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TheRumpledOne
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Postby TheRumpledOne » Sun Dec 07, 2008 4:45 pm

razorboy wrote: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


THAT'S NOT THE POINT!!

THE POINT IS TO MAKE MONEY!!

These "rules" are really "rules of thumb" or guidelines.

Trading is like being in THE MATRIX

You can bend some rules and you can break others.

You have to "go with the flow".

ZEN MIND

BE THE LEAF!!
Last edited by TheRumpledOne on Sun Dec 07, 2008 4:49 pm, edited 1 time in total.
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Postby razorboy » Sun Dec 07, 2008 4:48 pm

TRO

I am well aware of where you are coming from - all I was getting at is that MS Forex was trying to do some testing with rules and you cant just decide to let it ride a bit
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Postby razorboy » Sun Dec 07, 2008 4:54 pm

which psychological level was the EA using? the 1H?
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Postby razorboy » Sun Dec 07, 2008 5:13 pm

Previously I was basing all decision on what i saw on the 5 min chart - and having varying degrees of success. So if the EA is using the 1 hour pivot points for entry, will obviously have the same type of results
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Postby razorboy » Sun Dec 07, 2008 7:05 pm

I've never even looked at an ea, so not sure if my comments are right or not

TP 10 SL 30

Log (DL_DEBUG, "reversal candle forming - waiting for crossing level");

// calculate current line

CurrentLineInt = (Bid / LineDistance)*LineDistance;

isnt the currentLineInt equal to the bid then - the division and multiplication cancel each other out?
CurrentLine = CurrentLineInt + LineDistance;

So now we add 0.5 to the Currentline so it is bid plus 0.5
Log (DL_DEBUG, "Current Line is:" + CurrentLine + ", Bid =" + Bid);




if (Bid >= CurrentLine)

{

Log (DL_DEBUG, "Signal Order Buy");
Buy if the bid is great or equal to bid plus.05?

Did i miss something
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Postby eudamonia » Sun Dec 07, 2008 7:15 pm

TheRumpledOne wrote:
razorboy wrote: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


THAT'S NOT THE POINT!!

THE POINT IS TO MAKE MONEY!!

These "rules" are really "rules of thumb" or guidelines.

Trading is like being in THE MATRIX

You can bend some rules and you can break others.

You have to "go with the flow".

ZEN MIND

BE THE LEAF!!


Agreed. Adhering to arbitrary rules is pointless. You need to see each trade as an individual. If the tape shows that the market has stalled at your entry point then why would you ride out a 20 pip loss. If the tape keeps printing aggressively and quickly on the ask after you enter your long then it may be very advisable to ride the trade for 20-30 pips.

For those of you who haven't read it - I strongly suggest you read my "Trade like a Cheetah" thread.

The way I trade I end up with a lot of scratched trades and small losers (3 pips-5 pips). I don't sit in 20 pips drawdowns. That ain't my style. I also hit a few solid grounders - 5-7 pips. But what makes the real money is to know when you have a genuine opportunity to take the stuffing out of the market and go for 20 pips or more. These opportunities happen maybe half a dozen times a week. But you must have the patience (like a Cheetah) to wait for the weakest, sickest gazelle in the herd - and then BAM lunch time!

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby eudamonia » Sun Dec 07, 2008 7:26 pm

msforex wrote:
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...


Msforex,

No - you are missing the point! EAs do not and cannot work for backtesting. The very data that you are relying on for signals is absolutely no good. It is NOT timestamped tick data. It is not filtered. It is "reconstructed" 1 minute candles.

Don't believe me? My timestamped tick data from my broker Interactive Brokers is completely different from an Alpari or IBFX backfill. Indeed, out of the 200 or so banks and datafeeds that eSignal tracks (all time stamped tick data) NONE of them match a MT4 backfill. Why? Because the backfill at MT4 doesn't really exist. It's imaginary simulated data. Think this doesn't matter? I've had 5 minute candles in Alpari backfill that printed in reverse order (i.e. they went down when they should have gone up first) from what really happened on that same live feed!!!!!!!!!!!

Do you get it? So good luck with your imaginary simulated EA.

BTW, this is just one of the many many potential pitfalls of B.S. backtesting.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby razorboy » Sun Dec 07, 2008 7:30 pm

Edward

I see where you are coming from - you just cant program like that unless you are into fuzzy logic. MsForex was trying to do some testing, so I figured at least make sure she is testing the right things

I quickly ran through the last 5 days of EURUSD 5 minute and 1 hour data and the MTF approach seems to hold up quite well (obviously)
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Postby eudamonia » Sun Dec 07, 2008 7:56 pm

Razor,

To clarify - one can do automated testing. But they must KNOW what they are doing.

When Michal kindly showed me some of the 100's of pages of C# code he had created just to ensure that he had quality data (which he compiled himself), I realized I would never be an automated programmer. If you aren't capable of understanding the whys and hows of how to do something like this - odds are you aren't gonna be able to accurately backtest your ideas (particularly for short-term trading).

Obviously testing an EA that only trades off of 4 hour bars is a different ball of wax.

Oh and no fuzzy logic is required - just real, timestamped, filtered data.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby razorboy » Sun Dec 07, 2008 8:17 pm

He who knows he is a fool is not a big fool :)
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