The best NEW ideas are well forgotten OLD ones !!!! Super money management - will it pull out any unstable trading system? - page 2
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On the issue of the MA period. Imho will not work for the same reasons for which traditional techniques do not work well on crossing moving averages - often the MA period does not coincide with the period of fluctuations. Undoubtedly, there is a POWERFUL way to choose a moving average that results in profit on some historical interval (lag estimates are not difficult to find on the Internet), but this period must be changed quite often. I.e. MA should be adaptive. In my opinion, in that case it is much easier to impose it on the price series, although even in that case the average gain above the spread is not guaranteed.
Conclusion:
- Even with such a shamelessly leaking EA, it is possible to improve the results. (So to say to alleviate death cramps :-)
- As you can see from the above screenshot, New Balance behaves much "firmer" to drawdowns and has a flatter look.
- In order to better understand how this method of transaction management behaves please send tests in Excel format performed on profitable Expert Advisors.
In my opinion, the serious effect will be seen in those EAs that have long series of both losing and profitable trades.
Isn't it too early to draw such conclusions? The method reduces losses but profits as well. This can be seen with the naked eye on a period of 30 to 250 trades.
Muvinings are good on the trend. On a flat, they are losing money. What if your balance has started to flat?
Example:
A losing trade (or several losing trades) in real and balance under the muvinng. A couple of profitable trades in a row in the notebook and the balance above the muving. Now we open a trade in real, and this trade (or several) is unprofitable. Balance under the moving average again - trade in the notebook. Balance has popped out over the moving average - open transaction in the real, and it is unprofitable. I.e., only loss-making trades are opened in the real account, and profitable ones are opened in the notebook.
What should we do when the balance started to go flat? Mooving does not like flat.
Why did you decide to use a moving average instead of the Bollinger Bands or Ishimoku indicator? :)
Muvings are good on the trend. On a flat, they are losing money. What if your balance has started to flat?
Example:
A losing trade (or several losing trades) in real and balance under the muvinng. A couple of profitable trades in a row in the notebook and the balance above the muving. Now we open a trade in real, and this trade (or several) is unprofitable. Balance under the moving average again - trade in the notebook. Balance has popped out over the moving average - open transaction in the real, and it is unprofitable. In other words, only loss-making trades are opened in the real account, while the notebook contains profitable ones.
What should I do when my balance has started to flat? Moovings don't like a flat.
And why have you decided to use Muvinjer Bollinger Bands or Ishimoku Indicator instead? :)
I am not saying that this principle is a universal panacea. Besides, I made a note..." - in my opinion, the serious effect will be seen in those EAs that give long series of both losing and profitable trades.
The example I gave above of a losing EA is not an illustration that you can make candy out of dung with this principle. I am saying that it can help to make an unstable EA more resistant to prolonged drawdowns.
And not to be unfounded, let's run the test results of profitable, but unstable EAs together using the scheme above. When we have a statistical base, we can draw some serious conclusions.
If an EA is unstable, it is very difficult to conclude that it is PROFITABLE.
To the sceptics!!!!
Didn't get lazy and did a little research in Excel.
1. Took Reshetov's most plummeting advisor https://www.mql5.com/ru/code/8870 ran it from early 2008 to May 2009 - WITHOUT any confusion it is plummeting.
2. I have copied the test results into Excel and slightly processed the balance curve.
3. i applied a simple mouwing with period 13 to it (i didn't optimized it from the ceiling) it's a bit time consuming to optimize it in Excel.
4. As a result I got the plum, but it was half as much. See the screenshot below.
The loss of the Expert Advisor on each trade was initially within the spread?
How many profitable and how many losing trades did the original EA have during testing? (number and proportion)
How many profitable and losing trades did you have using your MM? (number and ratio)
I think these three figures will be enough to explain half of all the losses. :)
Expert Advisor balance curve will or will not take into account absolutely ALL factors and their strength affecting price behavior, but there are two more factors in the balance curve of the Expert Advisor - the principle of operation of this EA and the factor steadily pulling down the balance curve (spread, swap, commission, etc., etc.). Hence, the larger is the spread and the more is the forecasted balance curve, the stronger is the factor of principle of our Expert Advisor . Having analyzed the virtual balance curve behavior, can write an Expert Advisor based on the given balance curve that will be profitable until a new price movement factor appears in the market, which will have a greater influence on the virtual balance curve than the principle we found.
Conclusion:
Balance curve analysis to improve the quality of trades, only reinforcing the principles for trades that can go bust when new strong price movement factors appear in the market. But if the initial virtual balance curve is built well enough, it will allow you to create profitable Expert Advisors in a constantly changing market, because new strong factors do not appear every moment.
PS The analysis of the virtual balance curve for adding conditions to trades has nothing to do with money management.
It's crazy, isn't it?
instead of analyzing the causes of the balance curve, we will analyze the consequence, the curve itself, so we live by touch, getting bumps from time to time
so instead of improving our touch, we'll analyze what shape the bumps on our forehead resemble and how it could be used