SAR system based on QQE Adv and MACD Platinum

wow Jim, you still hang around here glad to see you again

Once a Forex Trader, always a Forex Trader firedave. I could say the same about you....

Trade update:

GBP now long 5x at 1.5855. There was a profit of +65 on the previous short. 65x3=195 As there was a carry over loss of -368, I will deduct this 195 from it which leaves a overall loss of -173. Divide this by 5 as this is the new position size, which gives me 35 (rounded up). New break even target of 1.5890.

AUD now long 1x at 1.0548. This is the 2nd trade. There was a loss of -40 on the previous short. Break even target of 1.0588.

EUR now long 2x at 1.3341. This is the 3rd trade. Pretty sad when I couldn't even make up the -3 pips from the 1st trade. There was a loss of -38 on the 2nd trade, which gives me an overall loss of -41/2 = 22, so break even target is 1.3363. As it has already hit this with a high of 1.3371, the sequence closed at break even and a new sequence begins with a new long 1x at 1.3363. Remember nil stop or profit target. Like the GBP, it is ugly already.

No change to the other three pairs for now. Cheers. Jim

hahahaha i just regain the access to FF after no activity for quite long years

hello buff,

it seems that your indicators dont indicate a direction that well if you have to reverse your direction so many times to even get to BE.
could it be that TF is too small or need a better confirmation that the direction has changed?
if a lot of ranging is going on, how can you stay of a market like that?

personally I wouldn`t be happy to have so many US related pairs in my line-up.
you might say that its only a demo, but why not treat the demo like a real account to have any value.
or have many more pairs to see which pairs suit your method. E/A and G/N have good trends.

ever done median grid trading?

Yonnie,

Thanks for the comments. You are right, there is a lot of sideways action at the moment, especially on the EUR/USD and AUD/USD. The way I look at it, is that it's a numbers game. The breakouts will eventually happen, but nobody knows when. I just want to be in a position so I don't miss it when it does happen. So what if I take a number of small losses along the way, I'm fine with that. I'm looking at the overall big picture where at the end of the month I have made an overall profit without too much stress or drawdown, that's cool.

I'd probably disagree with my indicators not being that good, as keep in mind I need both of them to be in sync to create a new signal. No indicators are perfect as they are just designed to give you an edge or a slightly higher probability.

As for the pair selection, I wouldn't normally trade the AUD/USD with this method because as you have seen from the videos and the trading to date, it's not exactly a fast moving pair at times. I also wouldn't trade the CHF and EUR in the same basket due to their normally high correlation. It was just a basket chosen to show some very good pairs and some not so good pairs. You have to find the happy medium with which you would choose.

At the end of the day, I have just picked a basket of commonly traded pairs on an easy timeframe to monitor and presented a method that I believe may have some potential, where one day, if it proved to be viable, could be converted into an EA. It is a method that takes a lot of guesswork out of trading and keeps you in the market at all times. Anyone here at Forex Factory can run with this method or modify it to suits their particular needs, or whatever. I am here just to get some some feedback, whether good or bad, and to have some public accountability for a forward demo test I am running. It's not perfect, I'm sure of that, but is it profitable over the long term?? Time will tell.

So keeps the comments coming boys and girls....

Trade update:

CHF came within a pip of closing out at break even, but not to be as yet.
EUR is now short 1x at 1.3317. There was a loss of -46 on the previous long that went nowhere. It is stuck in a range for now. New break even target of 1.3271 as this is the 2nd trade in the sequence.

All other trades remain unchanged for now but it looks as though there maybe some reversals on the next 4hr candle in about 2 1/2hrs. Cheers. Jim

Trade update:

AUD is now short 2x at 1.0535. This is the 3rd trade in the sequence. There was a loss of -13 on the previous long, and combine that with the -40 loss previously, now have an overall loss of -53/2 = 27. Target for break even is now 1.0508.

E/AUD is now long 1x at 1.2632. There was a profit of +38 on the previous short. This is the start of a new sequence.

No other changes at this time to the other pairs. Cheers. Jim

Start Date : Jan 10th 2013
Closed results to date : +1255

PS: Sorry Yonnie, forgot to answer one of your questions. No I have never tried median grid trading. Never actually heard of it. Thanks.

that method is doing what you want: precise entries are not that important + make money in ranging and trending conditions + no need for martingale.
if interested, look it up here in FF: started by xaron.

good luck with your trading

yonnie, I'll check it out. Thanks for the tip.

Trade update:

As I type this, GBP is verry close to break even, but not quite.

EUR is now long 2x at 1.3337. 3rd trade in the sequence. There was a loss of -20 on the previous short, and add that to the other loss of -46, gives me a total shortfall of -66. As this new trade is for 2x, only need 33 pips to get to break even at least, therefore this target is at 1.3370. Gotta get out of theis tight range sooner or later.

EUR/JPY is now long 1x at 118.05. There was a profit of +144 on the previous short. Start of a new sequence now.

All other trades remain as is for now. Cheers. Jim

Start Date : Jan 10th 2013
Closed results to date : +1399

hi Jim,

somewhere you said that the size of the 1st trade of a pair is dependent on what happened with the last trade(s) for that pair.
that means that those realised 1399 pips are not of the same $ value.

for easier following, wouldn`t it be better to state your starting capital and the $ value of your realised pips, so that we can see the return on investment?
after all, in the end it all comes down to the money isn`t it.

happy trading

yonnie,

Not sure what you mean yonnie. Every 1st trade starts exactly the same size. In this forward test, that is 1x, whether that be 0.01 lot or 1 lot, so each one of those 1399 pips is the worth the same $ value, other than the fact that a CHF pip won't be worth the same as a EUR pip due to the exchange rates. But if I was only trading the ???/USD pairs, then they would all be worth the exact same amount.

When calculating results, I always go back to the single lot. For example, if I had a loss on a 5x trade for 30 pips, then that loss would be 5x30=150pips. Add this to the previous losses to get an overall loss. Continuing with the same example, say I already had a combined loss of -534 on the 1x, 1x, 2x & 3x trades, so I would add that 534 to the new loss of 150 which would then give me a new total of -684. Now I know the next trade in the sequence is for 8x, so I would divide 684 by 8 which equals 85.5. Round this up to 86, so wherever my entry is, I would either add 86 or deduct 86 from it depending if it is was a buy or a sell, to give me a break even target for the sequence. If that target is achieved, then that sequence is closed and a new sequence starts at that exact same price for 1x.

The only time I can have a winning trade is based on a sequence of one trade only as once it goes into multiple trades, my only aim is to get out at break even on that sequence.

The first trade in every sequence remains constant at 1x. If that sequence is a winner or break even, then the sequence starts again at 1x. If the trade is a loser, then it goes into the Fib sequence 1,1,2,3,5,8,13 etc.

Hope that helps, and just to clarify, every one of those 1399 pips is worth pretty much the same. Cheers. Jim

hi Jim,

must have misunderstood your explanation in post 5 about trading size being dependent on prior result.

about your results:
I know you will have to have small trading size initially to be able to ride out your losses to BE.
a realised profit of 1399 pips might be large or might be small; it all depends on your trade size with your first trade.
for me to know how your system is performing, I would need to know how many dollars those 1399 pips are and your starting capital.
then I can see what the % return on your capital is for your system.

so starting capital $ 10,000; 1399 pips profit = $ 125.00; return from 10.1.13 1.25%

am I missing something?

yonnie,

It is difficult to nominate an initial position size on this particular forward test as there are just way too many things to take into consideration. If I was trading live, then I would have to have a pretty serious look on which pairs I wanted to trade. It wouldn't be these six pairs. Then I would have to take into consideration what my account leverage was, and for me that is no less than 400:1. I have 6 live accounts and the problem one is Oanda due to the fact that it is US based which limits my leverage to 50:1. One of my accounts, XE, is actually 888:1. The higher the better for this type of system, but be careful as it is a double edged sword. Based on your calculations, I figure you must be starting with an initial lot size of 0.01. To me that would be extremely conservative and safe. I'd be more inclined to up that somewhat to around the 0.05 to 0.1 range with a 10K account. It all depends on the number of pairs etc. I have been doing more manual backtesting on the 4hr charts and was deliberately looking for ranging markets, where I did find some very ugly scenarios where I was getting up to 55x before hitting break even, so if you started with 0.01, then the largest position size would have been 0.55 which is still quite acceptable on a 10K account. But if you started at 0.1, could you handle 5.5 lots?? It would be stressful, trust me.

Keep in mind you don't have to use the indicators I suggest. I have just used these to give people some ideas. You could greatly reduce the number of trades by using different indicators that are not as sensitive as the ones I have suggested. Tonight, I am even planning on doing a bit of testing either on the 5m or 15m charts, using the EUR due to its low spread and then containing my trading times to the London/US sessions. Just a bit of variety where you should catch some nice moves during major news releases. This way you may just have a daily target and then start afresh the next day. Plenty of options here. But you are right, money management is critical and I guess, using your figures, 1.25% in 13 days is not too shabby, and using the power of compounding, you could build a nice little nest egg if you remained consistent.

Trade update:

Like watching paint dry at the moment. The EUR is stuck in a range that must be frustrating traders all over the world by now. The GBP came within 1 pip of break even, but not to be. AUD actually made a low of 1.0506, but I'm not calling it a break even as yet as I would like to see a definite break of the nominated price just to convince everyone I'm not fudging the figures. Cheers. Jim

Jim,

Everything else being equal, choosing the strongest and cleanest trending pairs in the next higher timeframes (D1/W1 in this case), at any given point, might prove to be your optimal route. And then taking trades only in the direction of that trend. Admittedly that removes the SAR element, and also complicates the martingale, in that you'd possibly need to recover losses in one pair by using a suitably sized TP in a different pair — because the window of suitable pairs would be continuously changing. It would also make (eventual) coding an EA much more complex.

Up until a week or so ago, all XXXJPY pairs were trending strongly upward, delivering easy profit (and without the need to use any kind of martingale ). Even though a tighter spread of national interest rates (caused by the recession) has diminished the potential of the carry trade, macroeconomics and central bank interventions can still create long weekly, and even monthly, trends. There's an excellent thread on money flows here.

Failing that, even if you chose to trade the same pairs consistently, then having the backing of higher timeframes (in terms of choosing the direction of your trades), still helps to slant the probabilities in your favor. As is widely known, multiple time frame confluence is the one of the cornerstones of successful 'trend trading'.

Of course all of this is starting to move away from your original concept; I don't want to unduly sidetrack your thread.

5.5 lots is $55/pip on any XXXUSD pair. If price was to move (for example) 100 pips against you, you'd be down $5,500. But there would also be losses of 1+1+2+3+5+8+13+21+34=88 units prior to that. On a $10K account, I suspect the drawdown would be close to irretrievable.

Hence it might be worthwhile — in establishing optimal position size — to ascertain what the largest historical trade loss was, pip-wise, on each pair. And then attempt to factor in a suitable margin for error, given that there's always the possibility that the future may throw up a worse scenario than has occurred in the past. But you still have the nasty problem of trying to guess what the worst progression step might be, that you must allow for; there's a world of difference between 1+1+2+3+5+8+13+21=54 and 1+1+2+3+5+8+13+21+34+55=143, for example, and yet the latter allows only 2 additional steps. The joys of martingale.

With martingale variants, compounding becomes a double-edged sword. For example, if you size consistently at 0.01 lots, then as your account grows larger, your chances of surviving any given number of progression steps increases accordingly. But if you're risking X% per trade, then the dollar amount at risk is increasing in the same proportion as the account size. Hence the risk of ruin is always approximately the same.

David

hanover,

I understand what you are saying and you are spot on. If I did have the time and the smarts, I would be trading these pairs manually and really keeping a close eye on them, restricting it to no more than 4x pairs at one time. I do trade like this on the daily charts on a large group of pairs, but that only requires checking once a day. I guess I am looking for a SAR type system here that is low maintenance for me, where I don't have to think too much, and eventually build an EA around it. And just looking at some of my backtesting results, I would have to keep my initial position size pretty small to avoid those long sideways times. I don't think it would be viable the way it stands at the moment. Having said that, it may go for a couple of years on these pairs without too much of a problem where you could build up a nice profit, but it could also start caving in now. Nobody knows.

I did have a quick play around with some 15 min charts on the majors, just trading between the open of London through to about lunchtime in the US. Doesn't look too bad using the same method, where you would take the first new signal and just trade through the nominated session only. This way you are limiting your risk because it would be highly unusual to have more than a max of 8 trades. Another options would be to say trade 4x pairs and aim for a target of 20 pips on each during this session. Once the 20 pips is achieved, take no further trades on that pair. If at the end of the session you had not achieved your target, you could either manually manage the open trades or just close out everything, possibly for a loss and start afresh the next day. This is just a quick overview and more thought/backtesting would be required. It would be pretty straightforward building an EA around that idea anyway. Check out one of my old articles at http://ezinearticles.com/?Forex-Trad...gh?&id=3536411 which gives you an example of how just a few pips a day can produce some good results.

Trade update:

The AUD has now definitely gone through the break even target at 1.0508, so that sequence is now closed for an overall break even result. Now short 1x at this same price for the start of a new sequence.

CHF now long 3x at 0.9306. This is the 4th trade in the sequence. There was a loss of -23 on the previous short, therefore 2x23=46, and add that to the previous losses of 112=158/3=53, therefore break even target is 0.9306+53=0.9359. Came within a pip of closing the short out at break even.

No other changes at this time. Cheers. Jim

Trade update:

EUR hit the break even target at 1.3370, so that sequence is complete. Now long 1x at 1.3370.

GBP is the problem child again. Now short 8x at 1.5787. There was a loss of -68 on the previous long, which equates to -340 plus the -173 from the previous trades = 513. Divide that by 8 = 65, so new short break even target of 1.5722.

No other changes to remaining pairs for now. Cheers. Jim

Well I have been out of town since Friday lunchtime only to come home to floods and wild weather. It was really hot and humid in Mackay, but at least it wasn't raining...Cheers. Jim

Trade update:

EUR still long 1x at 1.3370. 1st trade in the sequence.

GBP went long 13x at 1.5797, so took a loss of -10x8=-80. Add this to 513 = 593, then I had a break even target of 1.5843. Didn't make that before it reversed to a short again with 21x at 1.5760. So there was a loss of -37x13=481+593=1074/21=52. New break even target on this short is 1.5708. This is where this method may not prove viable as the trade size is getting out of hand. It may get to the stage where you as a trader, would decide enough is enough and cut your losses and commence a new sequence. Not sure when you would do this, possibly after a trade has moved in your direction so you could recover some of the losses. Difficult question.

AUD still short 1x at 1.0508. 1st trade in the sequence.

CHF is also proving to be a problem. Went short 5x at 0.9251 and therefore took a loss of -55x3=165+158=323/5=65. New break even target of 0.9186. Didn't come close before it reversed to a long 8x at 0.9269, so there was another loss of -18x5=90+323=413/8=52. New break even target of 0.9321.

EUR/JPY is now short 1x at 121.91. 1st trade in the sequence and there was a profit of +381 on the previous long.

EUR/AUD is still long 1x at 1.2632. 1st trade in the sequence.

Start Date : Jan 10th 2013
Closed results to date : +1780

Quick trade update:

EUR is now short 1x at 1.3439. There was a profit of +64 on the previous long.

Looks like there maybe some changes on the open of the next 4hr candle which is still 116 mins away, but in the meantime the troublesome GBP has hit the break even target of 1.5708, so that big sequence is closed and I am now short 1x at this same price as it is the start of a new sequence. Now to sort out the CHF. Cheers. Jim

Start Date : Jan 10th 2013
Closed results to date : +1844

Trade update:

EUR remains as is.

GBP long 1x at 1.5715, which means there was a loss of -7 on the previous short. As this is the 2nd trade in the sequence, there is a break even target of 1.5722.

AUD long 1x at 1.0411, which means there was a profit of +92 on the previous short. This is now the start of a new sequence.

CHF short 13x at 0.9239. There was a loss of -30x8=-240 on the previous long. Add this to the previous losses, -240+-413=-653/13=51, therefore new break even target for this sequence is at 0.9188.

EUR/AUD short 1x at 1.2920, which means there was a profit of +283 on the previous long. This is now the start of a new sequence.

EUR/JPY remains as is.

Cheers. Jim.

Start Date : Jan 10th 2013
Closed results to date : +2219

Trade update:

EUR now long 1x at 1.3491. This is the 2nd trade in the sequence. There was a loss of -52 on the previous short. Therefore my break even target is 1.3543.

GBP achieved the break even target at 1.5722, so that sequence is now closed and a new one begins as now long 1x at 1.5722.

EUR/JPY now long at 122.38. This is the 2nd trade in the sequence. There was a loss of -47 on the previous short. Therefore my break even target is 122.85.

The other trades remain as is for now. CHF came pretty close to break even, but not close enough. Cheers. Jim

Trade update:

EUR/AUD is now long 1x at 1.2875. There was a profit of +40 on the previous short. This is the start of a new sequence.

All other trades remain as is for now. Cheers. Jim

Start Date : Jan 10th 2013
Closed results to date : +2259