Developing my own bullet proof system to trade FOREX.

No one Knows · Dec 13, 2008

Today i decided to put pen to paper and write out what i would like to achieve and how i would go about doing this as Van K. Tharp suggests in his book "Trade your way to financial freedom".

I ended up writing for about 3 hours and unintensionally wrote out a complete system based on my beliefs. I ended up designing an oscilator trading strategy that i would like to use in forex.

This is the first system i have attempted and have done a quick test on 3 currency pairs (by hand) on 5 days of 5 min data. They came back looking pretty good. with about 60% winning trades and twice the size wins as loses. Im trying to be very carefull at this stage (of dare i say) "Optimization" as i just guessed 25 pips as a good stop level.

I obviously need to test this system against alot more back history on forex if anyone can suggest where i can get 5 min data for a couple of years on the popular currency pairs for as little as possible and what anyone thinks about trailing stops to lock in profits as i think this could help my trading system alot ( will need to add to my test).

Regards Mark

everyonerich · Dec 13, 2008

u need to tell us everything about your strategy if you dont mind. then if getting good feedback that means your strategy really works and we'll see how long it works until forever.. ?

if doesnt work then, you still need to search what it takes to make money from market.

No one Knows · Dec 13, 2008

When RSI is overbought then that is part one of the setup, then when the RSI goes back below 70 and the second RSI high is made and is 5 points(or more) lower high than the first but the price makes a new high then there is a divergence. The opposite applies for oversold.

everyonerich · Dec 13, 2008

No one Knows said:
When RSI is overbought then that is part one of the setup, then when the RSI goes back below 70 and the second RSI high is made and is 5 points(or more) lower high than the first but the price makes a new high then there is a divergence. The opposite applies for oversold.

pls show ur chart? u should have give more detail. and if its profitable, its best if also include trading result.

No one Knows · Dec 13, 2008

Hear is a picture of some sell and buy signals with the divergence over the last week on EURO/USD

No one Knows · Dec 13, 2008

Did the trades for last week by hand, can give you the summery. EUR/USD 20 trades 13 wins 7 losses, 69 pip drawdown total pips win= 168 average win 31, average loss 19.

GBP/USD 12 trades 7 wins 5 losses, 54 pip drawdown total pips win= 224 average win 46, average loss 25.

This is based on getting in and out at the worst price shown by the 5 min candle to give a worst case more realistic senario.

No one Knows · Dec 13, 2008

Need some more data to test on, any suggestions

everyonerich · Dec 13, 2008

i wondered which broker u use? u can just printscreen the chart then paste your trading result here.

No one Knows · Dec 13, 2008

Im Just paper trading and using a free charting package thats on the FXCM website which you only get 5 days of 5 min data thats it. If you can tell me about a package that is free that is good and will help me that would be great.

everyonerich · Dec 13, 2008

No one Knows said:
Im Just paper trading and using a free charting package thats on the FXCM website which you only get 5 days of 5 min data thats that it. If you can tell me about a package that is free that is good and will help me that would be great.

oh ok.. if you already had sucess with your paper trading strategy, then its time for demo account.

Free forex demo account | Forex practice account

download the program and install it. usually its recommended to demo trade until 3 months before deposit real money. its just my opinion thou

No one Knows · Dec 13, 2008

Can you program and backtest tho in these demo accounts, to tune my strategy.

No one Knows · Dec 13, 2008

Seen that alot of people suggest using NINJATRADER, looks good but it requires that you get the data feed from one of there brokerage partners and i think you can only get a 2 week real time data trial and wont include the 5 min data that i would require to test the system for the past year or 2.

everyonerich · Dec 13, 2008

aww... im also looking ppl to help me backtest my strategy. but dun know anyone yet.

but since youre in UK, there are many firms and just try to walk in there and try to know some ppl in there. sure you can pay them a little bit of money to help you backtest it.

chilltrader · Dec 13, 2008

Metatrader4 is very good for backtesting and programming.

shadowninja · Dec 13, 2008

Forward test it with Oanda demo.

UKtradergirl · Dec 13, 2008

everyonerich- this guy comes on here asking where to get back data from and you grill him on his strategy as though he is selling something- the poor guy, leave him alone!

As above poster suggests... metatrader 4 is great, just sign up for a demo with any metatrader 4 brokers and there will be loads of backdata there to look at. (can also forward test this way too). Oanda is good too for forward testing (as other poster says about too!)

No one Knows · Dec 14, 2008

UKtradergirl said:
everyonerich- this guy comes on here asking where to get back data from and you grill him on his strategy as though he is selling something- the poor guy, leave him alone!

As above poster suggests... metatrader 4 is great, just sign up for a demo with any metatrader 4 brokers and there will be loads of backdata there to look at. (can also forward test this way too). Oanda is good too for forward testing (as other poster says about too!)

Thanks, abit more on line with what i was asking for.

regards Mark

zupcon · Dec 14, 2008

No one Knows said:
Thanks, abit more on line with what i was asking for.

regards Mark

Hi Mark

try Forex Trading Software: Forex Trading Platform MetaTrader 4

Theres usually 6 months or so 5 minutes data included.

It might be worth searching around some of the autotrading sites for additional data. The big problem is that most brokers use different server time settings so stitching together data from different feeds can get a bit complex. Also watch out for holes and gaps !

No one Knows · Dec 14, 2008

zupcon said:
Hi Mark

try Forex Trading Software: Forex Trading Platform MetaTrader 4

Theres usually 6 months or so 5 minutes data included.

It might be worth searching around some of the autotrading sites for additional data. The big problem is that most brokers use different server time settings so stitching together data from different feeds can get a bit complex. Also watch out for holes and gaps !

Thanks for reply. Just looking around the different trading software providers at the moment, will deffinately give meta a look. Not sure what you mean by "Autotrading sites", 6 months of data should be a good start to test the strategy im working on.

regards Mark

tomorton · Dec 14, 2008

No one Knows said:
Today i decided to put pen to paper and write out what i would like to achieve and how i would go about doing this as Van K. Tharp suggests in his book "Trade your way to financial freedom".

I ended up writing for about 3 hours and unintensionally wrote out a complete system based on my beliefs. I ended up designing an oscilator trading strategy that i would like to use in forex.

This is the first system i have attempted and have done a quick test on 3 currency pairs (by hand) on 5 days of 5 min data. They came back looking pretty good. with about 60% winning trades and twice the size wins as loses. Im trying to be very carefull at this stage (of dare i say) "Optimization" as i just guessed 25 pips as a good stop level.

I obviously need to test this system against alot more back history on forex if anyone can suggest where i can get 5 min data for a couple of years on the popular currency pairs for as little as possible and what anyone thinks about trailing stops to lock in profits as i think this could help my trading system alot ( will need to add to my test).

Regards Mark

Hi Mark - Well done for setting up this system - Forex is not my field but I am interested in your entry/exit rules. I have a simple system for the FTSE and Dow, currently 70% and 65% reliable respectively. However, my exit signals are simplistic 2% from entry for both stop and profit target, so the winning and losing trades make or lose the same amount each. How do you ensure your winning trades will make more than the losers lose?

PS - I find that if I reduce the % stop and target limits from entry to 1%, the win rate really suffers.

Developing my own bullet proof system to trade FOREX.

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