Good Morning!
Well, I’ve been messin around with charts trying to get the directional movement indicator and CSI on excel. Not goin so well.
I’ve been reading. And did my first SI trade. Excel really helped me to learn the system BUT its just way to time consuming to trade from. I’m going off of the ASI chart on delta now.
I was wondering Dale. Are you still experimenting with the CSI? You haven’t mentioned it for awhile.
First SI trade results,
GBP/CAD Short +42 pips
Cheers,
Randon
Hi,
I don’t use the CSI at all i.e. I only use the ADX/ADXR values. ADX/ADXR will give you instruments / pairs with good directional movement whereas the CSI will give you instruments / pairs with good directional movement AND high volatility. I don’t use the CSI because I don’t believe that it gives comparable results across ALL instruments / pairs i.e. you’re not comparing ‘apples with apples’ or ‘like for like’ (I’ve covered this previously in detail).
Ok,
SO…I just sent my application for Deltastock. I put Dale Brenton Paterson Introducting Broker under the"where did you hear of Deltastock" section of the application. Just waiting for them to get back with me and then I’ll fund my account and get going.
Hey,
‘Good on you’ Randon and thanks!!! You won’t be sorry I assure you (and trading these systems will become a WHOLE LOT easier)!!!
As soon as your account shows up on my IB list and it’s funded I’ll send you the indicators (updated).
Also: if it’s OK with you then please be sure to install Yahoo Messenger and ‘invite me’ to ‘be your friend’ (or whatever it is the hell they call it)!!! It’s necessary for me to be able to go through all the indicators with you and it makes it a whole lot easier to support you and the trading platform.
(My Yahoo Messenger ID is ‘fintransdbp’ BUT I would suggest you send me an email telling me what time suits you to connect because to be honest YM has become ‘distracting’ to say the least)!!!
Good (Sunday) morning everyone!!!
As some of you may know I posted on Friday with regard to the CSI problem that I thought I had solved but after close inspection it turns out that I was talking utter nonsense so I deleted the post!!!
However: I NOW think that I have INDEED solved ‘half the problem’ with the CSI as it relates to (most) forex pairs.
At the moment I am ignoring all the other variables in the CSI equation i.e. I’m only using the ADXR(14) and ATR(14) values simply to find the forex pairs that have good strong directional movement as well as high volatility (for reasons mentioned in ‘the book’). I’m calling this my ‘CSIADXADXR(14)’ (as opposed to ‘CSI’ purely to distinguish between my ‘watered down version’ of the CSI and the ‘proper’ version). In other words: the ‘CSIADXADXR(14)’ is giving you the forex pairs that have good strong directional movement as well as high volatility but not necessarily the forex pairs to be traded that are the ‘best bang for buck’ as it were.
I’ve also come to the conclusion that you CANNOT mix forex pairs, commodities, and equities together by using this method for the simple reason that with forex pairs the margin requirements, spreads, commissions payable, and $ per pip movement are all very similar to each other BUT with commodities and equities this is NOT so i.e. the leverage is totally different (much lower), the margin requirements and commisisons payable are a lot higher, and the $ per pip movement is totally different not only between forex pairs but between the different commodities and equities themselves.
In short: I have arrived at the conclusion that it’s OK to eliminate the margin requirements, spreads, commissions payable, and $ per pip movement when rating forex pairs against each other thus the ‘CSIADXADXR(14)’ formula BUT if you’re going to rate forex pairs against commodities and equities as well then you HAVE to use the FULL CSI equation.
I have attached an updated (based on Fridays close) ‘Daily ADX ADXR CSIADXADXR’ work sheet for you to look at. The instruments that are ‘greyed out’ are the instruments for which there is still some further investigation necessary before I’m happy with their overall rating i.e. I think that the ENTIRE CSI equation has to be applied to them before an accurate overall rating against the ‘normal’ forex pairs can be arrived at (but I’ll get to that tomorrow).
Take a look.
If I’m right (which I’m almost 100% sure that I am) then it simplifies things somewhat i.e. all the trend following systems are to be used with instruments / pairs with the HIGHEST CSIADXADXR(14) values and the systems to be used with range bound instruments / pairs are to be used with the instruments / pairs with the LOWEST ADX(14) and / or ADXR(14) values.
I’m also happy that the JPY crosses are now being correctly rated against the other pairs. The method was simple i.e. ATR(14) is giving you the Average True Range IN POINTS / PIPS so all you have to do is agree the ATR(14) between the different pairs to get an accurate reading and this is done by multiplying the ATR(14) by a ‘multiplier’ e.g. for the JPY crosses (where prices are quoted with two decimal places) the ‘multiplier’ is 100 whereas with all of the other forex pairs (where the prices are quoted with four decimal places) the ‘multiplier’ is 10 000. This is then used for the CSIADXADXR(14) or the CSI calculation.
(By the way: for those of you who saw this message earlier I’ve just edited it i.e. you DO NOT divide the resultant ATR(14) by 100 after multiplying by the ‘multiplier’ of 10 000 i.e. if you do it ‘disallows’ you from comparing other intruments like the stock index futures).
Daily ADX ADXR CSIADXR.pdf (12.4 KB)
Dear Traders,
I am pleased to start my career in Babypips in this thread. My journey to the Forexland is still in its beginning, I have been studying the Babypips school and forums and practiced with demo accounts, trying to find my trading personality and appropriate systems that would match it and prefereably also be profitable. I have read the thread “PSAR - that’s all” through, and found it both entertaining and extremely educating. Thanks, Dale and the others, for both it and this thread.
I have some practical limits for trading caused by my daily job, which I am not intending to quit right now, so I want to check my trades once a day at a fixed point of time. This seems to leave only the volatility system for me of the Wilder’s systems discussed here, so here is my small contribution about it to your great work. Sorry, I have not bought “the book” - yet, though I know it is sort of an entrance criterion here. Explanations for the volatility system were available in the internet, and it was not too difficult to understand.
I have read through this thread trying to find some backtesting data about the performace of VS in the long run, and tried to google that as well, but haven’t succeeded. So I thought to do some coding in MT4 to see the results myself. But I did not end in going that path because of the algorithm to count the daily values is somewhat recursive, and having done some experimenting with EAs, I was quite afraid about the speed of the calculations - it might take ages to calculate the results for just one set of input parameters. So I decided to do it in a traditional way by coding in C++, which was also an easier coding task. There is a nice feature in MT4 to export data in a csv file, which I have so far done only for EUR/USD, 1999-2008. My program then eats this data and calculates the results. MT4 exports several timeframes in separate files, which makes it easy to compare them. Here are my initial results:
During this period of time, i.e. almost 10 years, there were a bit above 50 trades, making about 5 trades per year.
I parameterised the ATR factor and the number of ATR days used. For this pair it seemed that 3.1 and 8 yielded about the best results. Just following the rules, it calculated a total of about 5300 pips. The biggest drawdowns for single trades were around 350 pips. 12 of the trades went over 1000 pips, but only two of them stayed there up to the bitter end. My conclusion would be that at least for this pair it would be quite beneficial to use a stop at 1000 pips, once it is achieved.
There has been some discussion about how this system would perform on lower timeframes. I did some checking on H4, but the results are not worth mentioning here. I think that once I get some other pairs checked as well, I’ll check H4, too, but just for curiosity and completeness. By the way, I had to use ATR factor above 4 there to get at least some kind of positive results.
If you folks are interested to hear more, I’ll post results from other pairs as well once I have them. I just hope that my coding went correctly, at least my cross-checkings did not reveal anything alarming.
J.
Good (very early here) Monday morning!!!
kaalilaatikko:
Welcome and thank you for the interesting post and the trouble you went to to backtest the VS. Makes for interesting reading. One thing that does trouble me somewhat, however, is the (your) mention of a stop loss. The VS does not USE a stop loss at all so I’m not quite sure what you’re trying to say.
One word of caution to everyone else: I am indeed aware of some ‘free summaries’ of Wilder’s work on the Internet and I myself have had a good look at all of them. The details of the actual systems are ‘sketchy’ at best and really only give a very broad outline of the methodology or logic used. In addition to this I think I’ve made my (personal) stance on this issue very clear i.e. the cost of the book is a mere ‘pittance’ in relation to the potential profits (even fortunes) to be made and I can tell you that I’ve probably learned more from Wilder’s ‘non system specific’ comments than I have from the actual systems themselves.
Good Evening!
Welcome to the thread, kaalilaatikko! I would also encourage you to buy the book. Makes life so much easier. You mentioned “I want to check my trades once a day at a fixed point of time” Well don’t rule out the SI and the RT systems. It wouldn’t take too much to keep these up after a hard days work. Hope to hear more from you in the coming months.
Is it just me or were the markets kinda dead the last week? I didn’t see much movement in the pairs I was following at all. I missed some nice SI trades earlier this week, grrr. Didn’t see much later on in the week(SI Trades). Most of my RT trade B/S weren’t hit, not much movement on sooo many pairs(unlike the previous week).
Still waiting on Delta to approve my documents. And THEN, I’ll be able to mail them. Can’t wait!
Trades:
GBP/CAD Short +42 pips (SI)
AUD/CHF +38 pips +7.70 (RT)
Short GBP/BGN pending (SI)
Long CHF/BGN pending (RT)
Cheers,
Randon
Hello Randon,
I agree with you about the markets being ‘kinda dead’ last week (and about everything else you said of course). Because I’m still ‘nurturing’ my AUD/NZD position I’ve be apprehensive about taking on more ‘long term’ trades so the end result is that I’ve been sitting on a single position that aside from it’s massive move last week has done absolutely nothing (as a matter of fact the bars on the hourly chart for this pair resemble more of a ‘bar code’ than a ‘bar chart’ i.e. THAT is how ‘tight’ it’s been trading)!!! Very bad trade and very bad call on my part. My current ‘hope’ is the the Elliot Wave theorists and fibo traders are ‘on the mark’ because it’s SUPPOSED to retract to it’s 38.2% fibo line before moving higher in which case I should ‘clean up’ VERY nicely BOTH WAYS!!! I, like you, also missed some ‘stellar’ SIS trades (strangely enough NZD/USD being one of them)!!!
Anyways: I’ve started trading using the CSI (my ‘CSIADXADXR(14)’) today (on one of my other smaller accounts) so let’s see what happens. One thing that I am just a ‘tad’ worried about is the fact that it appears to be possible to get a very high CSIADXADXR(14) rating with a very low ADX(14) / ADXR(14) rating because NOW the CSI is being ‘pushed up’ by the ATR(14) and is not relyant SOLELY on the ADXR(14) value anymore. I THINK this has something to do with the statement on page 111 (that starts with ‘The paradox is that volatility . . .’).
And just so that we DON’T all miss this one: looks like there is a ‘stellar’ trade coming on EUR/SEK i.e. a long SIS trade i.e. high on the CSIADXADXR(14) scale but signal not generated as yet (maybe tonight) and short term trend (LRC 14,100) is up.
And by the way: don’t let Delta ‘mess you around’ i.e. they’re normally OUSTANDINGLY good with their admin and customer support but now and then they (like everyone else I suppose) need a ‘gentle friendly reminder’ to ‘move things along’. (Like I have said to some people who have ‘doubted’ Delta’s ‘authenticity’: if they ARE a ‘bucket shop’ then they SURE go to a lot of trouble AND EXPENSE to prove otherwise)!!! What I’m saying is that I know it’s a pain to have to send original documents and stuff like that and wait for the account to be opened but they are governed by some very strict rules and regulations as set out by the EU so the ‘hassle’ of going through all the ‘red tape’ in my opinion is well worth the ‘piece of mind’.
Edit:
Also just ‘by the way’: for those of you who are able to trade the US stock index futures (Dow, Nasdaq, and S&P) (and have the margin of course) they are all pretty well near a ‘retro’ VS trade i.e. they have all NEARLY retraced to the same point where you WOULD HAVE / SHOULD HAVE ‘got in’ when the very first initial VS entry signal was given. In other words: had you entered at the CORRECT time you would STILL BE in the VS trade and ‘looking to go short’ now and the VS SAR to go short is MILES away so this MAY be a very good way to get into the ‘Dow to 14 000 and beyond’ trade!!!
Another edit:
Hoooo Boy!!! If you thought the markets were quiet LAST week (and the week before) then don’t even bother getting out of bed today!!! It’s public holidays in the USA AND in the UK!!!
Hi Dale, if I am reading this correctly and you are referring to -
My conclusion would be that at least for this pair it would be quite beneficial to use a stop at 1000 pips, once it is achieved.
I think [B]kaalilaatikko[/B] means a [B]profit target[/B] rather than a stop loss.
Cheers
Now THAT makes more sense (if that’s what he meant that is).
I suppose you could even set a trailing stop once you’re at a certain target i.e. many ways to ‘play the game’.
I’ll tell you all this though:
MAN: a day like today is soul destroying!!! Do you know that as of 12h43 GMT the maximum pip movement on forex pairs (excluding the ‘exotics’) is a WHOLE 34 pips!!!
This is note to anyone who is going to open an account at Deltastock and is going to trade using my ‘sysdicators’ and money management rules:
BE SURE that you specify ‘zero point five percent’ or ‘0.5%’ as the margin requirement for forex pairs on the relevant account opening document i.e. the equivalent of 200:1 leverage. The DEFAULT is ‘one percent’ or ‘1%’ and this is the equivalent of 100:1 leverage and if you need this changed AFTER THE FACT you will be required to submit yet another ORIGINAL to them before the change can be made and of course this just serves to delay the opening of the account even further.
This applies at GCI:
The DEFAULT at GCI is 0.5% margin requirement or 200:1 leverage but all my ‘stuff’ for GCI is based on 0.25% margin requirement or 400:1 leverage so be sure to request this change when opening an account at GCI. This is a simple matter of sending an email request to them though.
Good day everyone,
Thanks for more valubale insighst there Dale. The thread seem sto be gathering quite a following which is good. Sorry I cant contribute much right now as I’m a bit busy with work (bloody employers), but hoping to back soon.
Cheers all
Dale-
How hard would it be to switch from USD to EUR as my base currency in my Deltastock account? Reason I ask is if the dollar collapsed and I think its a very real possibility then my account wouldn’t be worth much. Besides the euro is performing quit a bit better.
Hello, gentlemen,
My reasoning went like this: the log showed 12 trades that went over 1000 pips, and 10 of them retraced back below 1000. So with this data it would have been over 80% possibility to loose pips after reaching 1000. I thought that once getting over 1000, it would be safe to secure what you have got and then see if you could get a bit more. So I initially meant stop loss. If this would have been done in the 10 year period, the total result would have been at least 8500 pips, but not much above it, as only two trades would have yielded something more. But anyway, that’s about 60% better than by just blindly following VS.
If that 1000 would have been TP, the result would have been quite the same, only the surplus from those two trades would have been missed, 300 pips altogether, expecting that there would not have been any dips after placing the SL.
But maybe the best idea here might be securing the profits by a trailing SL, as was suggested. I have no idea what would be a good value, perhaps e.g. once the magical 1000p is reached, a trailing SL could be placed 100p behind. Without big dips, you might have been able to secure 12 * (100 … 600) pips, meaning >1000p, maybe even more than a 2000p bonus above the 8500.
So this is so far just a study of one pair. I hope that other pairs would confirm my findings, let’s see.
BTW, the log shows several rows of negative results, the longest of them being 5 trades, taking about 6 months of time and 1200 pips. That row was surrounded by a 1000p trade on both sides, but anyway, you sure will need strong nerves and good trust in the method while living through a row like that.
Does anybody have any comment about the figures I have shown? Are they “big” or “small”, and by which criterion? Yes, I know, it is not always a good thing to measure results with pips, but as long as I am talking about just one pair, here all of these values are comparable with each other, and it is easy to give a �� value for a pip as you like and go calculating the needed money management.
J.
Thanks for the kind welcome for everybody! I just forgot to add in my previous post that I just placed an order for “the book” - hopefully this makes it a bit more legitime to take part here 
Well, I had already made a decision to buy it for a while ago, but had just been gathering some other books in the same Amazon shipment. They promised about one month of delivery time, so in the meanwhile I have just to suffer and come along with a poor man’s solution
J.
Good (very early Tuesday) morning!!!
Randon:
To the best of my knowledge (I stand to be corrected but this is what my business partner was told a while back) if you ALREADY HAVE a USD denominated account you can open another account with a different base currency WITHOUT having to complete additional account opening documents at Deltastock. (I personally seem to be one of the few who has the utmost faith in the USA and the USD so I’m not QUITE sure that I agree with your reasoning but that’s just me)!!!
kaalilaatikko:
I’ve said ‘from the beginning’ that the VS requires ‘balls of titanium’ to trade and loads of free margin / capital for the very reasons that you’ve now pointed out. Having said that: with sound money management rules you’ll be fine and do well with the VS in SPITE of a number of consecutive ‘bad’ trades. Also: I’m not sure if your backtesting methods are able to, or do take this into account: just bear in mind that using stop losses could in itself cause the system to underperfrom over a protracted period of time i.e. remember that if you close out a VS trade early it could be days, weeks, or even MONTHS before you get another entry signal on a particular instrument or pair. In other words: while it may SEEM prudent to TP early with the VS remember that there may be very long periods of time when you will not get another entry signal i.e. the VS is an ‘always in the market’ type system i.e. a ‘true stop and reverse system’. Just a thought. (Like I said: your backtesting methods may or may not include this ‘phenomenon’ and if they do not then just bear this in mind).
dpaterso: sent you email and PMs … anyone home?
Hello,
Just one more thing to add to our discussion about the VS.
Look: ‘common sense’ also has to be used when taking a VS trade (as with ANY trade I find).
Take a look at the attached chart.
The blue line across the chart is the current VS SAR (those of my ‘clients’ who have my ‘sysdicators’ know what I’m talking about I hope) and the VS dictates that if there is a close BELOW the VS SAR in this case i.e. below the blue line then it would be time to stop and reverse or enter by going short at market.
First: it’s quite obvious that there is a (possible) low significant point a few days back (LO SIP) so going short EVEN IF the price closes contrary to the SAR would be madness at this stage (in my opinion of course).
Second: going short at market is NOT the way to go either (again of course in my opinion) i.e. I see it almost every day now i.e. a price will close contrary to the VS SAR and retract the very next day to well PAST the level where you got the entry in the first place!!! OK: sometimes (as Nick and Boca can attest to) even placing a STOP ORDER is no guarantee that you’re not going land up in a ‘bad’ trade BUT the odds are that by NOT going in at market you will stay out of more than a few ‘bad’ trades.
In BOTH scenarios you’d end up losing BIG TIME for the simple reason that now you have to wait for ANOTHER close contrary to the VS SAR (you’d now be ‘looking to go long’ in this example) and this could take an absolute AGE to happen which needless to say is gonna cost you money. Also: you must take the ‘interest factor’ into account with the VS the reason being that you’re in a trade for SO long that sometimes the interest being paid (or if you’re real lucky being earned) becomes a factor!!!
I saw two potential RTS trades last night.
(the ADX and +DI and -DI) were all below 20.
a potential GBP/CHF long trade (Today is B day)
a potential EUR/GBP short trade(Today is S day)
But both pending orders are not executed yet.
Did any of you guys take these trades or am i making a mistake somewhere?
This is my first demo trade using the RTS system.
I would like to sharpen my skills furthur before trading real money (dale - i will put your name down as introducing broker for delta when i open a live account)
feel free to comment
Thankyou
