P2: A batch of FX market trades

[sasch]

I ended up with +1R (exit at 1.09005) with the second trade (pin bar retracement entry).

Was not happy with my trade management again.
I ended up being a d--k for a tick, as the trade ended up not reaching the +2R target by about a 1 point.
This was stubbornness on my part as logically it was a good spot to exit, due to the resistance at this level. There was also a second opportunity to exit at +1.5R.

 

[andymac]

equipment query?
i am using mt4 on a mac for last 4 months or so. every 6 weeks or so it crashes, completely. have to re-download, contact broker, reset password, and then redo all my settings and charts in the new one. such an enjoyable afternoon!!!!!
anyone else have this problem?

 

[peter2]

@andymac If you didn't get shaken out yesterday in your gold trade then I can tell you you're looking good now. You should be able downgrade to a PC with the profits.

 

[andymac]

ha!!! not that brave to let it sit through the fomc rubbish last night, but got a little piece yesterday and another little piece half an hour ago and now i am being a piggy and going for three in a row,,, but i think its nearly done T=1181.5, we see

 

[peter2]

I'm old enough to remember the Sesame St song;
"One of these charts is not like the others"

Very easy to trade the system (4T) and go long Nasdaq (+2R).
I was also short gold following the 4hr trend. Took out my price target just before I got home.
These won't be included in results as I didn't have time to post before tennis.

I only mention them to demonstrate (near) real time application of a TP.
I'm never going to get them all or every move. I only need to get a few.
I didn't get any of the FOMC moves as I was asleep. It doesn't matter. Get ready for the next move.

 

[sasch]

equipment query?
i am using mt4 on a mac for last 4 months or so. every 6 weeks or so it crashes, completely. have to re-download, contact broker, reset password, and then redo all my settings and charts in the new one. such an enjoyable afternoon!!!!!
anyone else have this problem?

I have not had any issue on PC with MT4.

It appears Mac does not have a native version, as it seems to work in conjunction
with Wine. But, then I notice, some brokers offer a native version? Not sure if they are
just including a Wine wrapper in the executable here.

Wine is not a very stable platform, so this could be why you are having problems. If you
don't already, you could try running Windows in an emulator on your Mac and then run Mt4 on it. Or run Mt4 natively on a PC and then use remote desktop to connect via your computer.

Not sure if you use trading bots. I find it handy having a separate PC to run trading bots, as I don't have to worry about my main computer being on all the time.

You don't mention any other problems with other software, otherwise I would guess you
have a flaky hard drive.

 

[sasch]

I'm old enough to remember the Sesame St song;
"One of these charts is not like the others"
View attachment 89495

USTEC entry aligns with 4hr upward trend, the others in downward trends?

Peter, Do you wait for these trades to be in break even positions, before leaving them unattended, or are you happy to leave SL at initial level?

Have you ever done a comparison between your automated trades (set and forget, and play tennis) and your actively managed ones in terms of Risk/Reward and win %?

 

[peter2]

@sasch They're two very good questions.

If price moves slowly, I'm happy to leave the initial SL as it was. The market is telling me that I have to be patient. If price moves quickly then I tend to micro-manage depending on where my initial target is.

Should I micro manage? That is the question. I haven't done the comparison you suggested, but I may not like the results if I did. I do have a tendency to take profits too quickly. I excuse this behaviour because there are plenty more opportunities. This doesn't make it right.

I'm skewing the results in my favour but I'm unaware if I'm also reducing my profits.

My advice to a new trader would be don't micro-manage.
Let the trade go and trail the stop using an objective rule and plan to add to the trade at set intervals.
I've noticed than when I'm prepared to add to a trade I'm less likely to take profits quickly because I'm preparing for a larger move. Some of these 4hr swings go for quite some distance.

 

[aus_trader]

It is coming to the end of the week and only now some of the charts are starting to show some clear direction such as Euro-Dollar and Aussie-Dollar. But some of the other cross pairs are still ugly !

 

[peter2]

I've mentioned several times now that I haven't tracked the performance of different exit strategies. Could my edge be improved if I applied a different exit strategy?

It's time I addressed this opportunity. Whether I like what the results may suggest or not.

I've started modifying my spreadsheet to track the performance of a number of exit strategies. There are two main exit types with unlimited possibilities. I'm going to track a few that I would consider using if they produce significantly more than what I'm actually earning.

Profit targets: 1R, 1.5R, 2R, 3R (This will provide data about my edge on entry.)
Trailing strategies:
(i) Trail by 1R
(ii) Exit when the 4hr bar closes across the 8EMA(O)
(iii) Exit below the low/above the high of 2 bars back
(iv) Exit below the low/above the high of 1 bar back (ignoring inside bars)

If you have other suggestions then please post them.

 

[andymac]

hi Sasch and thank yu for the reply and info, yes although the broker offers a mac version i do believe it is just a bit of an aussie style bodged up version but that is also where my tech knowledge ends. i think i may take peter's advice and go get a PC just for trading which would not be a bad thing anyway.

 

[andymac]

sitting down for the arvo and first thing i notice is that aud has retraced almost 50% of last few weeks move up in a nice A-B-C, and now down move is looking tired. Gold same only nearly .62 retrace. Eur same only initial move up was stronger and looks more like 1-2,1-2 and has now retraced .62 of second leg up. USD index same as euro but in reverse of course.
Anything could happen next, and often i find friday a bit quiet as well, but i might just be sitting watching for evidence of a reversal tonight.

 

[andymac]

Sasch - in relation to your 2 questions for Peter above, very interesting topics, especially the second one which i always battle with.
i believe anyone can enter a trade on just about any pretence and be right about half the time, which if you think about it is as often as most really good experienced traders are right. It is all about making a better profit on your good ones than you lose on the other half. everybody i have ever read or talked to can tell you about how much they have left on the table. so i have to accept that WILL happen.
the problem i have is when one really goes my way i keep finding supposed "good" technical reasons why it will go further and then all of a sudden you have bugger all.
So i will be looking forward to the results of Peters latest mission.
Interestingly i have learnt from him last few months and have been just taking a set profit target, maybe 2r but lately just a set dollar amount in relation to my acct size. when a trade hits my pre-determined profit target i just take it and be happy with that. and that seems to be working better for me.
So back to your first question - and remember i trade shorter time frames for a shorter period of the day than Peter, probably watching my trades more closely - so my initial stop doesn't really matter to me, it is wide, previous swing hi or lo, just so i don't get tipped out quickly. I do my work at the start of my trading period and leave orders in the market, until they are triggered. THEN i almost always start aggressively chasing stops up to break even or better. i have a lot of small losses and small profits and the occasional good profit, i think it is the big losses that can kill me.

 

[peter2]

I can't wait until the end of batch to show you the results after 16 trades.

The first four exit strategies use profit targets. They either hit the target or get stopped out for -1R.
The second four trail the exit stop using an objective strategy.

I'm loath to draw any conclusions yet as there's too few results.
(I'm quietly pleased)

There's got to be a better trail strategy than what I've started with.

 

[andymac]

Peter i don't think there is- a better trail strategy - i don't have empirical evidence, but i have been on that track for a number of years. i have discussed and read widely and tried many methods, indicators, MA's, etc, etc, they all have pluses and minuses and none can be said to outperform another.
Having said that i do trade 2 longer term systems that both use MA crossovers for exits and i happily use them as they are part of a back tested system and by sticking to the system i know what results i can expect.
i am very interested in your project and would love to be proved wrong,(as it would make trading easier) but for a discretionary trading regime i think there is far more to be gained from trying to find better methods of setting profit targets rather than trailing stops. and i think your preliminary results(if i read them correctly)are showing that and that what you were already doing was best.

 

[aus_trader]

I also have had similar experience in the past, so these results are a good way of adding further evidence to it. In other words I've found whatever method I use, if I don't set a profit target, then other than a once in a blue moon huge winner there is too many losses if purely trailed on each trade. So I am convinced from my experience that setting a profit target is the best way to maximise gain.

Interested in Peter's forward testing experiment to see the optimal target that will result over a larger batch of trades.

Also surprised know that pure trailing strategy actually works! for a longer term strategy. But if it works that's fantastic.

 

[andymac]

apologies for jumping in and out a couple of trades triggered, 1 dead, one barely alive , so the best results i have had so far revolve around using pattern recognition to set targets rather than trailing stops. in simple terms the old double bottom/top, triangles, head and shoulders etc etc. the thing i like about patterns is that they come with defined targets. there has been quite a lot of research - mostly bulkowski- whom i am sure you have run across, around success rates using patterns and under what conditions they work better than others. again none of them are perfect, far from it, but i think results are better due to a defined target and by its nature a defined pattern that , when it fails, you know it has failed and time to leave.
The difference is you are setting a target rather than trailing a stop. and you are already proving that a set target works.
So my mission has been to find a better way to set targets. hence Elliot and Fibonacci, -modern elliot not the dribble espoused by prechter jnr -which are really just more involved market patterns and measurements. and i won't rabbit on,,,

https://www.elliottwavetrader.net/e...-Basics-of-Fibonacci-Pinball-20130129224.html
sorry don't know how to post a link
edit- it seems to have worked

 

[aus_trader]

apologies for jumping in and out a couple of trades triggered, 1 dead, one barely alive , so the best results i have had so far revolve around using pattern recognition to set targets rather than trailing stops. in simple terms the old double bottom/top, triangles, head and shoulders etc etc. the thing i like about patterns is that they come with defined targets. there has been quite a lot of research - mostly bulkowski- whom i am sure you have run across, around success rates using patterns and under what conditions they work better than others. again none of them are perfect, far from it, but i think results are better due to a defined target and by its nature a defined pattern that , when it fails, you know it has failed and time to leave.
The difference is you are setting a target rather than trailing a stop. and you are already proving that a set target works.
So my mission has been to find a better way to set targets. hence Elliot and Fibonacci, -modern elliot not the dribble espoused by prechter jnr -which are really just more involved market patterns and measurements. and i won't rabbit on,,,

https://www.elliottwavetrader.net/e...-Basics-of-Fibonacci-Pinball-20130129224.html
sorry don't know how to post a link
edit- it seems to have worked

Yes all good, the link takes you to the Elliot Wave page.

 

[andymac]

hi austrader, now i know that posting a link works have a read of this if you feel like it---

http://www.easysharetradingsystems.com.au/how-to-trade/52-week-highs

this is so simple i think most people refuse to believe it can work. i have been following and doing since 2014, i do spend a little more time than him on my buying parameters, but not much, my results match his published. the E book on his site is the best $30 i have spent since i started trading.

 

[aus_trader]

hi austrader, now i know that posting a link works have a read of this if you feel like it---

http://www.easysharetradingsystems.com.au/how-to-trade/52-week-highs

this is so simple i think most people refuse to believe it can work. i have been following and doing since 2014, i do spend a little more time than him on my buying parameters, but not much, my results match his published. the E book on his site is the best $30 i have spent since i started trading.

Thanks for the info, I'll have a look...