My New Day Trading System-rate and test - page 2
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Ea
Nice trading strategy and simple. I will attempt to make an ea of this.
Hey guys,
I put this system together last night after coming to the conclusion that there must be some way to take advantage of the price's tendency to move in large waves.
I observe these waves on the 1 minute chart all the time. I'll share this system with you guys with the hope that at least some of you will join me in forward testing it.
As far as systems go this one is pretty simple. It mainly only attempts to follow the price action over large moves while limiting losses. It is capable of making 100 pip gains while risking very little. Though actually getting those 100 pips takes experience.
Some newer traders who can't read that currency pair as well might close the trade early, resulting in around 40 pips or something.
Anyway...
my theory here is very simple. We need an indicator that simply mimics the price action but that also provides signals based on said action.
Instead of writing something from scratch I found a pretty perfect analogue.
This is the indicator that you will need for this:
Williams Percent Range.
It's already in your Indicators folder.
Set input to 2000, chart to 1 minute.
You will have this:
You can see some nice price action there.
Now let's add a few levels.
I won't draw this out.
What I'm thinking of is selling at -60 for a sell signal, like this:
With a stop loss at -50. Some may think that -40 would be better but I've found that -50 is usually fine because if it retracts that far its very likely to reverse all the way to -60 anyway.
The above example is for a sell, obviously. The system only sells into negative momentum. This means that you only sell if the price HAS BEEN all the way up to -20. This helps to ensure that we are getting in with a huge wave.
Simply reverse for a buy trade. Buying at -40 with -50 for stop loss.
Now, this doesn't give you much action and you might want to take more trades in a day. If so you can do this:
Then, your Trip Lines would be:
Buying:
-40 from below
-20 from below
Selling:
-60 from above
-80 from above
By using the extra trip line and watching the five majors you will almost always have at least one of them about to pop off.
I know the indicator looks cluttered but you get used to that pretty fast.
PLEASE DISREGARD THE OTHER RANDOM INDICATORS IN MY METATRADER PICS. THEY ARE IRRELEVANT HERE. THE ONLY INDICATOR THIS SYSTEM USES IS WILLIAM'S SET TO 2000.
I just didnt' feel like uploading new screenshots when I realized I'd left those indicators on there.
If I havn't been clear please let me know.
Let's test this!Your explanation doesnt make sense, please clarify.
What is input 2000?
You said only sell if it has been above -20, then you said:
Buying:
-40 from below
-20 from below
Selling:
-60 from above
-80 from above
EA - Negative
EA shows negative, wont post
EA shows negative, wont post
I don't trust EA back testing anyway, thanks though.
The problem with trying to use an EA with this is that you have to use concrete profit targets and stop losses. This simply isn't possible. It will probably never show positive for this reason. A trader has to put in some screen time (sitting at the screen for hours simply watching a currency pair) before they can forecast what the price might do.
This is why I don't believe in EAs and I'm not surprised that it showed a loss.
EDIT:
I should probably elaborate on this. Making this into a mechanical system won't work. You won't be able to put in a profit target that will appropriate for all circumstances. I'm sure that a platform exists that is sophisticated enough to handle all of the possible circumstances that allows an experienced trader to make a reasonable prediction in any given trade but Meta Trader is not it.
Also $ management is extremely important here. I have personally seen the 'system' make gains of 100 pips in a day. It will not, and should not ever, make a loss of 100 pips in a day. It is within this ratio that the profit will come. This implies that the trader is proficient enough in trading that they will be able to read the currency pair for signs of stagnation and other things that tells them either "Ok, it's up 60 pips, momentum is great across time frames, I can hold out for 40 more" or "It's stagnating, creating a channel, I'd better take what I have off the table".
An EA can not to do this.
I will try to post some general profit targets that junior members might be able to use with success.
Your explanation doesnt make sense, please clarify.
What is input 2000?
You said only sell if it has been above -20, then you said:
Buying:
-40 from below
-20 from below
Selling:
-60 from above
-80 from aboveSorry Extra it was 4 in the morning when I posted that and I was coming from a full day of trading. I should have waited till this evening to post.
"Input 2000"
This simply refers to the input of the %R indicator that is found in Meta Trader's Indicator folder. It's called William's % Range and it is a default indicator in Meta Trader.
In Meta Trader:
1. Make sure that you have the chart set to 1 min.
2. Click on Indicators->Oscillators->William's Percent Range.
3. Now click on on Charts->Indicators List->William's Percent Range. You will notice that the default setting is 14. Change this setting (Period) to 2000.
The indicator will recalculate and the end result is that the line looks very much like the price line.
I'm not sure what levels (lines on the indicator) come standard with the indicator but these are the ones that I use for my 'simple' set up:
a. -20
b. -40
c. -50
d. -60
e. -80
If those don't come standard then you need to repeat step two but instead of 'parameters' click on 'levels' and then you can input the missing ones.
4. Click on the Template icon->Save Template. Name the template w/e you wish.
5. Now open the five major currency pairs. These are:
1. USD/JPY
2. EUR/JPY
3. NZD/USD
4. EUR/USD
5. AUD/USD
6. Click the Template Icon on each chart window and load your new template for each.
Now you are ready to trade.
TO SELL:
In order to make a sell the price MUST be coming from the North (let's call the upper -20 area "The North" and the lower -80 area "The South" for simplicity's sake) and headed down. In other words the up trend must be in serious jeopardy.
So the line would have been in the upper -20 area, then broken through the --40, and now finally it's broken -50 and is flirting with -60. This doesn't have to be a straight line down, but you will be able to see that the Bears mean business.
When the price closes below -60 you sell. If the price retracts and closes above -50 that's your stop loss. Rinse and repeat. Eventually the price will either retrace back up to the -20 area or make a large move South.
Simply reverse the above steps for a buy trade.
It is very uncommon for it to stall there in the middle but this does happen. It's up to the trader to decide how many times they will try. This is why this is a discretionary system that can't be coded into an EA.
The traders level of familiarity with the currency pair will affect how profitable they are. But don't fret my friends, screen time is something that you need to put in no matter what kind of system you are using.
Think of this system as the catalyst. The framework within which you trade.
I predict that this system will be proven profitable on average with live forward trading.
If I still have not been clear please let me know.
I just shorted gbp/usd at 159.25.
Had a 9 pip profit, went back to even, and I am still short.
Any ideas for profit targets?Hey Finally,
This depends in large part on the users familiarity with the particular currency pair, whether there is news coming out, volume and momentum across time frames and some other things.
I will in the next few days come up with a general guide to the profit target.
The out right goal of the system is to catch large 100+ pip moves that happen regularly in these large movement waves but the counter-goal is to know when this isn't likely to happen and to simply take what you are being offered.
Actually, this is, in essence, the goal of any discretionary system and is the mark of a fine trader.
This system will provide (imo) a very good frame work for providing high probability trades.
So obviously if the user doesn't have much screen time on the Majors they will have to practice on a demo account, though if they have a spare $50 a micro account would be more realistic.
After saying that I should repeat the mantra:
Never trade with money you can't afford to lose.
I just think using a bit of real money in the beginning is imperative because a demo account doesn't give an accurate account of that gut wrenching feeling that you get when you lose real money.
So if you can afford to lose $50 do it on a micro. You will learn much more because you will actually be paying attention.
This is just general advice to new traders Finally, and isn't directed at you.
It looks good on following strong trends, and trading from pivots... thats all
cheers
mikeWelcome aboard Mike.
Yeah it's designed to catch large moves. These moves would appear on the 1 and 4 hour charts but I think that it's an improvement on simply trading MA crosses on those time frames.
I believe that the price crossing the center of the %Range (period:2000) actually has significance and you can't see it on those charts.
If nothing else you know for sure that w/e camp it's coming from (Bulls or Bears) is seriously losing steam.
Here's a trade that's been going for the last 10 hours.
Note the bounce off of -80. This usually isn't usually a good sign but I was willing to wait it out and see what it would do. It hit around 60 pips profit but I didn't pull the trigger. Currently it's nestled right in the middle of the trade's range (how far up and down it's gone from the point where I opened it..sorry to explain everything but I don't want people telling me I'm not being clear) and I'm not too anxious.
Usually if the trade breaks through -80 without hesitation you are about to make a lot of pips. Trades like these you will really need to do your intra-trade homework to validate not taking the pips off the table.
And yeah, I did nearly get stopped out early on. This was a retraction in the sustained down trend on the 1 hour chart so i wasn't too worried. I would have preferred of course that it bust through -80 and send me home early, but hey, what can you do?
The first image shows the 1 Min time frame. The second shows the 1 hour.
The indies on the 1 hour are simply for trend analysis.
NOTE:
The bottom indie on the 1 MIN chart is the Market Facilitation Index and is worth learning how to use. It will give you insight to the quality of the volume that's coming in and which direction is 'winning' over time.
Just to be clear...
As with any system you WILL get stopped out on a fairly consistent basis.
This bears repeating..
You will have days when the price suddenly loses momentum and your stop gets hit. You may or may not get another signal that day.
You have to learn to grin and bear it and remember that the next 50, 80, or 100 pip trade could be just around the corner.
Also keep in mind that just because we may earn 100 pips in a given day that it won't be pure profit. It has to cover our losses first, naturally.
As we move forward with calling live trades we will see just what the ratio is like.
I'll go ahead and predict that a string of 4 losses in a row will be unusual. We'll see.
Finally closed that trade
The down trend held firm and made new lows..almost a 100 pip profit.