Let do an experiment part two

Beginner Questions
21

Sorry guys I was unable to make any trades last night because a storm knocked out my internet.

As for the trades they all went down hill. So here is the run down for the 3 accounts.
Account w/l (week) w/l (total) p/l balance(total)
.5-1 3-1 8-6 +$14 $1949
1-1 0-4 2-12 -$100 $1796.07
1.5-1 0-4 2-12 -$100 $1769.66

The last 2 have seen 10 straight losses in a row. How often will we do that? lol! This is a bad time for this pair because it is range bound. On a few of the trades it has come with in a few pips of a profit and then turned around for a loss. I am thinking about also trading usd/chf as a hedge with the eur/usd. The pair move almost 100% differntly. Give me some input on this topic, since I hear alot of people asking about hedging.

As for You adam. You have a vary noble goal there and I hope it works out for you. Also if I do as good as I good as you hope to do I would be more than happy to donate to your cause.

Do you really plan on spending 15 years learning on how to trade the fx market? I have herad that it take 1 to 3 years to learn the market. I suggest that you get in sometime around there.

As far as opening an account for $50. Why? If you have the funds avaible that you say you have. (By the way personall infomation like this is not a good idea to post on the net) Then at least open an account for $250 this will allow you better money management. Remember most people lose because of under capitalization.

I do have some home work for you. I want you to read some books by Robert T. Kiyosaki autor of the “Rich Dad Poor Dad” series of books. You can get them at any book store or goto richdadpoordad.com and see everything this guy as to offer. I wish I had his advice when I was your age.

See ya next week!

22

bazooka, if I may be so bold as to offer a suggestion. You say that the recent EUR/USD range tradeing is resulting in only very small gains followed by reversals and stop outs for the 1:1 and 1.5:1 reward/risk accounts.

I would recomment perhaps a manual trailing stop. If you happen to check and see a small profit, perhaps 15 pips, during ranging, change SL to 0 or even +5. At 20 pip profit, (this mostly benefits the 1.5:1 account) change it to +10.

This will allow your larger account to break even more, and even make smaller profits.

I, mystef, am considering whether or not to increase my reward/risk ratio.

The reason I chose 2:1 is because I was afraid that any higher and the only executed trades would be SLs.

But now that I can set manual trailing SL, I am more free to open that up to 3:1, TP of 75, and as long as I check in once in a while, I should be able to catch and save many smaller gains.

Obviously the biggest problem with my method is that I require sleep, and so for 8 hours at a time I am away from my computer.

But, if I purchase during the day, instead of at night, then by the time I am about to retire for the night, any trend in my favor should be apparent, and so I should be able to set a SL to capture a small to medium profit, should the trend go against me while I sleep.

Perhaps such would also help your two loseing accounts.

Change the purchase time to noon or so, increase Reward/Risk ratios slighty, and try a manual trailing stop loss to save smaller gains.

I will continue to report back on this modifed triple bazooka system, (moditripooka) and how it fares.

P.S I think that the secret to its success so far is that I have 16 currency pairs to choose from at random. This increases the likelyhood that I will stumble upon a trend with high enough momentum to hit the TP or at least make a decent profit.

Since I limit the downside, my profits are large enough post a good return so far.

Hopefully, with a little further tweaking I can turn this automated, chance based money management parlor trick into an ATM!

You know what? I have just inspired myself!

I will open a new account, set for 4:1 reward/risk and see if I can get any TP of 75. (the current trippoka will change to 3:1 ratio with manual trailing stop loss)

If I can I will then alter the reward/risk to 5:1 and see if a TP of 100 comes along. I will continue to do this and see how how reward/risk I can use, and most importantly see if this system out profits the current one.

Now these accounts will be 4 days behind the moditripooka I am currently reporting on, but I think that the chance to catch serious trend movements, of over 100 pips, may make for a system that can compete with any technical indicator system out there.

23

Well adam I have concidered your suggestion, but the experiment is based solely on money management. I do not want to alter the parameters because that would squew the results. I don’t care on the w/l rate because if I do 50/50 then 2 of the 3 should be profitable. Pluse I want to see if a smaller risk/reward is more profitable then a larger risk/reward. Everyone says that you should be at least 1.5:1 in order to make money. It is true that you only have to win about 33% of the time to break even. But if you can win just 70% (which is vary easy to do) then you should still be able to make at least 5% a month, depending on how much you trade.

As far as you opening up your r/r I have a demo where I have no t/p only 100 pip s/l. Everytime it goes up 100 pips I add to the trade. The same amount that I started with. ie. if I bought 1 lot at 100 pips profit I would buy 1 more lot. So far I am up 35% on the month. This account has also tripled in the last 2 months. I think that this is a good system.

24

These systems sound very interesting, keep up the reporting and dont get discouraged. I am very interested in the results after a few weeks.

Nice effort putting in the time there adamgalas!

GCTrader

25

That sounds like a fantastic idea bazooko! I shall try it with system 4, which is the last one I will try before I give them all a month and crown the winner.

This system is based on the book, Forex: maximizing profits, though a bit simpler.

I will risk 2% account, use 1 day chart and time entries when 34 EMA, (the author raves about this Fibronaci EMA as the best of all of them and back testing seems to prove her right), is broken by the price.

Confirmation is when CCI goes to 100+ fr long, -100 or less for short.

initial stop loss is -100, so leverage is 2:1, this larger SL proves very good in back testing, so lets hope it works live.

And as bazooko said, add positions when profit is 100 pips, with same SL, -100.

Close out position when candles dip other way through 34 EMA and CCI moves to opposite position.

For example, when candle breaks through 34 EMA and CCI is over 100, you go long. You exit when either, SL or candles break below and CCI is -100. Vica versa on shorting.

I will report also on this 4th system and let you all know how it works out.

So what I will be testing is 4 comparing 4 systems.

  1. total money management only, no manual trailing stop losses, only EUR/USD, random buy or sell once/day with 25 SL and 50 TP.

This system is based on money managemnt only.

  1. money management, also chance based, but with 3 random currency pairs/day chosen by random integer generator, whether or buy or sell is also random, sl is 25, TP is 50 but manual trailing stop loss kicks in at 20 pip profit to change SL to +5, over 30 and SL is +50% profit.

This system is money management and protecting profits that do appear based on chance.

system 2.A same as 2, except TP is 75 instead of 50, also if TP occurs I will increase TP to 100, and keep increasing to see how high a reward/risk ratio you can actually use.

system 3. Actual technical system, uses 5,10 EMA crosses along with stochasic and RSI confirmation to enter, exit trades, SL is 25, no TP, and again manual trailing stop loss kicks in once profit of 20 pips is achieved.

This is a slightly modified version of the first system described in the pip school.

system 4. actual technical system, uses 34 EMA and CCI to enter,exit, SL 100 pips, and increases positions when 100 pip profit achieved.

So we have a total of 5 systems I suppose you could say. 3 have their actions dicated by chance and rely on money management and intraday profit management to win.

2 systems are technicals that require slightly more time and effort, but should, theoretically offer more % wins.

Lets see how these systems compare after 5 weeks.

Hopefully 1 will prove profitable, or I will have to give up of Forex until next summer. (Its to time consuming to do research, backtesting and juggle multiple demo accounts when attending college.)

Let the grand expirement begin, or at least continue from here.

26

Ok, so I know volume is light on sunday’s, but afer 8:00 PM eastern Tokyo opens and the spreads become small as usual on my 16 pairs so here is the update of the 5 systems so far.

system 1. well the EUR/USD is ranging like crazy so the friday trade is still active and is up 3.4 pips, today’s is down 1.2, both are buys.

system 1 is so far down 3% and 0-3 for completed trades, though I am hopefull that a continued rally by the Euro could bring in TP for both and so that would make the system profitable.

system 2, today’s rades were as follows.

EUR/CHF long, currently down 16, though it came close to SL but turned back from the brink. I am hopeful that a rally tomorow could bring this into win column.

AUD/JPY long was SL for 25 pip loss.

EUR/JPY was near instant TP for 50 pip profit.

Overall tonights closed trades yield a 1% return and make system 2 (6-8) in terms of picking winningtrades, and is ahead 2.9% after 5 days, with one trade still outstanding.

system 2.A, the moditripooko, this is the 3:1 reward/risk ratio version of system 2. Tonight the manual trailing stop loss resulted in a 22 pip SL for EUR/JPY so this system ends its first trading day down 1.1% and 1-2 in terms of trades.

system 3. tonight saw no new trades but the SL of CHF/JPY for 25 pip loss and EUR/CHF for 10 pip gain.

Only EUR/GBP short is still active, now up 10.7 pips and showing signs of going up tomorrow.

I am hopeing to see it rise to 20 pip profit so I can change SL to +5 and put that trade, which is from day 1 of demong this system, in the win column. Right now this system is 2-4 in terms of trades and down 2.5%.

system 4. no trades presented themselves today. CAD/JPY short looked hopeful before markets opened, but by time Tokyo brought spreads down CCI was only at -51 and so no dice.

So the rankings so far are:

1st: system 2, +2.9%, 43% profitable trades
2nd: system 4, due to technicality of not yet makingtrades. +0%
3rd: stem 2.A, moditripooko, -1.1%, 34% profitable trades
4th: system 3, -2.5%, 34% profitable trades
5th: system 1, -3%, 0% profitable trades

Very interesting how the highest % of profitable trades comes from a system that chooses pairs and positions at random.

At the same time system 1, bazooko’s system, is in last place, with a chance to move up to second.

I think the lesson here is that when you are relying on money management alone coupled with random chance to make money, then you are praying to the gods of statistics.

This means that over time 50% of your trades should come out as winners. This only applies to an infinite sample size.

The quicker you approach infinite trades the better this system will do.

That is system 1 problem, it is 1 trade/day for 1 fixed currency.

system 2 makes 3X as many trades and so has a much larger sample size, and not how it is very close to 50% winning trades.

I continue to have high hopes for system 3 and 4, since they promise to offer, at least in theory, better than 50% winning trades.

But so far random chance is coming out ahead.

More tomorrow. And if I may so inquire, where is everyone?

This thread began with several 4 different people discussing this expirement, and now its almost entirely me and bazooko.

People please! Chime in if you have something to say.

Wasn’t someone else planning on running their own expirement?

Well please post the results here!

This expirement is an important one, and the many possible parameters that could be set such as:

number of currencies traded/day
number of trades/day
leverage levels
reward/risk ratios
different profit saving methods
ect.

These parameters would require dozens of accounts to try out, more than 2 people can handle.

So please, if you are intrigued by the concept of bazooko’s expirement, feel free to demo an account based on chance in some way and report the results.

There is an optimal system out there for making money doing this, we just have to find it, and me and bazooko alone don’t have a prayer of that.

And if you don’t feel like participating in the expirement directly, but have some idea on how to tweak the systems to maximize profit, please offer them up.

Or if you just wish to leave feedback, that is also appreciated.

Whether you think bazooko, or myself are prophets of a coming age in which millions of people turn to random chance and money management systems to trade Forex and reap untold riches, or that we are lunatics who disgrace the very concept of Forex trading with our presence, let us know.

27

Ok the weekend is over and its time to make some money. By the way I am still selling this system so place your orders fast because I have to make my child support payment soon.

So tonight we went back to the canidain coin. The canidain dollar has been good to us. And tonight the Queen came up so that is a buy at 1.3837 our s/l will be set at 1.3812 and the t/p’s will be at 1.3850, 1.3862 and 1.3874.

I feel that a turn around is comming our way, so good luck!

28

It happened last night again. All 3 are losers. I hope tonight will be better. The loonie duck came up so we sold at 1.3830 with a s/l at 1.3855 and our t/p’s are 1.3817, 1.3805 and 1.3793

Now this auto produce a win or else I will,… we I don’t know what I will do but I’ll do it, you can bet on that.

Until tommrow!

29

Well today has been a great day, well for most of the systems.

System 1, unfortunately is just sinking deeper. The two long trades on the EUR/USD stopped out this morning, making 5 straight losses! What’s more today’s short is down 8.5 pips!

system 2. Oh how sweet it is! Last night saw AUD/JPY stop out but EUR/JPY TP so that put system 2 25 pips ahead, with EUR/CHF ending the night at -17 pips. Well last night saw a rally and this morning EUR/CHF TPed at 50 pips!

What more, today’s trades are kickin! Long EUR/USD, up 4.4 pips, short USD/CAD -6.3 pips, and CAD/JPY short? TP of 50 Pips!

After 6 days system 2 is 8-8, 50% winning trades and up 7.1%! All hail the gods of money management and statistics!

system 2.A, the one with 75 TP instead of 50.

So far, this system is 1-2 after 1 day and is up 5.4 pips on EUR/USD long, up 49 pips on CAD/JPY short and -6.3 on USD/CAD short.

Hopefully CAD/JPY short trend continues for at least another 25 pips.

system 3, today saw the trade EUR/JPY short and that trade is rockin! + 54 pips, SL now +27! Oh and my beloved EUR/GBP short? the trade that has been with me since day 1? Now up 37.3 pips and SL locked in at +10! That’s 2 guranteed profits, which will put the system at 4-4, 50% winning trades, and close to break even.

But both trades look good for a few more days. So hopefully these trades put system 3 into the green.

system 4, saw its first trade today when CHR/JPY candle broke beneath 34 EMA and 20 day CCI was under -100.

This trade is up 31 pips so far and SL is now +10, up from -50 to start. so a good start for a very promising system.

I must say I am glad that system 3 and 4 are doing so well. As cool as it is to be rolling in riches based on 2:1 reward/risk anagement, 1%/trade risk and random chance, I do hope that system 3 or 4 cn hook me up with some sweet trends. System 4 especially, if back tracking is to be trusted, should make available some 100+ pip profits, which could blow away even system 2!

More tomorrow, good luck to all!

30

Last night was a funny one. The .5-1 was a win the 1-1 was a loss and the 1.5-1 moved down 4 pips befor I was able to place my bid so when the 1-1 account was stopped out at the exact pip the 1.5-1 account was still open and as of now it is up 21 pips. So there is still a chance that we could get a win out of that one.

Onto tonights trades. I have been watching the baseball game all night and the Tigers have given up a 6 run lead so we are trading with Hobbits system tonigh (six pack of beer). Well it took 5 times to catch that damn quarter tonigh, must have been the wind. But the duck came up. So we are selling at 1.3809 a s/l at 1.3834 the t/p’s are 1.3796, 1.37784 and 1.3772

Lets see where thig gets us.

31

ok, its very late so a quick update.

system 1. sopped out last night and today’s long is down 7 pips as of now. Honestly the worst luck I have ever seen makes this system 0-6 and down 5.9%.

system 2. very good night yesterday, EUR/USD stopped out +5, CAD/JPY TP of 50 and USD/CAD was down all night until CAD news this morning sent this shorted position down ino TP of 50.

Today was all shorts day EUR/CHF, EUR/CAD and USD/JPY. First two stopped out for 25 pip losses but USD/JPY TP of 50 so tonights a was that leaves system 2, 11-10 for trades and un 9.4% after 7 days.

system 2.A First TP on USD/CAD short last night means today’s trades now have TP of 100 pips.

Sofar USD/JPY has SL of +25, EUR/USD is down 5.6, EUR/CAD short stopped out for -25 pips, but USD/JPY is up 53.3 while EUR/CHF, which stopped out in system 2, is still with us and up 30.3 pips. system 2. A is 3-3 for trades and up 2% after 3 days.

system 3. well EUR/GBP is still here, up 22.6 as I write this, with SL set at +10. Today say GBP/JPY short trade, but stupid me, I didn’tcheck the spreads ahead of time, and because news had just come out, I shorted at 8 spread. This resulted in a SL of-25. I checked, had I waited till spreads came to 2, I wouldn’t have SLed and would be up now. Well chock it up to experience.

system 3 is 3-10 and down 3.3%

system 4, saw no trades today, came close with GBP/JPY short and UAD/SPY short but CCI was only -57, so no go.

This system had SL of +10 pip from CHF/JPY short and so is up .275% after 1 succesful trade.

I must say I am lovng system 2. Its run is unbelievable.

Comparing it to system 3, 4 I am starting to believe ranom luck and money management, as well as profit protection through trailng stop losses are all you need to make money.

Heck, even Cowabanga picks 49% winners, and averages 185 pips r so/month. My system is a bit over 50% and has 185 pip profit in 7 days!

Not that I think this can continue, I may see a few days of all 3 trades going against me, but it looks like statistics is indeed in favor of this chance based system.

More tomorrow.

32

So I spent last night running numbers and here is why I think bazooko’s system is failing. He uses 1 trade/day, so he wins or loses, 50-50, (though 7 losses in a row is very extrodinary indeed).

If you increase to 2 trades/day, on different currencies you have 2 ways to win, only 1 to lose, so you expeience 2/3 winning days.

3 trades/day gives 2 ways to win, 1 to lose and 1 to tie. Since you earn interest on account I call breakeven a win.

That is 75% winning days.

ove 3/day the % winning days oscillates up and down.

I am willing to try one more system, the Pentooko in which each day you randomly choose 5 pairs out of the 16 that have 4 pip spreads r less, randomly buy or sell them, and use SL 25, TP 50 and manual trailing stop as explained before.

However juggling 6 sytems is becoming a pain so I will eliminate the least profitable on Friday night and continue to do so each week until we have only 2 by the end of the summer.

33

I will be ending the trailing stop losses on system 4 and instead use when the candle breaks in the opposite direction through 34 day ema. The CHF/JPY short which was this systems only trade SLed at+10 pips, which is a shame since it would be up 170+ right now.

This system is more volatile which is why it uses 50 pip SL. However back testing indicates that this system is remarkable at predictng major trends.

Sometimes the price will fall sharply when candle breaks below 34 ema and CCI less than -100, then shoot up, but stop and reverse right beneath 34 ema and plummet hundreds of pips.

That is the purpose of this system so I will give it enough slack to try for those mega returns, though it may just end up hanging itself.

Today’s trades for that system by the way are short EUR/CAD and GBP/JPY, also short.

Full report on all 6 systems later tonight.

34

Adam I am sorry but I have to correct you. It was 11 losses in a row. You do raise a good point about adding more trades. But I look at your numbers a little differently. If I make 2 trades they could both be losers. With a tight s/l even if I trade to pairs that behave opposite of each other they could both end up losing and still move in opposite directions.

Remember the main point is not to put more then %5 of my account on any one time. But I think at the begging of next month I will start a new account and trade 2 pairs.

As for you starting a new demo. Don’t you need more than 2 weeks to come to a conclusion. If you want to drop one or two that would be good but don’t get too far ahead of the game. You might find out that in the long run a bad system ends up being the best one.

As for last nights trades. They were all winners. WHOS YOUR DADDY???
Weekly reviews will come out on friday, lets hope we can get to break even.

For tonight the queen came up so we will buy at 1.3711 with a s/l of 1.3686 and a t/p of 1.3724, 1.3736 and 1.3748

Keep em rolling.

35

sorry about the delay, busy night.

Here is the summary:

system 1, up 1 pips so far, if it reaches 20 then it will be the first win.

system 2. started off slow, USD/JPY long stopped out at +5, then USD?CHF nd GBP?CHF TP fo 50. This system is exeriencing a massivly prolonged winning streak. 14-10 so far and up 13.93% after 8 days.

system 2. A USD/JPY SL at +10, GBP/CHF SL o -25 and USD/CHF short is up 61 pips as I write this.

So far system 2.A is up 1.9% after 4 days, and is looking at adding 3% in prft if USD/CHF short goes14 pips lower.

system 3, bad night, USD/CHF long and EUR/USD short stopped out at-25 each andEU/GBP short finally SL at +25.

this system is down 4.3% so far.

system 4. EUR/CAD short and GBP/JPY short both stopped out for -50 pips each. System down by 1.8%

syste 5. 5 currency pair trades at random/day, went 2-3 last night with +1 pip sled fr our winners, so a loss of 55 pips last night, this system is down 2.2% after 1 day.

On a different note, bazooko is of course correct in that I should give more time to each system since espeilly 3,4 can offer big winners that could take the system positive, that is why I am hopeful that system 3,4 will make it into next round.

I just can’t juggle 6 sytem, (7 because 1 is unofficial, meaning I don’t keep records on it, just to much time in excel) for 5 more weeks.

36

well today sucked for most systems

System 1. An exception, with the last two day’s trades, longs, taking 50 pip profits. So far this system is 2-7 and down 3%, but if it manages TPs tomorrow it will end the week down only 1%, quite a comeback.

system 2. experienced its first perfect storm. 3 stop outs, a 3% decline for this account. this system is now 14-13 and up 9.83%, still the best by far.

system 2. A exciting news to report, USD/CHF short experienced TP of 100 pips today! This means that I will now be raising Reward Risk ration to 5:1, TP of 125 pips, to see if that is feasable. Manual trailing stop loss rules are in effect as well.

besides this good news, of corse was the 3 losses today, but still, despite today’s terrible markets, system 2.A is 7-8 and up 3% after only 5 days.

system 3. This system, which is basically a longer term Cowabunga method, is not doing so hot.

EUR/GBP stopped out for 29 pip profit but AUD/JPY and EUR/USD shorts stopped out and today’s USD/CAD long is down 11 pips so far.

This system is 3-9 and down 2.2%.

system 4. This system has no trailing stop loss and a large 50 pip SL to start so I was hoping for some major wins. Haven’t found them yet.

Today saw the stop out of EUR/CAD short for -50 pips and the AUD/JPY short that was up over 100 pips intraday is now up only 5.5 pips. Still 1 day CCI is -212 so I will hold on and hope that the Yen gains strength against the aussi dollar.

Still kicking myself over useing a trailing stop loss on CHF/JPY 2 days ago. That cost me over 100 pips in lost profit.

Still this system is only 1-3 and down 1.8%, so 1 good trade can make this system a champion.

system 5, pentooko, is doing much better today, with 2 stop outs and 2 take profits putting this system up 50 pips for the day and with 1 open trade, EUR/CHF short up 17.5 pips so far and with SL now set for +10, this system is guranteed to go into the green soon. Right now it is 4-5 and broken even.

Finally, I will also begin tracking a 7th and final system, an unofficial one. I call it that because I will not be useing excel to track it, and because it is absolutely insane!

Here it is:

Useing system 2 I choose 3 random currencies and positions and then set SL of 10 pips and TP of 25.

The rational behind this lunacy is as follows.

First, 2.5:1 reward/risk ratio means that long term profits should be higher.

Second, 25 pip TP is very reasonable, meaning they should happen more frequently then 50 pip TP or higher.

Third, 10 pip SL, though very quick to execute, (1 trade today moved against me within 30 seconds) also allows for 1% risk while useing 10:1 leverage.

I know its a mad amount of leverage, and I eminently expect this system to fail, but consider this.

This system can do only 4 things in a day.

3 wins, 2 wins, 1 win or 0 wins. Since I am making 25 pips per win, and -10 pips per loss the only way to lose is to lose all 3 trades.

Here’s how today’s madness unfurled.

EUR/JPY short AUD/JPY long stopped out within 15 minutes for -20 pip loss, but AUD/USD long took profit so today this lunatic system is up 5 pips.

If ever it should win 2 trades in a day it will be up 40 pips, which, with this level of leverage means 4% profit in 1 day.

A perfect 3-0 day would mean 7.5% profit in 1 day.

A general note on how things are turning out.

Bazooko’s orginal theory regarding money management is indeed proving out. Even though system 1 was down 7% 2 days ago, and it seemed a total flop, this system is now only 2 good trades away from being profitable.

This is the power of statistics at work, which predicts 50% winning trades.

Note that system 2 is now slightly above 50% and system 2.A slightly below 50%, while system 5 is exactly 50%.

It will be interesting to note whether or not system 3,4 can ever beat 50%. I doubt it and here’s why.

The Cowabunga system, after 130 or so trades has won only 50% of it’s trades.

If after so many trades, such a technically based system can’t beat the flip of a coin, then can any of us?

I suppose perhaps a 75% winning system could be devised, such as wait for RSI to hit 85+ or 15- or Stochastic of 95/-5 and then place opposite trade, but such a system would offer very few trades indeed.

Also note, that while Cowabunga averages about 185 pips/month, in 9 days, even with today’s 75 pip slaughter, system 2 is up 214.4 pips.

Now I am not claiming to have devised a system, inspired by bazooko, that can earn 750 or so pips/month, by no means.

However, if system 2 proves to, over a period of several months, earn 50% winning trades and 200 pips/month on average, then it will be more profitable than Cowabunga, and take up only 5-10 minutes of your time each day, meaning anyone could use it, even busy professionals or students.

It is also idiot proof, since there are no technical indicators or graphs to consult and thus no oppertunity to misread an entry or exit.

I hope with all my being that tomorrow system 2 can shake off its defeat today and the gods of statistics and money management see fit to once more rain riches upon it.

For if they do then Bazooko will be vindicated with his thesis that money management alone can make a winning system.

37

Adam I love you new idea! Sometimes we have to push the boarders of our imaganation andtry to fail. The only problem I see is that sometimes a 10 pip s/l is too small and you get stopped out befor you can make a profit. But your theroy is sound. You have to excuss the spelling tonioght I took a trip to Jamica and by that I mean a 6er of Red Strip, mon! Teaching the white man to dance for over 60 years.

Anyway you have some good thoughts but don’t be too quick to make a decision becuase you could end up eating crow.

Since everybody is afraid to join in our little experiment or make their own maybe we should just start a web site and do this the right way. By the way what are you doing taking on the cowabunga system like that? You sound like one of those guys that “runs with the bulls” while wearing a red shirt.

Well its time for my update. I know that you all are really woundering how it is doing, and here it is. We had another big day yesterday. All three came up aces. Yep all winners. Tomorrow will be the weekly p/l statements and I think that some of you will be surpised. Maybe not hobbit but I think he quit reading this post, so I guess he losses.

So tonight the duck came up. We are sticking with the canadian quarter or doller no one really knows, becuase it is the most important part in making a totally random system profitable. We are selling at 1.3744 with a s/l of 1.3769 and the t/p’s are 1.3731, 1.3719 and 1.3707

Lets keep em rolling, mon!

38

well today was a sweet, sweet day!

system 1, again, an exception, sl of -25 again, making system 1 2-8 and down 4% after 2 weeks.

system 2. this was a scary day because random integer generator order USD/CHF, CHF/JPY and long CAD/JPY. Only CHF/JPY short was in agreement with trend so I thought this would be a bloodbath as yesterday was.

Well CAD/JPY long stopped out at -25 as expected but as of the market close USD/CHF is up 17.3 pips and CHF/JPY short is down .3 pips.

system 2 is 14-14, and up 8.74%.

system 2.A more disapointing, with both CHF/JPY short and CAD/JPY stoppin out and USD/CHF short up 15.5 pips as of now. This system is 8-9 and up 1%.

system 3. Today was a day this system could do no wrong.

Except for the GBP/CHF short which stopped out for -25 pips. But last night at around 11:30 PM eastern before I retired I noted some entries such as:

Long USD/CAD, up 97.4 pips
Short EUR/CHF, up 77 pips
Short NZD/USD, up 197 pips
Short GBP/USD, up 54 pips

Of course I have set SLs to +50% of profit and all trades show strong trends continuing into the immediate future, so I will hold on and hope they continue next week.

Right now I am guranteed 8% profit, which would bring system 2 to 2% profitability after 2 weeks, not bad but not too hot either.

system 4: a monster today:

EUR/CAD short stopped out, but no matter, because AUD/USD short, NZD/USD short, USD/CAD long, AUD/JPY short and EUR/CHF short all made **** loads of money today.

Unfortunately do to carelessness on my part AUD/USD short TP at 17 pips. system 4 doesn’t allow for TP or manual trailing stops, but I guess I forgot when inputing this order, seeing as I was also inputing orders for 6 different systems. Chalk it up to experience, and hopefull, when I start trading exclusivly I won’t make such stupid mistakes.

Besides that though I am loving life, check it out:

USD/CAD long +108.4
EUR/USD short +13.3
NZD/USD short +54.3
AUD/JPY short +328

Overall this system’s closed trades are 2-3 and this system is down 1.5%, though unrealized profits, if realized toda would make it up 7.5%.

Overall, all trends are very strong going into next week so hopefully these profits will continue to grow.

The one weakness of system 4 is that its exit is based on the candle breaking to the other side of the 34 day ema, or CCI switching to negative buy signal.

This means that I will probably give up a whole lot of profit before I exit any of these trades.

The system is designed to catch mega trends such as AUD/JPY short and hopefully, giving up 50% of a paper profit is no big deal if the trend you catch is 500+ pips, but if all you manage is 50-100 pip profit then your profitable trades could turn into losses, which would pain me greatly.

Specifically I worry about intraday swings, possibly based on news, when I am in class and unable to watch the markets.

I could find a 100+ pip profit turn into a stop loss of -50 pips because of bad news while I was taking a Organic Chem exam. Such news would surely be an blow to the day’s outlook, especially if I do poorly on the exam.

For this reason system 3 is slightly more user friendly, since it uses manual trailing stop losses to lock in profits, though it also can limit them as well.

system 5. a very bad day for this system, went 1-4 today, for a combined loss of 25 pips.

this system is 6-9 after 3 days and up .1%.

Overall I expected this system to do more poorly than system 2 and I am glad it is. It takes a lot more time to make 5 random trades/day compared to 3 and then there is the extra time tracking them intraday and updating the manual trailing stop loss, (Oanda add that to your service already!) so I am glad 2 is beating 5, it vindicates my statistical analysis, (3 trades/day means only 4 possible outcomes, 3,2,1 or 0 wins, with only the last scenario resulting in a loss for the day, all the rest are wins so 75% of days will be winners, with 5 trades/day there are 6possibilities with the 5 or 4 losers resulting in a loss for the day, meaning only 66.67% winning days).

system 6, the crazy 10:1 leverage, 10 sl 25 TP version of system 2, lost all 3 trades today and is down 2.5% after 2 days.

So after 2 weeks here is where the systems stand.

Rankings Profitability % winning trades

1st: system 2 + 8.74% 50%
2nd: system 2.A +0.99% 41%
3rd: system 5 + 0.1% 40%
4th: system 4 -1.47% 40%
5th: system 6 -2.34% 14%
6th: system 1 -4.1% 10%
7th: system 3 -4.13% 33.3%

As promised I will now eliminate 1 system, though it will not be system 3, for 2 reasons:

  1. by executive order I declare system 6 to be bad**** crazy and thus not worth my time to track in any way.

  2. System 3 is on fire today and shows promise as a technically based system.

Thus I declare system 6 banned forevermore and shall not speak of it again.

Though a word of warning to the other 6 systems, there shall be no new contenders added and thus nothing to prevent the elimination of the weakest system next Friday.

Specifically this means that system 3 and 1 better get their **** together lest they be banished. Of course system 3 is on a role, while system 1 baffles me as to its crappiness, so most likely it will be history in a week.

Though you never know, it could hit 6 in a row at which point it would be +8% and perhaps #1 in the rankings.

Personally I hope that system 2, the Tripooko, is the winner. Nothing beats it for simplicity, and low maintenance statistical effectivness.

And on a final note, Bazooko made the comment last post that I am just asking to incure the wrath of the baby pips faithfull by taking on the Cowabunga system head on.

Well sir let me remind you that many a brash young pipper has laid claim to such a system, and let me point out that the statistics on the Cowabunga themselves bare out my claims.

It is no better than a flip of a coin, in terms of picking winning trades. That is an undeniable fact.

It has averaged 170 pips/month in profit this year, this is a fact.

Am I arrogant enough to say that the Tripooko can slay the Cowanunga? No not yet.

But I will continue this tournament of systems all summer, until there are only 3 left standing by the time september arrives. With luck I will be able to continue to track the smaller number of systems for 2 more weeks until only 1 remains standing.

I will then allow for another 2 weeks before I present the system to the systems forum, in an exlusive thread.

I will then continue to Demo trade that system for an additional 2 months before I dare to open a real account and try with real money.

But I dare say that one of these systems, hopefully the Tripooko, is capable of doubling money quickly. Of this I am confident that I shall make the following boast.

The winning system of this tournament shall double the original $1000 within 100 trading days.

For such a system to be real would mean that an account would increase over 4X per year.

Let us hope such a thing exists, and let us hope it is the Tripooko, a 100% mechanical, mindless profit machine, whose sole reason for being is to make ungodly sums of money for those who dare to manipulate it to their ends.

Any thoughts?

39

I have to admit Adam with all of your systems I have a hard time trying to figure out which one is which. So you might say I am glad that you are elimating a few of them. Maybe some TV station will pick it up as a reality show. It would be more intersting then the crap they have out there now. Can you give a quick 1 or 2 sentence on what the rules are for each system? You have to keep it short becuase I have a short attention span.

As far as the flip system. We did great this week. Here are the results
system w/l(week) w/l(total) balance
.5-1 4-1 12-7 $1977.00
1-1 3-2 6-13 $1820.07
1.5-1 4-1 6-13 $1893.02

This is intersting as bad as the last system is doing it is only 3 wins (in a row) from turning a profit. The 2nd system needs 7 wins in a row to break even and the 1st system althou it is winning 60% of the time is still 2 winners from turning a profit.

Remember the game is to stay in the market while we ride out the down time and strike when we are hot and turn an insane profit. So after 1 month the totals are 24-33 that is a 42% winning rate and we are down $332.91 on a $6000 opening balance. Which is our 5% s/l rate. It will be interesting to see what it will look like at a 70% win rate.

40

Ok, so here is the update for the 7 systems, (I swear upon my life that this is the last one that will be added.)

system 1. (EUR/USD chance based system, )

Not much to report, at present today’s Long trade is down 3 pips.

system 2. (Random 3 pair, chance based system).

Ok, so last I left off on Friday USD/CHF short and CHF/JPY short were still open. Well tonight they closed, with the former stopping out at +5 pips and the latter TPing at 52 pips.

Tonights trades were:

EUR/GBP long, USD/CHF short and EUR/CHF long, as of now they are as such, respectivly,

-8.4 pips, +7 pips, SLed at -25 pips.

system 2 A. Same as system 2, but with TP of 125 pips, SL 25

EUR/CHF long stopped out, EUR/GBP long down 4 pips, USD/CHF short up 9.2 and most promising Firday’s USD/CHF short is up 44 pips, about to TP.

system 3, Cowabunga derivative, 5 and 10 day EMA cross with RSI and stochastic verification,

Tonight EUR/GBP long was added, it is so far -4.6 pips, here are the others:

Long USD/CAD: +125.4
Short EUR/CHF: + 105.6
Short NZD/USD: + 232.2
Short GBP/USD: +57.5

All the stop losses have been adjusted to 50% of the highest point at which I have seen these.

system 4, 34 day EMA cross with 20 day CCI above 100 for long, or less than -100 for short, no TP no trailing stop loss, SL 50 pips to start

This system is really on a role, with all 4 outstanding trades still showing strenght, here is how they stand.

Short AUD/JPY: +362 pips
Long USD/CAD: +136.4 pips
Short EUR/USD: +15.2 pips
Short NZD/USD: +89.8 pips

While this system is doing very well I am very worried about the exits.

According to the system I exit only when these trends reverse across 34 day EMA, which for example, in a back test had a EUR/USD 300 pip paper profit close out at about 100 pips, not bad for a week’s work, but I wish I could lock in some of these profits.

But this system is designed to catch the major moves, and trailing stop loss can often stop you out of a trade to early.

For example the recent GBP/JPY collapse meant 900+ pip profit in a period of 3-4 days. Had I used trailing stop loss I would have made 30 pips before I was out.

So we’ll see in the long run whether system 3 or 4 can win out.

system 5. Chance bases 5 pair 1/day trade at random, SL 25 pip, TP 50 pip

here are today’s trades for that one.

USD/CHF long
USD/JPY short
GBP/JPY long
EUR/CHF long
EUR/CAD short

Here are the results so far:

GBP/JPY long stopped out for 25 pip loss
EUR/CAD short stopped out for 25 pip loss
EUR/CHF long stopped out as well

USD/JPY short is up 7 pips
USD/CHF long down 9 pips

system 6, the last new one I swear on my life.

Uses Awsome Oscillator only and on 1 day charts. Go long when red turns green and vica versa.

SL of 50 no TP.

Now initially it seemed that this system needed 100 pip SL to survive daily chop, but that would either mean 1:1 leverage with 1% risk or 2% risk and 2:1 leverage.

I prefer at least 2:1 leverage and really can’t stomach 2% risk so 50 pips it is.

Besides, despite some nice long trends like we’ve been having AO often has color chance that lasts exactly 1 bar and that often leads to SL. For cases such as that I prefer 50 SL, that way if I make it out with 75-100 pip profit I know that I am in good standing.

If SL was 100 then 75 pip profit means your next SL will set you back.

Anyway tonights trades were supposed to be EUR/CAD long and EUR/GBP long but the rule is that you only enter or exit a trade when the color of the oscillator changes.

Since there are now 2 green bars for these pairs I am left sitting on my hands.

Now as to the matter of how this week’s elimination will go, I will excempt system 6 so as to give it 2 weeks to make it fair with the other systems.

This still means system 1 is likely to go at the end of Friday.

And on final note, Bazooko, your comment about your system reaching 70% profitable tradability at some point is, unfortunately wrong.

Your system is based on pure chance and thus statistics. Your system will most likely regress to the mean, meaning that over time your system will approach 50%.

Thus if you are currently below 50% which I believe you are, then the chance of you experiencing a long enough winning streak to reach 70% seems highly unlikely.

Of course as you noted your .5:1 system is already 63% winning trades, but you are down because it takes 2 wins to overcome 1 SL.

Thus this system would need to beat 66.67% to make a profit, which seems unlikely. Yes 12.5 pip profit compared to 25 SL might make this system slightly over 50% but definetly not 66.67%.

As to your others, the 1:1 system will, over time break even,

the 1.5:1 should make money but this might take a while.

My experience with system 1, which is your system with 2:1 reward/risk ratio is staggering. 20% winning trades is amazing losing streak.

The fact that the system is down 4% only is credit to your money managent lesson, however I do not have the patience to carry on with system 1 past friday if it is still the worst of the 6 systems facing the chopping block, especially when system 2, 2.A and 5 are also random chance systems that prove the same point.

Good Night and good luck.