Macfibo system

[mario777]

@caliphtrading

1st Trade Using Macfibo and Custom Parameters

Finally, entered a trade using my parameters and Macfibo. Decided to ignore the RSI signal!

Took profit on half of the position entered at 127.2 Fibo because of a 4 week low line just beneath 168.1 Fibo. Move hard stop to BE for the rest of the position.

this is what I observe in these kind of forums. The original thread/rule was so simple and effective and yet people keep adding their own parameters/rules/indicators.Why not start your own thread by your own rule so will not confuse the original rule.:eek:

[alfa2]

Hi Bro Sufi! Yesterday I have opened a short GBPJPY when a sign was given. After a good start the momentum was lost and the price mouvment became flat during Asian session as you can see on the attached chart. So now I decided to close with the actual 22 pip profit, not waiting anymore to reach 168. Did I do correctly?

[richhand]

I already answered about this issue here

so you did, cheers

[sufiansaid]

Hi Bro Sufi! Yesterday I have opened a short GBPJPY when a sign was given. After a good start the momentum was lost and the price mouvment became flat during Asian session as you can see on the attached chart. So now I decided to close with the actual 22 pip profit, not waiting anymore to reach 168. Did I do correctly?

According to the original rule (ver 1.2), you should have closed the trade when 5ema crossed 8sma. You did not have to wait/hold the trade until Asian market open. Ofcourse you would not get anything (Break even at best) if you exited when 5x8 but that is the exit mechanism. What was your exit plan when you entered the trade in the first place? Wait price to hit SL?

[alfa2]

According to the original rule (ver 1.2), you should have closed the trade when 5ema crossed 8sma. You did not have to wait/hold the trade until Asian market open. Ofcourse you would not get anything (Break even at best) if you exited when 5x8 but that is the exit mechanism. What was your exit plan when you entered the trade in the first place? Wait price to hit SL?

I was not at my screen when 5x8 happened, SL was at 38fibo. I have the feeling, that 5x8 may be the week point of the system. Sometimes it occour too late (loss is near to 38 SL loss), sometimes it gives a false signal, because trend comes back. This was my present case. If I close 5x8 profit 0 pip, as I did not close profit was 22 pips, because trend came back. However I do not like this “manual” trading.

[sufiansaid]

I was not at my screen when 5x8 happened, SL was at 38fibo. I have the feeling, that 5x8 may be the week point of the system. Sometimes it occour too late (loss is near to 38 SL loss), sometimes it gives a false signal, because trend comes back. This was my present case. If I close 5x8 profit 0 pip, as I did not close profit was 22 pips, because trend came back. However I do not like this “manual” trading.

Allow me, it doesn’t matter what MA you put there, it will always gives false signal. All MA crossover type methods will give false signal. I’ve accepted that since the first day I tested MA crossover based systems. I think I’ve asked you this before but I could be wrong, but how many test trades have you gone through apart from yesterday’s cases?

5x8 is designed for me to cut my losses small and designed to allow me NOT to guess the market rather react on a well-tested signal. When you said “If I close 5x8 profit 0 pip, as I did not close profit was 22 pips, because trend came back” was as if you knew what is going to happen in the future… that the trend would definitely returns… unless you have some trading edge that has high probability to ‘predict’ a trend will continue, then I will be more than happy to hear it

For me, trading is about managing risk. When 5ema cross 8sma, I regard that as a warning and I should close my trade entirely, because STATISTICS shows when 5ema cross 8sma, it is more likely to continue than not. You might think I am upset that you find ‘weakness’ in the system… not at all. I know it has weakness but I rather you point out the weakness after you actually test the exit mechanism over the number of trades i’ve suggested many many times in the thread.

Moreover, I also mention the dangers of ‘guessing’ in trading. I admit the asian open was a flat market but did you exit based on a rule you set to yourself that ‘when market is flat, then exit existing trade’? If so, well done to you for following your trading rule (which I’ve mentioned many many times how important is it to follow your own rule)… if not, then I suspect you were guessing.

All I am trying to say, ALL trading signals will sometimes gives FALSE signal… and it is not a weakness, it’s just the way it is… thats why trading system is only 10% whilst money management and psychology is 90%. When you present a simple system to three different traders… high chance you will get three different results… and the difference of results entirely because of the 90%. One might have different risk portfolio or have problems in following the system rule etc etc… Please test the system thoroughly before judging one rule or one mechanism is not good… I am not saying you can’t say Macfibo has weakness… no no… Macfibo got LOTS of weakness but to ALL trading system that you currently test and in the future.

I am here to help, so just take this post as my way of helping.

[alfa2]

Allow me, it doesn’t matter what MA you put there, it will always gives false signal. All MA crossover type methods will give false signal. I’ve accepted that since the first day I tested MA crossover based systems. I think I’ve asked you this before but I could be wrong, but how many test trades have you gone through apart from yesterday’s cases?

5x8 is designed for me to cut my losses small and designed to allow me NOT to guess the market rather react on a well-tested signal. When you said “If I close 5x8 profit 0 pip, as I did not close profit was 22 pips, because trend came back” was as if you knew what is going to happen in the future… that the trend would definitely returns… unless you have some trading edge that has high probability to ‘predict’ a trend will continue, then I will be more than happy to hear it

For me, trading is about managing risk. When 5ema cross 8sma, I regard that as a warning and I should close my trade entirely, because STATISTICS shows when 5ema cross 8sma, it is more likely to continue than not. You might think I am upset that you find ‘weakness’ in the system… not at all. I know it has weakness but I rather you point out the weakness after you actually test the exit mechanism over the number of trades i’ve suggested many many times in the thread.

Moreover, I also mention the dangers of ‘guessing’ in trading. I admit the asian open was a flat market but did you exit based on a rule you set to yourself that ‘when market is flat, then exit existing trade’? If so, well done to you for following your trading rule (which I’ve mentioned many many times how important is it to follow your own rule)… if not, then I suspect you were guessing.

All I am trying to say, ALL trading signals will sometimes gives FALSE signal… and it is not a weakness, it’s just the way it is… thats why trading system is only 10% whilst money management and psychology is 90%. When you present a simple system to three different traders… high chance you will get three different results… and the difference of results entirely because of the 90%. One might have different risk portfolio or have problems in following the system rule etc etc… Please test the system thoroughly before judging one rule or one mechanism is not good… I am not saying you can’t say Macfibo has weakness… no no… Macfibo got LOTS of weakness but to ALL trading system that you currently test and in the future.

I am here to help, so just take this post as my way of helping.

I really hope you are not upset, you wrote somewhere that remarks, proposals for improuvment are welcome. Of course I do not have a tonns of statistics, but I have backtested several pairs, I did not make all the notes, but I had this impression (I wrote: I have the feeling, maybe) concerning 5x8.

A was not guessing to exit. You get a sign, the initial trend prouves the validity of the sign, but after a while the market sits down, become flat for 10-15 hours. From that point to remain in position is a pure gambling for me. That’s why I decided to exit.

[sufiansaid]

I really hope you are not upset, you wrote somewhere that remarks, [B]proposals for improuvment are welcome[/B]. Of course I do not have a tonns of statistics, [B]but I have backtested several pairs,[/B] I did not make all the notes, but I had this impression (I wrote: I have the feeling, maybe) concerning 5x8.

A was not guessing to exit. You get a sign, the initial trend prouves the validity of the sign, but after a while the market sits down, become flat for 10-15 hours. [B]From that point to remain in position is a pure gambling for me. That’s why I decided to exit[/B].

Hehehe don’t worry buddy. I was not upset hence I stated in that post clarifying that I was not. In reference to the bolded statement in quote…Clearly I did not read all your post, so allow me to ask what actually did you propose as to improve the exit mechanism, in this case, 5ema cross 8sma mechanism?

Well done in backtesting several pairs, how many test trades have you made?

Yes it is gambling exactly… hence it looked as if you were also ‘gambling’ when you did not exit when 5ema cross 8sma and ‘hoping’ the trend would continue… but yes duly noted that you were not in your chart (hence an exit EA is more useful to write rather than anything else).

Again, just to clarify you and others I am not upset. Far from it :D… far from it. Hehehe…

EDIT : Infact, I can propose you perhaps you don’t use 5ema cross 8sma, just use the fixed SL. In this way, you can keep stay in the trade even when 5x8 incase the trend continues. Maybe that suits you… I can suggest you an advanced way to exit a trade… it involves candlestick reversal analysis… up to you. Let me know.

[earquake]

I just want to say wouldnt it be better to focus all your energy in testing the system manually as it will give you MORE than EA generated results could ever give. This is just my opinion but in my years of trading, EA generated results (EA backtest results) never reflects the true nature of a system… it either could give you ridiculously AWESOME results or ridiculously HORRIBLE results.

Yes manual backtesting is slow process. Automated backtesting is Quick and easy. I don’t know about you but I don’t believe in short cuts. I treat Forex trading as real business, and if it requires me countless hours and days testing the system thoroughly, so be it.

I am sorry but I will not ever rely on EA particularly in setting up a trade for me. I might be interested however if someone would create an EXIT EA for me (5ema cross 8sma). If my suggestions counts for anything, I suggest that you backtest the system manually according to the rules (original or modified). I can give hundreds reasons why I believe manual backtest is better but I will tell you just this two reasons :

a) Macfibo is not ‘a simple method to code’, errors and bugs are imminent.
b) It is simple enough to be traded on your own.

A lot of programmers over the years have tried to code Macfibo EA. Some claimed to successfully coded it 100% as the original rule but as I tried to check the EA, I noticed the EA would TP all the way to 261.8 instead of 1.618 (i believe the inaccuracy of it’s PT B), it would ignore S/R or worse, ignore the 5x8 crossover. You can’t blame me to be very skeptical in using a robot to do the backtest for me… nevermind trade live for me.

Having said that though ehhehe… you want to do your EA, write your EA to make backtesting easier, well it’s your choice and i wish you good luck. I wish EA writing or discussion about how to code this how to code that wouldn’t become the new theme of the thread.

God bless…

I can’t make a close EA for a manual trade. When an EA open a trade it sets a “magic number” that identifies the trade. In a manual trade this number will be always 0, so the EAs can’t know what trade to close.

For the moment my experiment shows suport/resistance levels and manage the wicks. I think this afternoon I can have finished this first task.

I want to develop this EA because it isn’t an easy to code strategy, it is a very good exercise for me. And because when the EA is done I can know exactly how affects the repaint issues to the strategy.

Keep in touch.

[PingPong]

Just a thought … to solve the “magic number” problem of the EA, what if we engage the EA only when we see a trade that we are ready to take manually. Only then will we turn on the EA for it to open a trade. But in reality, we do that so we will be able to close the trade when 5x8 happened, automatically with the EA?

What do you think?

[earquake]

Just a thought … to solve the “magic number” problem of the EA, what if we engage the EA only when we see a trade that we are ready to take manually. Only then will we turn on the EA for it to open a trade. But in reality, we do that so we will be able to close the trade when 5x8 happened, automatically with the EA?

What do you think?

What we can do is open the trade with a script that allows to put a magic number. Then you could manage the operations through an EA.

[Yaman]

I am sorry but I will not ever rely on EA particularly in setting up a trade for me. I might be interested however if someone would create an EXIT EA for me (5ema cross 8sma).

Attached

If you have a buy order open and you put this EA on your chart it will close all orders for that pair when a new candle opens and the Fast EMA is above the Slow SMA.

The parameters are:
TimeFrame - The minutes each candle represents i.e 60 = 1 hour; 240 = 4 hours
Fast_EMA = 5
Slow_SMA = 8

As with any code supplied by a random stranger on the internet [B]TEST IT[/B]
Then [B]test [/B]it again, then do some more [B]testing [/B]and when you are sure it works as expected [B]test it again.[/B]

I do not offer any guarantee nor do I offer any support for this code.

[earquake]

1st Checkpoint: Automatic Support/Resistance levels.

Daily/Weekly Highs/Lows shown as color rectangles, where colors range from the coldest to warmest:

• MediumBlue => Weakest
• Maroon => Strongest

[mario777]

I would like to share with all of the thread’s subscribers/readers to one good post about ‘Life of a trading system in a forex forum’. Most of the points posted by the author really hit the nail. Let me put a disclaimer, though I posted his post here doesn’t mean it reflects entirely what I agree or think or believe in. Read all of the points of the post and I will add some points at the end of his post/article.

It basically about the number of free forex trading system made available in any forex forum and how it can be popular for many weeks or months and suddenly the thread becomes dead.

[B][I]I became a member of the forum 7 years ago. As a beginner I spent most of the first 2 years studying various trading systems posted here, using some of them on demo accounts and (unfortunately) a few on my live account. Eventually I created two of my own which I still use with little modifications up to this day. However, the old hobby is not dead. I still test almost everything. Occasionally I find a new idea, an interesting indicator, even a good system that can be made profitable with some adjustments.

But the really fun part is to follow what happens to such systems over the months and years that follow the initial post. They have a life of their own and seem to follow the same path, over and over again. Hundreds of systems, thousands upon thousands of posters and posts … and nothing ever changes. To me their evolution is now more than predictable and I’m sure there are many others who have noticed the same patterns.

1. Here’s my holy grail! The OP tells us a bit about himself, the rules of the system, some charts carefully chosen with entries/exits that worked great. He informs us that he’s been very successful using the system.

2. The fan club is created! The first people who post are those who have a few winning trades using the rules originally posted. They become groupies and whatever happens in the future they will defend the system even when it’s obviously failing miserably.

3. The newbies are here! People who know virtually nothing about trading, Metatrader or indicators start asking questions such as “where do I put the mq4 and tpl files?” … “how many lots should I enter?” … “what time is it here in <insert place> when London opens?” … “does this work without a stop loss?” and so on.

4. You’re a legend Sir! Following the beautiful charts with a bunch of winning trades and the very wise answers given to the questions asked by the army of beginners the OP gains the unofficial title of super-trader. The number of posts grows exponentially. Everybody is happy, doubling the account is around the corner, and from there it’s just a matter of months until making it to Forbes.

5. We need more indicators! Market conditions change and the system loses money a few days in a row. Clearly it has to be adjusted. How? By adding more indicators to filter out the bad trades. It’s very easy, isn’t it? Just add something that would have kept one out of the last losing trade. It doesn’t matter that the very same filter would also prevent one from taking many of the trades that turned out to be winners. Nobody bothers to backtest this. So … let’s add the stochastic … the 200 EMA … examine the higher time frame … check the daily range … put the Renko bars to smooth it … the TDI works best … I would add the Bollinger bands …

6. The systemS are here! Since everybody is now euphorically adding indicators and rules we no longer have one system. We have anywhere from 3 to 10 versions of the system, some of which having in fact very little in common with the original rules.

7. Chaos reigns supreme! With all those new additions and people posting like crazy charts and results using different setups nobody knows exactly what’s going on. The thread is full of requests like “can anyone point me to the latest official version of the system?”

8. We need them robots! Now that we know how great the system is it’s time to ask some great coders to make an EA. Which version of the rules should he use? We can try a few … maybe one will work.

9. Nah … dem robotz no good! The EA is losing because we humans can see and feel things about trading … it comes with experience. So let’s forget EA results, forget backtesting, and let’s just trust the thousands of pips reported by the groupies. The system must be good, no doubt!

10. It’s just that little thing left to do! After a while, noticing that a large number of people posting in the thread get mixed or even bad results, someone has an epiphany. All we need to make the system really great is an indicator or something to tell us if the market is trending or ranging. But not yesterday or last week or last hour. What is it GOING to do next?

11. It works for me! So we are left with the OP and his early followers claiming that the system works beautifully, they all make thousands of pips each week. We have a few others who claim that it’s losing big time and others get so-so results. And the vast majority still keeps trying to find that extra indicator that will make the system perfect.

12. There’s a new kid in town! A few months later most people left the building. Even the OP most of the times. Nobody knows why. Have they become so incredibly rich that posting on FF is no longer interesting? Or maybe the system is not so good after all? But hey … who cares? Did you see that new system? That one is really great! [/I][/B]

Which phase Macfibo system is on in Babypips forum? No.3? No.4?

Like any trader in Internet age, forex forum is the first destination I went to in finding some useful system that I could copy, modify, test, traded etc etc. I believe it was around 2006 or 2007. I remembered number of systems that was so popular and many thought in few months, most of the traders will become millionaires or rich etc etc. Systems I could remember was like Sidus, Bagovino, Sonic System, Vegas system, SRDC, Rob Booker’s Arizona rule, Ttalmoi system etc…

They had a lot of followers, like what the author of the article stated in Phase 2. I was one of the them. Infact I was the one in phase 3.

Phase 5 happens… but after the systems harvested positive pips week in week out… then until ranging markets HIT the pairs traded and those 100 pips per wiin becomes 45 pips per loss… 1 loss, 2 loss, 3 loss, 4 losses, 5 losses… in a row. Then most people panicked/ had a kneejerk reaction and decided to TWEAK the system… only after one week or one month of BAD run. Now, I think I stated this weeks ago when Macfibo was having a little bit of dry spell? and urge new traders not to panic and one bad week or one bad month doesn’t make the system into a bad system.

Phase 5 is what i really fear will happen here in macfibo system forum thread… because phase 6 and phase 7 will definitely happen. Infact, I can guarantee it! I had ONE of my simpler system posted in one forum, it became a bit popular for a while until once the system hit 8 losses in a row… everybody panicked and claimed MARKET HAS CHANGED… we need to change it… we need to adapt. Chaos. People started to talk beyond the main essence of the system. For the betterment of other newbies, I ‘deleted’ the thread and I never look back. The few traders who stick to the system rule AND ones who tweaked but backtested in over 400-500 test trades, still use the system and only experienced very few rare negative months… but never broke their account.

Tweaking a system is not wrong. That isn’t what I m trying to say. But when you tweak a system only after the system suffers one week or one month of bad performance, is not ‘adapting’ but it is just pure PANIC. If the system suffers MONTHS of losses, YES… I agree you shoud tweak it but you can’t trade the new refined trading rule WITHOUT testing it thoroughly.

Several programmers/traders tried to code Macfibo, in attempt to make it automated. I never against it not I ever recommended it as well. This is just my personal preference, but I rather trade according to my own decisions… not robot. No matter how accurate the EA replicate the complete trading rules. Few days ago one generous trader wants to write the Macfibo EA for me, assuming for Free. But I still strongly believe that trading by our own is 100 times better because with it, you gain experience and experience is something you can’t buy from expensive or cheap mentorship programme. I never been a fan of automatic backtesting because you learn nothing from other than computer generated results, which you still not sure if the EA executes your trade as what your system say. Again, I am all with modernization with EAs but just be careful with it.

Phase 11… well, I will not say I have make millions after trading Macfibo over the years… but I have met 80-90% of my trading objective (I will keep it private)… my intention of starting this thread is to help new traders and perhaps asking for more ideas how to make it better… but as I’ve said several times… every idea is a good idea but until proven otherwise… like phase 9, people tend to forget to test their new ideas, new indicators. 100 test trades is not big enough to suggest an idea will work. (not that 200-500 trades will replicate it’s pattern in the future but it provides more solid proof than less than 100 trades).

Another thing that i want to try to say is I don’t want this thread to be dead in few months and I do not plan to abandon this thread as well. If this system’s thread can maintain to be active, I will be happy… and I am more than happy to continue post system updates and release more advanced versions of Macfibo as long as there is interest and Phase 5 doesnt happen.

This is really true. Now we are on PHASE 8 :31:

[earquake]

I strongly agree with the basics of the previous post.

I have also spent many hours visiting forums with strategies, noting each of the previous phases.

Is clear to me. People come into euphoria or panic. So I do not usually trust what people say or modifications which may add to the system. The rules of a system can never be changed. A system should not contain arbitrary or subjective rules.

So in what I hope is what can be tested. So I want to automate this strategy.

I disagree that you can not learn anything from an EA. The EAs are a world apart where other concepts come into play. People often think they can buy any EA, plug it into a VPS and start going to Atlantis Hotel in Bahamas. Learning to understand, analyze and run an EA takes many years. I carry 3 or 4 years of study and still feel I have much to learn. It costs a lot to develop a strategy like this. If I succeed and backtest result is negative, I know why the strategy fails. Almost all fail because the indicators repaints.

[mario777]

If I succeed and backtest result is negative, I know why the strategy fails

Read more: 301 Moved Permanently

So you mean you will know a strategy is good or bad only after you tested with your EA?

[sufiansaid]

[B]I disagree that you can not learn anything from an EA.[/B]

Let’s agree to disagree.

Manual backtesting serves me well and it should not be a surprise that I am pretty biased on this matter… and I am sure you have best years of trading in using an EA so I totally understand your stance on this matter. All the best to you in your EA writing. As I said earlier in the thread, I really hope EA writing discussion won’t be the new theme of the thread.

I have an idea without sounding ‘hostile’ or anything, but I really do believe it is a good idea to have Macfibo EA writing discussion it’s own thread so it won’t confuse everyone. I am sorry but I had an active thread years ago and the thread diverted from it’s main purpose as soon as people starts talking about ‘programming’ rather than discussing about price action, entries, exits, trades etc etc. I don’t want that to happen again.

I do appreciate your interest in automating the Macfibo system without asking any fee or anything from me, but I have to be honest, the only EA i am interested in is the exit mechanism… and I would appreciate if the programming discussion done in a different thread. My main aim sharing this system is mainly to help other new traders to go through the worst phase that every trader will face… the learning phase, where loads of money will be lost. Its a way for me to give something back to the new traders community per se… and i’d like this thread to stay that way, talking about trading and backtesting etc.

Manual Backtesting Vs Automated Backtesting, Manual Trading v Automated Trading etc etc… it’s a huge issue and a huge topic. I am not here to ‘preach’ which one is better etc… I just state my preference, manual backtesting and manual trading serves me very well and I want to help other newbies to achieve some trading consistency the same way I did. That is all… cheers.

[PingPong]

Let’s get back to the topic, ladies and gentlemen.

Sufiansaid has spoken several times, he prefers MANUAL, but he is not totally disagreeing regarding EA trading as well. So, let it be, maybe we can start a sub thread on MACFIBO EA?

Just my 2 cents …

[shah]

Bro Sufian… McFibo System is Best… :5:

[dineshydv]

sufiansaid - Just a doubt that - 5x8 exit mechanism is for loosing trades only or whatever occurs first among [SL, TP, 5x8 opposite crossover].??