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Hanover - can you help me with MT4 qs please? 4 replies

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Hanover replies to PMs

  • #501
  • Apr 16, 2016 11:56am Apr 16, 2016 11:56am
hello Hanover please do you know/have a free indicator which can highlight/detect candlesticks with specific volume.
So for example any candlestick with volume 1 and 0 ? Im talking about the volume from the data window.
Thanks.
  • #502
  • Edited Apr 17, 2016 10:44am Apr 16, 2016 3:59pm | Edited Apr 17, 2016 10:44am
Quoting heispark
I would like to ask your advice about currency futures.
Sorry, but I don't have any experience trading currency futures.

However, to state the obvious: if you're looking for information, Google is your best friend, provided that you can find unbiased info. Usually, reading between the lines with some common sense can tell you whether a writer has some kind of vested interest in the product he's describing. And you can get several opinions, both for and against, and then again apply common sense to gain some kind of 'average' weight. With most topics, there is no right or wrong answer, i.e. there are pros and cons about every product, method or idea.

However, if I may make a couple of general observations:

No matter what market you trade (spot, futures, binary options, ...) you must still perform much the same analysis, and decide whether the asset/instrument will rise or fall in value. In other words, if a trader's analysis with spot is ineffectual -- or he has unresolved emotional issues -- then his results are not going to be any better just because he chooses another asset class.

However, all markets ultimately move according to order volumes, and if your futures br0ker/platform allows depth of market or market fingerprints, then this gets you a big step closer to the real action than 'conventional' TA (indicators, trendlines, S/R, etc).

Another consideration is transaction costs, a factor whose destructive effect is underestimated by many traders. Over time, and everything else being equal, moving to a br0ker/platform with lower costs can make a significant difference to performance.

Sorry I can't be more helpful.

Quoting metta87
do you know/have a free indicator which can highlight/detect candlesticks with specific volume. So for example any candlestick with volume 1 and 0 ? Im talking about the volume from the data window. Thanks.
Perhaps I don't understand you? The volume values in MT4's data window are the same tick volumes as when you press Ctrl-L to toggle the volume bars on/off, and the numbers are in the thousands, not 1 or 0.
  • #503
  • Apr 16, 2016 7:17pm Apr 16, 2016 7:17pm
Quoting hanover
{quote} Sorry, but I don't have any experience trading currency futures. However, to state the obvious: if you're looking for information, Google is your best friend, provided that you can find unbiased info. Usually, reading between the lines with some common sense can tell you whether a writer has some kind of vested interest in the product he's describing. And you can get several opinions, both for and against, and then again apply common sense to gain some kind of 'average' weight. With most topics, there is no right or wrong answer, i.e. there...
Thank for your feedback, sir. It helps and I appreciate that.
Simplicity is the ultimate sophistication - Leonardo da Vinci
  • #504
  • Apr 17, 2016 4:05am Apr 17, 2016 4:05am
Hello

I read in your older post: http://www.forexfactory.com/showthre...93#post4280193

Quote
Like I said, I use many of the same ideas (tight initial SL, trailing SL) but I also use multi-TF correlation, S/R confluences, climax volume candles, and currency strength (pair the strongest against the weakest to find the strongest, cleanest trends). Rightly or wrongly, I've assumed that these additional components contribute significantly to whatever edge I might have. My win rate is likewise < 50% due to the tight SL causing many trivial losses, but the low-risk entries plus longer term trends create a growing accumulation of high RR trades....

Incidentally I came to the same method of trading separately recently.

I am wondering if you still trade like this and if not what are your enhancements? If yes, could you please share your experiences?
Cut short your losses. Let your profits run on. David Ricardo (1772-1823)
  • #505
  • Apr 17, 2016 9:30am Apr 17, 2016 9:30am
hanover

what is ur trading strategy plz
  • #506
  • Apr 17, 2016 9:40am Apr 17, 2016 9:40am
Quoting hanover
{quote} Perhaps I don't understand you? The volume values in MT4's data window are the same tick volumes as when you press Ctrl-L to toggle the volume bars on/off, and the numbers are in the thousands, not 1 or 0.
Oh i did not know about the ctrl-L nor that they were in the thousand thanks. Im using a renko chart and sometimes when i scroll over i see some bars with volume 1 (single digit) and other bars with volume 0. So i wanted to know if you knew an indicator which could find those type of bars only because i have to scroll a lot to find them and the ctrl-L doesnt help neither.
  • #507
  • Edited 4:37pm Apr 17, 2016 10:55am | Edited 4:37pm
Quoting metta87
Im using a renko chart and sometimes when i scroll over i see some bars with volume 1 (single digit) and other bars with volume 0. So i wanted to know if you knew an indicator which could find those type of bars only because i have to scroll a lot to find them and the ctrl-L doesnt help neither.
I'm not familiar with renko charts (I assume that they are similar to range bars?), and I'm not aware of a volume indicator that works with them.

Quoting Akademon
what is ur trading strategy plz
Quoting Ramadas
I am wondering if you still trade like this and if not what are your enhancements? If yes, could you please share your experiences?
FWIW this is more up to date.
  • #508
  • Edited Apr 23, 2016 9:53am Apr 22, 2016 4:10pm | Edited Apr 23, 2016 9:53am
Quoting alphaomega
Trading with the trend will not put the odds in your favour......
The following is merely my opinion, but I agree with much of what you say. Mechanical trend following systems offer no real promise of profit. But I wouldn't necessarily say that it's the worst strategy one can apply, because I've yet to see evidence that mechanical systems that trade against the trend, or on the basis of price reverting to the mean -- which you say is prevalent -- fare any better. Either way, if attaining consistent profit was as easy as following a simple mechanical maxim, then we would see an army of profitable retail EAs, which obviously isn't the case. As indeed you say.

Random games like coin toss and roulette all generate apparent 'trends' (heads/tails; red/black) that can't be exploited mathematically. But if you find a physically biased coin or roulette wheel, then you can gain an advantage. Hence the key is not the appearance of a 'trend' but its underlying cause. Markets are more complicated -- opposing trends can co-exist in different timeframes/fractals; and there are always multiple causes playing tug of war against each other -- but the basic concept still holds good. The trader's goal is to find situations where a single fundamental driver is influencing a disproportionate amount of heavyweight players, before this sentiment dissipates and the ensuing move becomes 'priced in'. (Easier said than done, of course!) Or otherwise find some other basic market truisms or patterns that provide directional or behavioral bias in upcoming price movement, and recur in a way that they can be exploited.

I believe a key to improving trend following is to choose markets or instruments that are currently exhibiting the strongest trends, especially if those trends have some kind of fundamental cause. Or, if you're trading a single instrument, to apply some kind of contextual analysis, amd turn the system off while market conditions are unfavorable.

I also agree that mechanical systems can never trade as intelligently or adaptively as an experienced human trader. Further explanation here.

I likewise believe that transaction costs are a silent killer -- especially of ineffectual/edgeless systems -- and that their gradual corrosive effect is greatly underestimated by many traders. There may be research-backed arguments demonstrating fat-tail distributions where trend following provides some kind of edge -- my friend started exploring these possibilities in this thread -- but my understanding is that in many cases this type of edge is eroded, to the point of being unusable, by costs.

I also agree that ill-discipline is not the only problem, and is frequently blamed as the most obvious cause of failure, when it might be masking an impotent system. In other words, even if the system had been traded with perfect discipline, it would have eventually lost anyway. And that many traders fail to understand the effect of statistical fluctuation (info and examples here), which when allied to transaction costs, become a reason why many seemingly 'profitable' systems eventually implode (and their trade explorers and myfxbooks suddenly disappear!)

As I said, it's just my opinion, and I'd be delighted to be proved wrong by anybody who has a mechanical trend following system that's delivered regular income over a long period (say 10 years). Why would I be delighted? Because I could use something similar myself.
  • #509
  • Apr 22, 2016 9:29pm Apr 22, 2016 9:29pm
Quoting hanover
{quote} The following is merely my opinion, but I agree with much of what you say. Mechanical trend following systems offer no real promise of profit. But I wouldn't necessarily say that it's the worst strategy one can apply, because I've yet to see evidence that mechanical systems that trade against the trend, or on the basis of price reverting to the mean -- which you say is prevalent -- fare any better. Either way, if attaining consistent profit was as easy as following a simple mechanical maxim, then we would see an army of profitable retail...

Good read, and agreed, thanks.
  • #510
  • Apr 23, 2016 4:17am Apr 23, 2016 4:17am
Hello Hanover, I have just read your post about trend-following and I am glad I have found a trader with common sense and with ideas similar to mine.
I am an experienced trend-follower who uses a manual discretional system, and I have to say that using a system based purely on trend-following has worked well for me over the years.
It's true that in order to be successful you need a human trader, a system that is not just mechanical, and you need to choose to open trades only when a strong trend appears. This means that sometimes I don't open a single trade for a few months, because there isn't any strong trend in any of the markets I am following.
If I traded the stock market instead, if would be different, because between thousands of stocks there are always several of them that are trending well.
On the topic of the importance of fundamentals, I would say that it's not that important after all to follow the news, because the fundamentals are already reflected in the price action, so the charts will already tell you the current bias of the fundamentals. For example when EUR/USD dropped from mid 2014 to the beginning of 2015, just by looking at the chart I could tell that most traders thought that the european economy was performing worse than the USA.
Another important thing to underline is that I only trade on high timeframes (weekly chart), because low timeframes move more randomly, are more affected by news, suffer more from the spread and require more screen-time.

This is all I have to say for now. I will be following this thread.
  • #511
  • Apr 23, 2016 10:02am Apr 23, 2016 10:02am
Quoting Xumm
I have just read your post about trend-following and I am glad I have found a trader with common sense and with ideas similar to mine.....It's true that in order to be successful you need a human trader, a system that is not just mechanical, and you need to choose to open trades only when a strong trend appears.
Indeed our thinking appears to be very similar.
Quote
On the topic of the importance of fundamentals, I would say that it's not that important after all to follow the news, because the fundamentals are already reflected in the price action, so the charts will already tell you the current bias of the fundamentals.
I used to believe this also, until I found a mentor who profits from news trading, and demonstrated that this was not always the case. Having said that, I still don't trade into or out of news myself.
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Another important thing to underline is that I only trade on high timeframes (weekly chart), because low timeframes move more randomly, are more affected by news, suffer more from the spread and require more screen-time.
Agree, for all of the same reasons.
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I will be following this thread.
The thread has become a miscellany of trading and programming Q&A.
  • #512
  • Apr 23, 2016 11:40am Apr 23, 2016 11:40am
Quoting hanover
The thread has become a miscellany of trading and programming Q&A.
That's fine, I will just look at the posts that are about trading.
By the way, I have a simple question: where can I find some information about the trading system that you use? I would be curious to know something about it.
I believe your system is based on trend following but also on other discretional factors like Support & Resistance levels. I also saw that you use indicators of the strength of the different pairs.
If you already answered this question, you can just give me the link, and if you decided not to make your trading system public, I can understand that.
  • #513
  • Apr 23, 2016 3:10pm Apr 23, 2016 3:10pm
Dear Hanover,

Do you have any mathematical explanation in favor of pyramiding (scaling in) in Forex. If mathematics say it is better than 100% default position. Instead of 100% position we would pyramid 4*25% or 40%+30%+15%+15%.

Livermore was using 1/4 of his position first and then if market moved according to his plan, he added more. But Forex seems more like mean reversal market than stocks...
Cut short your losses. Let your profits run on. David Ricardo (1772-1823)
  • #514
  • Edited 7:22pm Apr 23, 2016 5:35pm | Edited 7:22pm
Quoting Ramadas
Do you have any mathematical explanation in favor of pyramiding (scaling in) in Forex. If mathematics say it is better than 100% default position. Instead of 100% position we would pyramid 4*25% or 40%+30%+15%+15%. Livermore was using 1/4 of his position first and then if market moved according to his plan, he added more.
This is the nearest I came to posting a mathematical answer. PipMeUp has a greater knowledge of math and stats than I do, and has posted much more comprehensive answers, but I don't have the links, so you would need to find them yourself.

However, more recently I've come to believe that the answer is not so much mathematical, but is dependent on imminent market conditions, and the trader's skill in predicting them (to whatever extent that's possible; or simply assuming that the current conditions -- trending, ranging or indeterminate -- will continue). In a strong trend, pyramiding can multiply your profits several-fold, as all trades simultaneously accumulate pips; while in a sideways market, these additional trades cause the racking up of additional losses. In other words, any mathematical considerations get trumped by the market type. I posted a little on different strategies for different market types here.

Quote
But Forex seems more like mean reversal market than stocks
If I may generalize, forex does revert to a mean, especially as governments intervene to stimulate, and then combat, measures like growth or inflation, creating cyclical price patterns. However forex can also trend significantly, if a measure goes through a prolonged period of anticipation, or a fundamental cause (perceived as 'good' or 'bad') persists for long enough. Two recent examples have been the recent 'Brexit' concerns (check out daily chart of GBPJPY, for example), and recovering oil prices (daily chart for USDCAD).

Quoting Xumm
where can I find some information about the trading system that you use?
See the link in post #507 above.
  • #515
  • Apr 24, 2016 8:53am Apr 24, 2016 8:53am
Hello Hanover.
Quoting hanover
Mechanical trend following systems offer no real promise of profit. But I wouldn't necessarily say that it's the worst strategy one can apply
I would like you to clarify your language. Statements such as 'no real promise' and 'wouldn't necessarily say that its the worst' are ambiguous and cannot be clearly addressed in discussion.
Quote
Random games like coin toss and roulette all generate apparent 'trends' (heads/tails; red/black) that can't be exploited mathematically.
Certainly. However, a simple look at the results of trend following systems will immediately make it apparent that the analogy is incorrect.
Quote
Hence the key is not the appearance of a 'trend' but its underlying cause.
I completely agree. However, the appeal to Fundamental Analysis to understand the underlying cause is flawed. Fundamental information is a part of the Market System, it responds to Price as well as the demand for explanations by market participants. Its part of the roulette wheel, not a flaw that missed the casino's eye.

Allow me to quote Stock Operator:
"When a stock is going up no elaborate explanation is needed as to why it is going up. It takes continuous buying to make a stock keep on going up. As long as it does so, with only small and natural reactions from time to time, it is a pretty safe proposition to trail along with it. But if after a long steady rise a stock turns and gradually beings to go down, with only occasional small rallies, it is obvious that the line of least resistance has changed from upward to downward. Such being the case why should anyone ask for explanations? There are probably very good reasons why it should go down, but these reasons are known only to a few people who either keep those reasons to themselves, or else actually tell the public that the stock is cheap."

Price contains the intention of the Market by its very nature.
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Markets are more complicated -- opposing trends can co-exist in different timeframes/fractals
A series of ups and downs is made up of a series of smaller ups and downs. Not that complicated.
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The trader's goal is to find situations where a single fundamental driver is influencing a disproportionate amount of heavyweight players, before this sentiment dissipates and the ensuing move becomes 'priced in'.
I recommend hindsight analysis.
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I also agree that mechanical systems can never trade as intelligently or adaptively as an experienced human trader.
I dont know.

I see CTAs provide great returns for their clients using mechanical systems and then I see Forex Factory comedians in all their adaptiveness and intelligence knock themselves repeatedly in the head and wallet.
Quote
Either way, if attaining consistent profit...
Alas, the 'consistent profit' myth.

You may have read of traders who have consistently profited from the market. Jesse Livermore himself took money out of bucketshops for a period of time... until the bucketshops refused his business. As a professional speculator he even enjoyed fruitful periods where he made more than 100% a month, for many months... until of course the big drawdown came. If you search enough you may even find mechanical systems that produce consistent profits over long rolling windows. 'Consistency of returns' is at the behest of market conditions and not an inherent property of a trader. Shall we continue to believe in Forex Factory's pet Unicorn? Or shall we acknowledge the evidence before us and adopt more realistic expectations in a game such as Market Speculation.
  • #516
  • Edited 2:28pm Apr 24, 2016 2:03pm | Edited 2:28pm
Quoting Atokys
I would like you to clarify your language. Statements such as 'no real promise' and 'wouldn't necessarily say that its the worst' are ambiguous and cannot be clearly addressed in discussion.
Hopefully the context is made clear from the post I was replying to. Alphaomega had stated that "Trading with the trend will not put the odds in your favour! If it was so simple.....everyone will do it and we will see a lot more successful people First of all, from all markets forex has the strongest tendency to revert to the mean This means that classic trend following is pretty much the worst strategy you can apply The other thing is that mechanical systems by default do not work. No matter what type of indicators or combinations of techniques you apply, if you use system with fixed rules - you will fail in the long run."
Now I'm saying that, IMHO, if there was a known color-by-numbers way of guaranteeing regular profits using a certain trend following approach, then I agree with him that more folk (including FF members) would use it, and thus be profitable. But I'm also arguing against him, in that there is likewise no known color-by-numbers way of guaranteeing regular profits using a counter-trend or 'revert to mean' approach, either -- given the same evidence -- and hence mechanical 'trend following' is no worse than a mechanical 'revert to mean' approach.

Perhaps I should have said "offer no absolute guarantee of profit" rather than "offer no promise of profit". My bad.

Quote
However, the appeal to Fundamental Analysis to understand the underlying cause is flawed. ..... Price contains the intention of the Market by its very nature.
Perhaps I should have said "a single underlying driver" instead of "a single fundamental driver". Nonetheless, I believe we differ in our views of the usefulness of FA. I will try to explain mine with an example. On Friday an item in the newsfeed that I subscribe to stated "BoJ officials are said to be considering applying negative rates to its lending program for financial institutions". That unscheduled announcement apparently surprised the market, so that its effect was not already reflected in the price at the instant the announcement was made. The JPY weakened across the board for the rest of the day (USDJPY moved 250% of its normal ADR). Skeptics can argue that this was mere coincidence, or caused by other reasons, or that I saw the price move in hindsight and only then looked for the best possible fundamental reason. But the fact remains that the price move did occur following an unexpected interest rate rumor reaching the media, and that information was available for (fundamental) analysis before the move.

Anyway, that's just my 2c; and I don't want to spend more time defending my position. Anybody is welcome to disagree.
  • #517
  • Apr 25, 2016 8:13am Apr 25, 2016 8:13am
Quoting hanover
Perhaps I should have said "offer no absolute guarantee of profit" rather than "offer no promise of profit".
Then it follows that Market Speculation is an enterprise that offers no absolute guarantee of profit. What else can be expected of what is essentially using past information to anticipate the future actions of buyers and sellers?
Quote
I don't want to spend more time defending my position. Anybody is welcome to disagree.
I respect your intention.
  • #518
  • Edited 12:54am Apr 26, 2016 12:31am | Edited 12:54am
My tests have shown me otherwice, trading with the trend definitely gives you an edge,
the problem I think most people do is they insert blockers preventing this to happen.
and they don't realize it. filters upon filters which are all blockers and makes things more complicated and confusing than it needs to be,
trading is easy, but most traders have a problem with their psychology, they are not mentally fit to be traders,
the nature of the mind is to over complicate things.

and also they trade a trend following system every day of the year when the markets only trend about 80% of the year,
so nobody needs to be rocket scientist to figure out what will happen. the market always changes so the traders need to adapt.
most traders don't do this, they have one system or strategy and thats the only thing they use day in and day out.

Here is a test I did on the EURUSD trend from 2006.02.22 to 2008.07.16 on the Daily chart,
buying every single bar at open, as simple as it gets.
the risk to reward used is 1:1, sl 100 pip and tp 100 pip, traded only 1 micro lot all the time.
as you can see, it produced quite a nice gain in relation to the lot size used. 61% win ratio, even sometimes it made deep re-traces.
I think this will prove that, the trend is your friend. and by using only 1:1 reward to risk ratio, which is about brake even expectations,
proves the trend is the big factor here.
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Bulls are stupid Animals!especially when Im short!
  • #519
  • Edited 2:41am Apr 26, 2016 2:25am | Edited 2:41am
Quoting roughtrader
My tests have shown me otherwice, trading with the trend definitely gives you an edge, the problem I think most people do is they insert blockers preventing this to happen. and they don't realize it........
Rough, many thanks for your reply.

I'm not saying that that you can't make money with a mechanical, trend following system. My programmer/trader friend (mim2005) spent several weeks writing EAs to test various entry and exit ideas, and three of these backtested very profitably. Details here. For better or worse, these were run over 6 years of high quality tick data, and generated between 500 and 3,000 trades. I'm not sure whether those numbers are high enough to be statistically valid. (That's a problem that you have with backtesting. Too little data and your results lack statistical validity -- i.e. there is too much statistical error -- but too much data, and the oldest data may be unrepresentative, as price behavior can change its spots over time).

I'm not wishing to bash you in any way, but I see one flaw in your test, namely that you've used hindsight to cherry pick a period where you knew that EURUSD was trending. In other words, had you actually been trading at that time, how would you have known in advance that a significant trend was going to begin on 2006.02.22, and that it was going to end on 2008.07.16?

Without the benefit of hindsight, you'd need to have some way of determining whether price is in an uptrend, downtrend (or possibly sideways) at any given point in real time. If (for example) you'd defined an 'uptrend' as price being above the MA in your screenshot, then the start and end of the trend would have been displaced a little, and I admit that wouldn't have changed the result much. But then you also have to consider all of the times when price moves sideways, oscillating between being above, and then below, the MA, and include those (possibly negative) results in your backtest.

I don't believe that the only reasons that many folk don't trade mechanical trend following systems are necessarily emotional ones. Mechanical systems can be coded, and an EA can help to create an increased sense of detachment, removing much of the emotion involved in trading. The great forex dream is to have your computer generate a passive income while you get on with the rest of your life. Hence even if trend following systems have a low win rate, and experience some drawdown while waiting for the 'home run' winners to occur, the fact that everything is automated, and provided the EA keeps risk per trade within your comfort zone, the drawdowns should be tolerable enough. So I have to ask, if it's possible to extract regular profit from a genuine strategy-based edge (entries/exits), and safe, conventional sizing, then why do most vended EAs use risky MMs (wide or no SLs, adding to losses, martingale variants, etc)? Surely, all things being equal, a safe income is better than a risky one? That's one reason why I have reservations about mechanical trend following: if it guaranteed a safe and worthwhile income, I would expect there to be a lot more retail trend following EAs out there.

David
  • #520
  • Apr 26, 2016 5:39am Apr 26, 2016 5:39am
No worries about bashing me and I certainly don't want to bash you or anyone either,
just a simple conversation here, thats how we all can learn from each other.

Yes you are right, I did cherry pick the period I tested,
I chosen a trend because that was what I wanted to bring out from your conversation with Alphaomega,
that there really is an edge trading with the trend as you can see. there is no other way around it.
of course it would have been a loser if I traded it across multiple market conditions.
so what I wanted to show you is that if you trade with the trend when it's trending, there is an edge.

yes there have to be a way to determine when you can trade a trend, and when you can't ,
and that is the problem and the hard part, the ability to adapt and change strategy between market conditions is the key.
why trade a trend following method when the markets only trend 20 -30%,
wouldn't it be better to trade only when the market is trending? and trade ranges or sideways the majority of times?

the problems for most experts are they can't trade in all market conditions, at least what I have seen.
if you trade only trends you will be giving it all back when the market start to range,
and if you trade the ranges only, you will give it back when the trends start.
all I have ever seen out there is trend following EA's, why is it so hard to create experts that trade ranges?

I don't think experts can be as good as manual trading, but at least they have one big advantage that they have no emotions.
I'm not saying it couldn't be done, but if anyone could do it , it would be you.
Bulls are stupid Animals!especially when Im short!
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