EA that can trade through all market conditions | Forex Factory

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EA that can trade through all market conditions

  • Poll

  • Do you agree with my statement ???
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  • #1
  • First Post: Dec 9, 2014 2:50am Dec 9, 2014 2:50am
Hi


There are plenty of mixed feelings about EA's because EA's can be programmed to take advantage of certain type of market condition or pattern.

BUT

The biggest problem is when the market condition changes.

I wanted to know what the EA expert thinks of the following hypothesis :

If an EA could survive the USD / JPY from 01 / 01 / 2014 till present then it can trade all market conditions right .I mean look at the a screenshot of the market for the year

Attached Image (click to enlarge)
Click to Enlarge Name: UJ.png Size: 34 KB


We have low range , low volatility , big range big volatility , massive moves , weeks of ranging etc

What do you think about the idea.......Am I right in my statement " If an EA could survive the USD / JPY from 01 / 01 / 2014 till present then it can trade all market conditions right .I mean look at the a screenshot of the market for the year " ????

OR am I missing some type of market condition that could happen ?


PLEASE NOTE I'M NOT SELLING AN EA OR ANYTHING JUST ASKING A QUESTION.......

Thanks for your time

Rooi
We miss 100% of the shots we don't take
  • #2
  • Dec 9, 2014 3:47am Dec 9, 2014 3:47am
If you do disagree.

Please share why........

I'm would love to have some insights why people think EA's might fail or why they have failed in the past if you have that type of experience

Rooi


PS- Thanks to the people who vote even if they dont comment
We miss 100% of the shots we don't take
  • #3
  • Dec 9, 2014 4:53am Dec 9, 2014 4:53am
Hi,

I think your question is worth being asked
For the record, i voted "YES, I agree"

However, since the 01/01/2014, we are inside a major uptrend, with periods of consolidation (range) and trend. Maybe a working ea on this period of time would simply crash in case of a change of a major reversal.

That would depend on the "accepted risk", the way your ea takes profit or accumulates position in a given direction, and maybe even other factors that i didn't cite here.
  • #4
  • Dec 9, 2014 7:07am Dec 9, 2014 7:07am
Quoting Akh12851
Hi, I think your question is worth being asked For the record, i voted "YES, I agree" However, since the 01/01/2014, we are inside a major uptrend, with periods of consolidation (range) and trend. Maybe a working ea on this period of time would simply crash in case of a change of a major reversal. That would depend on the "accepted risk", the way your ea takes profit or accumulates position in a given direction, and maybe even other factors that i didn't cite here.
Hi Akh

Thank you for taking the time answer what you think.

So then do you think if it can survive the Usd/Jpy from 01/01/2014 to Present AND

Survive the Nzd / Usd from 02/09/2013 till present day then we are looking at a much lager variation of Fx-Market type price action at any given time ?

Attached Image (click to enlarge)
Click to Enlarge Name: ND.png Size: 36 KB


There are plenty of people who develop and test EA's find them to be good and eventually lose money from in my opinion lack of proper forward and back testing

Once again,Thanks for your time

Rooi
We miss 100% of the shots we don't take
  • #5
  • Dec 9, 2014 9:18am Dec 9, 2014 9:18am
My first inclination was to vote 'yes'...because we have seen that properly coded EAs (and all automated trading mechanisms) "can trade all market conditions". Surely properly coded trading mechanisms can open and close trades regardless of the market conditions (unless you are trading with a shitty broker).

However, I don't think that is exactly what you meant. Maybe you meant to say "can survive in all market conditions". Well, then it depends. If you have sound money management, you should be able to handle just about any situation. Except for "Hyper moves"...see below.

In the end, I voted 'No' for a few different reasons:

1) You did not give a finite list of market conditions and you did not define each market condition. Also, it depends on the risk involved with the strategy. Without this information, I don't see how the answer could be 'yes'.

2) There is (at least) one market condition in which every strategy, doesn't matter if it is manual or automated, can fail. Hyper moves, although extremely rare, can certainly wipe out any account. If you buy USD/JPY @ 119.50 just before it falls drastically (let's say to 50) because of some catastrophic event. It is unlikely a SL would save you. However, it is very likely that the account will be empty (depending on your position size of course) by the time you could get out of the trade. It really does not matter if the system survived other market conditions...this one will be the killer.

My automated system has "survived" for 4.5 years. But I am certainly aware that the entire balance could disappear if a Hyper Move ever occurs. Of course, with sound money management, it would take a move of 1000s of pips...but it is possible.

Also, everyone's definition of a Hyper Move would probably be different. Someone risking 2% of their account per 10 pips is certainly going to define a Hyper Move differently than a more conservative trader risking 0.1% of their account per 100 pips.
  • #6
  • Dec 9, 2014 1:35pm Dec 9, 2014 1:35pm
I've got an easy answer for you -
1. EAs have to be profitable but also they should be able to keep up a good *equity* curve (forget about balance and etc.)
2. Making an EA that can survive all conditions means that for one year it should be able to open and close at least one trade per month (this takes out the 'chance' of opening a trade in ranging market WITH the global trend and just waiting for it to go into the profit-zone.
3. If you backtest it on a certain pair for a certain period of time which in your opinion includes all the needed market conditions, it won't bother you to run a backtest on another pair, just to see what happens with the equity curve.
4. Market conditions are assessed by the EAs via indicators, which is a dull idea, since they lag a lot OR (the other far-end) often show minor pullbacks as change in trend. On the other hand, if the pullback is filtered with something like a larger-period-MA it would make it even more laggy in spotting reversals. And since the 'holy grail' - the price action - cannot be coded in mql4, you are stuck with lagging indicators aaaaaaaaand you are pretty much f*****.
5. Surviving all market conditions means full automation - you should consider including very changeable money management system. The forex brokers offer a lot of leverage, so there could be someone willing to put it all on the table and others who would like to stay more conservative.

Don't get fooled by the fact that big investment companies use algorithms to earn a lot of cash, they also have supercomputers (and I mean machines we can't afford to buy anyway) plus a direct connection to liquidity providers. They do scams like the popular HFT or high-frequency trading, which means when a big order comes on the way, the algorithms spot it and open their own order few miliseconds before so they can take advantage of the movement before it even happens.

The problem is, you see, there are billionaire coders and billionaire traders, but I've never heard of a coder who won his first billion by writing a simple trading algorithm.
  • #7
  • Dec 10, 2014 1:42am Dec 10, 2014 1:42am
Thank you for sharing what you thought.


Quoting zznbrm
My first inclination was to vote 'yes.
Not sure we will ever see a hyper-move from 119 to 50 in the UJ with out me being able to get out of my small trades compared to what central banks and retail banks hold in reserve.A lot of people will just go banckrupt before me and I dont put all my money into a trading account anyway

Quoting ksofty
I've got an easy answer for you
I agree with you about retail traders want to make it to complex when designing an EA.It should be simple and easy to understand the logic of the EA is trying to do and what market conditions it will do well in and what it wont .


Once again thanks for your time

Rooi
We miss 100% of the shots we don't take
  • #8
  • Dec 11, 2014 2:21am Dec 11, 2014 2:21am
Quoting Rooi
Hi There are plenty of mixed feelings about EA's because EA's can be programmed to take advantage of certain type of market condition or pattern. BUT The biggest problem is when the market condition changes. I wanted to know what the EA expert thinks of the following hypothesis : If an EA could survive the USD / JPY from 01 / 01 / 2014 till present then it can trade all market conditions right .I mean look at the a screenshot of the market for the year {image} We have low range , low volatility , big range big volatility , massive moves , weeks...
Aren't EA's conceived as a tool for short term trading, namely scalping? What for we need EA for long-term positions? Don't see logic in the matter you started to discuss?
Sorry maybe I totally missing something..
  • #9
  • Dec 11, 2014 2:23am Dec 11, 2014 2:23am
Quoting leebsurag
{quote} Sorry maybe I totally missing something..
I guess you are...

EA's are made to trade a certain type of market condition or pattern.Short or long term but all strategies when the market changes the EA loses money.

Hope that help

Rooi
We miss 100% of the shots we don't take
  • #10
  • Dec 11, 2014 2:52am Dec 11, 2014 2:52am
My EA makes money on all market conditions man, i think that there is not enough information on Forums or anywhere online with regards to EA's, i think everybody or 95% of people dont realy understand EA's or what it takes to have a succesful EA, everyone is lazy to do they research on the subject.
I am what Many Dream to be but only a few can achieve, im a part of the 1%
  • #11
  • Dec 11, 2014 2:57am Dec 11, 2014 2:57am
Quoting Soros
My EA makes money on all market conditions man, i think that there is not enough information on Forums or anywhere online with regards to EA's, i think everybody or 95% of people dont realy understand EA's or what it takes to have a succesful EA, everyone is lazy to do they research on the subject.

I agree.

Would you mid sharing with us what EA you use....

Is it your own or did you buy it......

IS it based on price , indicators , neuromentalimphatic -networks ?

Thanks for your time

Rooi
We miss 100% of the shots we don't take
  • #12
  • Dec 11, 2014 2:58am Dec 11, 2014 2:58am
Quoting ksofty
I've got an easy answer for you - 1. EAs have to be profitable but also they should be able to keep up a good *equity* curve (forget about balance and etc.) 2. Making an EA that can survive all conditions means that for one year it should be able to open and close at least one trade per month (this takes out the 'chance' of opening a trade in ranging market WITH the global trend and just waiting for it to go into the profit-zone. 3. If you backtest it on a certain pair for a certain period of time which in your opinion includes all the needed market...

highly disagree with most of the stuff you said.. I know a person that runs HFT Algos, he doesnt have Super Computers, he just has a realy good and fast server thats near the exchange, also you must understand the way that these HFT algos trade is 100% different to anything that we know and understand, his algos are created to adapt to any market condition, it has alot of components including machine learning etc. I think the retail trader looses not because of Lack of resources but it is because of the lack of information, you dont have the right information to conquer these markets.
I am what Many Dream to be but only a few can achieve, im a part of the 1%
  • #13
  • Dec 11, 2014 3:01am Dec 11, 2014 3:01am
Quoting Rooi
{quote} I agree. Would you mid sharing with us what EA you use.... Is it your own or did you buy it...... IS it based on price , indicators , neuromentalimphatic -networks ? Thanks for your time Rooi

I cant share it, and i will never sell it.. very private and personal stuff.
I am what Many Dream to be but only a few can achieve, im a part of the 1%
  • #14
  • Jun 3, 2017 10:48am Jun 3, 2017 10:48am
I went to EA market I asked multiple person who was showing them from 100 to 10K profit no one is ready give my below needs.

I looking for EA which use scalping from low deposit of 100$ to 1200$ monthly gain. With 10 to 25% drawdown and need to have live trading result from VPS for minimum of 60 days running period.

So I came to know ALL person making EA was not tested there own EA on live market and not ready to show the result what they ran from demo account. So EA market is either SCAM or myth. They need someone to test there EA on live to find the result .
  • #15
  • May 27, 2018 6:16am May 27, 2018 6:16am
Looking for such an EA. I think its possible if proper risk control and money management is in place.There will be loosers but more winners as equity rises with time.
Follow the Flow and Grow
  • #16
  • May 27, 2018 7:56am May 27, 2018 7:56am
Quoting Rooi
Hi There are plenty of mixed feelings about EA's because EA's can be programmed to take advantage of certain type of market condition or pattern. BUT The biggest problem is when the market condition changes. I wanted to know what the EA expert thinks of the following hypothesis : If an EA could survive the USD / JPY from 01 / 01 / 2014 till present then it can trade all market conditions right .I mean look at the a screenshot of the market for the year {image} We have low range , low volatility , big range big volatility , massive moves , weeks...
Hi its a great question but the answer is not a straight one though,

What i mean is that for an ea to make consistent profit regularly and to survive in all market conditions the strategy which would require it to do so should not be curve fitted and any trading idea which is not curve fitted and which would work universally in all market conditions is hard to transform into an automatic trading system.

Its not impossible but its not going to be that easy because markets are ever changing and evolving dynamic complex structure.Which changes itself according to the entropy which it receives in the form of news,interest rates announcements,belief systems of market participants,large stop orders of major institutions such as hedge funds and money managers of big companies and taking into account all this information its very difficult for an automated system to calculate all such variables and develop an idea which could predict the market and make decent and stable profits.

The large class of trading strategies based on technical analysis indicators has high probability of failure but that has been wrongly attributed based on my experience to the optimization process for setting parameters. It does not even matter whether the parameters are set so that small changes in their values result in stable performance. This is not an issue of the integrity of the optimization method used but of the nature of these trading strategies.

But like i said it can still be done but it would require unconventional wisdom and unique understanding of the market structure and successful application of that concept which we created it for.
Attached Image (click to enlarge)
Click to Enlarge Name: Chart-view-of-curve-fitting.png Size: 140 KB
No one ever Discovered anything new by colouring inside the lines.
  • #17
  • Aug 4, 2018 7:12am Aug 4, 2018 7:12am
Quoting Hdhorda4
{quote} Hi its a great question but the answer is not a straight one though, What i mean is that for an ea to make consistent profit regularly and to survive in all market conditions the strategy which would require it to do so should not be curve fitted and any trading idea which is not curve fitted and which would work universally in all market conditions is hard to transform into an automatic trading system. Its not impossible but its not going to be that easy because markets are ever changing and evolving dynamic complex structure.Which changes...

How might we gain a unique understanding of the market structure?
Why is a Raven like a Writing Desk?
  • #18
  • Aug 4, 2018 9:26am Aug 4, 2018 9:26am
Quoting Rastus81
{quote} How might we gain a unique understanding of the market structure?
Hello for that you must study the market as is which most people are not doing. without the use of any external trading software.

Sacred geometry is one of the answers to study the market structure and how it basically works which most people have no clue what that is.

Search fractal market hypothesis and you will find some interesting information about the markets.

if you have time watch this,

Inserted Video
No one ever Discovered anything new by colouring inside the lines.
  • #19
  • Aug 4, 2018 9:34am Aug 4, 2018 9:34am
Quoting Hdhorda4
{quote} Hello for that you must study the market as is which most people are not doing. without the use of any external trading software. Sacred geometry is one of the answers to study the market structure and how it basically works which most people have no clue what that is. Search fractal market hypothesis and you will find some interesting information about the markets. if you have time watch this, https://youtu.be/56gzV0od6DU
Thankyou, i will investigate this.
Why is a Raven like a Writing Desk?
  • #20
  • Aug 4, 2018 9:34am Aug 4, 2018 9:34am
Quoting Rastus81
{quote} How might we gain a unique understanding of the market structure?

Only way to learn is do real trades, lose real money and find out.
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