Pending Orders, those that did not get triggered expire in 240 hours (10 days) in this case. In the original, they expire in 24 hours (1 Day only). I made the change because it is more profitable to leave them on longer.
However, open orders, those that are triggered and in the market are closed at the end-of the day. In the original, they remained open until the SL or TP was hit. My change is because it is slightly more profitable but mainly so as not to leave orders open and have SWAP charges.
As mentioned before, I used M1 data (not tick data).
Getting MT4 to use tick data in the [I]Strategy Tester [/I]requires some tricks to be applied and is a hassle to setup. It also takes much longer to run the back-tests and optimisation runs.
So, I reserve the use of tick data (and 99% modelling) only at final stages of testing EAâs. This one is still only in âalphaâ stage and for now, I believe it to be acceptable quality for the purpose of the demonstrations here.
But yes, a more accurate result would be better with tick data and modelling at 99% but only when things have matured sufficiently and after much more testing.
Hello traders,
I have attached a outcome of different percentage allocation.
The first one is with equal percentage allocation,second one with PARMAR 3P and last one with carnino allocation method.
He suggested 18,27 and 55 % on first,second and third order.
I just want the opinion of you guys what do you suggest and which is the best allocation method.
Total risk is $15 and total lot size is 0.3 lot.
The reason why i allocate 60% to 5 pips was the probability of hitting 5 pips is very high.
Honestly tell your opinion and also the reason.
regards
vijaykumar parmar
I would not change your current strategy just yet, until all facts are in and the changes well understood. If it makes money, donât change it yet. Make sure you understand all the factors involved first.
Please donât take my 18%, 27% and 55% as an Ideal Reference. I just used that as an example to show that an inverse/reversed option could have a large impact. You could have easily used a 20%, 20%, 60% to see a similar impact.
As I stated, the best values depends on the probability of the outcomes, but as I have stated, so far all the tests point to the ideal allocation of 0%, 0%, 100% but that allocation is still under review âalpha testingâ to see what other problems may arise, such as a lower win rate and slightly larger drawdown.
I have traded that method 100% lot size and TP 15 so risk rewards was 1:3 in live account for 3 months.
There are some days where you get a series of loss and that make me disappointed.
The market break high/low and move 6-7 pips and reverse back and make loss.
I havenât trade with 1:5 or 1:7 risk rewards targeting 25 or 35 pips with sl of 5.
Anyways will test and will publish here for 2014
regards
vijay
Yes, you are correct! As you can see from my back-tests that I published on MyFXbook, the 100% method has a [B]lower win rate [/B]and [B]higher drawdown[/B] and that can make anyone feel uneasy on those bad days, weeks or even months.
That is why I [B]warned people not to trade it on live accounts [/B]yet, because it is still in a âalphaâ stage.
The reason we are here is to learn by experimenting and sharing our findings and ideas so that we can improve.
As I progress with my testing, I will post more information and hopefully reach better and safer methods. So, please do not change your strategy until all the facts have been tested and verified.
Vijayâs original strategy is a very safe strategy because of the 3 Order system with the safe distribution over the 3 different targets that protects the profit.
On the other hand, my Single Order 100% allocation is much more reckless but also more lucrative. It lacks the âsafetyâ because it has a low win rate and a high drawdown.
So, how can we improve it? Can we not use the best of both worlds?
Well, Vijayâs strategy is basically a Scaling Out strategy, but instead of that, why not use a Trailing stop on the Single Order 100% allocation at similar target points?
That is what I have done using fixed size stops for both the Stop-Loss and the Trailing-Stop. The ideal solution would be ATR adjustable stops, but we will get there soon enough.
The results are even better profitability and much higher win rates and lower drawdowns:
EUR/USD (from 2012-12-31 to 2013-12-27) - DayBreak EUR-USD Single Trailing Strategy | Myfxbook
[ul]
[li]Spread: 1.0 pip
[/li][li]ZimeZone: UTC+2 (NY Close)
[/li][li]Trading Days: Tuesday-Friday
[/li][li]Breakout Offset: (spread) 1.0 pip only on High (0.0 on Low)
[/li][li]Pending Orders Expire 240hrs (10 Days)
[/li][li]Open Orders Closed at End-of-Day
[/li][li]Stop Loss Size: 5.0 pips
[/li][li]Trailing Stop Size: 5.0 pips
[/li][li]Risk: 1% (Initial balance $10000)
[/li][B][li]Profit: $31796.50 (317.97% Gain)[/B]
[/li][li]Profit Factor: 2.17
[/li][li]Relative Drawdown: 13.592%
[/li][B][li]Win Rate: 56.87% (320 Trades)[/B]
[/li][li]Reward/Risk Ratio: 262.16%
[/li][li]Avg. Profit/Avg. Loss Ratio: 269.29%
[/li][li]Win Rate * Reward/Risk Ratio: 149.10%
[/li][li]Win Rate * Avg. Profit/Avg. Loss Ratio: 153.16%
[/li][li]Kelly Factor: 40.86%[/ul]
[/li]GBP/USD (from 2012-12-31 to 2013-12-27) - DayBreak GBP-USD Single Trailing Strategy | Myfxbook
[ul]
[li]Spread: 1.5 pip
[/li][li]ZimeZone: UTC+2 (NY Close)
[/li][li]Trading Days: Tuesday-Friday
[/li][li]Breakout Offset: (spread) 1.5 pip only on High (0.0 on Low)
[/li][li]Pending Orders Expire 240hrs (10 Days)
[/li][li]Open Orders Closed at End-of-Day
[/li][li]Stop Loss Size: 5.0 pips
[/li][li]Trailing Stop Size: 5.0 pips
[/li][li]Risk: 1% (Initial balance $10000)
[/li][B][li]Profit: $53136.50 (531.37% Gain)[/B]
[/li][li]Profit Factor: 2.73
[/li][li]Relative Drawdown: 13.96%
[/li][B][li]Win Rate: 61.54% (299 Trades)[/B]
[/li][li]Reward/Risk Ratio: 258.33%
[/li][li]Avg. Profit/Avg. Loss Ratio: 262.06%
[/li][li]Win Rate * Reward/Risk Ratio: 158.97%
[/li][li]Win Rate * Avg. Profit/Avg. Loss Ratio: 161.27%
[/li][li]Kelly Factor: 46.86%[/ul]
[/li]
Obviously, GBP/USD is much better suited for this strategy but EUR/USD improved considerably with the Trailing Stop!
Now that the testing and demonstrations that I have posted here, have reached a reasonable level of maturity and statistical confidence, I would like to hereby highlight some of the points that I think you should consider incorporating into your strategy in order to improve results:
[ol]
[li]Use single pending orders allocating the full 100% risk instead of a diversified allocation among several orders.
[/li][li]Let your profit run instead of using fixed profit targets or fixed Risk:Reward ratios.
[/li][li]Use a trailing stop, instead of scaling out, so as to let your profit run, or maybe use a combination of the two methods.
[/li][li]Allow your pending orders to expire much later instead of just 24 hours. I used 10 days in the demonstrations, but experiment with longer periods too as they can have a large impact on the results.
[/li][li]Close Open Orders before the end of the day. Orders that are triggered usually hit the stops very early on, so donât leave them open too long. Rather close them and prevent Swap or Rollover costs.
[/li][li]Consider only using an offset on the High Breakout, based on the average spread. That is because it is triggered by the Ask price. The Low is triggered by the Bid Price, so there is no need for an offset because all the data used for the High and Low is based on Bid prices. If you still want to use an offset on the Low, then make sure that the High offset is greater than the Low offset by the value of the average spread.
[/li][/ol]
Well, at this point, my suggestions would alter your strategy quite a bit, and in all fairness, I would be hijacking your thread if I continue to delve in further into more enhancements. The strategy is no longer the same and in order to follow the rules and etiquette for this site, I should consider creating a new thread.
[B]So Vijay (and other readers), please let me know if you want me to continue pursuing further enhancements and I will create a separate thread for that.[/B]
I am following this thread with great interest.
Never I would have guessed that a system based on daily low/high could actually be profitable in the long run.
This makes me wonder, Can we think of ideas to cut the losses? Or is the idea to take the system as-is and optimize it using the given parameters? (I dont intend to hijack this thread)
For example do not place order when:
order would be close to Big Round number (resistance/support on BRNâs could be responsible for losses)
Daily candle is very large or very small (indicates an abnormal event, after which the market only moves a littlebit)
Or, if we want to go bold, include other indicators such as do not trade when:
order would be against the general trend (support may be stronger than restance when trading against the trend)
stochastic is converging (indicating loss of momentum)
Personally, I rather have fewer trades, but higher win-ratio. That helps me sleep.
The saying âwinning does not feel as good as losing feels badâ could have been my credo on forex.
Egosuma, donât you think that you are over complicating things a bit too much?
Please remember your own words - âNever I would have guessed that a system based on daily low/high could actually be profitable âŚâ
Maybe it is profitable, because it is simple and elegant!
Vijayâs strategy is clean, using no indicators what-so-ever, depending only on breakout price action! Most importantly, it uses pending orders so to liberate the trader from having to watch the market the whole day.
My suggestions offered a much higher profit and improves the win rate too as you have mentioned, but still keeps Vijayâs original simplicity in place - it uses no extra indicators and Trailing Stops can be set with the Pending Orders and [I]MetaTrader[/I] takes care of it for you without the need for an EA.
Hi carnino,
I donât have any issue if you post in these thread. After lots of experiment and works I have come to these method. If you could develop any better than these than it is good.
Trading is a learning process and it continues till the end. Everybody can share their ideas and view in these thread. Any modification in method if result in more profit than it is good however I will not implement straight by backtesting only. Forward test is necessary. Trailing will work ideal in backtest but when forward test will come it wonât work ideally.
Regards
Vijay kumar
Hi egosuma,
The method has advantage of simplicity while adding support,resistance,BRN etc will make it complicate.
The advantage of these method is who has 0% knowledge in forex, who does not know about trend, indicator,SMA,EMA etc can trade it.
While trading these method we donât have to use any logic. It is a set and forget method.
Regards
Vijay
Today Stat
Trade 3
Winner 3
PARMAR 3P Trading System | Myfxbook
Regards
Vijaykumar parmar
Hi, some weeks I understant that on monday you donât place orders with the closing prices of last friday and keep the last open ones, thursday`s, is it correct? but today I see you opened possitions with the closing prices of friday, could you please confirm whitch is the correct system on that? or if it depends of anything.
No I trade on Monday as wellâŚHowever sometime price open with GAP and EA does not place order if it is GAPUP/GAPDOWNâŚyou can check the history whenever price did open within high/low of friday bar the trade has taken place.
regards
vijay
some time when price break high/low than in few second the pair move fast and trailing was not working as per expectation.
Also I have tried to move to breakeven at certain pips however in that case also winner trade will close to breakeven.
That is reason i prefer three order and three target at different level.
I am using EA but those who trade manually can not sit in front of computer for trailing so for them it is better to place 3 order and 3 target.
regards
vijay
