How is the viability of a trade idea determined? - page 3
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Nobody's stopping you from being concerned). Just ran a test. A grid and a margin are being used.
It seems to me that the only way to measure the quality of entry points is by all means to set equal take and stop and the take should trigger more often.
How do you check the quality of entry points on a grid and a martin?
Suppose I have an idea for a new input signal. I code and run it in the tether. If drawdowns are unacceptable or I am losing no more than 3-4 times per year, I believe this strategy is worth trying. I decrease the maximal drawdown rate to an acceptable level by making some adjustments to the algorithm, introducing filters and tuning some parameters. If I fail to do it, say, within a week, I abandon the strategy and look for a new one.
My primary concern is not accuracy of entering a trade, but how to get rid of trades that lead to unacceptable drawdown. In my experience, this approach provides the fastest path to success.
It seems to me that the only way to measure the quality of entry points is by all means to set equal take and stop and the take should trigger more often.
Why is that the only way?
You can be guided by "number of profitable trades" indicator... If this indicator is higher than 85-90%, then the quality of entry points is VERY GOOD...
Suppose I have an idea for a new input signal. I code it and run it in the tether. If within a year unacceptable drawdowns or drawdowns occur no more than 3-4 times a year, then I believe that this strategy is worth pursuing. I reduce the maximum drawdown to an acceptable level by making some adjustments to the algorithm, introducing filters and adjusting some parameters. If I fail to do it, say, within a week, I abandon the strategy and look for a new one.
My primary concern is not accuracy of entering a trade, but how to get rid of trades that lead to unacceptable drawdown. From my experience - this approach provides the fastest way to success.
Well, usually the purpose of a stop is to cut off unprofitable trades at a level where they are not yet a disaster for the account.
Why the only one?...
You can be guided by the "number of profitable trades" indicator... If this indicator is higher than 85-90%, then the quality of entry points is VERY GOOD...
Because this figure can not be considered in isolation from what can affect it. If the take is 200 pips and the stop 400 pips, then even on random trades the take should trigger more often simply because it is closer. The price may hit it with market noise, and you will consider it a merit of a good entry point, when in fact you just got lucky. And if there is no stop, for example, why would it trigger? Either they will be triggered by a single take or a stop out. The system will either remain in the drawdown for a long time.
The number of profitable trades is a good indicator if it was reached in the conditions when it was equally easy for the price to reach both the take and the stop, but it reached the take more often.
Well, usually a stop is designed to cut off unprofitable trades at a level where they are not yet a wreck for the account.
I don't use a stop for each order individually. I have a total stop for the entire position. I usually put my Expert Advisor for testing in the real account only when a stop does not trigger during the entire testing period in the tester, i.e. all trades are closed with profit.
I don't use a stop for each order individually. I have a total stop for an aggregate position. I usually put an EA to test on the real only when a stop does not trigger during the entire testing period in the tester, i.e. all trades close with profit.
It is difficult to understand what the profitability is based on in systems containing martingale. Is it based only on martingale or entry points are also good. Because martingale can pull out even a system with bad entry points. But up to one particular case, when the money is not enough. The only question is when it will happen.
This is because it cannot be considered in isolation from what can affect it. If the take is 200 pips and the stop 400 pips, then even on random trades the take should trigger more often simply because it is closer. The price may hit it with market noise, and you will consider it a merit of a good entry point, when in fact you just got lucky. And if there is no stop, for example, why would it trigger? Either they will be triggered by a single take or a stop out. The system will either remain in the drawdown for a long time.
The number of profitable trades is a good indicator if we reached it in conditions when it was equally easy for the price to reach both Take and Stop, but it reached Take more often.
Take and stop are synthetic figures that have nothing to do with market conditions. They should be discarded altogether when determining the quality of entry points!
An entry point is ALGORITHM that may be good or bad... A NUMBER ( stop or take ) is in no way related to the market situation, and therefore can't determine the quality of an entry...
With systems like these, which include martingale, it's hard to know what the profitability is based on. Is it only on the martingale or are the entry points good too? Because martingale can pull out even a system with bad entry points. But up to one particular case, when the money is not enough. It is only a question of when it will happen.
Suppose my entry point is always a range and I can enter in parts, i.e. I can use price averaging or martin (in reasonable amounts of 1-2 knees).
Then the quality changes ?
With systems like these, which include martingale, it's hard to know what the profitability is based on. Is it only on the martingale or are the entry points good too? Because martingale can pull out even a system with bad entry points. But up to one particular case, when the money is not enough. The only question is when it will happen.
Why is it difficult? Both make a difference.
It can, but not always. That is why quality entry points are desirable, because in this case the matingale is attracted less often and the probability of a large drawdown is reduced.
Yes, that is true. But if on real it would happen once a year, that would suit me fine. My stop is 25% of my balance and therefore I would be short 25% of profit compared to what the testing in the tester has shown. And even if it was 2 times a year, it wouldn't be a disaster.
From my experience of using martingale on the real I can say that such TSs can work until the first stop trigger from 1.5 or more years.