Real market algo trading

NVP

Legendary member
36,506 1,833
hey L

can you give some idea of what you are actually doing here ?

thanks
N
 

NVP

Legendary member
36,506 1,833
Hi,

Today I will briefly describe strategy which is connected to myfxbook.
As I said before this strategy is in phase of incubation.

It is trend following strategy which is based on failures of last tops/bottoms.


Other rules:

  1. All positions must be closed at the end of the session.
  2. Use Breakeven.
  3. No Take Profits.

Why such rules?
Let’s start one by one.

1. Why I close all positions at the end of the session?

Because:
  • Swap is additional cost.
  • Lower liquidity during night (higher probability for flash crash)
  • New day – new opportunities.

2. Why I use a Breakeven?
  • No sense in staying in the undecided market.
  • Low profit is better than low loss.

3. Why I don’t use Take Profits?
  • No one can predict if directional move takes 20 or 200 pips.
  • Black swans really exist.;)
  • “Cut losses and let profits run”.

Money management in this strategy for now is set as below:
  1. Max DD: 50%
  2. Max risk per trade: 3%

After I accept strategy, I change MM to lower values.

interesting - so its a continuation strategy - like i trade most of the time on forex - at what point do you define "Failure" ?
 

NVP

Legendary member
36,506 1,833
I wish to share one of my trades from yesterday.

On EURJPY EA is currently looking for shorts and a failure of local bottoms.
In the picture below you can see that yesterday such a failure had place which gave opportunity to short sell and to flow with the momentum.
This trade was closed with 34 pips profit.

View attachment 262089

can you show exactly where you took the trade (s) ?

i know where i would have entered (subject to other rules i have being compliant) ...

will be interesting to compare notes

N
 

Likhazar

Junior member
35 1
Finally!

After 5 months of profit, a period of losses came. In fact, this is the moment that shows the actual strength of the strategy.

Over the past 3 weeks, I have returned the profit that we generated in less than 10 days in May. The most interesting thing is that one good day is enough to make up for a worse period. Will it be the same this time? time will tell




In such moments I see the advantage of automatic strategies over manual trading. I am sure that if I was involved in trading, I would probably start combining with the strategy. Trading using automated strategies, I am a bit out of the way, watching what the computer is doing and I know that sooner or later the markets will favor me because I know the statistics of my strategies.



On average, I have 4-5 months of loss each year.



And now substantive ...



As you have noticed, I publish "trading rules". I decided to create them because many novice traders have wrong expectations in relation to the market.

I know that they may seem trivial, but in the end you'll admit it's right, even if you disagree with me now.



Write me your opinion! I will gladly get to know other views
 

Likhazar

Junior member
35 1
interesting - so its a continuation strategy - like i trade most of the time on forex - at what point do you define "Failure" ?

I don't know if I understood you correctly but "failure" for me is when price goes above last top or below last bottom even by 0.1 pips.
 

Likhazar

Junior member
35 1
can you show exactly where you took the trade (s) ?

i know where i would have entered (subject to other rules i have being compliant) ...

will be interesting to compare notes

N
As you see in the picture I was entering as soon as price goes below last bottom. This is applicable to all shorts. For longs it is opposite, so when price goes above last top.
 

Likhazar

Junior member
35 1
Rule # 3 Understand the project you want to invest in.

Do you know in which market it works? What competition does he have? What makes it different?

By investing your funds in any project you are actually a shareholder in a given company. Do you think that any fund would buy companies without checking what they buy? You must act in exactly the same way.
Maybe there is something that will not be consistent with your approach. Maybe the investment horizon will be too long? or maybe the risk is too high?

It's better to know all about it at the beginning.
Also remember that a given project does not work in a vacuum and encounters different problems just like any other company, and despite the best efforts of the creators, something may go wrong. Also, try to assess the environment in which the project competes. Why should it go? Where is his advantage? The creators of the project will always look optimistically into the future, does your objective eye share their enthusiasm?
It's better to reject two good deals than to lose on one very bad. Therefore, before you make a transfer, understand the industries, understand the project.
Warren Buffett did not invest in technology companies for a long time, because he did not understand them, did he lose it? No, he earned and slept peacefully because he invested in what he knew.
 

Likhazar

Junior member
35 1
I am starting work on another strategy. I want to share my results with you and I will gladly get to know your ideas.

Initial outline:

Time horizon: daytrading
Trade type: for false breakout or for impulse exhaustion
Stop loss for the last top / bottom
closing the position: at 18:00 (at the end of the day)
Trend following
In the next post I will describe the assumptions of the entry.
 

Likhazar

Junior member
35 1
On June even BE didn't secure me from losses, so I had to give back some profits.
June.gif
 

Likhazar

Junior member
35 1
Another trading rule:


4 Never invest all funds in one project.



As Warren Buffett says - "never put all eggs in one basket." Despite the sincere desire of the originators, there is always something that might go wrong. Your task as an investor is to ensure the safety of capital. If you focus only on one project, in fact you become its biggest believer, because the fate of your funds depends on this project. If you diversify your portfolio for various assets and wisely share funds, you are able to withstand the loss of part of the capital, because other projects will allow you to make up.
Be independent, share funds for various projects, thanks to which your capital has a better chance to survive and multiply :)
 

Likhazar

Junior member
35 1
Another thing to consider:



04 I understand that the results should be considered in a one-year horizon.


Every beginner trader thinks that one can be profitable on the stock market everyday. That is why he sets goals of 1% a day, 100 USD a day, 10 pips a day. When it turns out that maintaining such targets becomes unrealistic, it goes to a higher interval. In the week of 1000 USD, etc. But this also will fail.

Why?


Well, because as in any business, the same is true of the stock market cyclicality. There are better and worse times. A lossy month? Normal thing, and 3 or 4? Also. Why? Because on trading you need to look long-term. The investor's goal is to patiently wait for a great time for his strategy and to survive the worse time and so on and on. Best of all, sometimes it takes 1-2 months a year to get a magical average of 100 USD a day.


Well, but right? This is only average ... and as it turns out, a person looks at what is in the middle, and forgets that the extremes determine the final result.
That's why the best investors are not those who earn every day, or every month, but those who are patient and can use opportunities. Because one good trend will pay for everything and will make your results much better than your dream of 1% per day.
 

Likhazar

Junior member
35 1
There is no strategy that earns in all conditions. My main strategy is based on breakouts, which is why I need strong, daily trends to make money. This is perfectly shown by the last two months. May, which had strong trends and June, an extremely consolidating month.

This reflection brought an interesting idea for a new strategy.
In the previous post I have already indicated what I mean, it is about playing the false breakout formation or to losing the momentum after a strong movement.

Entry rules:
1. Determining the last top / bottom according to the trend,
2. when the price hits the given level, I start searching for the moment of entering in the opposite direction.
3. Based on: stochastic / fractals / reversal candle formations.

Indicators:
1. Indicator for determining the trend - I am big fan of the averages so probably I will stay with it
2. Indicator / formation to determine the moment of entry - the simpler the better, I will test what I wrote above

Summarizing:
In the morning I set the last top or bottom (zigzag) according to the trend (MA), When the price hits the given level, I start to look for the opposite signal according to the selected indicators. I am opening the position. After opening, I put SL behind the last top / bottom, I close the position at the end of the day *

* I will determine exact hours during EA tests.

I am getting into coding and testing, I'll soon post the first results.

Oh, 98% of the strategy goes to the trash bin, so this idea can be exactly the same :)
 

Likhazar

Junior member
35 1
The lossy month is something normal

I do not understand why losses are taboo. Although most people are losing money on the stock market, hate meets them instead of support. I have already written about it and will mention it again - win rate is not a measure of a good trader. Trading is not a sprint, rather a marathon. Only the hardest ones reach the finish line. The best traders in the world have not only losing days, weeks or months, but can also count the year in the red. Is it wrong? Of course not, the strategy had worse period. Do all companies always earn? Those who are in business know exactly how it is.

I often say that the best test for a trader is how he goes through the period of losses. Is he combining? Is he depressed? Is he changing the strategy? It is in these moments that we show our predispositions to trading. If we trust our strategy, we should consistently implement the assumptions and wait for the end of a worse period.

Trading is an occupation for many, but not for everyone.
When you understand that loss is a normal condition and that there is no super strategy that always generates profits, then you will take the first step towards success on the stock market.