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msforex
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Postby msforex » Sun Dec 07, 2008 11:25 am

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.


TRO - the EA works exactly the way you recommend (unless I have missed something - then please correct me): wait until 3 candles of the same color are completed. As soon as the next candle moves in the opposite direction and crosses a psychological price level enter the trade. TP 6, SL 20.

Anyway, experience has shown me that the 1st step of any improvement should be detailed analysis of the current status. Thats what I did so far - making a small indicator counting the statistics and writing an EA for backtest. Both (!) have shown that the system in its current form (as as mentioned above) doesn't work!

However, this doesn't mean we can't make it work! I like the idea that after a long run into one direction the market is likely to bounce. But I think we need to add some "rules" for the 5Min timeframes etc. as well to make this a success!

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Postby razorboy » Sun Dec 07, 2008 11:25 am

so then we are all in agreement - exact same thing that TRO has been saying - and while price is price on all charts, it is easier to zoom in on your entry with the 5 minute than the hour - of course if you have programmed the EA correctly, it shouldnt matter
Last edited by razorboy on Sun Dec 07, 2008 12:18 pm, edited 1 time in total.

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Postby razorboy » Sun Dec 07, 2008 12:03 pm

you may be mixing up the entries.

I use the psychological entry point often and in the end, it ends up the same as the buyzone, but you will enter at different times and at different prices. how are you defining the psychological level.?
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Postby razorboy » Sun Dec 07, 2008 12:11 pm

Here are the set ups i have been using

I see a three candle down trend on the H1 - I mark the pivot point of the last hour with a horizontal line and then look at the 5 minute chart

If I am using the buyzone, I just wait for price to enter the long buyzone off of the open

If I am using pivot points, I look for a long set up near, but just below the H1 pivot, but timing it off of the dynamic fibs which would make use of a 5m pivot point, near the H1 pivot.

These two trades usually over lap each other - Alternatively, enter when a new higher high is made on the 5 minute candle - red dots on the dynamic fib lines start moving up through the buyzone
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msforex
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Postby msforex » Sun Dec 07, 2008 12:15 pm

eudamonia wrote:
razorboy wrote:I would cut ms forex some slack unless she is actually being intentionally malicious. If you just run the stats using a single time frame, without dropping down to a lower frame to trade, she is probably right.

When I was trading off of the fib lines on a 5 minute chart without really checking the h1 chart, there would be times I would be doing amazing - typically a trending market - up for half an hour, down for half and hour - back and forth - traces and retraces were spot on - then the market starts trending up and I would get killed when I went in for a reversal trade. Price would retrace to say the 38% level and then bounce the wrong way. I ran a number of spread sheets using only the 5 minute charts for Eurus and USJPN - sometimes there would win, sometimes lose - pretty much a zero sum game if you were lucky. I knew i was missing the obvious

Using the higher time frame to screen trades gets rid of the noise - yes, you miss a few, but you really do get focussed in on higher risk reward trades - the idea being that after 3 consecutive hours, price has moved too far in one direction and someone in the market will at least attempt to push it back


Sorry but the "automated idiocy" that sneaks into these threads really ticks me off sometimes. Some people act like they are the only ones who can code an EA or Strategy. As Michal told me - to do automated coding "you must know what you are doing". Never wiser words said. If you cannot code your own trading platform or a genetic algorithm from scratch then you aren't smart enough to accurately backtest squat. Doubt my word? Talk with Michal - he'll educate you.

I don't waste my time on automation anymore. I realize that isn't where my talents lie. What has and does continue to make money for me are reasonably good setups (i.e. ones that provide some statistical validity) and my ability to read the tape. I won't speak for Avery but I am reasonably confident (having watched him) that this is how he also makes money.

As an aside, yes watching a higher timeframe for a setup is a great filter. It is one of several ways to filter against trends when doing reversion to mean trading. There are several others - ADX, observation of the "stair step", bias in the T&S on the bid and ask, etc.

There are no shortcuts. I have literally spent thousands of hours training myself to trade. I am sure that for most other successful traders they have also put in this time. The lazy get no remorse from me. I just spent another 8 hours today replaying this weeks market and taking trades at 10X normal speed (thank you NinjaTrader). I typically spend 40-60 hours a week trading and reviewing trades (on top of everything else I do). I bet Avery spends much more than this (the man is a machine).

When Avery asks you to "see" the market action this is what he is talking about. So before you waste your time this week looking at a representation of the market (i.e. backtesting) I urge you to spend your time reading the tape. Watch what prices do at support and resistance. Observe the significant turning points in the market. Observe how prices move in waves. Now can you get on your surfboard and surf - or are you going to try to backtest it?

Edward


Edward,

Backtesting does have weaknesses and is certainly not a "holy grail", but it is very helpful in "pre-selecting" strategies and setups and getting market statistics in no time!

Certainly EAs can not (yet) trade as good as (some) humans. An EA can double your account in two weeks and then wipe it out I a single day. Thats because they cannot SEE any price trends or long term market actions - they work well for a certain period only and then need to be "adjusted" again.

But EAs/backtesting does have one huge advantage: EAs do not show any emotions! They do EXACTLY what they are told to do - so no "add a bit more stoploss" or "it would hurt to close this losing trade".

Again, the reversal has a 85% chance for success hence statistically still is not profitable - I think we all can very easily get fooled by this numbers...

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Postby razorboy » Sun Dec 07, 2008 12:39 pm

Msforex (so formal)

I truly am quite interested to see you work this out as I had come to the same conclusion as you had initially. I found making that making this work isnt a matter of adjusting your stop loss on the fly - its timing the entry right. the one thing I did find in my spread sheet work is that at some point, the 20 (22 if you want to include the typical cost of entry) pt stoploss worked like a charm (zero losses) and at others, it got blown out 4 to 5 times in a row. Looking back, it worked when price had deviated far from the mean.

Also, is your EA double dipping if price moves above the entry trigger for a second time in the hour? or just making one purchase on the first cross?
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Postby winny » Sun Dec 07, 2008 1:30 pm

msforex wrote:

However, this doesn't mean we can't make it work! I like the idea that after a long run into one direction the market is likely to bounce. But I think we need to add some "rules" for the 5Min timeframes etc. as well to make this a success!


msforex, I understand your concern. I must say that TRO's buyzone strategy worked out well for me in the past weeks. I hope this will continue. But one of the reasons why it does work for me is the fact that I also let profits run at certain moments (I am not satisfied with 10 pips if I can get 50 pips in one run), because of the fact that I do get stopped out regulary. For me the Buyzone is simply a strategy/rule to get in at the right side of the market.

In the past days I noticed that TRO also trades the Buzzard Reversal (3 candles in a row). This can be done 24 hours a day he wrote.
I have not tried it, so I do not know if this is strategy is a winner.

I really think that it does not really matter which strategy one uses regarding the buyzone. But I do think that it matters if you do, or do not, let profits run at certain moments. This is crucial (it is for me).

So I think both setups can be used to trade profitably, but with one small extra rule. And that is to let your profits run at certain moments if your on the right side of the market.

But again, if one can take 5-10 pips net out of the market with each trade, and does that over and over again, that would be very much ok I guess. I personally do not/can not trade this way. It is just not my thing.

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Postby winny » Sun Dec 07, 2008 2:11 pm

Use the BuyZone with a good/fast moving trend indicator on a lower time frame, that will do the job. It will also work with the 3 Candle Buzzard Reversal I assume.

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Postby razorboy » Sun Dec 07, 2008 4:28 pm

I think you are missing Ms Forex's point. The point is to apply a set of strict rules, not just let profit ride for a bit when you "think" you can get more. I am probably going to go over the past week' EurUSD data as well using the 3 hour rule and see what I come up with

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Postby TheRumpledOne » Sun Dec 07, 2008 4:39 pm

msforex wrote:
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.


TRO - the EA works exactly the way you recommend (unless I have missed something - then please correct me): wait until 3 candles of the same color are completed. As soon as the next candle moves in the opposite direction and crosses a psychological price level enter the trade. TP 6, SL 20.

Anyway, experience has shown me that the 1st step of any improvement should be detailed analysis of the current status. Thats what I did so far - making a small indicator counting the statistics and writing an EA for backtest. Both (!) have shown that the system in its current form (as as mentioned above) doesn't work!

However, this doesn't mean we can't make it work! I like the idea that after a long run into one direction the market is likely to bounce. But I think we need to add some "rules" for the 5Min timeframes etc. as well to make this a success!



I looked at the code and I told you it does NOT accurately reflect the BUZZARD trade.

You mixed BUZZARD WITH PSYCHOLOGICAL, which is OK.

But like I said, you need to use the BUY ZONE to trigger the Buzzard Trade.

I posted my trading screens earlier. I use the Buy Zone on the M5 chart to trigger the entry.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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