That’s impressive. I’ll have to look into the TPS Vic Mackey system. True to form looks like it kicks butt!
KC
BTW… Started reading the Fractal book by Andy Williams and skimmed through the other book that contains this system. tx. for those
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Will you (have you) trade this belief?
Good morning.
No. Definitely not. The key word in your statement is the word “belief”. What I believe is of no consequence and, quite frankly, over the years has usually proved to be wrong. So I can give an OPINION on something as I have done. I can make my own OBSERVATIONS as I have done. But given my track record of both my opinions and observations being incorrect most all of the time: I cannot trade on such opinions or observations. Which, in my case, is the reason that this trading system (and there are indeed one or two others but that are not actively traded purely because the signals required are very few and far between on an annual basis) works for me. It is the only way I can trade profitably.
Let me also add to the above:
My personal shortcomings aside it’s not just me that gets it wrong. A prime example right now as I type this: i can go online to Bloomberg (as but one of thousands of sources of information) and for every ten articles I find that will tell me that the stock market is going to crash and that the world is headed for a recession I can find another ten articles arguing the exact opposite. Same with the price of Gold. So who is wrong and who is right??? Bearing in mind that each of those twenty analysts firmly believe that their calls are correct. Point is and were I to base my trading on such: it would, in my opinion, be nothing short of taking a punt with a 50/50 chance of being correct. You need far higher odds in this business to be able to profit from it. In my opinion anyway.
To directly answer one part of your question as to HAVE I traded (this) such a belief. The answer is yes. On more than one occasion. And it has always cost me dearly i.e. lost loads of money because of it. My Gold trade of last year is the latest, and hopefully the last, proof of this concept. Thanks to analysts and articles and whatever else: I allowed my bias to be skewed toward the price of Gold reaching $1 350 USD. And to my BELIEF system this made absolute sense. What happened??? I just happened to be long Gold as per this trading system. And it started turning down. My BELIEF system had me not only ignore signals from this trading system that were SCREAMING LOUDLY to get out of the long trade and to go short. To make matters worse: my BELIEF system gave me the gumption to not only ignore those signals but to add to the positions on the way down. The rest is history. Eventually I had to realize a huge loss when the level of pain on the position had become too much to bear. Sadly that loss resulted in me wiping out a huge percentage of profits that I’d made in the preceding months of the year. Not only that: but it resulted in my not being able to take any other trades while I was holding the position(s) (held from early June until sometime in August if memory serves me correctly) mainly due to fear of being wrong on yet another trade. Gold did, eventually, rise to $1 350 (and more I think) but for me it didn’t come in time. And it is not a mistake I intend making again. So were the opinions of the analysts correct??? That’s debatable. Matter of fact I’ve now, in just this past week, watched two other analysts making Gold predictions of epic proportions. Are they correct??? Maybe. Are they correct for NOW as in “take a long on Gold NOW”??? Maybe. Are they correct in that Gold MAY explode and go to the moon in the next few months??? Maybe. But there are a lot of maybes in those sentences.
I hope that explains all and is of benefit.
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And now we have ANDY Williams in the mix!!! LOL!!!
I just have to take care of something quick and I’ll response to your posts.
This really speaks to removing emotion, ignoring the news, and believe in your system based on its track record.
That’s quite a post thanks for sharing. Great lessons in there
Is there anyone else who would like to share?
KC
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Hi.
Not much more I’m afraid.
This week has been extremely frustrating trading wise I can tell you. Open positions on my account have hardly moved. Under normal circumstances: wouldn’t bat an eyelid. But, well, you know (of) the situation. But it is what it is. Either stick with the discipline that works. Or go balls to the wall and hope for the best. And I’ve been at this long enough to know that the latter will only make things worse and by a very long shot too.
So far as I can tell: we’re probably going to be stuck right here until the FOMC minutes and the Fed. And who knows about China and tariffs and Trump and Iran and whatever else. Just got to sit tight and wait (and pay interest and dividends on shorts). Must say though: this is not usual for this trading system. At least not that I can remember anyway i.e. usually trades last only a few days and over and out. This month (matter of fact) seem to have been a total drag. Anyway. Will update with screenshots later I suppose (forgive my lack of enthusiasm at the moment).
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This is been part of my issue. Amazing how well I can convince myself that I know better than what the market is actually doing!
In reviewing my trades and current positions I found myself wrestling between my interpretation of PA and what the pa is actually telling me according to the moving averages I use.
I have only recently begun, past few days, tempering my emotions in the area of interpretation (which speaks to curve fitting as discussed in up the other) and hardening my resolve to trust the chart and what it’s saying.
Given this, and my change of heart on stop losses, in addition to my “scout” entry I hope to minimize my drawdown as compared to what it is presently and has been in the past.
KC
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Curve fitting. We’ve all done it. Some of us for longer than others that’s for sure. And it’s a problem for sure. That’s one of the reasons why I have such faith in this. Independent testing (not talking about MT4 here and I’ll explain something shortly as to why I mention this) by a few and over long periods of time (YEARS) (and I’ve posted some links above somewhere to some of those tests) have shown that adjustments to RSI periods and SMAs and whatever else have not radically transformed results. This being very different to tweaking parameters for optimal performance for a given period e.g. one year and only then to have the whole thing come crashing down in years prior or going forward. This usually ends up again in tweaking. And so on and so forth. And based on my experience in the past with other systems and going down this same road in year gone by: while you’re tweaking your backside off you’re slowly but surely (sometimes not slowly) bleeding away money. This system in its most basic form and according to the tests has only ever lost money overall during one particular year. And even during that year and according to those same tests: it was by no means catastrophic (albeit that I’m darn sure it must have been frustrating at the time to end up with less at the end of that particular than with what you started out with).
I specifically mention MT4 today because I was AGAIN reminded just yesterday of something (that obviously I’d forgotten about but was harshly reminded of last night). For reasons which are of no importance to the thread: I’ve been placing trades on MT4 as well as on my ETX platform. And last night I noticed that I should be taking profit on one or two positions as indicated by RSI(2) on my ETX platform BUT was NOT being indicated to do so on MT4 as RSI(2) nowhere near to 30 or below on MT4 on those exact same trades. I then looked at independent charts of the same instruments and sure enough: those charts TOO indicated that I should be taking profit on one or two instruments. But MT4 says differently.
Now as it related to the above: I’m not putting out a conspiracy theory here as it pertains to MT4 or anything like that. The difference could be due to the different brokers closing there daily candles at different times. In addition and one MAJOR pitfall with MT4 (something which again I’d forgotten about) is that MT4 usually shows a SUNDAY bar. In other words: you will have an extra bar in a chart for that one or two hours of trading (depending on the broker’s timezone). This obviously affects ANY indicator. Alright and in this case: POSSIBLY not too much given that RSI(2) is a very short period. But who knows. I guess the point I’m trying to make is this: even if you were fortunate enough to be able to curve fit this trading system on MT4 it does not follow that the exact same parameters would produce the same results with a different trading platform and at a different broker. In THEORY this should not be the case given that one of the things I bang on about is the fact that unlike spot FOREX: every Equity and Commodities trader and his dog on the planet SHOULD be watching the exact same daily closing prices. This is ONLY true, however, of the cash markets and ETFs. With futures: it depends on the timezone of the broker and/or when the broker decides to roll over daily bars. In other words: there’s a lot more things to be considered when attempting to tweak or curve fit a trading system.
Yeh. And I’ll tell you something else for nothing: it is the strangest thing. When you are ALREADY in a bad trade and the loss has gotten TOTALLY out of hand: you will find any reason under the sun to hold on to that bad trade even if you’re just hoping to get to BE. Every day that I was in that Gold trade I spent at least two hours looking for articles or analysis, even looking at candlestick patterns for goodness sake, JUST to justify to myself holding onto that trade. And the articles that I found that didn’t match with my bias and my hopes I shoved aside. Moment I found an article that suited me: walked away feeling alright. Next day and after yet another drop: rinse and repeat.
I know I bang on about that one trade. But it was painful. More so because of my pretty unblemished record for years prior. But as painful as it may have been: it taught me some valuable lessons. Which was surprising given that for about four years prior I’d not messed up on a trade. And therein lies BUT ONE GOOD lesson. You can NEVER let your guard down. It doens’t matter WHAT the circumstances. Doesn’t matter if your buddy is in charge of the Fed. and comes to you and gives you inside information as to what’s going to happen this week. That is only part of the story. Such information can in no way predict how the markets are going to react. They are a law unto their own. And the moment you get over confident in your prowess and ability: it is THAT DAY or THAT TRADE that will come back to bite you and remind you that you STILL have something to learn.
Hey @Spudfan
Nice. I THINK anyway. Need some more info. though in order to understand.
Where you have numbers in the square brackets: what are those numbers??? In this case is that the EUR amount in profits??? Or is it simply the number of points??? (Arguably of course if you’re getting 0.01 EUR per 0.01 movement in price the two are the same of course).
For my own curiosity (and not questioning you here at all I assure you but would like to understand the reasoning):
In all of your tests you are using a TP. On what is that based??? If it’s a TP based on the closing of RSI(2) at the end of the trading day well then obviously I get it. But my understanding is that you are using either a TP calculated as a fixed number of points (or pips in your case) or you are testing different TP levels but that are not based on the RSI(2) close. If the TPs are NOT based on an RSI(2) close then the question is: what made you decided to NOT base your TPs on the as advertised method of taking profit???
On this topic (and I don’t know if it’s something you could try but could be of interest anyway):
As I have mentioned on this thread before: at some point I did indeed reverse engineer RSI(2) so that I knew what price was required in order for RSI(2) to hit 70 or 30 DURING the trading day. At some point (for reasons that I cannot even remember at this time) I was not able to be at my PC to wait for the close. So my logic was that if I could work out what price was needed for RSI(2) to hit 70 or 30 then I could place my TP at that price so that if price reached that level intraday well, then, obviously the trades were closed out automatically at profit.
I will admit though: because of the frustrating movements with this system for the last two weeks I was wondering about the merits of employing this again. If you just look at the movements yesterday (indices obviously): most all of them traded to a point at SOME time during the day where RSI(2) actually hit 30 (bearing in mind I’m short all around) intraday. Had I been employing this method yesterday for example: most of my short trades would have been closed out at profit intraday and I’d only be left with a very few where price never caused RSI(2) to hit 30 intraday. This as opposed to now sitting on an entire “portfolio” of short trades that are costing me every single day in interest (including weekends). Alright and to be fair: it does mean that if these things trade lower in the next few days the profits will be greater on a close of RSI(2) at or below 30 (as they have that much further to now run in order for that to happen due to the RSI calculation itself). BUT: they could also go UP in the next few days which means I’d be sitting on losing positions for YET ANOTHER few days as opposed to having taken SOME profit yesterday and moving on.
Ok I read the whole thing now - Comment superfuous methinks 
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Hi Dale, the above result is the best I could achieve based on the 60 different TP and SMA combinations I tested. The first number, based on what I know from my forex experience, and since my account is dollar denominated, would be profit in dollars over the last 12 months off a $3000 starting capital, which represents a 26.8% return.
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I can share that I’m a ‘fundamentalist’ technical trader. I don’t watch the news, I refuse to read analysts’ forecasts as they simply pollute my mind and cause confusion. The charts are the only source of objective truth and I trade what I see in front of me based on my system.
My system for forex trading is to use D1 as my ‘base’ chart, to wait for an established trend to form (for a short, a lower low and a lower high as a minimum, and ideally a crossover of the 21 and 8 EMAs) and then to wait for a pullback of two consecutive candles where the second one has a higher high and a higher low, then to place a sell stop order at the base of the second candle, SL at top of that candle. If not triggered that day, cancel order and wait for the next 2-bar pullback. TP is set according to logical chart levels. I use W1 and MN1 to examine price structure in order to avoid trading into S/R levels or historical highs or lows.
I know this is not on the topic of this thread, apologies for that, I don’t want to distract and Dale, if you want to delete this it’s fine. Maybe retain the bit about my fundamentalist views, which does apply here.
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Good morning.
Ahhh… The man is full of surprises and knowledge.
Nice Alistair. Sounds relatively similar to one of John F. Carter’s trading systems called “Propulsion Plays”. Very good system I might add. Certainly still relevant. Just never had the patience myself. Then again: I’m learning patience in spades with this system at the moment let’s face it.
No need to be concerned about the thread and going off topic. Personal opinion is that my main goals for having started this thread in the first place have been achieved (correct risk based position sizing and the implementation of stops). Suppose from that point on most of my posts could be considered noise. Suppose also all that counts is that we are able to make a little trading the markets no matter how that is achieved really. So trade ideas and details of other systems always welcome. If nothing else: whatever is posted here is proven which I know includes the system that you have just described. So it’s all good.
Thanks for all the work.
How much information do you have in that head! Based on your replies and comments it seems extremely deep, really really deep!
I’m beginning to like this better than my thread!
KC
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LOADS. How much of it is useful is the question!!! LOL!!!
A mere 28.8% in a year, that’s a pittance. Based on the same setup but testing more combinations I came upon this. Big surprise is the SMA 70 / 90 being the most profitable, and the 480 might be a surprise if i was more familiar with the scale of numbers that characterise the DAX30. But the huge surprise was the profit of USD 5329 off a base of $3000 in 1 year. I ran the visual results version of the top line and have posted it below. It accurately represents the first line of the numbers produced here.
|5329.65|TakeProfit=480 |MA_Period=90|
|5329.65|TakeProfit=480|MA_Period=90|
|5106.08|TakeProfit=480 |MA_Period=70|
|4965.93|TakeProfit=470 |MA_Period=70|
|4909.25|TakeProfit=450 |MA_Period=90|
|4825.78|TakeProfit=460 |MA_Period=70|
|4685.68|TakeProfit=450 |MA_Period=70|
|4545.58|TakeProfit=440 |MA_Period=70|
|4488.85|TakeProfit=420 |MA_Period=90|
|4405.43|TakeProfit=430 |MA_Period=70|
|4265.28|TakeProfit=420 |MA_Period=70|
|4208.65|TakeProfit=500|MA_Period=90|
|4125.23|TakeProfit=410 |MA_Period=70|
|4068.5|TakeProfit=390 |MA_Period=90|
From here the results tail off steadily. The top 32 results from 144 tests all use 70 or 90 SMA and all use fairly large TPs (all 300 or above with the better ones above 400 - the pattern in these top 32 is very clear.
So am I curve fitting (that seems to be a dirty word around here)? Not at all. I am simply saying that from this date to that date based on data freshly downloaded from the server and seemingly accurately modelled, a TP of 480 and an SMA of 90, with an emergency stop based on a candle closing on the wrong side of that SMA produced xx result in USD.
That’s all I’m saying. Is it a useful predictor of future performance? Possibly. But until I have done the same test over a similar period further back in time eg the 12 months of 2009, or 2013 or whenever and found that the numbers are similar or totally contradictory, these numbers stand alone and say nothing about the future.
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Morning.
Here’s why I’m getting nailed on interest on a daily basis (below).
Chat just now. Trying to get my bearings this morning i.e. damn cold here this morning when I woke up.
Thanks for describing me. 
Straight confirmation bias right here. I don’t go that far though, fortunately or unfortunately. Am I reading bad news about to happen for a currency I just bought? Ignore. That’s not applicable to me. My trade can’t possibly get worse right??? I just keep repeating that line as it continues to drop. Fun times.
Morning.
Very nice. But I swear you ignore my posts for what reason is beyond me (are you worried they contain too much fluff of what so you speed read them or skim over them!!! LOL!!!).
I’ll try to keep it short then shall I (then again just not possible).
From the bottom up:
Well curve fitting by its very definition is throwing a whole series of different parameters at something until you achieve the desired result. This being said: how else to test a trading system. Only thing I would warn against here is the lookback period. Those TradeStation tests were done using years and years of data. And as I’ve noted on more than one occasion: changing parameters didn’t affect overall performance generally speaking. That’s robustness. Not saying your findings are incorrect. Just saying.
In your chart one thing that jumps out at me are the number of opposite trades that the EA is not initiating as a result of the SMA filter. From just looking at your chart: I see seven long trades that were not initiated during the downtrend below the SMA and all of which appear to have closed in profit. Whether this is just a lucky period I cannot say. Only your testing would verify whether there is any merit to doing away with the SMA as a filter (which as you know is the way I’m now trading).
I did ask you previously (only as a matter of interest) what made you decide to incorporate a TP but I think I’ve answered my own question i.e. the TP is optimized as opposed to it being a mechanical TP based on the as advertised method of closing trades out as per RSI(2). On this score your EA is not proving (nor disproving anyway) the core concept of taking profit as per the as advertised system.
Without position sizes being accurately calculated I cannot honestly say whether the results are good or not. Reason I say this is because even using the minimum lot sizes at a particular broker: you could very well still be overtrading the account. I don’t know but just something to be sure about is all. Your EA is saying that even if this indeed the case it’s not a problem. But just an observation. I know for me I can see the correlation between correct position sizing and the stops now being used. But those calculations do dictate that far more capital is required to trade this system or smaller lot sizes (and it’s possible to be in a situation where the minimum lot sizes as offered by your broker may still be too large).
With all of this testing: are you going to decide on a “one size fits all” moving average eventually (average of all the different moving averages I suppose) or is the intention to trade individual instruments with different settings??? Only for my own information is the reason I ask. Not saying one way or the other is correct (but again: this is by definition curve fitting).