Can mechanical forex systems work?

[rnicoll]

Ta.

OK - All trades have closed so I feel that it has come to a nice natural break to close it down for a Friday as I'm not a big fan of keeping trades open over the weekend unless they are longer timescale ones and there don't seem to be any of those developing.

Today wasn't up to to too much. It did fine - but not in the order of yesterday. however it is 10% up over 2 days so I can't complain. the reason for todays lack of performance was the risk/reward strategy.

You will notice 3 trades which all closed out for next to nothing - all of these went much further. I can see a reason on at least one of them where a re-adjustment of the reward it is looking for could have occurred.

So there is the first job for the weekend, and I will then run in comparison to this version to see what difference it could make.

It also passed on a few good trades. This was due to one of the filters I recently introduced. The filter is important - but my implementation of it is crude. So I need to look at the trades it is passing up on this and see how I can make it a little more accurate (read complex!).

Have a good weekend all.

Mine won't shut down until 9-ish tonight, but is mostly profitable today (it picked up the GBP/USD dropping too far, and bought, which was very nice). Having done a careful analysis of my trades vs your trades, I notice there's practically no resemblance whatsover

Quick question on execution actually; are you still trading spread-bets, and so the spread is relatively fixed? If not, do you have any code to handle wide spreads, and fancy sharing?

 

[north5]

Are we calling opposite ends of moves? Mine called the GBP/USD fall at 7 but got out way too early at 10:30.

Wish I could help with spreads - but I just use fixed SB spreads.

 

[rnicoll]

Are we calling opposite ends of moves? Mine called the GBP/USD fall at 7 but got out way too early at 10:30.

Wish I could help with spreads - but I just use fixed SB spreads.

Could well be; mine is trend-reversal, I'm guessing you're trend-following?

No worries about the spreads. I just need to actually sit down and get the code done. Right now it enters by market order, which can be an insane spread (10+ points), but reworking it all as limit orders means handling cancelling them if anything goes wrong.

 

[rnicoll]

Final wrap-up stats for this evening. 4.5% before margin, which means about 45% profit this week. Now if only it would do that every week!

 

[BREND]

Of course mechanical forex system works. After years of test and modifying, I had created a system call BL TS that works very well for me.

This is my trades for this week, all trades are executed from BL TS signals:

458 Pips Profit For This Week (24 Nov - 28 Nov)

This week 14 trades were executed: 11 trades won, 3 trades lost (78.57% success rate)

1. Yesterday (27 Nov) I had bought 20,000 USDJPY at 95.46, Stop level at 94.90, Target level at 96.42.
With some profits on hand, Dow Jones is weak, I decide to take profit first. Sold at 95.43, profit is 8 pips, US$16.75.

2. Today (28 Nov) I had shorted 20,000 AUDUSD at 0.6558, stop level at 0.6620, target level at 0.6492.
With 40 pips in the money, I decide to take profit as I do not want to hold any position over the weekend. Bought back at 0.6518, profit is 40 pips, US$80.00.

3. Yesterday (27 Nov) I had bought 20,000 EURJPY at 123.14, stop level at 122.40, target level at 124.01.
Market is moving very slow due to US holiday (Thanks Giving Day). I decide to take profit first, sold at 123.25. Profit is 11 pips, US$23.09.

4. On 27 Nov, I had placed an order to sell 10,000 USDJPY at 95.27, stop level at 96.00, target level at 94.11.
My signal has turned from sell to buy, so I decide to cut loss. Bought back at 95.46, loss is 19 pips, US$19.90.

5. On 27 Nov night, I had shorted 10,000 EURJPY at 123.48, stop level at 124.10, target level at 122.46.
Target level is reached at 122.46. Profit is 102 pips.

6. On 26 Nov I had shorted 10,000 GBPUSD at 1.5246, stop level at 1.5350, target level at 1.5129.
Stop triggered, loss is 104 pips, US$104.00.

7. On 26 Nov I had shorted 10,000 EURJPY at 123.68, stop level at 124.73, target level at 122.60.
My signal has turned from sell to buy, so I decide to take profit first. Bought back at 123.28, profit is 40 pips, US$42.07.

8. On 25 Nov night, I had shorted 10,000 USDJPY at 0.9542, stop level at 0.9640, target level at 0.9391.
Today (26 Nov) the sell signal from BL TS is getting weak, so I bought back the short position. Profit is 33 pips, US$34.70.

9. On 25 Nov I had shorted 10,000 EURJPY at 125.19, stop level at 126.20, target level at 123.60.
Target level of 123.60 is reached. Profit is 159 pips, US$167.05.

10. On 25 Nov I bought 10,000 USDCAD at 1.2411, stop level at 1.2290, target level at 1.2522.
Uptrend seems weak, so I decide to take profit first. Sold at 1.2441, profit is 30 pips, US$24.11.

11. On 25 Nov morning, I had shorted 10,000 AUDUSD at 0.6481, stop level at 0.6570, target level at 0.6385.
AUDUSD met some support at 0.6400, I decided to take profit at 0.6431. Profit is 50 pips, US$50.00.

12. On 24 Nov morning, I had bought 10,000 USDJPY at 95.36, stop level at 94.88, target level at 96.31.
There is resistance at 96.00, so I took profit at 95.87. Profit is 51 pips, US$53.20.

13. On 24 Nov I had bought 10,000 EURJPY at 121.13, stop level at 119.50, target level at 122.71.
Target level is reached, profit is 158 pips, US$164.69.

14. On 24 Nov I had shorted 10,000 GBPUSD at 1.4899, stop level at 1.5000, target level at 1.4803.
Stop is triggered, loss is US$101.00.

All of my trades are executed based on BL TS (trading system). If you are interested to make money from forex trading, send an email to me at [email protected].

If you want to view more of my trades, you can view my forex trading journal. Click on my name and pull down my Homepage.

 

[zupcon]

Of course mechanical forex system works. After years of test and modifying, I had created a system call BL TS that works very well for me.

This is my trades for this week, all trades are executed from BL TS signals:

1. Yesterday (27 Nov) I had bought 20,000 USDJPY at 95.46, Stop level at 94.90, Target level at 96.42.
With some profits on hand, Dow Jones is weak, I decide to take profit first. Sold at 95.43, profit is 8 pips, US$16.75.

2. Today (28 Nov) I had shorted 20,000 AUDUSD at 0.6558, stop level at 0.6620, target level at 0.6492.
With 40 pips in the money, I decide to take profit as I do not want to hold any position over the weekend. Bought back at 0.6518, profit is 40 pips, US$80.00.

3. Yesterday (27 Nov) I had bought 20,000 EURJPY at 123.14, stop level at 122.40, target level at 124.01.
Market is moving very slow due to US holiday (Thanks Giving Day). I decide to take profit first, sold at 123.25. Profit is 11 pips, US$23.09.

4. On 27 Nov, I had placed an order to sell 10,000 USDJPY at 95.27, stop level at 96.00, target level at 94.11.
My signal has turned from sell to buy, so I decide to cut loss. Bought back at 95.46, loss is 19 pips, US$19.90.

5. On 27 Nov night, I had shorted 10,000 EURJPY at 123.48, stop level at 124.10, target level at 122.46.
Target level is reached at 122.46. Profit is 102 pips.

6. On 26 Nov I had shorted 10,000 GBPUSD at 1.5246, stop level at 1.5350, target level at 1.5129.
Stop triggered, loss is 104 pips, US$104.00.

7. On 26 Nov I had shorted 10,000 EURJPY at 123.68, stop level at 124.73, target level at 122.60.
My signal has turned from sell to buy, so I decide to take profit first. Bought back at 123.28, profit is 40 pips, US$42.07.

8. On 25 Nov night, I had shorted 10,000 USDJPY at 0.9542, stop level at 0.9640, target level at 0.9391.
Today (26 Nov) the sell signal from BL TS is getting weak, so I bought back the short position. Profit is 33 pips, US$34.70.

9. On 25 Nov I had shorted 10,000 EURJPY at 125.19, stop level at 126.20, target level at 123.60.
Target level of 123.60 is reached. Profit is 159 pips, US$167.05.

10. On 25 Nov I bought 10,000 USDCAD at 1.2411, stop level at 1.2290, target level at 1.2522.
Uptrend seems weak, so I decide to take profit first. Sold at 1.2441, profit is 30 pips, US$24.11.

11. On 25 Nov morning, I had shorted 10,000 AUDUSD at 0.6481, stop level at 0.6570, target level at 0.6385.
AUDUSD met some support at 0.6400, I decided to take profit at 0.6431. Profit is 50 pips, US$50.00.

12. On 24 Nov morning, I had bought 10,000 USDJPY at 95.36, stop level at 94.88, target level at 96.31.
There is resistance at 96.00, so I took profit at 95.87. Profit is 51 pips, US$53.20.

13. On 24 Nov I had bought 10,000 EURJPY at 121.13, stop level at 119.50, target level at 122.71.
Target level is reached, profit is 158 pips, US$164.69.

14. On 24 Nov I had shorted 10,000 GBPUSD at 1.4899, stop level at 1.5000, target level at 1.4803.
Stop is triggered, loss is US$101.00.

Mechanical systems do work, although the downside to purely mechanical systems tends to be higher drawdowns than most will tolerate. I may be misinterpreting your post, but it looks as if an element of discretion is being applied (which is fine, I tend to trade in a similar semi automated style) but can you really claim the system is mechanical ?

 

[Victor90]

Do keep an eye on JBookTrader, it is being fairly actively developed, and having the complete source to your platform rocks IMHO.

Looks intresting

 

[Vrothdar]

*jumps back into the thread*

In response to North5 asking if there had been any sign of me or how my ideas were working out: They're not really. Unfortunately the personal problems that stopped me developing my ideas a while ago are still causing problems now even though at one point I had thought I was past it all.

Anyway, I still think the voting idea I was trying has further to run but trying to do anything much other than browsing the net on a 10" netbook is kinda painful! Hopefully I'll use some of my next paycheck to sort myself out a new PC and start playing around with some of my ideas.

The first things I'll be trying are managing trades so that it's not constantly in the market and seeing if I can calculate the price at which an entry would trigger rather than waiting to the end of the bar as I think that could get it performing closer to the accidentally precognitive version I created.

And thanks to Rnicoll for emailing me to prompt me to get back here!

 

[BREND]

Mechanical systems do work, although the downside to purely mechanical systems tends to be higher drawdowns than most will tolerate. I may be misinterpreting your post, but it looks as if an element of discretion is being applied (which is fine, I tend to trade in a similar semi automated style) but can you really claim the system is mechanical ?

my system is mechanical, but I do take my own discretion at times.
when I see that my profit is 50 pips, and trend is not very smooth, I would take profit first.
at of the day, my system is making a lot of money for me, that is most important. :clap:

 

[zupcon]

my system is mechanical, but I do take my own discretion at times.

So its mechanical, apart from when its discretional

 

[BREND]

So its mechanical, apart from when its discretional

It is still a good system. Here are the track records:

I had earned 458 pips profits this week: Forex & Binary Trading: 458 Pips Profit For This Week (24 Nov - 28 Nov)

I had earned 203 pips profits on 1st week of Nov: Forex & Binary Trading: Forex Trades This Week (2nd Nov - 7th Nov): US$727.93

I had earned 251 pips profit on 3rd week of Nov: Forex & Binary Trading: Forex Trades 17 Nov - 21 Nov : 86% success rate

I had achieved 100% success rate for USDJPY trades: Forex & Binary Trading: 100% Success Rate for USDJPY Trades

I had achieved 77% success rate for overall trades from Aug to Oct: Forex & Binary Trading: 77% Success Rate from BL Trading System

Surely this is a proven system that can help any forex traders to make money in the cruel and merciless forex market.

Anyone who is interested in my system, send an email to me at [email protected].

 

[north5]

Good to see you around again Vrothdar, hope you can move things along again soon. It is a long and painful journey.

I don't really have time to say a lot. Attached is current demo statement. Pretty good going I think. Within a week we've made 20% return - and as you can see that is with about 1% risk per trade.

The system will be turned off for tommorrow European and US sessions - but I shall let the current trades remain open. Got a few longer terms ones starting to kick in today, one of which is likely to be spiked tomorrow as it's EURGBP. Because it's a longer term bet though I'm going to leave it as the SL is larger than others.

I'll try and catch up with the goings on around here on the weekend.

 

[BREND]

US$919.33 Profit For This Week (1 Dec - 5 Dec)

This week 6 trades were executed: 5 trades won, 1 trades lost (83.33% success rate). 458 pips or US$919.33 profit was generated.

1. USD/JPY – Long closed (-104 pips) on 4 Dec

Open Buy: USD/JPY @ 93.51
Stop level: 92.47
Target level: 94.66
Closed: 92.47 (Loss is 104 pips, US$224.94)

2. USD/CAD – Long closed (+40 pips) on 4 Dec

Open Long: USD/CAD @ 1.2547
Stop level: 1.2443
Target level: 1.2663
Closed: 1.2587 (Profit is 40 pips, US$63.56)

3. GBP/USD - Short closed (+63 pips) on 2 Dec

Open Short: GBP/USD @ 1.4868
Stop level: 1.4950
Target level: 1.4735
Closed: 1.4805 (Profit is 63 pips, US$126)

4. USD/JPY – Shorted closed (+56 pips) on 2 Dec

Open Short: USD/JPY @ 93.46
Stop level: 94.30
Target level: 92.51
Closed: 92.90 (Profit is 56 pips, US$120.55)

5. GBP/USD - Shorted closed (+190 pips) on 1 Dec

Open Short 20,000 GBP/USD at 1.5311
Stop level at 1.5510
Target level at 1.5121
Closed: 1.5121 (Profit is 190 pips, US$380.00)

6. EUR/JPY - Shorted closed (+213 pips) on 1 Dec

Open Short 20,000 EURJPY at 120.73
Stop level at 123.00
Target level at 118.60
Closed: 118.60 (Profit is 213 pips, US$454.16)

All of my trades are executed based on BL TS (trading system).
If you are interested to generate alternative income by tapping on BL TS, send an email to me at [email protected].

 

[rnicoll]

North5, how's this week treated you?

I appear to have developed some sort of seriously persistent illness, which is hindering things, alas. That, and my going part time has failed due to bureaucracy. Rats.

I think where I'm going wrong in a lot of places is my stuff is directly trying to deal with the price stream, without filtering it. Essentially, it should be fairly apparent that the stream of prices is "dirty" - it can jump up and down, and depend in your data source can easily miss data points. So, one of the things I need to look at is having my trader filter the feed to try finding out what's going on in reality. So...

If the price feed goes "1, 2, 1, 5, 2", it should seem obvious that the 5 is out probably a glitch, right? A little more complex than that, but basically where I'm going.

I probably shouldn't write entries while half asleep...

 

[north5]

Well I'm really busy at the moment, and struggling to find any real time for this at the moment. However things should ease up soon and progress is still being made (although slowly).

EA got stuffed on two trades during the week - a bug in the code allowed it to take poistions way to big. So I had to fix that. Noticed then that after a recompile that it would open trades that it shouldn't (i.e. re-enter a long timeframe trade when the system had already traded that setup) so I had to fix that.

I have also managed to get system 2 into test - so am running that - different setups and philosophy behind the trades. It actually looks even more promising that the current setups - and I have an idea about how they can work together.

Also moving the test environment to a new PC in the next few days.

So it's been a bit of a week without any real ability to just let it run. Hopefully can sort out this new PC and can then just leave it running for a while - whilst I work on the joining up the two and putting in a better trade management system which I also have ideas for.

I had the same sort of problem with my initial custom system - I remember putting in some sort of counter if the price move variance was high and only allowing it to trade after it had settled.

Hope you get better soon.

 

[kwainpeter]

Forex Markets

Its really great thing to be here to share information regarding mechanical forex system.
Thanks for posting wonderful information for the beginners and most of people don't have idea about forex trading. I will suggest this forum to grab useful information for investors.

 

[Hunter08]

Hi folks

As a seasoned trader of almost 8 years now, my argument has always been that traders who follow or attempt to create mechanical trading systems are almost "mad" or just plain lazy and uneducated.
I am not here to create conflict, merely here to say that traders need to develop an understanding of price acttion and begin to read charts and master human psycology. 95% of people on these forums will never ever know what its like to read a chart correctly, the rest of the rubbish information is here to "tempt you", to "confuse you".

Let me tell you straight out, trading cant be a mechanical process in terms of entry and exit. The trading plan may be mechanical, but no trading method over time is going to work going forward without adjustment or manipulation, markets always change, and they always take back what they give. Computers are not as good as humans, and never will be.

The way to trade, and the way I trade is to study price action and learn human emotion and behaviour. There is a large amount of emotion on the charts at present, and the traders with a keen eyes for price aciton signals and reading the charts are cleaning up big time.

The site I learned plenty from and highly suggest for price action and chart reading is Forex Trading Training on Price Action
The key theme of this site is price action signal and to keep your trading simple and clean. Use risk reward ratios that make sense and understand how to master your emotions.

Never in my life has anyone proven to me with real, genuine money that trading a purely mechanically trading method will make money into the future. Learn a price action method and way to read charts, its much simpler.

Just my 2 cents, and I hope it helps some newbies.

Hunter

 

[Hotch]

IMO it's quite simple, if you're making a decision and not just guessing, then it is possible to express your thought process, and thus put it in a mechanical system.

 

[neil]

Hi folks

As a seasoned trader of almost 8 years now, my argument has always been that traders who follow or attempt to create mechanical trading systems are almost "mad" or just plain lazy and uneducated.
I am not here to create conflict, merely here to say that traders need to develop an understanding of price acttion and begin to read charts and master human psycology. 95% of people on these forums will never ever know what its like to read a chart correctly, the rest of the rubbish information is here to "tempt you", to "confuse you".

Let me tell you straight out, trading cant be a mechanical process in terms of entry and exit. The trading plan may be mechanical, but no trading method over time is going to work going forward without adjustment or manipulation, markets always change, and they always take back what they give. Computers are not as good as humans, and never will be.

The way to trade, and the way I trade is to study price action and learn human emotion and behaviour. There is a large amount of emotion on the charts at present, and the traders with a keen eyes for price aciton signals and reading the charts are cleaning up big time.

The site I learned plenty from and highly suggest for price action and chart reading is Forex Trading Training on Price Action
The key theme of this site is price action signal and to keep your trading simple and clean. Use risk reward ratios that make sense and understand how to master your emotions.

Never in my life has anyone proven to me with real, genuine money that trading a purely mechanically trading method will make money into the future. Learn a price action method and way to read charts, its much simpler.

Just my 2 cents, and I hope it helps some newbies.

Hunter

What.....the price on the site being spammed is $297.
Stuff on T2w is free for the determined newby trader

 

[Hotch]

What.....the price on the site being spammed is $297.
Stuff on T2w is free for the determined newby trader

I think the best thing on the site is the "testimonial" where the email address has been marked out, yet is still clearly readable.