Some Ideas to Select Trading Signals - page 11
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Ideas: change management
As market and prices can change very fast, I think that so relevant as the methodology to select the trading signals is change management.
So, you can set stop values, based in equity value, to change the trading signals as soon as possible (both winners and losers).
MQL5 doesn't want to publish their exact algorithm. I don't see the harm.
I doubt that they will want to make this tool an official part of MQL5, but the forum is a great spot for sure to offer to followers.
But this tool in tandem with MQL5's ranking will make it very easy for subscribers to WEED OUT the bad.
Take it from me, just because someone is at the top of the list on ANYONE's "Trading Signals Analyzer" means that the fun has only just begun.
Past performance can only hint at what is coming next. I was burned over and over again on as a follower with the "best" systems by my intricate rankings (pictured previously)
But we are just trying to get the odds in our favor.
And that is all we need.
MQL5 doesn't want to publish their exact algorithm. I don't see the harm.
I doubt that they will want to make this tool an official part of MQL5, but the forum is a great spot for sure to offer to followers.
But this tool in tandem with MQL5's ranking will make it very easy for subscribers to WEED OUT the bad.
Take it from me, just because someone is at the top of the list on ANYONE's "Trading Signals Analyzer" means that the fun has only just begun.
Past performance can only hint at what is coming next. I was burned over and over again on as a follower with the "best" systems by my intricate rankings (pictured previously)
But we are just trying to get the odds in our favor.
And that is all we need.
Good point, visibility is key today, but and others also have a secret algorithm.
Publish the rating value (as far as I know this is secret too) is the first step.
But MQL5 trading signals rating is a baby, I hope MQ will publish all this informations in near future.
Anyway, integrate the "Trading Signals Analyzer" spreadsheet in MT5 would be very good (so you can adjust your methodology in real time).
The other way around could be a crawler in MQL5 trading signals pages, parse all informations, and build a proprietary web tool to analyse, but this looks like a waste of time and resources. In this sense, a RSS link could be a first step to help integrate this performance data.
I enter into this post because I'm a customer future and I want to have the maximum of information possible.
I want to raise a question.
To stay easy my communication, I will call the signal provider as Master and the client signal as Slave.
I realize that never the Master show his strategys of risk management to Slave futures.
I enter into this post because I'm a customer future and I want to have the maximum of information possible.
I want to raise a question.
To stay easy my communication, I will call the signal provider as Master and the client signal as Slave.
I realize that never the Master show his strategys of risk management to Slave futures.
Is this correct?
No this ins't correct. The "slave" will not have a volume of 2.00. It will be something like 2.00 / (77.000 / 1200) * coefficient (see exact formula here). So the risk for subscriber is proportional and will be similar to the one of "Master".
Thanks for your support! Now, I get it!
Idea: regression analysis
I like too much the red regression line in trading signals growth % graphs draw by MQL.
This gave me an idea, that I would like to share and hear your opinions about.
For instance, someone can decide to just invest in one signal when growth % (blue line) is above the red line (or the other way around).
Do you guys believe this red line analysis can be useful, in some sort, to help choose any trading signal entry/exit time?
In an effort to help both subscribers and providers, I am trying to answer what I think are the two most relevant questions:
(second installment)
(A) Question: "What do signal followers really need and want?"
Answer: 1. Don't lose my money
2. Then make me some more.
(B) Question: "How can a signal provider best meet those needs and wants?"
Answer: See below
Preface: Followers that are new to FX trading DO NOT know what is best for them. They do not realize the risks that some high-flying providers may be subjecting the follower's brokerage account to. For example, they don't realize that the monthly USA non-farm payroll report is HUGE. They must watch the provider successfully navigate this potentially deadly news release. Because of this, they must do nothing with a signal system for a few weeks. The followers don't realize that max leverage and max margin is actually NOT one of God's gifts to man, but a flowing lava river of temptation that must be bridled and cooled.
1. Educate. So a provider needs to EDUCATE as well as have great results. Some providers teach about money management in their posts. They explain some of their actions. I think this is like the teacher of the statistics class I had in college. More than anything, she taught us to be good consumers and be mistrusting of the advertising hype. The more signal providers educate their own clients, the more the clients will learn and will repay that education by sticking around a bit longer than they might have otherwise when a system is not performing as well as it was.
2. Money management. A provider should discuss and demonstrate good money management. Don't take huge risks. Demonstrate slow and stable growth rather than flashy huge risky trades. They should keep use of margin reasonable and limit draw-downs by employing appropriate stops.
3. Improve their entries and exits. The essence of good trading is to minimize the bad trades obviously. I have been very guilty of mixing my swing trading and day trading methods when trading manually. I see a trade on a 15 min or 5 min chart, but I forget to drill down to the 1 min trade entry chart. I have been bit so many times.
(more to come)
Time to continue! "How can a provider best meet the needs of subscribers to not lose money AND grow the account?"
(These ideas are to help subscribers use the appropriate magnifying glass when selecting trading signals)
4. Demonstrate Discipline. When the provider constantly shifts methods, stops or position sizing, the follower becomes confused for sure, but more importantly the little bit that the follower has learned about the market becomes clouded with doubt. The human mind is the best pattern recognition machine that the universe possesses. And it is also an amazing learner as well, although it needs lots of repetition to fully establish and new neural pathways. As the signal provider modifies the "black box," the learning component is clearly sabotaged. Yes, many followers will not care one bit about learning but only want the cash, but many are trying to understand trading and graduate to their own EAs or discretionary attempts. A good signal provider will be consistent.
5. "For the love of STOPS." (In the USA, people sometimes say, "For the love of God . . ." and then they go on to say what is so important to them) I mentioned stops in #2, but it gets its own treatment now. From my 7 years of trading, I have learned that there is no single thing that is more important than consistently employing reasonable stops. The definition of "reasonable" depends on your account size, time frame, and risk tolerance. In my own trading I sometimes trade without stops at an extended high or low in the market where massive spikes up or down occur, but this is the exception, and I never "load up" the positions since the market can continue for weeks against the prevailing retail analysis. But 98% of the time, the lack of stops is pure insanity. No one likes to be wrong. But we are not here to be right, we are here to extract cash from the market. If the strategy gets 50% losers, but ends up 10% by the end of the year, was it a successful year? For some people, YES. Most traders (author included) have replenished micro-accounts more times than we can count. Why? Because we do not honor stops--pure and simple. SO, what can the provider do? Choose a stop, set it, and never widen it. This act will also teach subscribers by example. The big break though for me in my discretionary trading was two-fold: 1. Smaller margins. When I moved from futures trading with about $10 per tick per contract (oil and Russell) to the small positions possible in FX, my stress level dropped considerably. Previously I could not accept losses or I would be unable to trade the next day because I was too close to my margin and the broker allowed me to go into the negative margin realm. So I placed a trade and hoped it would go positive. Yes, I was pretty stupid. 2. Losses are part of the game. The second powerful idea was that LOSSES are simply part of the game. With an EA, the losses are highly quantified. But a manual trader must just pretend he IS the EA and follow his rules no matter what, take the hit, and move on. He must keep his eye on the big prize. I was amazed at one signal provider I saw on last year that had a mere 47% winning ratio, but he had TONS of subscribers. Why? Because he was profitable, and everyone knew that he would ALWAYS honor his 50 pip stop loss. A good signal provider will use consistent stops.
6. No Martingale Strategy. There are many signal providers who use a martingale (doubling up on draw downs) or modified martingale (simply adding an equivalent position during a draw down). YES, This works great most of the time. But when it doesn't and the market keeps going, it is CATASTROPHIC. "Averaging down" is so dangerous it should be avoided at all costs. So what is a provider to do? Only add to winning positions or do an "all in - all out" style. A good signal provider will NOT need 10 or 20 positions to trade. He or she is admitting that they spend most of their time "guessing" instead of doing proper technical analysis. So how can signal providers meet the needs of subscribers? Use fewer positions and become better technical traders. A signal provider worth anything should be able to use 5 or fewer simultaneous positions. 3 is even better.
More to come . . .Idea: regression analysis
I like too much the red regression line in trading signals growth % graphs draw by MQL.
This gave me an idea, that I would like to share and hear your opinions about.
For instance, someone can decide to just invest in one signal when growth % (blue line) is above the red line (or the other way around).
Do you guys believe this red line analysis can be useful, in some sort, to help choose any trading signal entry/exit time?
I think we are connected in thought, I was thinking the same thing, follow my idea:
I would not use the red trend line due the example below:
Let's take the example of the link www.mql5.com/en/signals/5092
The idea is the Metaquotes that puts a type of option for the customer , a "Trailing Stop" in value percentage about the Growth percentage.
The Subscriber's terminal would determine this option in %, in this exmple I put 20%
In the image above, the Growth percentage is 29,92%, then 20% would be 23,94, in the chart would paint a horizontal line, eu draw in the green color.
If percentage reach and cross this green line to below, the trade is closed in the Subscriber's terminal, and MetaQuotes would send msg to customer. So The customer would authorize new entry in trade in this signal provider
The customer would have profit!