It’s probably true to say that risking 10% average per trade would blow up many a solid strategy. If you were trading a basket of currencies using this same strategy, your risk would probably be in the order of 0.5% to 1.0% per trade, and the last two years would be seen as a mere blip in the overall scheme of things.
I like this strategy, and it would be interesting to see how other non-corrolated pairs stack up over the tested period. I also agree that finding another (simple) method of determining bias could be key in really turning this strategy around.
Dave.
I agree. But think of it this way… If you make 100% over 5 years then in 1 year you loose over 100%, then the overall long term risk reward is against you. So for a scientific evaluation of a strategy, I need to know if the winners exceed the losses in the long run (10years minimum).
Now look at my slingshot data. You will see that it makes a profit over the long run regardless of losses. It is only a small edge (percentage), but its still a consistent edge which the Mechanical S & D does not have at this point. I know I could have reduced my position size and finished off the 10 years, but to me its to much of a roller coaster when comparing win loss ratio’s. I also notice the slingshot has roller coaster tendencies on some years, but the equity was a smoother ride over 13 years.
On the bright side, I have change a my Bias rule to pure price action which so far has reduced 2009 to only 2% loss. See the chart below:
Mechanical supply & demand Strategy 2003 to 2013.
Test was based on 0.5 Lot size so results were doubled to coincide with the slingshot results.
2003 - Profit 132%Balance $16600
2004 - profit 64% Balance $19800
2005 - profit 76% Balance $23600
2006 - Loss 12% Balance $23000
2007 - Profit 38% Balance $24900
2008 - Profit 64% Balance $28100
2009 - Loss 96% Balance $23300 - 2nd test (new rule) Loss 2% Balance $28000
2010 - Loss 214% Balance $12600 - Loss 94% Balance $23300
2011 - Loss Wiped out account $0
I am just starting 2011 & I am please with the results so far. If 2011 proves to be a good reduction in the loss, then I will re test from 2003 for valid 10 year conclusion. I need to make sure the profits stay up which im sure they will 
New results for retest of the Mech S & D strategy using new Higher time frame Bias rule (2009 till 2011)
2009 - Loss 96% Balance $23300 - Loss 2% Balance $28000 - Mech S and D 2nd test GBPUSD 2009 2% Loss - YouTube
2010 - Loss 214% Balance $12600 - Loss 94% Balance $23300 - Mech S and D 2nd test GBPUSD 2010 94% Loss - YouTube
2011 - Loss Wiped out account $0 - Loss 104% Balance $18100 - Mech S and D 2nd test GBPUSD 2011 104% Loss - YouTube
Now I will restart from 2001 as I am not using 20ema for Bias.
New rule is explained in my first retest video here - Mech S and D 2nd test GBPUSD 2009 2% Loss - YouTube
I have just retested 2003 & 2004 GBPUSD for the Mech S & D using the new bias rule. Both years had a loss of more than 100% where as the original 20 EMA bias rule produced profits.
[B]Conclusion:[/B] The new bias rule I was currently testing on Monthly bars does not work for this strategy. This is the same problem I have found over the last 4 months of back testing similar trend strategies. So far I have not found any trend strategy to be profitable on the long run. More research & testing is needed. Back to the drawing board. I will close all positions on the live test account (Mech S & D) until more conclusive results are proven.
The Slingshot strategy will continue to be traded live with weekly video updates.
Keep at it, Tyrone. You are so thorough you are bound to find the right combination to make things work.
Thanks brutus2.
Its only a matter of time & effort. I will also start back testing the Slingshot on other pairs. I would like to compare the data to see how correlated the results are. Maybe the Slingshot has enough diversity across many pairs.
I’ve done some EURUSD weekly bar back testing of the Slingshot strategy. You will notice that they are not in sequence as I wanted to test the most volatile years first to compare with the GBPUSD data. I will complete all 13 years for a conclusive result.
[B]Results so far:[/B]
2004 - Profit 63% - Slingshot EURUSD 2004 Weekly bar back test Profit 63% - YouTube
2005 - Loss 66% - Slingshot EURUSD 2005 Weekly bar back test Loss 66% - YouTube
2009 - Profit %135 - Slingshot EURUSD 2009 Weekly bar back test Profit 135% - YouTube
I have just replied to BlueHenry’s journal & thought I would be wise to post this on my thread too. There is also a youtube Video which is extremely important to hitting step 36.
Where are you on the list?
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We accumulate trading information – buying books, going to seminars and researching.
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We begin to trade with our ‘new’ knowledge.
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We consistently ‘donate’ and then realize we may need more knowledge or information.
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We accumulate more information.
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We switch the commodities we are currently following.
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We go back into the market and trade with our ‘updated’ knowledge.
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We get ‘beat up’ again and begin to lose some of our confidence. Fear starts setting in.
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We start to listen to ‘outside news’ & other traders.
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We go back into the market and continue to donate.
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We switch commodities again.
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We search for more trading information.
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We go back into the market and continue to donate.
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We get ‘overconfident’ & market humbles us.
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We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.
Many Traders Will Give up at this Point as they Realize Work is Involved
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We get serious and start concentrating on learning a ‘real’ methodology.
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We trade our methodology with some success, but realize that something is missing.
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We begin to understand the need for having rules to apply our methodology.
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We take a sabbatical from trading to develop and research our trading rules.
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We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.
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We add, subtract and modify rules as we see a need to be more proficient with our rules.
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We go back into the market and continue to donate. We go back into the market and continue to donate.
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We start to take responsibility for our trading results as we understand that our success is in us, not the trade methodology.
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We continue to trade and become more proficient with our methodology and our rules.
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As we trade we still have a tendency to violate our rules and our results are erratic.
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We know we are close.
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We go back and research our rules.
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We build the confidence in our rules and go back into the market and trade.
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Our trading results are getting better, but we are still hesitating in executing our rules.
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We now see the importance of following our rules as we see the results of our trades when we don’t follow them.
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We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
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We continue to trade and the market teaches us more and more about ourselves.
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We master our methodology and trading rules.
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We begin to consistently make money. We begin to consistently make money.
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We get a little overconfident and the market humbles us.
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We continue to learn our lessons.
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We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
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We are making more money then we ever dreamed to be possible.
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We go on with our lives and accomplish many of the goals we had always dreamed of.
My trading, I feel is currently at number 36. I continue to learn my lessons from the market, but allow my system to direct my trading. There is no way to eliminate losing trades, but from a statistical standpoint letting the system work has proved to be consistently profitable. There is always room for improvement and I am always learning new things about the market and myself. Trader Jesse Livermore said it best,”A man may beat a stock or a group at a certain time, but no man living can beat the stock market.” Remain forever humble to the markets.
Video interview of Mark Douglas (Trading in the zone) - YouTube
Hi Tyrone,
I saw your name and it sounded cool to me so thought I drop by. I read the first page and read this page of this thread.
And it comes to me that you are [B]‘Data Mining’[/B] . If you are not aware of the term ‘Data Mining’ I strongly suggest that you read about it, the term sounds self explanatory but it really isn’t.
I don’t want to discourage you but many years ago I was doing something similar as what you do here and missed out on one very key component, which literally made my work useless.
Best
Hi Kasravi.
Thanks for dropping by. I like to know other traders views. Don’t worry…I wont be discouraged. I will check out ‘Data mining’.
The one thing I truly believe is there are many ways to make money in the markets. The hardest part is finding an edge that fits us personally like a glove. After all, how do we know what works for us unless we find out what doesn’t work first. I always think ‘Thomas Edison’ the inventor of the light bulb. I quote “I have not failed. I’ve just found 10,000 ways that won’t work.”
― Thomas Edison
I’ve been taxiing for many years now & have picked up several traders over the years. I personally have questioned them about there strategies etc. Generally they are fairly open with there answers. The one response that was correlated between all the traders was they all trade strict proven back tested systems. Also each trader has a different system to trade. Also new systems are also being developed. What they were saying is there companies were diversifying & always looking for ways to increase the yearly return. They look for smooth yearly returns too. I told one I made 35% last year & he said you are doing better than we are. This was a reality check for me. So this is why I am devoted to back testing.
Thanks again Kasravi. Safe trading
[B]Mon 24 Mar 2014 - Live Slingshot analysis[/B]
Balance $303
Floating Profit $306
Its been a bit of a bad week for the Slingshot, but I was expecting a hit sooner or later. Spoke too soon lol. Well I’m currently uploading the youtube update Slingshot live account update 24 Mar 2014 - YouTube
Hi Tyrone,
Firstly, great video…thanks again for your effort and sharing!
In my MT4 (FXCM-USDDemo01) last week AUD/USD closed at 0.90797 and this week opened at 0.91014. In your video AUD/USD (at time 2.52) AUD/USD appeared to open this week more near last weeks close.
Furthermore, CAD/CHF: this week you do not have a setup but (at 3.52 in your video) according to my data there is (last week close: 0.78554, and this week opening: 0.78608). Am I making mistakes or is it because we use different brokers? Thanks for your response.
Greetings,
Peter
Hi Peter.
No your right I don’t show a set up bar for the CADCHF as one of my rules state’s the set up bar has to close with in the upper or lower 40% of the bar. Any close in the middle 40 to 60% (20% bulls eye area) make’s the bar invalid. I just move on.
As for the AUDUSD, every broker is different. What matters is the close of the setup bar & the obvious break of high/low to initiate a setup. I have not come across much difference between open/closes in Forex Tester 2 or my live account (GMT). Maybe on smaller time frames this would be an issue or different time settings like New York etc. What may explain the difference is the 2/3 Hour Sunday eve bar on the market open that closes at midnight GMT. This is when my weekly bar closes. The same settings is what I use in Forex Tester 2. Again this can be adjusted on Forext Tester 2 to align with what your broker is using.
Regards
Tyrone
Superb Tyrone, thank your for the intel. I will keep this in mind.
Greetings,
Peter
[B]Mon 31 Mar 2014
Slingshot Live account update[/B]
Balance $300
Floating $320
Just waiting for Monday bar to close then I can close my 4 Monthly bar trades. As for the new week, there are plenty of potential weekly bar setups. Its all here - Slingshot live account update 31 Mar 2014 - YouTube
Been busy lately so not as much time to back test the Slingshot strategy. I have managed to do EURUSD 2001 Slingshot EURUSD 2001 Weekly bar back test Profit 53% - YouTube & will try & get through this pair up till 2013 as soon as possible. Then I will start the USDJPY.
[B]Results so far:[/B]
EURUSD Slingshot Weekly 0.5 lot size. Percentages below based on 1 lot size.
2001 - Profit 53%
2004 - Profit 63%
2005 - Loss 66%
2009 - Profit 135%
Some more back testing data:
2001 - Profit 53%
2002 - Loss 85% - Slingshot EURUSD 2002 Weekly bar back test Loss 85% - YouTube
2003 - Loss 46% - Slingshot EURUSD 2003 Weekly bar back test Loss 46% - YouTube
2004 - Profit 63%
2005 - Loss 66%
2009 - Profit 135%
That 2009 is looking HOT! Hows your trading going mate?
A bit slow last Month with a slight drawdown but this Months bars have a lot of potential. Who knows for sure, just following the rules.
Here’s a quick update of the [B]Slingshot[/B] live account - Slingshot live account update 2 Apr 2014 - YouTube
Balance $307
Floating profit $322
I gotcha. Am watching your march 31st update while I wait for the April 2nd to finish procession O.o.
Just edited this post cuz your April 2nd vid finally finished processing. I don’t know much about your strategy yet, will have to do some research, but I do like the monthly approach you are taking. Hopefully one day I can get into the monthly’s as well… and in the direction of positive interest differential as well. Would be nice to bank on some interest while the trade makes it’s moves. Keep up the good work, will have to subscribe to your channel.