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Max's Simple Ride the Wave System

  • #121
  • Oct 2, 2012 12:56am Oct 2, 2012 12:56am
I think you should really code your system in a script and backtest it with at least 4 years. Then you can tweak the rules and improve it. Using single trades for tweaking a system makes no sense. There are not enough trades for having any statistical relevance for future trading.

Learning to code is easy, anyone can learn this in one week. If there's interest I could post a course here.

I found one really profitable system so far in this forum, but most that I tested only generate marginal profit or are losing money. Yet they are apparently all still traded by optimistic people who have never really tested them.

A profitable backtest does not guarantee that the system is profitable in future trading, but an unprofitable backtest does absolutely guarantee that you'll lose money with that system.
  • #122
  • Oct 2, 2012 8:38pm Oct 2, 2012 8:38pm
Okay so this thread as this system is an evolution. There is a good basis to it and it just needs a little tweaking to improve it's accuracy.

So Friday I added a few Entry Orders using the 1 and 2 day candle high or low as the entry points to re-entry in direction of existing or new trend. Some worked out and some did not. Some closed already and cost me around -200p so I will record that -200p and show that since day 1 we are at break even point with a couple of trades open still today.

WEDNESDAY 3 OCT 2012

CURRENT TRADES:

EURUSD was hovering around the 10EMA just above the 21EMA so I figured this was likely to resume uptrend. I placed an entry order at the high Friday's candle and it triggered yesterday with a 1.5 candle low as stop. I think the order was too close and should probably have been up around 1.3000 to avoid any ranging but I am in now and lets see how it goes.
Currently at -52p
https://lh6.googleusercontent.com/-Y...20121003EU.jpg

AUDJPY had a new downtrend confirmed by 2 short candles beyond the 2 EMAs thus providing good order of price below 10EMA which is below 21EMA. A retracement candle completed 27/9 so I placed a short order on it's low with a 1.5 candle high as the stop. It triggered on Monday this week and moved in my direction.
Currently +27p
https://lh5.googleusercontent.com/-L...20121003AJ.jpg

AUDNZD was a lucky one for me. I used the low of the retrace candle as an entry with a 1.5 candle high as trailing stop. It triggered and retraced but then was in a good position when news was released yesterday in Australia of RBA rate cut. It shorted nicely and gained some nice momentum.
Currently at +143p
https://lh4.googleusercontent.com/-z...20121003AN.jpg
Winners add to winning trades!
  • #123
  • Oct 2, 2012 8:48pm Oct 2, 2012 8:48pm
Wednesday 3 Oct 2012

Trade Ideas:

USDJPY recently waved around and recommenced a trend short. I have gone conservative here placing a SHORT order on a 2 candle low for entry.
https://lh4.googleusercontent.com/-q...20121003UJ.jpg

USDCAD looks like it may cross for a new trend up but after such a nice and steady down, I am guessing a sustained uptrend will be short lived. So I and using the 2 candle low to re enter any trend short that may recommence.
https://lh4.googleusercontent.com/-S...20121003UC.jpg

GBPJPY has occassional bursts in an ongoing trend up so I placed a LONG order at the 2 candle high in order to catch any new upburst. I even placed a 1:1 target on this one in case I miss it.
https://lh4.googleusercontent.com/-H...20121003GJ.jpg

GBPAUD broke well above 1.5600 round number yesterday but can it stay above? In case it does, I have placed an order that the high of that candle. Probably should be at that candle x 1.5 but lets see how it plays out.
https://lh4.googleusercontent.com/-Y...20121003GA.jpg

EURGBP bounced off 0.8100 afew weeks ago and is now bouncing back off the 10 and 21 EMAs so I am predicting a re-attempt north and placed an order on 1.5 candle high to be in it when it does.
https://lh4.googleusercontent.com/-d...20121003EG.jpg
Winners add to winning trades!
  • #124
  • Oct 2, 2012 8:49pm Oct 2, 2012 8:49pm
Wednesday 3 Oct 2012

Trade Ideas #2:

EURAUD pushed past 1.2500 yesterday and so I have placed an order at that candle high plus half to catch it should it continue north.
https://lh4.googleusercontent.com/-d...20121003EG.jpg
Winners add to winning trades!
  • #125
  • Oct 2, 2012 10:10pm Oct 2, 2012 10:10pm
Quoting jcl365
I think you should really code your system in a script and backtest it with at least 4 years. Then you can tweak the rules and improve it. Using single trades for tweaking a system makes no sense. There are not enough trades for having any statistical relevance for future trading.

Learning to code is easy, anyone can learn this in one week. If there's interest I could post a course here.

I found one really profitable system so far in this forum, but most that I tested only generate marginal profit or are losing money. Yet they are apparently...
Please everyone, read through the post that JCL365 has made on this thread again and again until it sinks in. He is right in everything he has said in this thread so far. Also, see the post that he has made in other forums recently. He is suggesting the right approach here folks. Good trading to everyone!
Trading Foreign Exchange....But Only By The Grace of God!
  • #126
  • Oct 2, 2012 11:38pm Oct 2, 2012 11:38pm
Quoting McPip
Please everyone, read through the post that JCL365 has made on this thread again and again until it sinks in. He is right in everything he has said in this thread so far. Also, see the post that he has made in other forums recently. He is suggesting the right approach here folks. Good trading to everyone!
No one said anything about ignoring his posts. I agree with him. No one is adjusting rules based on 1 trade here. No one that I know of anyhow. No one should be using real money with this or any system until they are totally 100% comfortable with the testing results and the rules. I am not going to spend hours to code for backtesting when I can backtest pretty fast myself and have it nice and open for checking and rechecking, which is what I am doing.

I am also forward testing this as well.
Winners add to winning trades!
  • #127
  • Oct 3, 2012 2:25pm Oct 3, 2012 2:25pm
Quoting jcl365
I think you should really code your system in a script and backtest it with at least 4 years. Then you can tweak the rules and improve it. Using single trades for tweaking a system makes no sense. There are not enough trades for having any statistical relevance for future trading.

Learning to code is easy, anyone can learn this in one week. If there's interest I could post a course here.

I found one really profitable system so far in this forum, but most that I tested only generate marginal profit or are losing money. Yet they are apparently all...
I'd be interested in this.

I had an idea about the 'hugh briss quick and dirty end of day' system. It looks interesting but would like a method to test this sort of stuff before committing capital.

May ask - which system made money - and which criteria did you attach? Was it The7 method?
  • #128
  • Oct 4, 2012 2:26am Oct 4, 2012 2:26am
Sorry for the delay in posting today. I took screenprints this morning as new daily candle opened but did not get time to post until now.

THURSDAY 4 OCT 2012

CURRENT TRADES:

AUDNZD looks like a perfect retrace candle yesterday in a trend down and as I am already in this pair for 1 trade I figured I would add another trade as soon as my stop was in the positive. So another trade added.
CURRENT TRADE 1 +93p
CURRENT TRADE 2 -4p
https://lh3.googleusercontent.com/-h...20121004AN.jpg

AUDJPY still looking good to go further short so I simply moved my stop down a little today to 1.5 candle high.
CURRENTLY +25p
https://lh4.googleusercontent.com/-q...20121004AJ.jpg

AUDUSD looks like a great run but may have overextended itself. Tightened stop to 1 candle high. Should add to this position but I think a little risky. Lets see if today is a retrace candle.
CURRENTLY +112p
https://lh3.googleusercontent.com/-s...20121004AU.jpg

EURGBP Triggered our long entry yesterday set at the latest candle height + extra 50%. It then dropped a little so hoping today for more bull action.
CURRENTLY -4p
https://lh6.googleusercontent.com/-W...20121004EG.jpg

EURUSD triggered our long entry yesterday placed at top of 2 candle high. It also dropped a little but shows signs of moving north.
CURRENTLY -54p
https://lh3.googleusercontent.com/-a...20121004EU.jpg
Winners add to winning trades!
  • #129
  • Oct 4, 2012 2:28am Oct 4, 2012 2:28am
THURSDAY 4 OCT 2012

CURRENT TRADES: continued

GBPAUD pushing north and triggered our entry order yesterday set at the top of a large bullish candle. Today I moved the stop to 1.5 candle low.
CURRENTLY -11p
https://lh3.googleusercontent.com/-g...20121004GA.jpg
Winners add to winning trades!
  • #130
  • Oct 4, 2012 2:31am Oct 4, 2012 2:31am
THURSDAY 4 OCT 2012

TRADE IDEAS:

USDCAD in the process of changing to new up trend. Maybe! Entry order placed as latest high plus an extra 50%.
https://lh6.googleusercontent.com/-f...20121004UC.jpg

USDJPY sees price action above the 2 EMAs but they still could recommence a downtrend so SELL order entry placed at 2 candle low in case it gets itself into a range.
https://lh5.googleusercontent.com/-e...20121004UJ.jpg
Winners add to winning trades!
  • #131
  • Oct 4, 2012 5:45pm Oct 4, 2012 5:45pm
Quoting jcl365
But please in a different thread for not hijacking Max's one.
Thanks JCL but feel free to post in here if testing this system as it may help some of those following.
Winners add to winning trades!
  • #132
  • Oct 4, 2012 5:48pm Oct 4, 2012 5:48pm
FRIDAY 5 OCT 2012

CLOSED TRADES:

AUDUSD retraced back to be trailing stop but then fell away again. This trade closed but I am placing a new SELL order on the low of the retrace candle in order to catch any further move south.
PROFIT +65p
https://lh6.googleusercontent.com/-3...20121005AU.jpg
Winners add to winning trades!
  • #133
  • Oct 4, 2012 5:57pm Oct 4, 2012 5:57pm
FRIDAY 5 OCT 2012

Things are turning around well with 3 new trades triggered yesterday, 1 closing in profit and all others in profit! 9 trades in progress for a total of +400p so far.

1 closed trade for +65p (post above)

6 current trades open all in profit for a total of +350p (stops moved up trailing by 1.5 to 2 candles this morning)

3 newly triggered trades:
AUDNZD I added to manually as there was a trade already open at +100 so another position was added. It currently is sitting at +5p
EURAUD triggered just before midday yesterday morning an is currently +30p
GBPJPY triggered after midday and is currently +38p

2 trade ideas:
USDCAD removed the BUY order at 1.5x the last long candle as yesterday's candle was a massive short candle closed back below both EMAs. This could go either way or range for a while so I removed the order and decided to wait it out a little.
USDJPY has had a few long candles in a row even though both EMAs keep pointing down. I had a SELL order on the low of the latest long candle so with another yesterday I simply moved it up to the low of that candle. This places the order very close to the both EMAs and tomorrow I will prob remove it if it has not triggered today.
Winners add to winning trades!
  • #134
  • Oct 4, 2012 6:10pm Oct 4, 2012 6:10pm
END OF 4TH WEEK:

Week 1: 0 trades closed for 0p
Week 2: 3 trades closed for +365p
Week 3: 4 trades closed for -284p (testing range trading ideas and hedging)
Week 4: 8 trades closed for -426p (testing range trading ideas and hedging for 1st half of the week)

TOTAL: 15 trades closed for -345p

with 9 trades still open for +416p
Winners add to winning trades!
  • #135
  • Oct 5, 2012 6:37pm Oct 5, 2012 6:37pm
Okay I need to adjust this summary after week 4 as I did a bad thing last night. I checked to see how my 9 trades were going and they were all up. some +100 and others +30 for a total of +642. So I did a bad thing. I closed them all. I was so happy to be back in the positive and so late at night I just did it. So now I need to redo my summary.

END OF 4TH WEEK:

Week 1: 0 trades closed for 0p
Week 2: 3 trades closed for +365p
Week 3: 4 trades closed for -284p (testing range trading ideas and hedging)
Week 4: 17 trades closed for +171p (testing range trading ideas and hedging for 1st half of the week)

TOTAL: 24 trades closed for +252p. Yay!

NOTES: the ideas I had for hedging and trying to catch new trends before they cross the EMAs were bad and led to half a dozen really bad trades that cost me a lot. From now on I am sticking to the original rules of adding into existing trends at a very cautious location of signal candle high or low.
Winners add to winning trades!
  • #136
  • Oct 5, 2012 6:47pm Oct 5, 2012 6:47pm
JCL365,
I would like to learn how to program this language in one week. I have very little background.
Ron
  • #137
  • Oct 5, 2012 11:41pm Oct 5, 2012 11:41pm
Hi Max,

Thank you for sharing your strategy. I see that the rules have changed as you get a better feel of the strategy and I am trying to build on this too.

I would like to ask

1) Do you still wait for a pullback candle once a full candle holds above the 10ema or is this not necessary for you anymore? If it is not necessary, do you enter at the H/L once the candle holds above the 10ema?

2) How do you decide to enter on half the pull back candle or at the H/L or even 0.5 the distance away from the H/L

The reason I am asking all this is because I am trying to write some guidelines to this strategy as you did before.

Thank you
  • #138
  • Oct 6, 2012 7:22am Oct 6, 2012 7:22am
Max, Good to see things really getting in the swing now. Interested to see how this runs.

Would you consider adding on extra positions on the retrace as hugh briss & tradestar1 do - as per Yonnie's suggestion? I have a suspicion that if you catch a trend, you'll turn a 1 position trade into a multi-position winner?
  • #139
  • Edited 7:30pm Oct 6, 2012 6:36pm | Edited 7:30pm
Quoting Aston
1) Do you still wait for a pullback candle once a full candle holds above the 10ema or is this not necessary for you anymore? If it is not necessary, do you enter at the H/L once the candle holds above the 10ema?
2) How do you decide to enter on half the pull back candle or at the H/L or even 0.5 the distance away from the H/L
Thanks for the prompter. Here are the cleaned up more cautious system rules:

1. Open a Daily chart – this is simply an attempt to create something that only requires a few minutes a day to review and action.

2. Place a 10EMA and 21EMA – some sort of line in the sand. 21 days represents to me around a month of prior movement and therefore time for a change to occur. Short term trends changing regularly. It also means that on a longer term trend we may be able to make pips off a correction or retrace before again making pips off the continuation.

3. LONG SIGNAL occurs when a complete candle OPENS and CLOSES above the 10EMA and the 21EMA (i.e. no part of the candle touches the EMAs) AND the 10EMA is above and moving away from the 21EMA. This tells us there is investment from the market to move price up. We do not know whether or not this could be a long term thing or a simple spike. Now you are looking for short candles (close is lower than open) in order to identify possible confirmation.

4. ENTRY. 2 Options here.

1st option is to place a BUY ORDER at the high of that signal candle. The reason we do this is to avoid any bad reversals or longer term corrections. If price goes short, we can cancel the entry order and do the same once the next candle completes (as long as it is not a new SIGNAL SHORT ie below both EMAs). If it moves in our direction, we give up a few pips to ensure we are with the market. Don’t worry. If we are with the market, they will drive us where we want to be.

2nd option is to wait for a short candle and use that for the entry in the same way. Place the order half way along the length of this candle or at the high. Often these short term trends we want to spot are so violent, there is no short candle for a while so using a combination of both options is best.

5. MANAGE THE TRADE. If you have a set target then leave the position as we will either be right or wrong and you should trust yourself and the system to reveal that for you. This position is to get a quick win within a few days and locks in pips. You can adjust the stop as discussed below daily if you wish but leave the target as is. If you have no target then manage it daily by adjusting the stop and letting it run for as long as it can. This is to ensure we ride any longer term trends for maximum pips, locking in profit on a regular basis and exiting when things go flat or turn.

6. ADD TO THE TRADE. Add another position once the current position is up the value risked or when you see new reversal candle signals in step 4. Or simply add another position at every +100p or when stop gets to break even or when stop goes up by 100p

IMPORTANT NOTES:

STOPS. A couple of ideas with the stops is to set it at 100pips or the last swing low or use a 2 candle low explained. I tend to use the 2 candle low or 100pips, whichever is smaller. Now you know the stop, you can set your position size. Divide your risk by the stop size and then by 10 to get the position to take. ie 2% of account = $100 divided by 100pip stop = $1 divided by 10 = 0.10. So take a lot size of 0.1 or 10,000 units.

TARGETS. Again there are a couple of options here. Either uses the same value as the stop or leave it open and review the trade daily as explained.

TRAILING STOPS. Do not adjust the stop until the trade is at break even or in profit. I lean towards a stop based on 1.5 to 2 or even 3 previous candles called a Count Back Line. So for a LONG position the stop is at the bottom of the previous 2 candles where the #2 candle must be lower than the #1 previous. This may be 3 or 4 or even 5 candles further back. Draw a horizontal line at the low of the previous candle and look back and see if further back another candle is lower, then use that 2nd low as your stop. As the low of any new candle moves higher, this stop is moved up. This allows any sideways movement or small retrace to be tolerated before any continuation of trend returns. Another idea is to always sit 50 or 75 or 100 pips behind. So if the close of today is at +125 you place your stop at +75 or +50 or +25 and do that daily. You may have some of your own ideas on stops here so try them out.

EXITS. Always let the trade exit when it wants to either using your set target or by hitting the original or trailing stop. No decision necessary.

Always stay out of the market when price touches penetrates the 21EMA. This is too ranging and means the market does not really know what it wants to do other than sit back and see what everyone else wants to do. We do the same.

Be careful or lines of support and resistance (I look at Weekly and Daily charts for these), as well as pychological/round numbers and the candle formations themselves such as pins and dojis.

If 2 retrace candles in a row, use 2 candle high for re-entry in case a new trend is developing. 2 retrace candles in a row suggests good support for reversal of the trend.

https://lh4.googleusercontent.com/-P...ethewavev2.jpg
https://picasaweb.google.com/lh/phot...eat=directlink
Winners add to winning trades!
  • #140
  • Oct 6, 2012 6:45pm Oct 6, 2012 6:45pm
Quoting S_Ferrer
Would you consider adding on extra positions on the retrace as hugh briss & tradestar1 do - as per Yonnie's suggestion? I have a suspicion that if you catch a trend, you'll turn a 1 position trade into a multi-position winner?
Yep doing it. Check above post for latest version of rules.
Winners add to winning trades!
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