Follow The Bouncing Pip - page 92
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indicators
Thank you all.
In the illustration that Igor offered, there were 49 consecutive repaints -- therefore 49 consecutive losses. I have never met anyone, regardless of their money management skill, who could trade through 49 consecutive losses. It's too tough, mentally.
Why not enter in the reverse direction of the zigzag each time and take the profit that BigBear's stop loss would give? Winners would be 70%+, and you wouldn't have to worry about filters. The most important thing would be to contain the loss that this reverse logic would incur when the trend actually reversed.
False signals for any indicator come at lower time frames. So, the reverse logic might be more profitable in time frames less than four hours. I think this could be tested with the ghost arrows that someone produced to show the false signals earlier in this thread.You would have to run a pretty tight stop to do this with good MM on the smaller timeframes, though you might be able to have a SAR at your stop level to catch a trend reversal when it did occur. Instead of chasing all those small positions and paying spread each time, I think it would make more sense to just try and hit the bottom/top entry and ride it all the way.
49 losses was on the 1hr chart without taking into consideration candlestick formations, it would be interesting to see what forex11's profit was for that pair over the same period since I think he trades with some discretion on the same TF. Remember also that it was only one pair, if you diversify over 7 or 8 pairs which don't have the GBPJPY's tendency to only move up for long periods of time, you could still make some profit.
Improving this method
If Martingale is added and you have 45 losses in a row, there is not enough money tin the world to cover the losses.
This is because doubling lots at every loss, even starting with a penny, would result in 2 raised to the 49th power. This is a huge number.
Add CCI 34 or 55 to the chart and you will see a very good filter, especially for exits.
On the attached chart you will see how almost all false signals are avoided.
This is what I am currently testing.
Robert
another example
Here is another chart showing effectiveness of CCI
Robert
Martingale may not be the term..."averaging in" as it goes against you at 0.01 lot at a time...this brings the average trade price higher/lower as you are waiting for the turn..
ES
Martingale may not be the term...averaging in as it goes against you at 0.01 lot at a time...this brings the average trade price higher/lower as you are waiting for the turn.. ES
The Martingale idea is that when you have a loss on 1 unit the next trade is doubled to cover the loss with the first half and hope for a win on the second half. This is continued until you have a win.
Are you suggesting the first trade is 0.01 lots , then 0.02, then 0.03, etc?
Or is each trade for 0.01 lots?
Either way it does not help because of the series of losses not being covered by the final win unless there is a large return on the win.
I would prefer to use a filter.
Robert
The attached stochs with alarm will filter out a lot of false signals also
Attach ZZ pointer to H1 chart
Set timeframe of Stochs to 1440 and only buy when stochs headed up and of course sell (take arrow) when stochs going down. Best signals when 80 and 20 lines broken
name of game is Patience!
Ea
I have volunteered to put up the cash to have the EA produced by Mr Pip. We are working behind the scenes to see what works best. I will spare no expense to put together a top notch EA based on simple yet effective approaches.
I am reading and developing in silence.......
DonEDIT: I have found a bug in EA that makes it open multiple orders, so these results are invalid. I am working to correct the code.
Well, I have taken the original EA that zmax wrote, stripped out all unnecessary code and ran it on H1 GBP/JPY. Next will be to try getting out at the first zig zag. I ran it 1/1/07 - 9/7/07, and it lost money. However, I ran it 1/1/06 - 9/7/07 and it returned big.
There's a huge drawdown, so I added code to optimize the stop loss - testing that now. The number of consecutive losses would test even the hardiest of traders I think. But this system is profitable - extremely so even with its simple rules. 500% in 21 months? Yes, a huge drawdown, but did I mention - 500%?
Bars in test 15298
Ticks modelled 5665635
Modelling quality 90.00%
Initial deposit 10000.00
Total net profit 53287.95
Gross profit 98153.71
Gross loss -44865.75
Profit factor 2.19
Expected payoff 59.01
Absolute drawdown 4774.05
Maximal drawdown 94583.25 (71.86%)
Relative drawdown 71.86% (94583.25)
Total trades 903
Short positions (won %) 627 (1.12%)
Long positions (won %) 276 (21.01%)
Profit trades (% of total) 65 (7.20%)
Loss trades (% of total) 838 (92.80%)
Largest
profit trade 4381.43
loss trade -480.79
Average
profit trade 1510.06
loss trade -53.54
Maximum
consecutive wins (profit in money) 34 (87310.59)
consecutive losses (loss in money) 587 (-29735.98)
Maximal
consecutive profit (count of wins) 87310.59 (34)
consecutive loss (count of losses) -29735.98 (587)
Average
consecutive wins 6
consecutive losses 76
Thanks,
burn0050
I wish , that we can have luxury of "ZigZag Validity" and
"ZigZag Trend" indicator someday coded for MT4 that are using percentage of market move to validate last leg taking chunk of guessing out of trading.
Tradestation and MetaStock users have those already coded for quite some time
.
It would be nice addition to our trading ammunition.
THX mwbro for indicator
Another "filter" could be simply trading with the general trend...
I've marked entries into a trending market using stochastic 50,3,3. There's only one entry with trend, and multiple against. The same happens with zigzag. See for yourselves on a visual backtest. Now I know that some people don't know how to spot a trend, so here's a simple way: if it moves up, wait for it to move down, and enter once zigzag turns up again without the price going below the last low. If you watch more than one pair, you will be able to spot many trends. Reverse applies to downmoves.
Good luck