msforex wrote:razorboy wrote:is the ea programmed to take the first reversal entry after a 3 hour trend or does it just take every reversal opportunity.
If you just take every reversal opportunity, then yes, it is at best a zero sum game. If you actually look at previous price trend, much different story.
I can't program EA but I have played both ways - taking every entry I see regardless of the previous 3 hour trend and then using the previous 3 hour trend to determine if I should take a trade. My entries were based off of TRO's dynamic Fib Lines and the buy and sell signals they generate.
There is a huge difference in the success ratio of you only enter a reversal trade at the end of a 3 hour (or more ) trend. There is almost always a profit opportunity.
I have taken enough statistics course to know what you are getting at and agree with you if you take every trade. If you swing at every pitch, you are going to strike out a lot - with a lot of home runs (and a lot of commissions). I've done the numbers myself on a spreadsheet for over 3000 minutes for various currency pairs and yes over all, you will fail
If you are more discriminating, you get a lot of singles and doubles. But unless you have programmed you EA to include TRO's logic - not just his entry and exit points based on price reversal, yes, you will lose - but you are only using half of his rules - its like driving a car that randomly, without any warnings, loses its brakes or its reverse gear - good luck with that.
But I would rather you think that this doesn't work....so keep with that thought
The EA only places a reversal trade after 3 same colored candles!
Basically I agree with you that after a long trend there will almost certainly be a reversal. However, the market doesn't swing in a H1 frequency (or multiples)! The up and down frequencies change almost all the times, and to make things worse, there is interference between multiple waves! So to find a 6PIP reverse on a H1 timeframe is like searching for a needling in a haystack. Or - according to Sampling Theorem - when trying to read an x second signal with a H1 frequency we will only get "noise".
To really be able to detect a reversal we would need to analyze on much lower timeframes and try to "detect" the main "frequency" of the current market move and try to predict the timing of its reversal swing.
Yes, but the EA does NOT use the BUY ZONE to trigger the entry.
Does the EA wait for the bar to close or is there intrabar order entry? I don't code EAs so I don't know.
You are trying to prove it DOES NOT work rather than focusing on how to make it work. You'll get what you want either way.