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The Backwards System

  • #1
  • First Post: Edited Mar 23, 2016 2:00am Mar 13, 2016 5:17am | Edited Mar 23, 2016 2:00am
I came across this system by accident. In back testing the results were bad, so bad in fact, that if traded backwards the results were good.

Extremely simple to trade, a child could do it. But some people may find it hard, as it's only one trade a day, and some days - no trade. (If you're a day trader used to looking at the screen for hours every day, placing trades and charts on social media and you're addicted to the idea of trading and being an active trader you may find it hard.)

First lets examine a simple misconception. I don't believe markets are total random (chaos) but let's assume they are. With regards to a 1:1 risk reward ratio, one would assume a 50% win rate? what about a 1 risk to 2 reward... 33% win rate? Dose that mean if we took three trades and the first two hit stop loss there is a high chance the third trade will hit tp?

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Many thanks hakary for coding this EA.
So far this year the results have been interesting... (unless you use a broker which gives you a 10 pip spread on CADJPY as shown in this post, in which case, I recommend looking for a new broker...)
Attached Image (click to enlarge)
Click to Enlarge Name: Sdrawkcab.jpg Size: 203 KB
Attached File(s)
File Type: ex4 Backwards.ex4   14 KB | 537 downloads | Uploaded Mar 23, 2016 1:48am
  • #2
  • Mar 13, 2016 5:22am Mar 13, 2016 5:22am
of course not, it would still be a 1 in 3 chance in a random environment.
  • #3
  • Mar 13, 2016 5:40am Mar 13, 2016 5:40am
The System just uses standard MT4 indicators on the H1.
-Heiken Ashi
-Reletive Vigor Index (8)


My basic template..
Attached Image (click to enlarge)
Click to Enlarge Name: Backwards.png Size: 42 KB
Attached File(s)
File Type: tpl Backwards.tpl   3 KB | 582 downloads
  • #4
  • Mar 13, 2016 5:50am Mar 13, 2016 5:50am
I'll start a trade explorer and go into the details tomorrow during Europe session.
  • #5
  • Mar 13, 2016 11:43am Mar 13, 2016 11:43am
Love the idea bro.. Short the 95% be well
Learn THEN Unlearn
  • #6
  • Mar 13, 2016 12:01pm Mar 13, 2016 12:01pm
simple work watching to see your idea
  • #7
  • Mar 13, 2016 1:21pm Mar 13, 2016 1:21pm
Extremely simple to trade, a child could do it.

Love the Idea that my 5 years old son could work for me. Hope i donīt have to fire him
(.)(.) think first ...
  • #8
  • Mar 13, 2016 1:57pm Mar 13, 2016 1:57pm
Ok...let me take my wheelbarrow and lets start!
  • #9
  • Mar 13, 2016 2:04pm Mar 13, 2016 2:04pm
Idea is good.

Subscribed
  • #10
  • Mar 13, 2016 2:07pm Mar 13, 2016 2:07pm
Quoting BubaYaga
The System just uses standard MT4 indicators on the H1. -Heiken Ashi -Reletive Vigor Index (8) My basic template.. {file} {image}
How it works?
  • #11
  • Mar 13, 2016 3:00pm Mar 13, 2016 3:00pm
Quoting Fxx Trader
Idea is good. Subscribed
Why do you think the Idea is good, you donīt know the Idea or did i missed something. The only thing we know till now is that there is a strategy with bad backtesting results and now he/ she wants to do the opposite
(.)(.) think first ...
  • #12
  • Mar 13, 2016 3:53pm Mar 13, 2016 3:53pm
Quoting BubaYaga
I don't believe markets are total random (chaos) but let's assume they are. With regards to a 1:1 risk reward ratio, one would assume a 50% win rate?...
Not sure why folks always assume a 50% win rate just because the R:R is 1:1...you will always know the Risk (in most cases), but never the reward...I've back-tested the idea of 1:1 R:R with random entry, as many others have, and I can assure you that the win% is not even close to 50%...

Best,

Dave
  • #13
  • Mar 13, 2016 4:10pm Mar 13, 2016 4:10pm
Quoting davelansing
{quote} Not sure why folks always assume a 50% win rate just because the R:R is 1:1...you will always know the Risk (in most cases), but never the reward...I've back-tested the idea of 1:1 R:R with random entry, as many others have, and I can assure you that the win% is not even close to 50%... Best, Dave
I agree with you. Sometime a risk 4 or 10 times bigger than the reward gives you a better chance of a reward or the other way, with tight entries of risking a few pips you can get rewards of 200% or more. So itīs more about the strategy and trading style than RR because you never know the reward.
(.)(.) think first ...
  • #14
  • Mar 14, 2016 3:29am Mar 14, 2016 3:29am
Originally I tried a 1:2 risk/reward (25 pip sl, 50 pip tp), because I often heard people say "never risk more than you can gain'". It's just something that people say i guess, because it sounds like it's probably good practice or whatever. So I only required a 33.3% win rate to break even? We'll say 34.3% to *take into account commissions and potential swaps and slippage*. Let's just say the results were much worse than that in back test.

So reverses that (50 pip sl, 25 pip tp), required breakeven win rate is 66.6 (67.6*). One positive thing about having a higher win rate is slippage is more often in our favour.
  • #15
  • Mar 14, 2016 3:38am Mar 14, 2016 3:38am
Quoting BubaYaga
Originally I tried a 1:2 risk/reward (25 pip sl, 50 pip tp), because I often heard people say "never risk more than you can gain'". It's just something that people say i guess, because it sounds like it's probably good practice or whatever. So I only required a 33.3% win rate to break even? We'll say 34.3% to *take into account commissions and potential swaps and slippage*. Let's just say the results were much worse than that in back test. So reverses that (50 pip sl, 25 pip tp), required breakeven win rate is 66.6 (67.6*). One positive thing about...
But what is your Strategy? Can you explain, iīm eager to learn something
(.)(.) think first ...
  • #16
  • Mar 14, 2016 3:41am Mar 14, 2016 3:41am
As mentioned in the first post, there is only one trade a day and it is placed at 09:00 GMT. I use GMT because that's what Darwinex use. Most brokers use EET (standard time) 09:00GMT = 11:00EET.
  • #17
  • Mar 14, 2016 4:11am Mar 14, 2016 4:11am
RVI = Close - Open / high - low
Generally traders expect the RVI value to grow with bullish momentum because a currency pairs closing price tends to be at the top of the range while the open is near the low of the day.
The RVI on MT4 has a signal line (which is basically a 4 period sma of the RVI)

Heikin-Ashi Candlesticks use the open-close data from the prior period and the open-high-low-close data from the current period to create a combo candlestick (Average).

The only candle I care about is the one leading up to 09:00GMT (the 08:00-09:00 candle).
If that Heiken Ashi closes red, then I need the RVI to be below it's signal line at the close of that candle also.
-Because this is The Backwards System that is a long signal.

It only seems to work with CADJPY at that hour (one hour after the LSE opens and one hour after Tokyo SE has closed) for some reason(?).
That's basically the first part of the system... basic enough? I'll go into the second part once we have our first loser (sl hit).
Attached Image (click to enlarge)
Click to Enlarge Name: Backwards1.png Size: 51 KB
  • #18
  • Mar 14, 2016 6:36am Mar 14, 2016 6:36am
almost got in long at the days low... (and a little bonus the 0.4 pip slippage on exit covered the commission cost.)
-That's it for the day.
Attached Image (click to enlarge)
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  • #19
  • Mar 14, 2016 6:42am Mar 14, 2016 6:42am
Quoting BubaYaga
almost got in long at the days low... (and a little bonus the 0.4 pip slippage on exit covered the commission cost.) -That's it for the day. {image}
Why did you closed the order???
(.)(.) think first ...
  • #20
  • Mar 14, 2016 6:55am Mar 14, 2016 6:55am
Quoting maximumguita
{quote} Why did you closed the order???
The tp was set at 25 pips and price hit the tp
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