Maybe you could include this in another update of your EA Dodge? =D
While you guys are testing, try closing out the first lot at mid BB, and trailing the stop on the second lot to about 1/2 the distance between entry point and current price. Stop is only adjusted in the direction of the trade, of course.
Thatâs very close to the way I actually trade, only I just move the stop to above the next lower high on a down trend, or to below the next higher low on an uptrend, and I limit the stop moves to a rough exponential factor, or very small % moves in the beginning and larger ones as time progresses, slowly approaching 1/2 the distance between entry and current price, until I get to the daily ATR for a stop. Then I trail with the daily ATR max to next higher low, or lower high, as appropriate for trading the daily TF.
LOL, that may be way to complicated to program, so just trailing stop to 1/2 the distance between entry and current price should improve results, leaving you in longer for many of the best moves. Once you have that programmed, you can adjust that factor and test 1/4, 1/3, 1/2, or even exponential approach, and see what works best for you in different situations.
Also, I will early exit if the trade entry quickly moves against me. Itâs the same as entering with a very tight stop, say 10 or 15 pips. I get lots of small losses, but no big ones at all. A small factor of ATR, like 0.25 to 0.5 ATR may make a more optimum initial entry stop, depending on the TF being tested. The theory is, you can double your reward risk ratio either by doubling your reward, or by halving your risk. You canât always control doubling your reward, but halving your entry risk is easy and foolproof. Previous testing has indicated that halving the initial entry stop almost doubles profit. Just some things to try in testing if you wish 
Thanks for the ideas Graviton.
I think Iâll make a list of things to test and add this to it!
Have a good day.
[QUOTE=ada ighy;197233]that was some great informative stuffs guys. now if anyone is kind enough to take a look at the two charts below and let me know where i have gone wrong.
where would you make your entry on this trade?
Have you tried trading this? I do not think it will work out as well as planned. Using a 20 pip running stop loss on a 4HR chart will stop you out very quickly, before the trade really gets moving.
If you donât use a 20 pip running stop loss, but still use 20 pips are your increment (adding a new lot every +20 pips) you leave yourself in a position where a large retracement will destroy you. Imagine it, youâd be pyramidingâŚinto a bigger and bigger loss instead of a bigger and bigger profit!
[B]This is an issue I see with a lot of charts in this thread, and itâs one of the principle reasons I created my EA.[/B]
[B]Hindsight is 20/20[/B]
Itâs easy to look at a chart and say âOh yea, it would be perfect if I did this and this, and moved this here andâŚetcâ, without having any experience of your strategyâs real effectiveness. I suspect this is why many people lose everything after going live.
I learned this very quickly in Tymenâs first thread on CandlesticksâŚI would make an entry, then watch the trade would go immediately against me. I would then post the trades to the forum and everyone would say âWhy did you trade this??? the _____ is obviously _____â Of course the trade looked perfect when I took it, before the retrace.
[B]
Lesson Learned: [/B]Relying on indicators which repaint can lead to a false sense of security if not backtesting correctly.
In that strategy, we had two repainting indicators; The Starc Bands and the Bollinger Bands. Here we just have the Bollinger Bands, but guess what? If youâre waiting for the outer Bollinger Bands to turn before entering a trade, you are very susceptible to a repaint putting you in a bad trade. If youâre visually backtesting and waiting the outer Bollinger Bands to turn before saying âYup, I wouldâve entered here.â, you do not have a clear picture of the market. For all you know, the outer bands turned on the extreme wick of the last 5 candles, and if trading live you wouldâve already entered and hit your stop loss.
Also, attempting to backtest solely by looking at the candlesticks on a chart, can be very misleading, as a candlestick only gives you 4 pieces of information:
[ul]
[li]Where was price at the beginning of the time period?
[/li][li]Where was price at the end of the time period?
[/li][li]What was the high over the whole time period?
[/li][li]What was the low over the whole time period
[/li][/ul]
I implore you all to use the MT4 backtester (even if you arenât trading with MT4), or to forwardtest (in demo) your strategies, or modifications to Tymenâs strategy, before attempting to trade live. It may open your eyes, and save you some money
[B]IronHeart,[/B]
Rest assured that come Thursday after my examinations it will [B]backtesting galore![/B] I will look forward to comparing results with you.
I will also take into consideration the ideas posted by [B]Graviton[/B] and [B]paulmccarthy[/B]. Anything which can help improve our Risk:Reward ratio is a plus. It is also quite pleasing to see that we have reached the stage of strategy formulation where we are not devising ways to enter the trade, but are instead essentially [B]picking and choosing how much profit we want to take![/B] 
In my opinion this is part and parcel of a truly great trading method, which only seems to improve day by day.
Thanks again Tymen for enlightening us,
xXTrizzleXx
This is another one of those repainting situations. I donât see myself coding anything into the EA which relies on a repainting indicatorâŚespecially at the exact point (the mid BB) where a repaint is the most likely to occur.
Iâll post the cleanpivotsbb if you want it, but to post the rest would mean to include all the included indicators for each of those templates. This isnât relevant to the thread and would take some work on my part, so donât expect this to happen 
cleanpivotsbb.zip (3.57 KB)
[B]DodgeV83,[/B]
I have noticed that the constant repainting of the Bollinger Bands can indeed be a problem. This is why I fully agree with you that backtesting via MT4, as it generates the feed, [B]tick-by-tick[/B] is simply a much superior method of backtesting as opposed to visually observing the candlesticks. The issue of repainting with the Bollinger Bands, can however be reduced considerably by using higher time-frames, such as the 8-hour and Daily. I believe it would have presented more of an issue using Tymenâs previous Candlestick Method, since it occurred on a [B]much[/B] shorter time frame (30 minutes I believe?)
Thanks for sharing with us,
xXTrizzleXx
[QUOTE=DodgeV83;197266]Have you tried trading this? I do not think it will work out as well as planned. Using a 20 pip running stop loss on a 4HR chart will stop you out very quickly, before the trade really gets moving.
If you donât use a 20 pip running stop loss, but still use 20 pips are your increment (adding a new lot every +20 pips) you leave yourself in a position where a large retracement will destroy you. Imagine it, youâd be pyramidingâŚinto a bigger and bigger loss instead of a bigger and bigger profit!
[B]This is an issue I see with a lot of charts in this thread, and itâs one of the principle reasons I created my EA.[/B]
Youâre absolutely right Dodge, and this exercise was only to show that the pyramiding 20pips lots more interresting than doing it with lots of 50 pips.
Regarding the ATR on a TF 4 hours, it is generally double that of TF 1 hour, then in my opinion the trailing stop to evolve in the same proportions
Regarding your EA I did not understand how to do it adds lots every 20 pips = 20 pips = 20 pips etc. âŚ
Is he able to close all positions after the opening of four batches of 20 pips if the price declines to put a trailing stop 20 pips???
I do not want to clutter the thread with my stupid questions, :oand if you do not mind, PM me an explanation Dodge.
Regards Didier
[QUOTE=xXTrizzleXx;197232
[B]Scenario A[/B]
[ul]
We make our CBL, and have an inital Stop Loss of [B]275 pips. [/B]
[/ul]
[ul]
The trade goes according to plan, and hits the Middle Bollinger Band, located [B]300 pips[/B] away.
[/ul]
[ul]
We close one of our lots, bagging a tidy 300 pips, and then we set our Initial Stop Loss to Break Even (our Entry Point).
[/ul]
[ul]
The Price Action retraces, coming 20 pips above our Entry Point, stopping us out, and then proceeds to the Outer Bollinger Band, located a further [B]300 pips[/B] away. Since we have been stopped out, our profit remains at [B]300 pips[/B], as opposed to a total of [B]900 pips[/B] that we would have earned had we not been stopped out.
[/ul]
The above scenario produces a [B]Risk:Reward ratio of 1:0.55[/B], with our risk being our stop loss for two lots - [B]2 x 275 = 550 pips[/B] and our reward at [B]300 pips.[/B]
[B]Scenario 2[/B]
[ul]
Instead of waiting for TP2 to emerge, we conservatively opt to close [B]both lots as soon as the Middle Bollinger Band is hit[/B] due to the very high probability we have of this happening.
[/ul]
[ul]
We agree to stick to this Trading Plan, and fore-go the potential [U]straight runs to TP2[/U] and [U]extremely profitable Bollinger Band Walks[/U]
[/ul]
[ul]
In the above trade, we decide to close both lots at TP1, when the Middle Bollinger Band is hit, leaving us with a total profit of [B]600 pips.[/B]
[/ul]
The above scenario produces a [B]Risk:Reward ratio of 1:1.10,[/B] with our risk being our stop loss for two lots - [B]2 x 275 = 550 pips[/B] and our reward at [B]600 pips.[/B]
[/QUOTE]
Unfortunately, these calculations have a problem. In Scenario A, you are not using the [B]true[/B] Risk:Reward ratio of the trade. The Risk:Reward ratio cannot be calculated by using the outcome of a [B]single possible outcome[/B]. The trade can go one of three ways:
[ul]
[li]Immediately hit Stop Loss
[/li][li]Hit mid bb then retrace to BE
[/li][li]Go straight to outer bb
[/li][/ul]
In the above example, you took [B]one[/B] scenario out of three possible outcomes and used it as your R:R.
In Scenario 2, you take the [B]best[/B] possible outcome out of the two possible outcomes of that trade, and used that as your R:R. Using this approach, you fail to consider the possibility that if the trade in Scenario A hits the outer BB even [B]some[/B] of the time, the R:R jumps up dramatically, probably enough to overcome the bad R:R during a retrace.
You should calculate R:R using either the[B] largest Risk[/B] vs. [B]the largest Reward[/B] of all possible outcomes of the trade, or (my favorite method) use percentages to calculate your expected return from the trade.
I believe you have come to this incorrect conclusion, because of your assumed numbers. Usually, as seen in my screenshot below, the second leg to the outer bb is [B]much, much[/B] longer than the first leg to the mid bb. You set them both to 300pips, which is why your example will not work in the real market.
Here is an example from the last month of EUR/USD 4HR chart, I choose the second example as there is no BB walk to speak of, and the mid bb is sufficiently far from the entry point to lure someone into exiting early:
Stats for the month:
The % chance of hitting SL immediately = 16.6%
the % chance of hitting mid BB then hitting BE = 16.6%
and the % chance of going straight to outer BB = 66.6%
Expected Return = 0.166 * ( -140pips x 2 contracts ) + 0.166 * (160pips) + 0.666 * (600pips)
= [B]379.68 pips[/B]
Now letâs do the Expected Return of Scenario 2:
% chance of hitting SL immediately = 16.6%
% chance of hitting mid BB = 83.4%
Expected Return = 0.166 * (-140pips x 2 contracts ) + 0.834 * ( 160pips x 2 contracts )
= [B]274.354 pips[/B]
No my assumed stats arenât perfect, as they donât go back very far and they represent the very month Iâm trading in (I wouldnât know these stats when initially entering trades), but it shows a more complete picture of the market.
Dodge Iâm having an issue with the new EA in live trading, whenever is put an sst and it is triggered, the EA places a BuyTymenTakeProfit line -20 pips from the start.
Hi guys, as you can see we have 2 extreme candle for a valid cbl entry above. So which do we pick? Both has equal lows.
Or isit not e valid cbl entry as there is another candle with an even lower wick on the left side? (5th candle from the right)
If thatâs the case, assume that the 5th candle from the right is just a normal candle with a wick not longer than the 2 extreme candle, which extreme candle do we use for our cbl entry? Thank you!
Ouch! Didnât test this release enough with the BandsTrading off :o
Fixed and attached.
Final_Tymen_Variable_SL_Bands_Anti_Drag_Dual.ex4.zip (54.8 KB)
Hi fartist,
That chart looks to me like it in the early stages of a BB walk, look at the BB start to curve down quite steaply. 2ndly i canât see properly with the blue line in the way but it looks like the BB are still expanding again thats a no trade zone within the no trade zone, so definately if you want to trade the âno tradeâ zones do not trade until the conditions are met.
that aside, the first extreme candle could have been a valid CBL (cut in half) although the R:R would have been very poor with such a wide stop.
these are my thoughts on my understanding if iâm wrong could someone please correct me.
hope that helps
CBL is always drawn from the most recent candle.
Ah thank you so much for your input!
So as we canât tell as it its a walk or not, we do not take the trade as the BB is moving steeply against us?
The outter BB you mean, right?
I do understand what is a BB walk, however could anyone provide a definition of a BB walk. Like maybe 3 candle wicks that has penetret the BB in a row or something?
Because apparently above we see it could be a start of a BB walk, but it could or could not be? And the only clue we have is the BB going sharply against us, as well as midd BB going slightly against us.
Hope we could have more input from this and all learn together
Hi fartist,
yes, you can see the mid line is pointing steeply down also the outer BB looks like it is expanding as a contraction should show up below the upper blue line which it does not.
i would say it is a walk there is 5 consecutive candles breaking the BB and the lower BB i ssloping steeply down.
Iâve looked closely at my charts and the outter BB is not expanding.
However like you said earlier, it is likely to be a BB walk as 5 wicks has penetret through the outer BB, thanks.
Would be best if we could hear other inputs too!
The same chart with the trendlines for clearer view
One of the rules set by Tymen is:
- Never raise the CBL to take a long position!:eek:
Summary In the candle to make a valid CBL is the black candle that affects the middle BB has a long shadow down, the last lower.
Regards, Didier