Sharing a method which has been profitable so far - page 2
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On this identical thread over at FF, smjones posts 2 very helpful indicators for this trading method. It's the same exact heading over there, just search for it and you will find it.
i think there is no need for calcalation for entry... this system will lose when both SL is achived.. and win when one SL and TP is achieved..
All is needed is volatile prices and consideration of the spread...
The idea is great.. but the probability is unknown when you're paying twice the spread ...
EA replicating leebs results
Hi,
I have created an EA that in backtest replicates leebs result for the period 23.01.2008 to 08.02.2008. The result looks good for that period (see first image). However, when testing for the years 2002 to 2008 with 90% modelling quality the result looks terrible (see last image). I still think the idea is promising, but we have to play with the parameters and understand in which market condition this idea will work. I'll attach the EA...
Best regards,
Jan
Updated EA for leebs idea
I have updated a bug in the ea in my previous post (atr_trader.0.01). I realised that it sometimes made only sell orders or buy orders. That have been fixed. I just want to make you all aware that in the trade statement above the ea didn't make any trades between April 2002 and September 2006. I think that might have something to do with the processing power on my PC. However, I have been running tests year by year since 1999 and the results still doesn't look good. I have also noticed that if I change the parameter 'timeGMT' from 00:00:00 to 03:00:00 results are improving.
All of this below assumes no Sunday Bars for the midnight entry and I am using quotes from IBFX...keep in mind your calc's are different with each dealer
So lets look at the EUR/USD daily...
Fridays High = 1.4546
Friday's Low = 1.4450
...................2.8996/2= 1.4498 MidPoint
The current price is 1.4512 and when the market opens back up it will the price will need to fall 14 pips to trigger the concurrent long and short entries.
Both of these entries use a TP of 1/2 of ATR 14 period (daily) which is: 113/2 = 56 pips
and the SL is half of the TP which is: 56/2 = 28 pips
The concerns and questions that I have are the obvious ones that have been brought out by the other posters in this thread...
Conclusion: Wouldn't it be better to pick a direction with this 2:1 benefit to risk ratio that these calc's use rather than to dilute it with the hedge? One would need a 50% winrate to BE without MM. Assuming there is a valid trend detection method and you can get in....the drawdown could be minimal if you are patient. I am aware that this conclusion and the pullback method is not so successful recently.
ES
I just had an idea...
What if the entry stop/limit orders were based on the 1/2 14 period daily ATR on the pullback OR the rise from the open? 2 entry orders still, but both in the same direction of the longer term trend...but cancle the other one if one hits?
This would beat the market and the dealers at THEIR own game for a little while...
The 2:1 benefit to risk would still be used with the TP and the SL calc's this thread illustrates...a 1:1 benefit to risk could be used for one of the trades in my idea....guess which one
What do you think? If you like it...can some kind coder start a new thread and share the EA for us to test?
ThreadAuthor: I do not want to detract from your hedge idea, so this is why I suggested a new thread for my idea. I do not know if my idea has been tested...it prolly is here somewhere, but please do not yell at me..idea's are the flavor of the traders motivations and you kind Sir have provided the ingredients with your thread....
ES
The concerns and questions that I have are the obvious ones that have been brought out by the other posters in this thread...
If you are using the hedge this is how the trade could work. Your long or short could go to TP of 56 pips with the other side hitting the S/L of 28 pips leaving you with a profit of 28 pips. Or they could both hit there stoploss for a 56 pip loss.
Well yes and the trade (s) could just be closed on the rare instances of reaching the next order placement zone with open trade (s).
or
there could be no entries triggered at all ...
The concerns and questions that I have are the obvious ones that have been brought out by the other posters in this thread...
- What happens to the other side when the first trade hits it's TP?
- What happens to the other side if the first trade hits it's SL?
- If the trade hits a double TP, all is fine, but if one of the trades hits the SL then how many double are needed over the year to cover the spread and/or losses?
If you are using the hedge this is how the trade could work. Your long or short could go to TP of 56 pips with the other side hitting the S/L of 28 pips leaving you with a profit of 28 pips. Or they could both hit there stoploss for a 56 pip loss.I read the thread at FF.
I agree with one point there.
I am thinking of making a spreadsheet of the number of pips betwen the high/low to the midpoint to see if there is a valid filter to add to the EA. The EA could have an input named:
DisableEntry: ____(number of pips in midpoint to high/low)
also...am I missing something here? Don't the open trades get closed at the next entry zone and new entries made?
ES
P.S. Could someone tell me why this method does or does not work? Is anybody trading it live?
Leebs idea with Disabled Entry
Here is the same EA with ElectricSavants idea of a Disabled Entry. The EA's parameter for this is 'atrThreshold' and default is 0. If atr(14) is greater than atrTreshold (e.g. 80 or 100) then take pending long and short positions. Results still don't look good. See the discussion at FF where also Leeb is participating.