Well here I am again. It's been a while since I updated this journal.
1. My E.A. has "kind of" worked. It certainly did not lose money - but it didn't win as much as I might have wished. I was pleased to trade for such a long time without trading into a loss. So I think that my E.A. provides a sound basis for a trading method. But it needs improvement.
2. My demo account is not reacting - so maybe it's time to start a fresh one.
3. I have split my E.A. into two new E.A.s
4. One will trade conservatively ( Alpari ) and one will trade fairly agressively ( IBFX ).
I don't mind failing in public so I will be setting up an explorer for both versions of my E.A.
I am keen to see which versions wins the most - or loses the least.
5. I have found this journal very useful. Usually I invent several "world beating systems " a day. I try them for about two days and then abandon them. This journal has forced me to calm down - and to properly test an idea over several months.
I bet there are many would be "world beaters " like me, that flit from one method to another without giving any of them a chance to work.
One "Nedlud" is conservative ( the clue is in the name ).
The other " Swashbuckler " spends it's days standing in front of runaway trains, or holding out it's hands trying to catch falling knives.
I have set up an explorer for each of my heavy weight contenders and now I can sit back and watch them slug it out.
As you would expect the Swashbuckler trades all day and all night and he doesn't mind taking the occassional knock down. He just gets up and comes out fighting again.
Nedlud sleeps during the London night - gets up early and jabs away at any weak little pullbacks.
So far it's a very even fight.
If I was going to have a bet, my money would be on Nedlud, but I get much more entertainment out of following the Swashbuckler.
My consevative EA called Nedlud is making a reasonable start but, the other, more aggressive EA, was knocked out in the first round. I declare Nedlud to be the current champion.
There is a new EA contender , called Arctic. It catches a few knives and does wander onto the occassional railway track - but it is much more careful than it's predecessor.
I still think that Nedlud will win this contest.
I believe that Nedlud can be improved with experience. I have already tweaked the profit taking method, and I am also looking at the exit policy.
Your results thus far with you EA have been quite good. Hope it carries on, keep us updated.
Ciao
Ignored
Thanks for your comment Terraforce1. As you say the E.A. has made a reasonable start - but there is still plenty of time for the equity curve to nose dive !
The thing is, recently I have become obsessed with what I believe to be the key question in trading :
What should your take profit be ? and what should your stop loss be ?
I know it sounds simple, but to me it isn't. Before you can properly answer the question you have to answer a number of other questions:
1. Which comes first the chicken or the egg ? Do you decide what the take profit should be and then work out the stop loss that fits best - or vice versa.
2. Does it depend on your peronality ? Is your system going to aim for a big take profit, or would it be better suited to a small ( scalping ) take profit. Anyone who says "it depends on your personality" needs to be taken outside and put up against the wall...
3. I have created systems with a very small take profit and a big stop loss. This results in a profit curve that goes up as if it has been drawn with a ruler. The problem is it can always suddenly drop away, and then start to slowly climb again. So do I want a big take profit or a small one ?
4. Many "experts" say that if your stop loss is going to be 100 pips then your take profit needs to be at least 200 pips. Preferably 300 pips. They may be right for all that I know. The trouble is that I have not seen many profitable Trade Explorers on FF from these experts. They ( who ever they are ) say that the truly great traders have more losing trades than profitable trades. This would imply that that the ratio should be heavily slanted towards the take profit side.
5.Experts say that if you have a small take profit then you must have a small stop loss. But is this too simplistic a point of view ? Imagine a system that has a big stop loss - lets say 2000 pips. The take profit is only 100 pips. So the system needs 20 winners for every losing trade. But with so much elbow room this system normally has 30 winners for every loser. In other words it would be a world beater. I have often created systems that can win 50 or 60 times in a row - so that part is possible - it's just that a sudden huge loss could always spoil a perfect equity curve. But is this the area that we should be looking at ?
6. Even if your clever Dick TP to SL ratio is mathmatically in your favour you have to factor in the time it takes for the trade to win or lose. You have to factor in time because your broker is probably charging you a fee for every day that you keep a trade open.
7 And another thing ...who's advice on the matter is worth hearing? Thousands of people post on FF every day. Many of the more confident ones post Trade Explorers - some make short term gains. There are one or two Guru traders on FF who deem it to be beneath their dignity to reveal themselves on a Trade Explorer. I totally understand that point of view. I myself am the greatest tennis player that ever walked the earth - but I refuse to prove it by playing Andy Murray. My tennis activities are my own business not yours.
Having considered all of these awkward questions I am still a happy trader because ( in the short term ) my EA is still winning. As soon as it begins to lose.........
I have been using the EA on a few different pairs to make sure that it really works. Not much point in having an EA that only works on euro usd it could be a fluke.
The only mistake that I have made so far is taking out too many positions too quickly when I first started using it. I made a profit ok.... but it gave me a draw down that was bigger than need be.
With a limitation on the number of open positions - its cruising along quite nicely.
............must be time for a major setback methinks.
I started the account ( demo) in October with 5000$ and now it is standing at 6350$.
There is an awful long way to go but I can't help being pleased with the way the EA has started.
I think one of the key things is to frequently dump losing trades - also this EA has much better money management
than me in real life and my previous EA attempts.
This thread is intended to show what someone ( me or you ) goes through when they are trying to make a profitable EA.
I have had my ups and my downs .......and at the present time I have an EA that is doing just fine.
But I think that a defect in my trading is coming to the fore.
Despite the fact that my EA works - I am desperate to change it ........and try something else. This is clearly stupid of me - but the temptation is huge.
I am going to call it "Tinker's Syndrome".
I am starting to wonder if I'll ever be the rational trader that I dream of being.
