Cost Averaging System - page 16
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Carl,
You are right. There are plenty of trend following ideas around. Cost averaging is always anti trend. I am looking at trend exhaustions and the RSI maybe a good place to start looking.
Let me give you all a little background on how I got on to this kick. A couple of years back I bought a system of EBay which was based on cost averaging. I think the original firebird EA is based on it. The original system looked at daily bars and moving average envelopes. It was always trading same number of lots and not increasing the size of lots. After I bought the system, I tested it on Wealthlab and it was one of the few systems that worked. However, it was a slow and steady profit... just a few trades a year, but nice growth of profit and low risk, as you are forced to trade only a small portion of your portfolio because of the open ended risk. The guy who sold it was a money manager based in the UK, and he told me that him and his colleagues would be happy to make 25% a year. A few million dollars to manage, and that kind of return makes you happy.
Anyway, after that I got into other things and never really experimented on this idea. Suddenly I land up with the Firebird EA and that gets my wheels churning. I modified it, added some essential engines that were missing and now you have this cost averaging system. I think this system has promise, as long as you know how to control the risk. The way to do it, as the guy who originally traded the system told me, is to trade small. No need of a stop loss, but just a small portion of your capital. That means you are controlling greed and fear... the ingredients that can make or break a trader.
Anyway, the RSI system has some safety nets built into it. Also, the random entry, if you can trade it with large capital can withstand deep drawdowns and provide you with a profit at the end. Again, trade small... that is clue.
Thanks everyone for your time and offer for help. My goal is to make this cost averaging suitable for traders with smaller bankrolls. I can see that all of you are sharing that goal and I hope we can all succeed together.
Aragorn,
I see what you are saying. However, now you are wanting to catch the trend... is this true? Because ADX rising with +DI/-DI rising is catching a rising/falling trend.
In the codes current configuration, that would be very difficult. The way the indicator works is... the ADX peaks signaling a possible trend exhaustion. ADX falls as price consolidates or continues the new trend. ADX rises when the new trend is established. Start over again. My use is well documented in many technical trading journals.
My goal was to let Maji's code do its work. Not modify it to be a trend follower. I intended for new counter-trend positions to be in a better position strategically... by not willy-nilly entering positions just based on the pip-step.
Please clarify if I have mis-understood. I don't think Maji wants to turn this in to a trend follower.
CarlSo if I understand you correctly this will only allow 'tradenow' precisely when the peaks are hit. not before and not after. Therefore it's only placing trades precisely on the peaks themselves and forgetting about everything between the peaks. is this correct? Becaue the 'peak' is part of the determinant criteria of the if statement and the only time it will be true is when the peaks are hit. Is this correct?
My goal was not to make it a trend follower. Perhaps my goal is coming at this differently from what you have here...
If you look at the channel idea I was talking about earlier. I see this is safe to trade long within an uptrend until it nears the exhaustion of the trend. Much like the EMAcross EA would get into trouble when it had taken trade after trade as the trend moved up until the reverse and then it ended up with a dead position it couldn't recover because it was outside the trading range of the market. That one trade sat there and killed the profits of everything else.
When I worked on that EA I was looking for some way to clean up the abandoned trades and I was looking for cost averaging but didn't know it. I was looking at the time at the divergence trader and it's basketprofit but what in fact this cost averaging is doing is similar. It uses the profits of one trade to cover the losses of another trade. The thing is to get the trades that win to cover the trades that lose. That's the real trick isn't it.
Probabilities are that if you place the trades at peaks of the ADX at trend exhaustion points you do increase the odds of winning the position. But those peaks are spread out and between them I'm thinking should still be open season. If you know which way the trend has reversed to why not allow trades in that direction until it NEARLY exhausts. Again my goal is to not end up with trades in the direction of a trend that has reversed away from them.
You and I are both saying somewhat the same thing I think. Maybe, Maybe not.
Obviously when you have a peak you have a reversal and it's high probability to place a trade at a reversal. But until you have another reversal it is also reasonable to trade with the trend until you reach a point of uncertainty about it's continuance. Then wait for the next peak to start it again.
I'm looking for high probabilities most of all. Anything that is high probability weather trend or countertrend it doesn't matter as much as the probability of it being right enough to make a profit off of. It's the low probability trades I am trying to filter out.
Every system that makes money I know of is built on being right a larger percentage of the time than it is wrong. In this case being wrong once can be overwhelming even when trading small lots. The positions themselves have to have a high win/loss ratio. That's what I'm seeing. When you have a system that wipes out a hundred winning trades with one losing trade you're win/loss ration better be darn near perfect if you expect to keep anything.
As Maji has proposed this is not for the deep pocket guy who has a huge equity advantage to play with. But that in effect is exactly what this NEEDS unless it's win/loss ratio is practically bulletproof.
ADX Trend Exhaustion...
Aragorn,
Our goals are probably similar. However, what you have explained to me as far as entering more trades in the direction of the trend is NOT what Maji's EA does. We do not want to add that function to this EA.
Run the strategy tester in visual mode on a 15min cross. You will see what I mean. The original code, without my ADX mod will run as follows...
An initial trade is random, short or long. If the initial trade is long and price moves up to your profit target, the long is closed for a profit. If price continues up X number of pips, another long is opened. The EA will continue this cycle collecting profit as long as price continues into profit from the initial order.
If, after the initial long order, price falls, now we get into the martingale mode of the EA. Longs will continue to be added at 20 pip intervals as price falls. And lots will be added at 1.667 times the number of trades. So essentially, the cost basis is lowered, and we can eventually take a profit at a lower price for each position that is opened. Hoping that price will rebound in the other direction before you run out of margin/equity.
My ADX mod does not alter the way Maji's EA works. it only times the new counter-trend positions to a hopefully lower risk consolidation/trend exhaustion. So instead of opening new long positions as price falls 20 pips at a time, new long positions are opened as price falls 20 pips or more AND ADX signals a trend exhaustion. Hopefully, lowering the risk of opening up to many positions against the trend which will drain your margin.
You are continually talking about taking trades with the trend. This EA will only do that by accident/at random. It does not care what the trend is. ADX does not care what the trend is either (only +DI/-DI does), only the strength of a trend. Thus I believed that ADX is in line with the spirit of Maji's EA. I only reference +DI/-DI to filter technically relevent consolidation periods.
Carl
Can someone suggest to me what is better: wait or close this short positions on GBPJPY? Obviously the price is going in a uptrend?
Can someone suggest to me what is better: wait or close this short positions on GBPJPY? Obviously the price is going in a uptrend?
Fory,
I don't know this particular EA and this particular system.
I just looked at my informational templates:
- it is uptrend on H4 and D1 Ichimoku chart. Nothing is indicating for future possible reversal for sell.
- M5 timeframe. Price is starting to be reversed for the correctional sell. Just started. It will not be for a long itme - probable it will be duting the 5 or 10 hours only and then it will be buy once again (corectional buy _ up to the end of Monday or middle of the next week). And after that only the price will come to final correctional sell trend. But correctional only. And I am not really sure that GBPJPY will go down for 200 or 300 pips.
- it may be breakout on some news.
So all you can do now it the following:
- visit some news website where upcoming news are posted just to analyze this GBPJPY.
- wait to Monday open bar D1 to get more technical information.
Statement for first week
Statement for first week on FXDD, suffered from big DD by USD/CHF, USD/CAD. Initial fund 5000$, current balance 4342, equity 4198.
I'd be happy to test it. It looks interesting. Please post the EA with any suggested settings. Thanks.
yuxiaotao1982@gmail.com
Swap rates per 1 standard lot
Symbol Buy ($) Sell ($)
AUD/CAD 2.90 -3.95
AUD/JPY 10.85 -12.75
AUD/NZD -3.65 3.00
AUD/USD 0.90 -1.50
CAD/JPY 8.75 -10.20
CHF/JPY 2.00 -2.65
EUR/AUD -10.75 9.15
EUR/CAD -4.65 3.60
EUR/CHF 5.50 -6.30
EUR/GBP -7.00 4.90
EUR/JPY 9.10 -10.50
EUR/NZD -16.80 13.75
EUR/USD -8.65 7.20
GBP/AUD -6.45 4.85
GBP/CHF 15.85 -19.65
GBP/JPY 21.55 -25.40
GBP/USD -3.50 2.15
NZD/JPY 10.95 -13.15
NZD/USD 3.25 -3.75
USD/CAD 2.65 -3.20
USD/CHF 9.90 -11.50
USD/JPY 13.00 -14.60Can someone explain this to me? So if I bought one lot of GBP/JPY I would get paid $21.55 for that lot in interest. How often? are the specific times? If I was short would that mean I would be charged -$25.40?
Swap Rates
See link below:
http://www.interbankfx.com/swap_rates.php
is this EA similar tu multi_lot_scalper....using counter trend also