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Simple EMA mechanical system!

  • #1
  • First Post: Edited Sep 6, 2013 12:46am Sep 4, 2013 10:17pm | Edited Sep 6, 2013 12:46am
First, I need to say: " Welcome traders! Who believe that a pure mechanical system can generate profit consistently ! " - The rest one, who think that EAs are just bullshit. Please don't come here to disencourage us. Thank you.

Hello all coder's guru,

I'm backtesting a pure mechanical system and it is being profitable. Help me turn it into an EA if you are not so busy
Result here: from 14/6 to now 89 trades = 569.7 pips =5697 points
If you need I will post the detailed backtest here

So here's the strategy, this strategy is based on the SonicR thread but I modified a lot. Hope it will be profitable in the long run.

Indicator: 34 EMA applied to HIGH
34 EMA applied to CLOSE
34 EMA applied to LOW
12 EMA applied to CLOSE
Fractal
Here is the illustration:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 15 KB


Pairs: GBPUSD
Timeframe: M15

Entry:

Long positon: 12EMA crosses 34EMA low upward, 12 EMA crossed 34EMA close upward, 12 EMA crosses 34 EMA hign upward. Buy at the close price of the candle where 12 EMA crosses 34 EMA high upward.

Illustration:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 17 KB

Attention: Do not open trade in this case
Attached Image

For short position, just reverse the long position .

SL: Choose the nearest fractal that must be outside the tunnel (34-34-34)
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot4.png Size: 17 KB


TP: Risk vs Reward ratio = 1:1

Money management: 1 lot per 10.000$

Here is a typical trade which earn 420 points = 42 pips
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot6.png Size: 21 KB


Ask me if you don't understand something in this first post because English isn't my mother language
  • #2
  • Sep 4, 2013 10:37pm Sep 4, 2013 10:37pm
I'm sorry. I need to attach the backtest first:
Attached File(s)
File Type: xlsx backtest.xlsx   11 KB | 959 downloads
  • #3
  • Edited Sep 5, 2013 12:19am Sep 4, 2013 11:59pm | Edited Sep 5, 2013 12:19am
Quoting vothienphu93
I'm sorry. I need to attach the backtest first: {file}

80% or more profitability depends on the trader psychology. (Are you going to take that loss? Run your profits? or take profits prematurely and let the losers run?
Can you control your greed? Itchy fingers? feeling shit because you missed a great opportunity?Are you going to take every system trade no matter what?How about red box news coming up in 2hrs but you just took a trade 1 hour before news release etc.You see they are lot of variables that back testing can't test...
Any decent system can be profitable if the trader already passed the threshold of mental mastery.
What I am saying is back testing results mean nothing.
For trading insight read about Turtle experiment by Richard Dennis.
He mentored,taught his system,set rules and guide lines and provided 500k account to everyone in the group.
50% failed to follow his rules and dropped out. Some of these guys were very bright software developers,engineers etc.Goes to show trading is self discovery, a journey.Some make it some fail.Success in my opinion depends how dedicated you are about trading and make efforts working on weak points..
This is why I believe systems are like steering wheel but someone must know how to drive 1st.
Good luck
In trading, you have to be defensive and aggressive at the same time
  • #4
  • Sep 5, 2013 12:14am Sep 5, 2013 12:14am
Quoting Davit
{quote} 80% or more profitability depends on the trader psychology. (Are you going to take that loss? Run your profits? or take profits prematurely and let the losers run? Can you control your greed? Itchy fingers? feeling shit because you missed a great opportunity?Are you going to take every system trade no matter what?How about red box news coming up in 2hrs but you just took a trade 1 hour before news release etc.You see they are lot of variables that back testing can't test... Any decent system can be profitable if the trader already passed...
Thank you for caring about my thread.
It's a pure mechanical system. So just set and forget it. No matter how the market is going. So I just stuck into the plan. No greedy. No regret. That's why I need an ea to do trade for me.
If you have time, please help me code an ea based on the rules above
  • #5
  • Sep 5, 2013 12:27am Sep 5, 2013 12:27am
Quoting vothienphu93
{quote} Thank you for caring about my thread. It's a pure mechanical system. So just set and forget it. No matter how the market is going. So I just stuck into the plan. No greedy. No regret. That's why I need an ea to do trade for me. If you have time, please help me code an ea based on the rules above

EA trading is BS. Trading is all about discretion.Its an ART form.
Think why Banks pay millions to top managers to manage their funds.If EA was profitable they would of saved millions of overhead and let the EA do the work.
Good luck anyway.
In trading, you have to be defensive and aggressive at the same time
  • #6
  • Sep 5, 2013 12:30am Sep 5, 2013 12:30am
Quoting Davit
{quote} 80% or more profitability depends on the trader psychology. (Are you going to take that loss? Run your profits? or take profits prematurely and let the losers run? Can you control your greed? Itchy fingers? feeling shit because you missed a great opportunity?Are you going to take every system trade no matter what?How about red box news coming up in 2hrs but you just took a trade 1 hour before news release etc.You see they are lot of variables that back testing can't test... Any decent system can be profitable if the trader already passed...
I have just finished reading about Richard Dennis biography. He should be a market legend. 5000$ to 175 millions $. It's very impressive.
Do you have any documentations about his trading method in the future market?
  • #7
  • Sep 5, 2013 12:40am Sep 5, 2013 12:40am
Quoting vothienphu93
{quote} So just set and forget it. No matter how the market is going.
So if Bank of Japan is about to release major interest rate decision and your EA is still taking trades on Yen pairs and you are on potentially opposite side of news release how would you deal with that.
Could you answer to this please? Because you said "No matter how the market is going"
In trading, you have to be defensive and aggressive at the same time
  • #8
  • Sep 5, 2013 12:53am Sep 5, 2013 12:53am
Quoting Davit
{quote} So if Bank of Japan is about to release major interest rate decision and your EA is still taking trades on Yen pairs and you are on potentially opposite side of news release how would you deal with that. Could you answer to this please? Because you said "No matter how the market is going"
It seems that you haven't read about my strategy. I always trade the GBPUSD pairs
  • #9
  • Sep 5, 2013 12:54am Sep 5, 2013 12:54am
Quoting vothienphu93
{quote} It seems that you haven't read about my strategy. I always trade the GBPUSD pairs

Substitute Bank of Japan to Bank of England.
In trading, you have to be defensive and aggressive at the same time
  • #10
  • Sep 5, 2013 1:05am Sep 5, 2013 1:05am
Quoting Davit
{quote} Substitute Bank of Japan to Bank of England.
) nice question I think the news that made my strategy profitable. I don't know why but I look at the chart. Most of the profitable trades often happened near a news release.
  • #11
  • Sep 5, 2013 1:08am Sep 5, 2013 1:08am
I'm not sure that this strategy will be longterm profitable. But I think if there are any kind coder gurus around here helping me make this idea come true. I promise that I run it on a live account after let it run on demo account profitable ( with a small initial money 100$ and 0.01 lot per trades to make sure that it will be safe )
  • #12
  • Sep 5, 2013 2:30am Sep 5, 2013 2:30am
Quoting vothienphu93
I'm backtesting a pure mechanical system and it is being profitable.
How do you know it is profitable?

Quoting vothienphu93
from 14/6 to now
Great a backtest in a period of well behaving trends for G/U! What about crapy-choppy ranges?

Quoting vothienphu93
89 trades = 569.7 pips =5697 points
The profit is totally irrelevant. Only the risk matters.

Quoting vothienphu93
Hope it will be profitable in the long run.
Two paragraphs above it was already profitable.....

Quoting vothienphu93
Indicator: 34 EMA applied to HIGH
34 EMA applied to CLOSE
34 EMA applied to LOW
12 EMA applied to CLOSE
Why 34 and 12 as opposed to 35 and 17, 42 and 28, 30 and 10?

Quoting vothienphu93
Pairs: GBPUSD
Timeframe: M15
Why A/U H4 couldn't work?

Quoting vothienphu93
Entry:
Long positon: 12EMA crosses 34EMA low upward, 12 EMA crossed 34EMA close upward, 12 EMA crosses 34 EMA hign upward. Buy at the close price of the candle where 12 EMA crosses 34 EMA high upward.
EMA-low will always be below EMA-close which will always be below EMA-high. What is EMA-close useful for?

Quoting vothienphu93
TP: Risk vs Reward ratio = 1:1
Why? Can you prove it is bad to let the profit run now you got a breakout and a potential trend???

Quoting vothienphu93
Money management: 1 lot per 10.000$
Why? MM depends on the statistics of your system. You have no stats.

Quoting vothienphu93
Illustration:
In this first example you enter after the breakout right at the beginning of the well-expected pullback.

Quoting vothienphu93
Here is a typical trade...
In this second example you enter before the signal (which happens on the next bar). The nearest fractal low outside of the channel is not the one you spot.

According to your backtest your system is a breakeven-er in the best market condition of your BT period.

If you want some developer work for you --and I guess for free-- better off starting with a properly defined system based on something else than wishful thinking!
No greed. No fear. Just maths.
  • #13
  • Edited 3:39am Sep 5, 2013 3:02am | Edited 3:39am
Quoting PipMeUp
{quote} How do you know it is profitable? {quote} Great a backtest in a period of well behaving trends for G/U! What about crapy-choppy ranges? {quote} The profit is totally irrelevant. Only the risk matters. {quote} Two paragraphs above it was already profitable..... {quote} Why 34 and 12 as opposed to 35 and 17, 42 and 28, 30 and 10? {quote} Why A/U H4 couldn't work? {quote} EMA-low will always be below EMA-close which will always be below EMA-high. What is EMA-close useful for? {quote} Why? Can you prove it is bad to let the profit run now you...
Well,
Very long post, but I will answer your questions:

1: I use the present continuous being profitable not is profitable
2: I don't read my backtest file, do you? There are times that I lose 5 trades in a row because the ranging market. But at last, I'm still being profitable
3: I don't understand what you mean here. Please explain more clearly.
4: A profitable system doesn't mean that it will always be profitable. I hope that it could be profitable in 2-3 years.
5:34 and 12 because I spent a lot of time to choose the best filter for the system. At last, I think they are the best.
6:M15 and GBPUSD because the GBPUSD often has very wide daily range and it has also low spread. M15 allows SL smaller and more trades.
7: 3 EMA 34 above are a part of SonicR thread. I told on the first post that this strategy comes from SonicR thread. So I just want to respect the author's mental rules. That's why I kept 34 EMA close too.
8: 10000$ with 1 lot because if you want to blow up your account, you have to lost 10000 points in a row.
9: You know that the ranging market happens most of the time on the market. So I use this ratio for safe,
10: nearest fractal outside the tunnel is that point
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 21 KB


The entry point is at the smallest bar which connected by the dot line, can you see it? the nearest fractal is inside the tunnel. So we couldn't choose it. The next fractal, outside the tunnel. So we choose it.

Thank you for asking me. Let me know if you have another questions
  • #14
  • Sep 5, 2013 3:46am Sep 5, 2013 3:46am
Here is another example:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 18 KB
  • #15
  • Sep 5, 2013 3:46am Sep 5, 2013 3:46am
Quoting vothienphu93
{quote} Well, Very long post, but I will answer your questions:
I have a couple of simple questions, what is your risk ? what is your reward ? or average loss and average gain ?
20 pips a day isn't too much to ask . . .
  • #16
  • Sep 5, 2013 3:48am Sep 5, 2013 3:48am
Quoting RaptorUK
{quote} I have a couple of simple questions, what is your risk ? what is your reward ? or average loss and average gain ?
My risk vs reward = 1:1
But I don't use the percentage per trade like people do, why? Because most of my lost trade is due to the ranging period. And most of my winning trade is due to trending period. And the trending period is have higher range than the ranging period. That why's it could be profitable
  • #17
  • Sep 5, 2013 3:58am Sep 5, 2013 3:58am
Quoting RaptorUK
{quote} I have a couple of simple questions, what is your risk ? what is your reward ? or average loss and average gain ?
I've just added some new factors into the backtest file:
Attached File(s)
File Type: xlsx backtest.xlsx   11 KB | 628 downloads
  • #18
  • Sep 5, 2013 4:01am Sep 5, 2013 4:01am
another example:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 31 KB
  • #19
  • Sep 5, 2013 4:02am Sep 5, 2013 4:02am
Quoting vothienphu93
{quote} My risk vs reward = 1:1 But I don't use the percentage per trade like people do, why? Because most of my lost trade is due to the ranging period. And most of my winning trade is due to trending period. And the trending period is have higher range than the ranging period. That why's it could be profitable
So a R:R of 1:1 and a Win Rate of 52% ? that is very slightly better than a coin toss, the "slight better" bit could simply be due to your small number of trades . . .

For a "Coin Toss" type EA where it's WinRate (WR) is simply a function of it's R:R the following chart applies . . .

Attached Image (click to enlarge)
Click to Enlarge Name: LongShort.png Size: 40 KB
20 pips a day isn't too much to ask . . .
  • #20
  • Sep 5, 2013 4:03am Sep 5, 2013 4:03am
a losing trade:
Attached Image
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