Some Ideas to Select Trading Signals - page 4
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Ideas:
OK, so you have your own methodology and one or more trading signals selected.
Now I have a tip: what about select the best momentum to start your subscription?
As you can define the right time, and you really believe in the trading signal, the best momentum to start is when prices are near stoploss.
For sure, if you really believe in your methodology!
I've been analyzing some signs of the live account, and I found five that interested me. My strategy will be to choose three signals for me to make signatures, I go enter in all the three beginning with 250 USD.
I made a brief analysis, see table below:
Name Signal
SharpeRatio
RecoveryFactor
Initial
Dep
Profit
Growth
Signal Time
Maximun
Cons. Wins
Maximun
Cons. Losses
system I_MT5 (nosforex)
0,37
29,25
181,00 USD
138,95
76%
1 month
17
2
Gorshochekvari (dimadima)
0,54
10,91
40000 RUR
25060,19
42.55%
1 month 15day
17
3
Gnawul Diamante FX Strategy (mrlfx)
0,27
2,74
50 USD
287,07
545,25%
2 month
8
4
Beginner (pavlov)
0.35
2.63
100 USD
473,24
472%
2 month
48
2
Samba Estratégia CFY2Y1 (Figurelli)
0.18
1.45
9.999,70 USD
86263,70
862,66%
3 month 15day
14
12
I selected the order of classification of the signals in relation to Recovery Factor, I think this is a very beautiful name: Recovery Factor <:), then I think that if the guy has a very high recovery factor, your strategy is pretty good.
PLEASE, ANYBODY could explain me the functionality of these two information: Recovery Factor and Sharpe Ratio.
Thanks
Paulo Brasil
PLEASE, ANYBODY could explain me the functionality of these two information: Recovery Factor and Sharpe Ratio.
Thanks
Paulo Brasil
https://www.mql5.com/en/docs/constants/environment_state/statistics
Recovery Factor = total net profit divided by the max draw down. Bigger is better.
Sharpe ratio = total return divided by the variance or standard deviation. In other words, how volatile is the balance as we move toward the profit? Is it close to a straight line, or does it get to the goal by zigzagging all over the place? Bigger Sharpe is better, since it means that the variance is lower. See Sharpe ratio
Out of all the stats on the website, I think these two are the best to use, and you are off to a great start.
I liked Figurelli's comment about momentum, and I see it this way. You need to get a system that actually MOVES. Some have great stats for safety, but they rarely trade. Find one that trades at least a few times each week, that has a reasonable average trade size of 4 to 20 pips (too many only get an average of 1 to 3 pips, not thinking about subscriber's slippage), and that has good risk control stats.
As a great resource, I recommending going to and seeing all the stats they have there.
https://www.mql5.com/en/docs/constants/environment_state/statistics
Fator de recuperação = lucro líquido total dividido pelo máximo sacar. Maior é melhor.
Índice de Sharpe = rendimento total dividido pela variância ou desvio padrão. Em outras palavras, quão volátil é o equilíbrio à medida que avançamos em direção ao lucro? É perto de uma linha reta, ou ele chegar ao objetivo, ziguezagueando por todo o lugar? Sharpe maior é melhor, pois significa que a variação é menor. Ver índice de Sharpe
Fora de todas as estatísticas sobre o site, eu acho que esses dois são os melhores para usar, e você está fora de um grande começo.
Eu gostei do comentário Figurelli sobre momentum, e eu vejo isso dessa forma. Você precisa ter um sistema que realmente se move. Alguns têm grandes estatísticas de segurança, mas eles raramente comércio. Encontre um que negocia pelo menos algumas vezes por semana, que tem um tamanho comercial média razoável de 4 a 20 pips (muitos só recebem uma média de 1 a 3 pips, não pensando sobre o deslizamento do assinante), e que tem um bom controle de risco stats.
Como um grande recurso, eu recomendando vai e vendo todas as estatísticas que eles têm lá.
Unfortunately, MQL5 doesn't show stats in "pips" but dollars, so it is very hard to compare systems.
And they don't show the duration of the trade. Ideally, I would get a signal that has an average trade time of less than 18 hours. This shows that they are not swing trading and being subject to the big market moves while they sleep.
The other thing I don't like is that they don't show the high mark and low mark of each trade, and the draw down is recorded for only closed trades. In reality, you would like to know the AVERAGE NEGATIVE EXCURSION of each trade.
More thoughts later.
I think this question that I go now write is relevant to the subject in thia topic.
I have another question, I have always worked with the MT4 platform, I have little time that I use MT5, but I'm not still 100% conversant.I think that many traders are in the same situation. My doubt may be of many people .
So I want to sign with three different signal providers, in consequence, I need to have three separate accounts live on my broker to MT5 platform, is this?
In the MT4 platform there would be this problem, because when I go with 3 trades followed in the same currency pair, I can work with the orders separately, for example, I am going to insert three different targets and three different stop loss, I can to close an order and leave the other two order in opened.
In MT5 platform seems to me that this does not happen equal the MT4, if I enter 3 orders for the same currency pair , the MT5 will add the sizes of the volumes, add targets, add the Stop Loss and everything will be conditioned to a single order. That way I will not be able to put three signal providers on same broker account
Or is there some setting in MT5 to stay equal to MT4 in this direction, if is there I'm not aware.
Help me!!!!
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)
Ideas (this is for the MT5/MQL5):
I think MT5/MQL5 are evolving very fast to offer a great trading signal subscription tool. The high level integration between clients and servers and trades routing architecture is for me a killer app and very innovative.
So any ideas at this moment are no critics but just efforts to contribute in this way.
I will expose two ones that I consider very relevant to developers, providers and subscribers:
First: the rating formula is secret, no problem about that, but in my opinion it could be open and more, any subscriber could adjust a self formula to select trading signals. In this sense, imagine a field in MT5 platform where you define a rating formula as custom max resource is used for backtesting. For instance rating=PF*RF/DD*subscribers (where PF=Profit Factor, RF=Recovery Factor, DD=drawn down and subscriber the number of subscribers of the trading signal). With a tool like this, subscribers can change anytime their own formula and compete each other trying to find the more profitable sginals.
Second: while First idea is just a dream, I think is very useful publish the MQL5 rating value like, opening a new quantitative door to subscribers/developers/providers analyse the trading signals, like, for example, user rating here in the forum. This rating value would be present in MT5 signals table and MQL5 page of the signal.
I hope, in the near future, MQ enable the second idea to facilitate identify the quality of each trading signal in a quantitative way.
I think this question that I go now write is relevant to the subject in thia topic.
I have another question, I have always worked with the MT4 platform, I have little time that I use MT5, but I'm not still 100% conversant.I think that many traders are in the same situation. My doubt may be of many people .
So I want to sign with three different signal providers, in consequence, I need to have three separate accounts live on my broker to MT5 platform, is this?
In the MT4 platform there would be this problem, because when I go with 3 trades followed in the same currency pair, I can work with the orders separately, for example, I am going to insert three different targets and three different stop loss, I can to close an order and leave the other two order in opened.
In MT5 platform seems to me that this does not happen equal the MT4, if I enter 3 orders for the same currency pair , the MT5 will add the sizes of the volumes, add targets, add the Stop Loss and everything will be conditioned to a single order. That way I will not be able to put three signal providers on same broker account
Or is there some setting in MT5 to stay equal to MT4 in this direction, if is there I'm not aware.
Help me!!!!
https://www.mql5.com/en/docs/constants/environment_state/statistics
Recovery Factor = total net profit divided by the max draw down. Bigger is better.
Sharpe ratio = total return divided by the variance or standard deviation. In other words, how volatile is the balance as we move toward the profit? Is it close to a straight line, or does it get to the goal by zigzagging all over the place? Bigger Sharpe is better, since it means that the variance is lower. See Sharpe ratio
Out of all the stats on the website, I think these two are the best to use, and you are off to a great start.
I liked Figurelli's comment about momentum, and I see it this way. You need to get a system that actually MOVES. Some have great stats for safety, but they rarely trade. Find one that trades at least a few times each week, that has a reasonable average trade size of 4 to 20 pips (too many only get an average of 1 to 3 pips, not thinking about subscriber's slippage), and that has good risk control stats.
As a great resource, I recommending going to and seeing all the stats they have there.
Steven, well remembered, I like some of stats too, for instance Risk of Ruin, I think this analysis is very relevant to be used in the selection methodology.
Note that they are now a new player and force in Autotrade, like MT5 (are they planing compete copying trades without a good client/server architecture? In my vision this is a lost of time and money, since without a great platform and architecture you don't have chances to compete in this field.