GOLD, Gold and XAUUSD - page 138

[Veronika Terenteva]

Ренат Ахтямов #:

I agree, in about a month’s time

By the way, is there a reason?

It’s already started with the pullbacks, but the trend is changing

[Martin Stibor]

Ryan L Johnson #:

"Survive" is such an appropriate word for my strategy when intraday volatility is low. During those days, my EA goes into "self preservation" mode by reducing position size to the minimum allowed─and then waits for the market phase to change back to volatile, when the 1% of balance position size goes back into effect. The growth curve is basically a vibrating upward line interspersed by smoother sideways steps─most within 2 or 3% drawdown, with %5 being the worst. I've not noticed an issue with slippage, and spread is baked into the testing/design of the EA.

The underlying concept is to use tiny positions as "crash test dummies" for the purpose of detecting when live trading conditions return to a state of profitability per the rules of my strategy.

That "crash test dummies" framing is a great way to put it — you're spending minimum size to buy information about the regime, then paying up only once the market's confirmed it's worth it. Which is oddly the same instinct behind what I do, just at a different frequency: I stay flat and let a level actually break before I commit, rather than pre-positioning for a move that might not come. Neither of us wants to pay full size for an unconfirmed hypothesis — you probe continuously, I wait for one binary trigger.

The self-preservation mode is the part I like most. Most blow-ups I've seen come from doing the opposite — sizing up during the quiet stretch out of boredom, right before it stays quiet. A system that shrinks itself when it isn't being paid is doing the thing most discretionary traders can't make themselves do.

Genuinely curious about one thing, no rush: what flips it back out of preservation mode — a volatility threshold, the recent trade outcomes, or something else deciding conditions have "returned to profitability"?

[Ryan L Johnson]

Martin Stibor #:
[W]hat flips it back out of preservation mode — a volatility threshold, the recent trade outcomes, or something else deciding conditions have "returned to profitability"?

It's actually nothing clever. After a series of losing trades, just one trade closed in profit goes ping like an airsoft bb, and then reloads a 12 gauge slug. The number of loss trades in the series (threshold) is determined by one thing─the average count of consecutive losses (plus 1) in a proper, accurate, and lengthy backtest report─the opposing threshold.

TBH, your way is better for breakout trading because you don't have to "pay to know." For scalping however, I've yet to find a suitable replacement for buying crash test dummies which tell me whether the market is predominantly "in-sync" with my strategy in the moment.