EA's that did not work as well as I wanted

[Brian Rumbles]

This is an EA I worked on , but it did not work as well as I had hoped. Most if not all EA's I have made are like this, but they may still be interesting to someone, so I will share some of them here.

This first one was supposed to find a combination of the previous N (eg.7) losses (where the SL was hit), and then start trading from there. However I think the combination of losses was so random that it made no difference compared to just randomly buying and selling

[Brian Rumbles]

This version here works the same as above except it only searches for N amount of straight losses of buys in a row or sells in a row and then starts trading. This seems to work a lot better than the previous one except that the results may be bad when N is set to 3, good when N set to 4 and then bad again when N set to 5, so it may just be luck if any setting is good in the backtest

[andrew4789]

Brian Rumbles:

This is an EA I worked on , but it did not work as well as I had hoped. Most if not all EA's I have made are like this, but they may still be interesting to someone, so I will share some of them here.

This first one was supposed to find a combination of the previous N (eg.7) losses (where the SL was hit), and then start trading from there. However I think the combination of losses was so random that it made no difference compared to just randomly buying and selling

I think an old adage probably applies here; "In an infinite universe, sooner or later all events will happen". So, sometimes your strategy will work, sometimes not, even under seemlingly similar conditions.

Something I'm looking at, is to look at a grid of orders; different currencies, time frames etc. then manage the grid as a single order. For example when the grid is in profit, close all trades, and start again in n bars... etc.  This might overcome the randomness in individual trades....

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[Brian Rumbles]

Yes, I agree with you, any strategy I have come up with was valid only for a sample. That was a nice way of putting it. I like your idea of different currencies and time frames but it is also complicated to try to figure out if it will work or have the same problem we are discussing. Let me know more.

P.S I will add one more comment, the problem with these types of investments is obviously lack of information that causes uncertainty. Then we follow the price, however maybe it is better to think for our selves : "do I like what the price is doing now?" If not then don't be exposed to it, wait  4 hrs, 8 hrs or a day etc. until you more happy and then try, if it does not work wait and see again, wait for the price to move.

[optionshk]

Brian Rumbles:

Yes, I agree with you, any strategy I have come up with was valid only for a sample. That was a nice way of putting it. I like your idea of different currencies and time frames but it is also complicated to try to figure out if it will work or have the same problem we are discussing. Let me know more.

P.S I will add one more comment, the problem with these types of investments is obviously lack of information that causes uncertainty. Then we follow the price, however maybe it is better to think for our selves : "do I like what the price is doing now?" If not then don't be exposed to it, wait  4 hrs, 8 hrs or a day etc. until you more happy and then try, if it does not work wait and see again, wait for the price to move.

Financial trading is full of uncertainties. 

It is more like a fishing activity and I don't believe in keeping any secrets. I am more than willing to share my actual hands-on experience with you since you seem to be a passionate trader and hope you will continue your efforts in refining your EAs .

I prefer to fish in a pond because it is easier to catch fish in a pond than in the ocean. It is soothing and relaxing to be near the pond.

Fishing needs a good rod and strength to pull the rod when catching big fish.

For me, good rod is  PATIENCE and  Margin CAPITAL is the strength. Since money is involved there will be unavoidable psychological PAIN POINTS and I don't disregard this factor.

I have never done martingale trading using variable lots. I have used fixed lot sizes and have stuck to averaging consecutive trades rather getting upset by the sheer force of the momentum.

The process is as follows:

1. Choose the right candidate by taking a look at volatility statistics or ADRs Monthly or Quarterly dashboard .

2. Then use simple indicators (like provided on the mql link) or Pips Bands to measure the volatility and identify outliers. Free Indicators coded by https://www.mql5.com/en/users/mt-coder are quite helpful. Bulls and bears and Big times particularly.

3. My favoured symbol is GBPJPY. I have not tried averaging trades with any other currency pair because it provides momentum as well as volatility.

4, I normally look back at 2 years of data and plot the maximum days or hours a currency or stock index has taken on a daily TD between four consecutive Outliers. Flash crash is not considered an outlier.

 For GBPJPY I have defined the size of the outlier as 1200 pips . I stuff my account with 1200 +5% money worth the pips. Lots can be anything from 0.10 to 5 lots depending upon the capital capacity. Even micro lots will do as long as you find a honest broker. It is rare to find  MT4 brokers who acts as a broker as well as a market maker. 95% of them keep different Books for different clients. Micro lot traders may not easily find such a credible broker.

5. I can build Balance easily up to 50% by trading 60 pips sized trade within a period of 30-45 days and a TP of 30 pips. The Pain points start from the moment the drawdown starts hitting 30% and more and can last until next 90 days.  Accumulation and Distribution goes on uninterrupted.

6. I go through the pain until reversal happens. If I have time and appetite to take further chances, I will resort to hedging and will provide another 600 pips capital for it assuming when I unlock hedges, it takes me further to drawdown level.

I have tried it with 100 pips lock and TP of 20 pips. When the pair is in momentum and gunning for consecutive runs, it is in no mood to pull back or retrace by more than 20% . Locking losses by way of hedging helps control margin. Unlocking the hedges opens up the possibility of increasing the drawdown. Most important is you have to monitor your trades and draw Fibo Pivot bands to manage unlocking and again locking. Do you want to learn the skills of locking and unlocking hedges or not and whether you have time for it, is another cosideration.

7. I prefer to wait and bear the swap costs which might take 20% of your profits when delivered. Psychologically, I am prepared for it because I have gone through this state of mind several times with no harm being done. It is a matter of managing your psychology.

It takes at least 90 days to reverse but I am mentally prepared for 120 days and with an Equity Stop Loss. Luckily, it has not been hit in last 10 years. Unluckily, when flash crashes have happened, I was not trading. If I had, I would have made good money because I use TP and I only SELL. GBP Flash crashes have wiped out the buyers margins. 

8. Your estimate of TIME for the whole cycle has to be based on lookback analysis of at least 2 outliers (for me it's 4 outliers and not 2 years). It should not be based on  hopes or expectations.   

I hope you will use this information to develop an effective two EAs one without using Hedging and another with hedging while paper trading this tried and tested simple strategy (for forward testing for 3 months).

I will use your EAs, when ready, to forward test other symbols. I don't know how to backtest but I know how to design models manually based on my actual trading experience even with no Excel or programming skills.

If anyone can support me for this, I am willing to share my experience without any monetary consideration and with no strings attached. Programmer is free to pursue own commercial agenda.

I am 71 and it gives me satisfaction to pass on my knowledge and experience to serious takers.

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