. Thats how a lot of the successful EA's that actually make lots of money, work. They take little bites out of the elephant. They have a huge stop loss, and tiny take profit, but they are certain on the direction first. for a simple example, they will only trade in the direction of MACD on the H4 chart, and aim for a 2 pip profit, guess what, they are almost 100% sure to get it! Multiply that by 30 or so currency pairs, and you've got yourself a very profitable EA.
Hello Timo7
thanks for your encouraging words and pointers. If someone could incorporate these ideas together then we could either prove or disprove the theory. Worth a shot anyway.
Thanks.
AndyG
  • #11
  • Aug 5, 2012 12:21pm Aug 5, 2012 12:21pm
This reminds me of an EA that was released a few years ago for EURUSD, with something like a 6 pip TP and a 650 pip SL

It showed 15 years of continual profits, and then guess what? Within 2 weeks of it being released for sale the 650 pip SL was hit

Now what AndyG is suggesting here isn't as extreme, but nor do I believe it can be successful, having a tighter SL just means it will get hit more often
  • #12
  • Aug 5, 2012 12:29pm Aug 5, 2012 12:29pm
Quoting AndyG
I know this goes against the established Risk Reward, MM advice etc. but I think it might be worth a try. Any coders out there willing to put an EA together to do this I would really appreciate it
If you are new to trading i think the best you can do is the opposite of your idea. Forget robots and go for manual trading using "the established Risk Reward, MM advice"

You will probably learn more about trading, the learning will go faster and you will have far better chance of making profit.

Arctic4x
  • #13
  • Aug 5, 2012 12:35pm Aug 5, 2012 12:35pm
Quoting Timo7
Actually AndyG, you're on the right track. Thats how a lot of the successful EA's that actually make lots of money, work. They take little bites out of the elephant. They have a huge stop loss, and tiny take profit, but they are certain on the direction first. for a simple example, they will only trade in the direction of MACD on the H4 chart, and aim for a 2 pip profit, guess what, they are almost 100% sure to get it! Multiply that by 30 or so currency pairs, and you've got yourself a very profitable EA.
"Almost" being the keyword. I'd be very curious to see the actual win ratio and the actual average win/loss value. It might turn out that the "very profitable" EA is not that profitable in the end.
Personally, I like the opposite approach - very tight SL and very large TP. The win ratio, of course, would be very low. To each his own, I guess.

Sincerely,
Barbossa
  • #14
  • Aug 5, 2012 2:07pm Aug 5, 2012 2:07pm
Quoting Andy B
This reminds me of an EA that was released a few years ago for EURUSD, with something like a 6 pip TP and a 650 pip SL

It showed 15 years of continual profits, and then guess what? Within 2 weeks of it being released for sale the 650 pip SL was hit

Now what AndyG is suggesting here isn't as extreme, but nor do I believe it can be successful, having a tighter SL just means it will get hit more often
15 years of continual profits would do me ok - you got a copy of that EA?
AndyG
  • #15
  • Aug 5, 2012 2:11pm Aug 5, 2012 2:11pm
jeez, trading is not that hard, put some time in and use your head
tradewith60
  • #16
  • Aug 5, 2012 2:12pm Aug 5, 2012 2:12pm
Quoting Arctic4x
If you are new to trading i think the best you can do is the opposite of your idea. Forget robots and go for manual trading using "the established Risk Reward, MM advice"

You will probably learn more about trading, the learning will go faster and you will have far better chance of making profit.

Arctic4x
Hello Arctic4x, thanks for your response - yes I am aware of the problems this idea may have but I need to give it a go to confirm or otherwise. Thanks.
AndyG
  • #17
  • Aug 5, 2012 2:17pm Aug 5, 2012 2:17pm
Maybe you require something like this ea

It will place a series of pending orders.

Good luck.!!
Attached File(s)
File Type: mq4 Larry Kirkbride.mq4   43 KB | 529 downloads
  • #18
  • Aug 5, 2012 2:22pm Aug 5, 2012 2:22pm
Title of the thread is Awful!!!
The Market pays you to be disciplined
  • #19
  • Aug 5, 2012 2:32pm Aug 5, 2012 2:32pm
Andy...

Keep at it mate... if you are right, you are right... if you are wrong, you are wrong.

You will have to learn for yourself!

I am not knocking your system, just reading the thread - if you believe in the system than carry on until you doubt it yourself and then try the next thing, but there are loads of systems here - Read Peter Crowns and The Real Things posts, loads of valuable stuff there (and there are loads of other peeps as well, but these to my head at this moment).

Good luck
Vip
  • #20
  • Aug 5, 2012 2:34pm Aug 5, 2012 2:34pm
Quoting AndyG
15 years of continual profits would do me ok - you got a copy of that EA?
AndyG
Of course not, why on earth would I buy an EA like that?

I told you it wiped out users' accounts within 2 weeks and you still want a copy???

You do realise that you can't trade the past with this EA don't you?

The reason the SL was set at 650 pips was because the worst drawdown it had in 15 years was 625 pips; it was set to 650 so that it would show a 100% winning record
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