Hi Vijay,
So the new strategy is
Buy 1 lot at 1 pip higher than the previous day’s high.
Sell 1 lot at previous day’s low.
Take profit 15 pips, stop loss 5 pips.
If that is the case, don’t you think using a trailing stop wud be a much better option?
Have you tested this method?
Cheers
Suraj
Carnino, I am deeply sorry for your loss, and am very grateful that you still feel you can spend time with us here on Baby Pips. Your input has been amazing and hope that you will continue with your work here.
Thank you!
Morning all.
Three wins again last night for me, so this month definitely looking better so far.
Anyone else got ideas about the month is going?
S.
Today it was 1 winner in my other account with 5 stop and 15 target.
regards
vijay
Seems to be going very well so far!
I dont know if it is the body of the thread but for some reason I could not find it. How to we account for spread with this strategy? I see on the Myfxbook the losses are exactly 5 pips. Do we make the stop loss 5 pips including spread so really about 4 pips?
Well, [I]Vijay[/I] does not address that issue directly. However, in several posts scatted over the thread, I do address it on various fronts.
[ul]
[li]For the High and Low offsets, I suggested setting only the High offset to the average spread and setting the Low offset to 0 (see Post #229).
[/li][li]I also suggested choosing a stop size that takes into account the average spread and average slippage (see Post #432). This goes for the trailing and the relative target as well. So instead of 5 pips, you could use something like 5 + 1.5 (spread) + 1.0 (slippage), so as to use a 7.5 pip stop size.
[/li][li]In my trailing strategy, [I]Vijay[/I] also suggested a “Trailing Gap” which can be set to the average spread as well, but he never implements it in his own EA. In my back-tests and in my own EA, it does improve the outcome to a good degree.
[/li][/ul]
Hope that helps! Best to read the entire thread completely for more details.
Thanks Carnino! Now do you raise your profit target if you raise your sl? If your ls is now 7 do you shoot for first target of 7 pips or still 5?
In [I]Vijay’s[/I] original strategy, the stop size is also used in the 1-2-3 ratio for the targets, so yes, for a 7 pip stop loss, you aim for 7, 14, 21 profit levels. In my trailing strategy, the stop loss and trailing stops can be different sizes but normally trailing and stop loss are the same size.
[QUOTE=“Carnino;647204”] In Vijay’s original strategy, the stop size is also used in the 1-2-3 ratio for the targets, so yes, for a 7 pip stop loss, you aim for 7, 14, 21 profit levels. In my trailing strategy, the stop loss and trailing stops can be different sizes but normally trailing and stop loss are the same size.[/QUOTE]
And have you found this to also be profitable?
Looks like you have been skipping a lot of the posts here. It might be wise to go back and read it all.
I have posted various statistics and back-tests showing the profitability on different variations. In one case, a back test was done for someone who had an 8 pip minimum stop-level limitation.
I’ve now read most of this thread. But has anyone tested setting the TP levels closer and having more pending orders to diversify the funds instead of just 3?
I wonder if it would hurt or help.
I am not exactly sure if you are referring to reducing the stop size or only reducing the TP, so here are my answers to both:
[ul]
[li][B]In the case of stop size reduction …
[/li][/B]You would be killed by variable spread and slippage, just as many here, including [I]Vijay[/I] himself, have complained about. In fact, thanks to [I]felipebr[/I] for informing us of the technique, I have recently run some back-tests with variable spread and simulated slippage and can confirm that even the 5 pip stop is too small; hence my suggestion to you of adding to the 5 pips the average spread and average slippage for a final larger stop size.
[li][B]In the case of only reducing Take Profit Levels …
[/li][/B]No, I have not looked into that because my line of thought has been to have the profits run with a trailing stop. However, you have piqued my curiosity and will take some time to look at that, even though I suspect that it will hurt the Reward to Risk ratio and ultimately the profitability. I will let you know what I find!
[/ul]
It’s kind of hard to explain but what I was think is to keep the same risk:reward ratio but instead of opening 3 pending orders at a 5 pip difference was opening 6 or 7 pending orders that are only 2 or 3 pips apart and allocating the funds for the trade to 6-7 orders instead of just 3.
Then the answer was Point 2!
However you have to remember that you are limited by stop-levels. In the case of my broker, for GBP/USD my minimum stop-level is 3 pips, so the TP could be no smaller than that.
Also, if entering the pending orders manually and taking into account that slippage is usually positive on pending stop orders, then your targets would be under valued and affect your RR ratio. Even if you use a technique as is done in [I]Vijay’s[/I] EA, you would still most likely not be able to place the targets so close due to the stop-levels, spread and slippage in effect during the order opening.
However, I as I said, I will look into it with an open mind and do some tests to see what the real results will be.
Preliminary results are in!
As I suspected, your suggestion, not only is it less profitable but all other metrics are lower too - Profit Factor (lower), Win Rate (lower), Kelly (lower). I tested 4TP at 3.75 pip intervals (5 pip SL) and 5TP at 3 pip intervals (5 pip SL).
Sorry, [I]Kelton[/I]! The 100% Allocated Single Orders with Trailing Stop, is still the more profitable of all the variations thus far.
[QUOTE=“Carnino;647471”] Preliminary results are in! As I suspected, your suggestion, not only is it less profitable but all other metrics are lower too - Profit Factor (lower), Win Rate (lower), Kelly (lower). I tested 4TP at 3.75 pip intervals (5 pip SL) and 5TP at 3 pip intervals (5 pip SL). Sorry, Kelton! The 100% Allocated Single Orders with Trailing Stop, is still the more profitable of all the variations thus far.[/QUOTE]
Damn your fast lol but good to know! Thanks man.
Hey Carnino! Which strategy are you referring to that is the most profitable?
The 3:1 risk reward ration allocating 100% on one with a fixed TP and trailing stop or no fixed TP and a trailing stop.
Also my spread would be 1.5 so would I still make the trailing stop loss 5 pips in total? or make it 6.5?
Thanks carnino!
The Single Order, 100% Allocation with Trailing Stop and with no TP as I introduced in Post#228 and described further in Post#229, that I have defended so far as being the most profitable.
As for the stop size, I advised you earlier on that in Post#568. However, do some research on your own by doing a few manual back-tests (or forward tests) on your brokers data. Don’t just take my word for it. Verify it so that you can feel confidant in its use.