Separation Trade-90% success - page 6
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Hi,
I'm also new to this forum and read a lot about this Separation Trading system. Unfortunately I can't find any system description. In his first post Wingstar mentioned that it is attached.
Someone who can help?
Thanks
Antomi
"Hi,
I am new to this board and very happy to have found it. I have recently been introduced to EA and am technically challenged. I have outlined the trade and the rules in the attached file and would appreciate it if someone would code it. It has a 90% success rate when traded according to the rules, and I have manually backtested it on the eur/usd for a year and a half using 1 full lot. It was profitable every month with the lowest profit being $1800 and the highest being $6000. The trade occurs most frequently when I have to sleep so an EA is the perfect solution. Thank you in advance for your help."
Of course backtesting is not reliable, there are too many variable that are in effect during live market action such as broker spreads, news etc. Backtesting can just give an idea of performance. Of course, we should be using a 90% modelling quality to get better backtest results which are closer to real market action.
I dont mean to be rude but I'm so tired of hearing this mantra. "bactesting is not reliable" Bactesting is as reliable as you want to make it. I have been watching charts for years in live markets and I keep records, I also compare multiple brokers. The bottom line is that with minor variations (1 to 3 pips) all candles (especially on 1 hour and above) open and close at the same time.
I have forward tested this data (live traded) in my many years of trading, why then would I (or anyone else) assume that the data suddenly changes when I look back? Are you suggesting that the open and close of candles change after they are formed? When? after an hour or do all of last weeks candles suddenly change for no reason after a month has passed?
The notion is ludicrous. You just have to use some common sense.
If the system you are backtesting requires a 35 pip stop then ignore borderline trades. For example trades that come within one pip of the stop will be counted as a loss. This will still work because I can assure you, after trading on 3 or more brokers at one time, that a trade can be stopped out on one, but not the other two. Once again just use some common sense.
All systems should be tested on the open of the next candle after the signal anyway. And if the variance on that close is 1 or 2 pips then how can you not build a good picture of possible results. (possible results is the intention of backtesting anyway)
The real issue here is not backtesting being unreliable in its function but the fact that the market can change substantially if a new economic environment occurs (sub prime anyone?). A 35 pip stop 3 months ago may need to be a 45 pip stop today. For example I always increase my stops in August. Why? The market tends to overshoot with less liquidity. The smaller traders get more control while the big boys are all on vacation.
So if you are thinking of backtesting, use some common sense. Only take results on the close of the next candle, after the signal and do it by eye. Don't use software. Also I would not bother whith anything over 6 months as the market is not the same anymore, I gurantee you that.
Some people think backtesting is supposed to predict the future. The best it can do is show you the past. For those that say backtesting doesn't take into account news, etc., of course it does. It takes into account everything. It's the resulting price when everything that happened is taken into account. But if you expect backtesting or forward testing or anything else to accurately predict the future, good luck. Even the AI programs that use neural networks to attempt to model it aren't perfect, although I've heard some win more than lost, and that's all that matters, right? After that, it's just how much money you're willing to risk.
Backtesting does not predict the future, nothing does, however...
The market stays consistant enough in its patterns and actions to allow us to test a theory on backdata, and have a reasonable idea that it will work in the future. Unless the market makes a drastic change overnight. Most changes are slow enough.
Lets face it pivots still work, Fibbonacci still works, historic Highs and Lows still work, S & R still works. EMA crossovers still work and this seperation trade still works. So If I backtested variations of any of those it should be reliable enough. Unless, S & R and trends stop happening tomorrow and all we ever see is inside candles forever more.
Maybe the reason why the "backtesting does not work" mantra is so strong, is most don't really understand the point of backtesting, it's limitations and the advantages to your trading. The reason for this is most people have the wrong focus and are obsessed with pips rather than profitability.
I agree.
backtesting chart data is not wrong, with variances between brokers.
but the programing of the MT4 platform has inherant problems that cause predicted backtesting to yield false results - i am told over and over again. MT4 is updated every few weeks nearly. what version is it now? 310?
I would say don't use the EA on post #44. It has the.... Ma Trend period slow =26 and the Ma Trend Period Fast =10. Which is backwards if you try to correct it it won't trade so it's totally opposite all the way through. When it should be trading a Buy it's actually doing a Sell and vice-versa.Hope this saves someone cash. Wow, I guess dealers post too or unsuspecting people trying to share, what shouldn't be shared. Glad to help. Maybe we should all take a closer look at what we download, I know I'm guilty of trusting everything till it doesn't work then I take a look. Hey, that's backwards.
I would say don't use the EA on post #44. It has the.... Ma Trend period slow =26 and the Ma Trend Period Fast =10. Which is backwards if you try to correct it it won't trade so it's totally opposite all the way through. When it should be trading a Buy it's actually doing a Sell and vice-versa.Hope this saves someone cash. Wow, I guess dealers post too or unsuspecting people trying to share, what shouldn't be shared. Glad to help. Maybe we should all take a closer look at what we download, I know I'm guilty of trusting everything till it doesn't work then I take a look. Hey, that's backwards.
Sorry to say it, Comrade, but it is you who got it wrong. Of course slow MA is 26 and fast is 10, and when the fast crosses UP the slow one, it's buy and vice versa.
There is another discrepancy in this EA, though, it works with MACD, which is not included into strategy and the diff btw two MAs is calculated including MACD, which might mess the things a little bit. But that's not a big thing - could be corrected easily.
Thanks for the EA, indicator and explanations to everybody who contributed here.