The T2W Members Forex Strategy - A Collaborative Effort!

[JTrader]

How are you going to know in advance without actually going ahead and trading it ?

Do you really think that JonnyT developed his approach knowing that it may suddenly fail to work ? The fact is that all trading strategies will have lose money at certain times and this is unavoidable in my view.


Paul

Correct.

More specifically, what i was trying to explain was that JonnyT's approach worked well on that market during that particular phase of time. As the dynamics of the markets changed, his parameters became less effective - leading to a lot of drawdown.
His parameters were time-based with an SL, and maybe a PT.
Other peoples parameters may involve indicators.
Yes, both approaches can become less effective, leading to extended drawdown, with changes in market dynamics.

In essence, what i was saying is that if you give me an indicator based methodology, and a price action based methodology, and a time-based methodology, all with equal performance levels, and personally, i would choose the time-based (maybe a breakout) method last.
However, primarily, i would go with the methodolgy that is most proven/has performed best - whatever methodolgy this may be based on.

 

[zupcon]

Yes CV, that all does sound like a good idea. A bit like "oceans eleven" :idea: .

Having a bunch of people with different skill's and area's of expertise is all very well and good. The problem is you still need someone to direct and coordinate them, they wont just spontaneously start creating a solution in a synergistic fashion. There needs to be a leader

 

[JTrader]

Having a bunch of people with different skill's and area's of expertise is all very well and good. The problem is you still need someone to direct and coordinate them, they wont just spontaneously start creating a solution in a synergistic fashion. There needs to be a leader

Thinking back to my academic days, a leadership structure is of importance with such project tasks. This may not lead to the best possible decisions/outcomes, but at least things are more likely to be orderly, with minimal wastage of time & effort.

 

[Trader333]

i would choose the time-based (maybe a breakout) method last.

If this is the case then it implies that your preferred method is not trend based trading. Can you expand a bit more on what your preference is and also whether this would be intra-day or EOD ?


Paul

 

[JTrader]

If this is the case then it implies that your preferred method is not trend based trading. Can you expand a bit more on what your preference is and also whether this would be intra-day or EOD ?


Paul

My preference is for intraday.

Based on my experience of system testing, EOD forex trading does not lead to as good a return, in comparison to shorter timeframes like H4 - especially for trend following.
On an end of day basis, forex prices begin to enter an area that is determined much more by fundamentals, with price entering a zone.
In my opinion, finding the right timeframe is a balance. Too shoret a TF & you struggle with the basics like covering the spread. Too long a TF and any profits will be amassed too slowly. Finding the ideal/optimum TF is important.

Also, I do like trend based trading.

 

[JTrader]

A strategy will also rely on using either close of candles, or intra-candle. I prefer strategies that purely look at the close of the candle, regardless of timeframe. Because these strategy types allow you to go away between the close of candles, and do not require intra-candle screenwatching.

 

[Trader333]

Too long a TF and any profits will be amassed too slowly

This is not the case in my view. Those who trade longer term make the largest profits by far because they use compounding which is almost impossible to do intra-day. Even Grey1 who makes large intra-day profits has stated that it is pocket money when compared to his longer term trading.

It is long term trend traders who make the largest overall profits. I know you look at ForexFactory and if you check some of the threads on there (such as Jacko's) you will see that he is a long term trend trader whose profit is huge.


Paul

 

[JTrader]

This is not the case in my view. Those who trade longer term make the largest profits by far because they use compounding which is almost impossible to do intra-day. Even Grey1 who makes large intra-day profits has stated that it is pocket money when compared to his longer term trading.

It is long term trend traders who make the largest overall profits. I know you look at ForexFactory and if you check some of the threads on there (such as Jacko's) you will see that he is a long term trend trader whose profit is huge.


Paul

I disagree about long term forex v's short term forex. Compare a H24 & H4 GBPUSD chart for example. With a typical indicator based strategy method, compare how many trade opportunities you get over lets say 6 months, on both TF's.
Also compare how big a pip SL you have to use (If you use smaller SL's you get to use bigger stake sizes, while risking the same % of capital).

On the H4 chart, there will be many more trade opportunities, you will likely be using smaller SL's, and you have 6 times the opportunity to be in & out of trades on H4 as you do on H24. Therefore the H24 can be seen as sitting around, unneccessarily wasting time, while you could be much more active, in & out of trades more often, with smaller pip SL's on H4 TF, thuus being able to build/compound your capital quicker.


Why do you say it is almost impossible to compound profits intraday? i don't see why.

Overall, the pip profit levels might be equal. The H24 pip rofit levels might be higher than H4. But if you've had to use bigger SL's on H24 than on H4, risking say 1% capital per trade, your stake sizes will have been smaller on H24, and therefore your overall cash£$ profit levels will/may be smaller from H24 over the 6 month period.

Also because on H4, you will be in & out of more trades, you can compound you profits/increase stake sizes more easily/quickly/more often in a given time period. Over a month H4 might produce 10 trades, H24 1 trade. This means that you have had no opportunity to compound any profit/increase stake size on H24.

Cheers.

 

[Hoggums]

I disagree about long term forex v's short term forex.

I agree with Trader333 - although I am slightly biased because I am a long term trader. By your argument JTrader then you should trade tick/1min data - then you could capture all the ups n downs intraday. But I'm sure you realise this is not a viable option because the shorter the timeframe the more random the price action appears.

I'm suprised having been a member of this site for 5 years you haven't given longer term trading a try.

Besides, talk of tighter stops etc is irrelevant. If I make 1 trade a week risking 100 pips - it's no different to you making 10 trades a week risking 10 pips. And I would be far more confident that my one trade wins more pips than your 10 combined.

 

[JTrader]

By your argument JTrader then you should trade tick/1min data - then you could capture all the ups n downs intraday. But I'm sure you realise this is not a viable option because the shorter the timeframe the more random the price action appears.

And get the TF too short and you can struggle to cover the spread in relation to the expected pip profit size.

 

[trendie]

has anything been defined yet?
I think the only idea been considered is that it should be about 4-hrs time-frame.

it is a good idea, but I think generating and sustaining momentum is also needed to maintain interest.

I still think the RSI 80/20 higher/lower "hooks" is as good as any! :cheesy:

EDIT: with regards to recent flurry regarding time-frame, I think deciding the best time-frame is important.
But consider also the transaction costs. if you make 100 pips in one trade, you have to make 103 pips for example. (cost of spread)
but, in order to make 10 lots of 10 pips, youa ctually have to make 13 pips 10 times, to nett 100 pips.

so, the cost of transaction as a function of your anticipated profit needs to be factored in.
however, I think JT has got the 4-hr TF right, more due to psychology, as you get feedback in terms of trades won/lost more regularly, rather than trading of EOD, and possibly losing 2 days worth of profits before being stopped-out.
4-hrs gives a good "feel" to it, as you get a chunk of the days range.

 

[JTrader]

I still think the RSI 80/20 higher/lower "hooks" is as good as any! :cheesy:

Hi TR

i've been busy working on an improved strategy of my own, so have not put a great deal of thought into this one.

Yes its possible to build something around RSI hooks for sure.

 

[Trader333]

I disagree about long term forex v's short term forex.

It doesn't matter if you agree or not as this is a fact and it is because of compounding that it is possible. The number of intra-day opportunities is irrelevant to the argument. Do you understand what I mean by compounding ? Paul

 

[JTrader]

It doesn't matter if you agree or not as this is a fact and it is because of compounding that it is possible. The number of intra-day opportunities is irrelevant to the argument. Do you understand what I mean by compounding ? Paul

What do you mean by compounding?

Thanks.

 

[jacinto]

What do you mean by compounding?

Thanks.

scalling in, increasing size, etc. etc. i.e. making each pip worth more every time you add to your position

 

[JTrader]

If you had to choose only 1 chart item to use OFR TRADING, what would it be and why?

Ultimately, I think i would pick a straight line. Because i can use this to identify trend direction, channels, breakouts & S/R.
Used in conjunction with a knowledge & interpretation of price action/candlesticks/HH-HL-LL-LH etc. what more could a trader wish for....:idea:

 

[JTrader]

This is not the case in my view. Those who trade longer term make the largest profits by far because they use compounding which is almost impossible to do intra-day. Even Grey1 who makes large intra-day profits has stated that it is pocket money when compared to his longer term trading.

It is long term trend traders who make the largest overall profits. I know you look at ForexFactory and if you check some of the threads on there (such as Jacko's) you will see that he is a long term trend trader whose profit is huge.


Paul

A few people have mentioned grey1's methods. Have they been published on these T2W boards?

I had a quick look but not find anything substantial in detail.


Cheers.