Is there an automated trading strategy similar or the same as the “The_so_easy Its Ridiculous System”? I’m not well capitalized, but I have risk capital. Because of this, I’m interested in doing scalping, as it has the least capital requirements. I also have a lot of time on my hands.
At the moment I am doing a practice trade with the system on the FXCM demo platform. Because I am practicing as if I was on a live account, I only invested the minimum amount on a trade of 1 K. Because of this, the maximum profit during the trade so far has only been about 7 pips, which isn’t going to be very profitable, since I opened the trade at about 4:10 PM AEST and it went till now (5:03 PM, so 53 minutes). The trade closed at a loss because I had a trailing stop which was set.
If I hadn’t set a trailing stop, and had simply set a stop (which hadn’t been triggered) then I would’ve stayed in the trade. Even though the trailing stop was triggered, there wasn’t a confirmation from the indicators to close the trade. The moving averages had crossed over (I had a short trade, and so the fast MVA went above the slow moving average), the RSI was greater than 50, but the stochastic was in overbought conditions. At any rate, if I hadn’t set a trailing stop limit, and just a stop above the previous major high in the longer-term timeframe, that stop still would’ve been triggered and I would’ve lost more on the trade. Nevertheless, when following a mechanical trading system it’s important to stick to the rules.
Also at any rate, I think I need to have more risk capital to even do scalping and get sufficient value from trading. Having an automated strategy may be a key to that.
The main purpose of this post (in addition to documenting the trade) is to find out if anyone knows such an automated trading strategy as posed in my opening question.
It also tends - especially in inexpert hands - to have the most wildly fluctuating and inconsistent success-rates. and it very clearly has the highest overall dealing-costs, in proportion to its returns. I’ve seen many people getting into trouble because they start off by trying to scalp, rather than trading methods based on higher win-rates, larger moves and lower trading-frequency.
If your working capital is a little less than you’re fully comfortable with, I’d suggest that scalping should perhaps be the [I]last[/I] thing you look at, at least until you have both more capital and more experience.
That’s a reason to indulge in more trading education, not in more trades.
I use a trailing-stop for only one of my regular trading set-ups, and for that one only because extensive backtesting and forward-testing have proven that it makes a little more overall profit, that way.
Trailing stops [I][U]look[/U][/I] very attractive. In reality, they [B]often[/B] produce situations in which the price moves something like three quarters of the way towards your target before dipping just below its opening-level (hitting the TS) then fairly quickly to reverse again and hit the target. This is “normal”.
Before being willing to use a TS to trade a particular method, I need to see [B][U]very[/U][/B] convincing, statistically significant proof that it produces more overall profit.
I strongly suspect not, James. “Automation” is typically a very inappropriate and misguided approach to finding successful methods, and if you have so much time available, then in contrast to many people trying to become profitable traders, it’s something you can afford to leave alone.
Say I started with around 1K of capital in my trading account. What sort of rate of return could I get? Obviously this depends on a whole lot of factors, so I’ll be more specific. Trading between 1-35 hours a week; day or swing trading. It’s OK to give me a range, particularly since I gave a broad range for factors.
