Long Term Goals and Methods

I have mentioned once or twice on threads I post on that I more than doubled my live account last month and I have recieved a few questions about my trading methods so I thought I would start a thread to answer some of them, firstly I should say I don’t have system to teach everyone. What I do have is a long term goal which was to create the perfect EA so I won’t have to stare at charts all day lol
Sounds like a crazy dream but I do believe it is possible and my experiments so far are starting to confirm this.
This is how I plan to create the perfect EA and why I believe mine will outperform all the rest.
Ill get to the doubling my account thing in a mnute.
I have learned in a relatively short time there is no one method that is going to work all the time, market conditions change which is why you will see a lot of EA’s described to work with a particular currency pair and not others or a particular time frame, and in the backtest results you see often big rises while market conditions are optimum for its trading method then falls when conditions changed and the system is no longer working well.
I don’t want to create an EA that will reap profits some of the time then lose most of them when market conditions change I want one that will reap profits all the time.
I believe it should be possible to create an EA with the ability to identify different market conditions and then apply the trading system that works best during those kinds of conditions, and I believe that is where the answer lies. I want to define several different trading systems in an EA and allow the EA to compare them on the fly to see which would be the more profitable way to trade at the time and then use that method, then change to a different method when market conditions change and a different system would be more profitable.
The reason I doubled my account was because while experimenting with indicators for the reasons I outlined already, I noticed last month on EUR/USD the RSI indicator performed outstandingly at picking good entry points, the reason I think it was doing so well was because the market was providing lots of reletively close highs and lows, in other words what you need for the RSI to work well is lots of cleanly defined ups and downs. It wont help much during long smooth rises or falls.
So after identifying the RSI as a good indicator during the precious months trading by a little visual backtesting, I started tentativly opening trades with tiny lot sizes based mainly on the RSI open and close indications.
Anyway I had a lot good trades and gradually increased my lot size from 0.01 to 0.6 This worked well and I more than doubled my account this way last month.
This doesn’t mean that would work next month which is where my long term goals come in, next month the market may behave differently and I will probably be experimenting with other systems to find which one works best in a different trading scenario.
My aims over the long term are firstly to figure out how to identify a set of parameters that will describe different market conditions so that my EA can then apply the trading system that should work well at that time.
This is going to take a lot of testing and I believe probably at least two years of work, especially as my programming experience in mql4 is limited. But I am getting there with mql4 slowly.
During this time I will also be trading and experimenting with other systems and combinations of indicators and hopefullly continuing to increase my account at the same time.
So you see, my current trading practices are more to do with experimentation for my EA than to keep doubling up my account, but if it so happens I do, I wont be complaining.
The unfortunate thing about this is it means I don’t have any one successful system to describe to everyone.

So I take that this is your log/diary of your quest to build the perfect EA?
I’ll watch. it seems like you got a level head thus far.

Well not really a log diary I just thought I would try and attract some comments, maybe a few helpful pointers etc while answering a few questions I had been asked.
I could add though my initial reasons for embarking on this project was because I came to realise the trading systems that recieve the most attention are those which consistantly provide profits over the long term and look good during backtesting, those systems usually dont provide a whole lot of profits but at least they provide some which seems to be what most people look for especially when backtesting.
The systems and indicators that get dismissed as no good are the ones that provide extreme profits over a short period then lose them when conditions change, so over long term backtesting appear to be worthless.
Those are the ones I am interested in because I want to try and identify when they work well and use them at the right times.

So you’re saying you doubled your account last month?:stuck_out_tongue:

All jest aside, I wouldn’t count out an EA that consistently profits, but I wouldn’t bet on one either.

Static reaction to certain signals will always have a crack in the dam somewhere because of the nature of the market itself.

The price of money can change on a whim, and often does. Things you don’t know about, or can’t foresee crop up all the time.

A terror attack, a country defaulting, a natural disaster, oil refinery fire. They are all sudden, and shocking elements that move things in ways an RSI, or stoch can’t predict, only react to.

Good luck with your endeavors.

actually as of yesterday I trebled it but, I didnt want to brag also that wasnt within the same 30 day period, it was one month and one week :smiley:

If you actually created one some years later…You probably will win the noble prize :slight_smile: lolz…

There is a technical indicator which could be utilized for that though, volumes.
Next time there is a news event which causes a big sudden price movement check out the volumes of the candles immediatly after that, I have seen the volumes quadruple almost instantly after a news release, a function could be written into an EA to recognise this and act accordingly.