Haptics Mechanical Chicken (R.I.P)

Trading Discussion Trade Journals
1

Hi all!

I am a novice trader simultaneously pursuing two different styles of trading. One of them is discretionary and one is mechanical. This is the mechanical line of inquiry, and unlike the other trade journal this one is running only in demo mode. I frankly don’t expect it to last long, but you never know.

THE SYSTEM
This system was designed using the Visual Strategy Builder developed by Forex Tester. The service is very much in beta but shows promise. The service can take your rules and create an EA backend code for you which can be run in metatrader 4. This system backtested well across most years and the major pairs when I ran it in Forex Tester 4.

THE RULES (buy rule, invert for sell)

-The Daily 20 SMA must be higher today than it was 2 days ago.
-The Daily 20 SMA must be higher than it was 5 days ago.
-The Daily 20 SMA from five days ago must be higher than it was 10 days ago.

As you can see, this is my primitive way of trying to explain to the computer in mechanical rules that the 20 SMA should be pointing up.

If these conditions are met, buy at market immediately with a 36 pip stop loss, a 50 pip take profit, and a 35 pip trailing stop which moves in 20 pips increments. “Move take profit” is enabled, so if the take profit is hit, the system can breeze past it and continue with the trailing stop. Which probably means the take profit target is redundant.

The system runs on the following pairs:

EURUSD, EURAUD, EURCAD, GBPUSD, AUDUSD, USDCAD, AUDCAD.

This system trades ALOT. If its profit factor stays above 1.1 I could see it being very successful indeed, but I don’t see that happening. I set it running on monday in the demo with 10k and it immediately went backwards by $30, yet today it seems to have come back, so I’ll post here its results along with my observations until the experiment ends.

At the moment things look like this:

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Each trade is 1% risk.

Go mechanical chicken! :joy:

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Yep good effort. Let’s see how it goes.

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3

Yes, good effort. Profitable trading systems do not have to be complicated. Trading well does not have to be down to individual momentary inspiration and fast reactions.

4

A day later, mechanical chicken is trading like crazy and going precisely nowhere:

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5

This week has been rubbish for me everywhere so far. The long-term positions have ever so slowly appreciated.

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6

Would you say generally if a risk off mood strengthened your positions would benefit?

7

Definitely, I am mostly short AUD, EUR and NZD.

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8

Do you do much commodity trading? I’m pretty curious on it all. For example been eyeing off the weekly copper chart for a while. Corn looks scary and unpredictable though.

9

Not trading commodities right now, my spreadbetting platform only offers a limited range and at poor leverage. Price per point is often too high for my style on the less commonly traded (i.e. by private retail traders) instruments.

10

Mechanical chicken is currently long the eurodollar:

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11

Here lies mechanical chicken. It was a simple EA built with the VSB tool in forex tester. It traded for a little under two weeks, and made about $15 from a capital base of 10k using 1% risk.

I’m 99% confident it was so full of bugs that at times it was buying when it should have been selling.

I’ll be making my way back to the drawing board now, having learnt a huge amount about

-How metatrader works (I had never used it before)
-How EA’s are installed and used inside metatrader
-How a mechanical system for all its faults, is immune to human emotion and can just keep going back in even after being stopped out if the conditions are right

This project also led me right to the edge of committing to learning Python for finance, an intimidating project which I am seriously considering undertaking, because I have come to believe that it might be necessary in order for me to properly express my mechanical trade ideas and test them.

So in conclusion this project failed in its goal of turning the forex market into my own personal atm, but its also been a great learning experience in many ways, and I’m sure mechanical chicken 2.0 is already on the horizon.

My ideas for mechanical chicken 2.0 are still a bit nebulous, but so far include:

-Appropriate debugging

-A kathy lien style trade management system which can move a stop to breakeven when T1 is hit, and perfom a partial close, leaving the rest of the trade to trail out.

-An ability to do a “time lockout”, so if a trade fails, don’t just go in again straight away if the conditions are still present for a trade, wait a predetermined length of time first. This is because I have noticed in my backtesting that when a trend ends most of my systems take a while to catch on, and give money back during that period. I think this might help clean up that “noisy” trading at the end of a trend.

-Increase risk profile to 2-3% per trade.

To carry most of those points above, I will need the ability to write my own EA’s, as the VSB does not carry that kind of feature set.

12

Good effort. Hope to see you back at it soon.