I’m in the situation at work a lot, of compiling information, which is the very time consuming part, then I go to analyze it with very tired eyes, and someone I review it with will be like “Oh did you think of x.” I’m like dude, I spend so much time in the forrest, that I need time to back up and look at the trees. People often use the expression of taking data and turing into information
My wife and I discuss what my days would be like if I ever was able to make enough money to trade full time, and she’s like ‘well you can do all the chores.’ My thoughts are like even if I were to try to make a living from trading three trades a week, my schedule would be so regimented with tons of back testing, contributing to a sharing community like BP, etc that it would be a very full time job.
One area that I’m especially interested in backtesting is time of day, and day of week theory. I think there is a strong relationship between what happens each day and what happens each week, but I want to find a way to test it.
Would it help if I looked at some of the population of winners and losers you idnetify, and tried to tie them to one of two or three simple methodologies. I could probably do some testing over the weekend, and I also use Think or Swim, which has good historic abilities. Let me know as I’m happy to help test.
I had this Scottish manager that I became good firends with, who would call me ‘laddy’ whenever I did something right (rarely) and just scream at me when ever I did something wrong (usually.)
I could easily send you what I have to look at mate, but in reality all it is, is an excel spreadsheet with 4 columns and 260 rows in each column. If price reached the target, (10 pips or 15 pips) I coloured the box green, if it failed to hit the target, I coloured the box red.
I also marked in the box of the losers how many pips were lost. In the vast majority of cases, if not all, the trades were finished by the time NY started.
I have it all written down in an A4 pad and I’m transferring it to excel a wee bit at a time. I shouldn’t be doing it at all to be honest cos I’m supposed to be studying the other stuff for the future University course, exam is in March, that’s why my presence here is a wee bit sporadic.
NP. I know you’re busy, and I dont want you to lose time. At some point I’ll take a look at some hourly candles from these times, and see if I can spot a couple of big losers, and try to find a common theme in why they lost. Sometimes good trades just lose.
That’s a good question. I suppose that if I could choose, I would probably focus on day trades. I’d set up my R:R, so that I could net 40-80 pips per week, with say 2-3 trades each week. The one thing that I find a little easier, is identifying a daily bias usually. The difficulty I have is turning my bias idea into an actual entry, because I sleep most nights from 11pm Est to 6AM est. I usually look for entries on retracements, but sometimes the swings are on the 15M charts and do not form until closer to LO. So very often I have to guess at entry points the night before.
I’m open to any suggestions that you have regarding this. Do you recommend swing versus day trading? I’ve assumed that you trade as your full time work, given your precision, is that correct? When it comes to getting in to trades, I find myself looking more and more at the S/D approach lately.
I think I was way too tired reading this thread last night because I couldn’t understand this London open strategy at all. But now I get it. The pics help! Are you looking to close the whole trade at 1.3232 or maybe leave some on until 1.3250, for example?
Or are you just demo trading the strategy? In which case I suppose it doesn’t matter.
I’ve just caught up with this thread and it is honestly one of the best threads I’ve read on BP. HoG, yunny, ST; you all provide such great information and learning material. It’s a pleasure to read. So, thanks to you guys especially. And I hope this thread doesn’t just fizzle out as I’d like to start getting involved.
I don’t know if this is just coincidence and not interesting, or maybe quite interesting. But today’s Daily R1 and R2 on EUR/USD are right at the origin of those two sharp, quick down moves from Wednesday and Thursday. So if we get up there today, they could be really good levels for something…I’m just not quite sure what yet, as I don’t think I’d want to short there. Maybe for a short scalp?
Not sure I fall into the same “giving good information” bracket as yunny and ST mate, but it’s good company to be in anyway.
As for the 1 hour strat it’s only a demo test so it’s pre-set for 10 pips and out. Made the 10 pips on the long break of the 7-8am candle this morning and now I’m short looking for 10 pips from the break of the 8-9am candle.
As Hogarste and I have been discussing it needs some refinement as the risk reward is way too high on some trades even though they ended up winning.
Also the funny thing is that the biggest profit so far ISN’T coming from the test from above that has the highest win rate. If I manage to get the details finished over the weekend I’ll post the results.
Apologies for any typing errors, I’m doing this on my phone
Just as a quick note, the second trade has now closed for a gain of 10 pips. +20 for this morning then.
That said, total risk for both trades combined was around 54 pips. Some refinement needed then. Maybe if you were sitting watching the trade unfkld you’d let it run, I dunno, needs looking at
Certainly the back tests so far have proved profitable, all depends on whether you’re happy risking 30, 40, or 50 or more pips sometimes just to make 10 or 15 profit.
But like I said previously to Hogarste, I do think it might be the basis of something, just not sure what yet LOL !!
I have seen a system using EMA cross overs on min 5, using min 15 as a guide two years back.
The system advocated a 30 pip SL and a 15 pip TP, essentially a 1:0.5 risk to reward ratio, with a daily risk of up to 25%.
This flies in the face of everything we know, but there it was.
It generated anywhere between 4 to 7 trades a day just trading the London open till late American.
The systems author and his student, who happens to be my friend, were raking it in with that sort of MM and RRR.
We should be skeptical, in the face of what we already know. But its also healthy to keep the receptiveness to new ideas open.
I like what you are on to. I been looking at a trader here in South East Asia who trades what he calls London Bank Candles. His trades on a daily basis seems quite profitable, holding just for about four hours. I dont know how he decides on the direction of the london open move, but his doing it.
Also, I was promised an email by a trader here in Singapore. Apparently it contains time and day patterns of major money market deals done on a monthly basis. I have yet to get my hands on it.
But both methods above has similar approach to what you are on here.
Ill keep a close watch no doubt, and if I do finally muster enough motivation, Ill try to sift through both the bank trade method and the contents of the email to see if there is anything we can use.
I’m going to start tracking this next week as well. I can’t trade it in my demo, as I’ll be sleeping, but I’ll log it on a going forward basis in Excel. I think I’m going to add a couple of small things. One will be the success and risk when trading with the direction of the market vs not, two will be some type of moving SL and TP, and three will be tracking the days of the week. Once I get this set up in Excel, I will share the file if anyone wants, and or I’ll provide updates as often as anyone likes.
Any other criteria ideas that folks have, please let me know.
Sometimes when you turn conventional wisdom upside down on stand it on its head you have a unique opportunity. You can prove conventional wisdom is pretty weak and you can shake the money loose from its pockets. Just be careful. Conventional wisdom has a reputation for a reason. It has a mean left hook.
Ok I think I have worked out how to link myfxbook to a demo Oanda account with £1000 starting balance.
I will begin testing this theory from Monday morning trading both the 7-8am candle and the 8-9am candle. I will only be trading 1 lot each trade so each pip will be worth £0.86, looking only for the 10 pip moves, (although I will make a point about that later tonight)
Risk will be whatever the range of the candle is
Leverage on the account is 50:1, not that I think that will matter in this case.
If I wanted to stick to a 2% risk, it would allow me 23 pips risk on each trade, 3% would allow me just under 35 pips.
ALL I NEED NOW IS ONE OF YOU LOT TO SHOW ME HOW I LINK MYFXBOOK TO BABYPIPS SO YOU CAN SEE IT LOL!!!
Having said all that, should this by any crazy stretch of the imagination actually turn out to work and be profitable, I may be forced to delete all mention of it, shut down the thread and move to Marakesh and have all who have read about it bumped off in the dead of night.
My only question is this. Have you looked at a total sample or an outside sample to compare your results with?
Using a random entry, price will go 10 pips in one direction more often than it goes 11 pips in the other direction. It will go 10 pips in one direction more often than it goes 12 in the other direction and it will go 10 pips much, much more often than it goes 50 in the other direction… you get the idea. This is what you seem to be doing, just hoping price moves a few pips in your chosen direction before it moves a lot of pips in the other direction.
I am not at all sure that time of day has much of anything to do with it. Crunching a few numbers in Excel shows that time of day, so far in what I have looked at, is somewhat irrelevant (at least during London and NY sessions) but I haven’t come close to being finished with the number crunching.
Direction of candle close has a slight favorable bias. If a candle closes up, for instance, the next candle’s high has a 60% chance of going beyond the high of the original candle without regard to time of day (and this includes Asian session).
The smaller the wick on top of the up-closing candle the greater the likelihood of the next candle’s high exceeding the original candle’s high (I used 10%, 25%, 50% and 75% minimums of wick to entire candle). Maybe you should at least consider the wick length of your LO candle? I don’t have an optimum wick length for you but it at least has a bit of logic behind it (at least I think it does).
Anyway, thought I would throw some random stuff out there. Good luck house shopping in Marakesh. I hope you get to move!
I wouldn’t say it is a non-factor. The Asian session, for obvious reasons, pulls down the overall numbers. The NY and London sessions have better numbers but rather inconsistent data. Is it that certains hours are more conducive to this “strategy” or is it just the random nature of price movements doing random things at random times? I haven’t clue yet and my data set is, so far, limited.
This may be the easiest way to riches ever devised for all I know but one big candle going the wrong way can put you in a deep hole real fast. Then again, my formulas may be screwy and I may be accidentally calculating Pamela Anderson’s bra size for all I know.
