TA Forex Trading

Pennies how would you setup your stoploss-say using a audusd chart--using the MA SHADE

If you're using the recommended 15 minute time frame Jav, a 15 to 20 pip stop loss is plenty. Any more than that and it's just a waste of money since we're trading it manually.

An automated system would require a larger stop loss though. I've actually been working last night and today on an EA based on the general principals of the MA shade trading system but it's difficult to say the least. I can see the trade setup easily but teaching the stupid computer to recognize a setup is proving to be quite a job.,,LOL!

For higher time frames on the MA shade setup, you'll have to adjust stop losses accordingly although none of them have to be very large relative to the time frame you're trading compared to the win rate and what you make on the winning trades.

Pennies now you're talking Greek to me lol
on your backtest charts

EA Demo Account Tracking with Actual Trades

Ok gang, I created a new demo MT4 account to forward test this EA. I had to "creatively" borrow some other EA's along with my own code and set this up. However, it is only designed to run on a daily chart...no scalpers...sorry about that. I'm still working on that one so we can trade lower time frames.

I'm providing the link here for the demo account. I didn't realize it, but for some stupid reason, the demo MT4 accounts always set up with a million bucks starting balance no matter what you tell it you want...dumb...I don't know anyone who has a million bucks to throw around. I told it to use a thousand bucks and then it added 999,999 more. I tried it 3 times and it did the same thing no matter what I selected.

Oh well...it's about percentages anyway, not dollars.

So, I have 5 pairs running...AU, EU, NU, GU, and UJ...the big five. The rest don't matter. The EA has automatic money management so as it makes profit, it automatically adjusts trade entries...basically, it's all hands free.

The EA balances out the losses with the wins by taking additional trades at key points along the way. Rather than the Shade setup, I had to settle for a breakout strategy instead. Seems to work very well. The EA just doesn't lose money as long as you trade the daily account and it compounds the gains. Typical drawdown is around 5 or 6 percent max and its got a win rate of 90% or higher.

So here's the link. If it runs well over the next month or two, I'll go to a live account with it and turn it loose.

https://www.myfxbook.com/members/nettechs/breakout/2184811

My thoughts pennies........it seems to me that with all the possible "if, and, then" possibilities that could be written into an EA program, it seems to me that running the program on a few different pairs can help catch profits on let's say the 5 minute chart when any one pair is in a long tight price range consolidation, while one or more of the other pairs might not be.    So you could be profiting on one pair while the program waits out price action change on the other consolidating pair.

Also, one would have to write trade triggers accommodating prior price action zones on any time frame including let's again say the 5 minute chart.     I have a real problem with taking losses, but if prior price action zones were accommodated in the software programming on the 5 minute chart, then I can see where the breakouts versus stop losses would still carry great profits in the long and short run.      I'm just at a loss as to how you could get the computer to recognize the actual and accurate historical price actions zones.

Hey Qui, just checking back in. I did backtest the EA against all the 5 majors for the past 10 years and they all made money. Of course, you have to remember 2 things...

1. The EA is designed to run on a daily chart. It looks for 100 pips of profit per trade and the money management portion of the EA adjusts for any losses by taking additional trades after 1 trade closes so the effective loss is basically nothing. The largest drawdown on the majors after 10 years backtesting is only 5% to 6% per pair.

2. The EA is extremely conservative, taking only 2% of risk per trade. The money management potion of the EA automatically increases your trade size as profit accumulates in the account.

The pairs had different levels of profit over the 10 year backtest, which is of course to be expected. Most of them showed anywhere from 150% to 200% total profit over 10 years for each pair.

Now, that works out to 15% to 20% per year average gains per pair. So if you're trading one account with the 5 major pairs, you can basically expect to double the account each year, more or less.

That's at the extremely conservative level of only 2%. If you increase the risk, you increase the gains but of course, you can experience more drawdown in the account, which means you can't trade as many pairs.

Trying to set up an EA to trade on a small time frame is, as I experienced, extremely difficult. There's too much variation in the way the chart can move. MA's cross and recross constantly as price action swings wildly back and forth over the MA's. Plus, when you're trading small time frames, you have to have smaller TP levels and smaller stop losses to be effective. Eventually, you get to a point where you're dealing with TP levels and stop losses that are only2 or 3 pips, which is pretty much the spread in most of the pairs we trade. So you start getting stopped out almost immediately when the trade triggers simply because of the spread.

Overall, I've found that the smaller time frames are just too risky to let a robot trade. It takes far too many losses for my comfort. I'll still play around with it but unless I can come up with an EA that gives me at least 90% accuracy with less than 10% drawdown over a 10 year period, I'm not gonna unleash it.

It's easy for us to look at a chart and say "this trade was obvious" for this reason or that reason. But trying to teach the robot to look at all the things that we take in when we look at a chart is like trying to get an artificial intelligence program to understand what a chair is.

Think about how you would teach a computer what a chair is. You might something like "Well, it's something you sit on." But that doesn't work well. You can also sit on a table or on the floor or on a couch or what have you.

So you might start adding conditions...things like, "It's something you sit on and it has 4 legs". Ok, that sounds good...until the software tries to figure out what a 3-legged stool is because it doesn't fit the rules.

A 2 year old child can figure out what a chair is because the human brain is a rather complex feat of engineering. But the computer and any software you attempt to create to interpret anything, is faced with the stumbling block of having to have every single step and every single possibility programmed in because it can't think on it's own.

Such is the ultimate problem with creating EA robots...most all of them fail miserably because they can't think on their own.

A short is in order for CAD/JPY.....IMO of course

It went up 900 pips without a meaningful pullback, but I expected it to go a little further. To about 90.50. It may still, but from the looks of it, that is not its next move.

May be right kermit. I wont ride it to 90 though. Like the AU short I'm still holding. And those that doubted the EU long pairs....behold!!!!

Hey pennies..........I've spent a fair amount of the day watching "Mql4 Lessons" by "Jimdandy1958" on youtube to try to see if I can't put some of my ideas in an EA together at some point in the future.     I don't know C++ but the guys vids are helping to get a feel for the language and flow of the EA script.    He's put together over 150 vids relative to forex and EA programming.    He has one, and I've seen a couple from other people in searches regarding EMA trade based EAs, so I'm hopeful I can include the EMA tunnel as one of my trade variables in an EA.   

I do get what your saying about the inability to program the computer to think as a human thinks.   That's why I'm not sure the price action aspect of our method of trading can be applied to an EA.   Maybe there's some way to write in a formula that will work but I know this is going to take a while.    It's interesting though so I'm going to continue in my trek whether it ever pays off or not; a bit of a new hobby I guess.

Referring to the "drawdown" you mentioned in your last post, I would be more than happy to bump up the risk while reducing the number of pairs traded as long as the gains on trading only one or two pairs can be found to consistently deliver 5% or better profit per week.      Oh and your struggle to make the 5 minute chart pay off in the long run due to all the ema crosses and gaps etc., doesn't surprise me.     A 5 minute scalping EA just may not be realistic in the end.     If it is possible, I think applying the EMA tunnel to the trade variables will be the answer if it's even possible to do so.