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-1BTC@(18.18-17.71) - OPEN SHORT - PL: +2.5Hope you're doing great In chart - Oscillators chart This allows you to combine 5 differential oscillators in one chart - - Duot oscillator Mcguinly moving average of the 5 normalized oscillators and william's vix fix bars, the 3 waves are customisable smoothed McG averages. - Duot strategy Instead of trading individual oscillators it smooths decisions by averaging the 5 oscillators into one, we found that gives higher success rate than trading individual oscillators. this is based on the idea that most traders will actually use 2-3 of these oscillators manually and their decisions will always be maximums or minimums of a subset of these oscillators. So argument is trading their average would give slightly better and smoothed out results. as you can see the final oscillators have fewer rectified smooth cycles visible in their combined average. The main decision point is divergence of the price line trend from the average oscillator, this indicate lag in price response, accompanied by a confirmation with wiliam's vix fix, ---------- Attached a backtest of the script results, you can go trough the trade log by going through the ideas log in my profile Title Format: -1BTC@(18.18-17.71) - OPEN SHORT - PL: +2.5% (-1/+1)@SYMBOL(START_PRICE, CURRENT_PRICE) - POSITION_STATE - CURRENT_PROFIT_LOSS POSITION_STATE = (OPEN LONG|CLOSE LONG|OPEN SHORT|CLOSE SHORT) Cheers, and finger crossed for the current position
BITSTAMP:BTCUSDShort
by duot
4 simple steps to create your perfect strategyHello traders, Introduction How many times did you find a perfect strategy giving great results in backtest but wasn't working for LIVE trading? This effect is due to "overfitting" your past signals giving great historical results in a past environment. Overfitting means you're forcing the results to look great; hence not realistic; knowing the historical price action. Unfortunately, new traders don't know how random financial markets could be. Then, a backtest with very controlled and precised conditions is often irrelevant for real/live trading. Building a trading system is like solving a puzzle. We don't define the entries and exits separately - entries are defined relative to the exits and vice-versa. Imagine a RubixCube where solving one face of the cube could mess up with the other faces of that cube. Step 1 - Define your entries Finding entries is the easiest step. Most indicators on a big timeframes give great entries but poor exits. I appreciate low timeframes a lot as it gives me a better control of my RISK. Thinking that low timeframes require more reactivity is a myth... If we use the standard values from our trading indicators - yes sure, we often enter/exit dozen of times before the real move happens - and when it happens we're too exhausted to trade it well. This is weird that many traders use common indicators with their standard values regardless of the timeframe. Think about using the MACD with the 12/26/9 or RSI with a 14 period for example. Using indicators with low values doesn't work neither for manual or automated trading. The new traders wreck themselves either via exhaustion (manual trading) or with paying too many fees (both manual and automated trading). If your high timeframes trades get invalidated/stopped-out, the drawdown is painful - and you really feel the pain if you use a big position size or a too high leverage... (please don't). What I'm going to say is going to shock a lot of our readers I know. Entries don't matter by themselves. If your exits are not well-thought, you're guaranteed to lose regardless of how great your entries are. Step 2 - Define your exits A strategy without exits (Stop-Loss for example), gives a win-rate by design of 100%. This is the most-common mistake apprentice quant traders make: they think first about PROFIT when actually they must think about the RISK first. How much you can lose is more important than how much you can win (by far). If you don't think about your RISK first, I tell you what's going to happen Maybe you would have predicted the correct directions, but the unrealized drawdown + trading fees + funding will get you bankrupt before the move. Anyone else already experienced this? Step 3 - Backtest From here, you don't even need to use a backtest system. What I do is setting my chart days/weeks before the current date and then scrolling-right from there until the current date. The goal is visually checking a few crucial things (in that order exactly): A) Are my entries early enough? B) If stopped-out how much do I lose in average? C) What's the average profit I can make per trade? per day? per week? You probably noticed that I don't mind the statistical data like win-rate, profit-factor, etc - I don't mind them because they're not relevant. A backtest with a high win-rate, high profit-factor, high EVERYTHING could still not perform well for LIVE trading if the system is "overfitted". Let's dig-in quickly into those 3 steps. A) Are my entries early enough? There is nothing worse than entering too late - this is obvious because it increases your drawdown if any and reduces your potential profit. B) If stopped-out how much do I lose in average? The most important item of the list If your entries are late, we get now that your stops are painful for your capital and psychology. Even early entries could have terrible exits - and you may still lose I don't use a price/percentage level stop-loss. This is too subjective and to speak frankly... not working. There is a great chance to get filled because of slippage even if the candles never hit your stop-loss order level and then we .... cry and rage because we predicted the correct direction but not the correct potential drawdown. I'm 100% convinced it happens too often (to be profitable) for all traders using those stop-losses. I won't say it enough... Use a hard-exit for your stop-loss - it could be an indicator or multiple indicators giving an opposite signal. Of course, it should be based on candle close - not candle high/low to remove almost completely the slippage risk . For the take-profits, that's exactly the same concept. I don't use price/percentage levels but a combination of Simple Moving Average(s), Traditional Pivots and Fibonacci Pivots C) What's the average profit I can make per trade? per day? per week? The goal of any trader: making money and quitting their jobs... I know. That's why we shall not forget about the average profit we can make per trade and per period (day, week, month, ...). Here it's important to have written goals and stick to them. Assuming I want to make 500 USD a day, then I build a system giving me in average 500 USD a day with the lowest risk possible. Step 4 - Rinse and Repeat Creating your strategy is a continuous process - not a one step and you're "done". After the previous step, you may notice some irregularities, some errors, some disturbing elements. If my entries are late, or exits are late/too big then I go back to the first step and repeat the whole process. With some experience, building a successful model for the asset and timeframe you want to trade shall take you no more than a few hours. This is quite fast by the way and you'll already be ahead of most traders out there. Conclusion Building your perfect strategy becomes easier with experience and after a lot of trials. There is no shortcut for becoming rich - you have to put up the work and be/stay focused. Dave
Education
by Daveatt
16
XAGUSD (4H) Backtest : 70% non-loser (net 15.75 R)Detailed backtest results - prnt.sc - Win/Loss ratio : 186% - Non losers : 70% - Net R : 15.75 R across 23 trades - Avg R / winner = 1.21 - Avg R / trade = 0.68 NOTE : DXY correlation was not used in this backtest Icons on the chart - Thumbs up : Trade was a win - Thumbs down : Trade was a loss - Circle with a cross : Trade was breakeven - Cross : Did not take the trade due to one or more trade qualifiers - Bug : I could not understand how to trade, so avoided trading Trade qualifiers - $ icon : DXY was either supporting the trade direction (and we took the trade as win/loss/BE), or DXY was not supporting the trade direction (and trade was not taken) - Dollar bill icon : Liquidity was present behind the stop loss How to read icons on chart? - Thumbs up + $ icon => Winner trade, direction was supported by DXY - Thumbs down + $ icon => Loser trade, direction was supported by DXY - Cross + $ icon => Trade skipped because DXY didn't support trade direction (though a liquidity hunt wasn't an issue) - Cross + $ icon + Dollar bill => Trade skipped because DXY didn't support trade direction & a potential liquidity hunt was due near the stop loss - Cross + Dollar bill => Trade skipped because a potential liquidity hunt was due near the stop loss (though DXY did support trade direction) Indicators at bottom of chart 1) Count of HH/LL for the pair - shows when market structure is broken => Also generates a signal on the main chart (highlighted vertical lines) 2) Count of HH/LL for DXY - shows how the pair is moving in correlation to DXY 3) Correlation of the pair with DXY - just to give an idea about how the correlation is moving Strategy Pickup a pair which is highly correlated to DXY (or ignore the DXY correlation) AND Wait for market structure to break, then trade the retest of that zone. Zone is drawn using the first candle which crossed the pivot high/low to begin trapping the traders AND Liquidity in form of equal highs/lows should not be present behind the stop loss AND Since the pair is highly correlated to DXY , the formation of HH/LL in DXY should support the trade's direction at the time of zone's formation How to draw the zones? Check this tutorial : Risk management 1) Reduce 50% at 1R => Trade becomes risk free 2) Reduce further 25% at 2R AND move SL to break-even 3) Close trade at 3R 4) Winner = 1.75R Variables Avg winner = 1.75R PS1 : Please excuse the busy chart! PS2 : This backtest was performed right to left, so could include visibility bias. However, I tried to follow the strategy rules in all trades.
OANDA:XAGUSD
by makuchaku
GICHSGFIN (4H) Backtest : 69% win rate across 13 trades => 11.4 Detailed backtest result : prnt.sc Non-looser = 77% Icons on the chart Thumbs up : Trade was a win Thumbs down : Trade was a loss Circle with a cross : Trade was breakeven Cross : Did not take the trade due to presence of liquidity (equal highs/lows) behind the stop loss Variables Avg winner = 1.6R Strategy : wait for market structure break, then trade the retest of that zone. Zone is drawn using the first candle which crossed the pivot high/low to begin trapping the traders.
NSE:GICHSGFIN
by makuchaku
USDCHF (4H) Backtest : 60% win rate across 20 trades => 14.2 RDetailed backtest result : prnt.sc Non-looser = 75% Icons on the chart Thumbs up : Trade was a win Thumbs down : Trade was a loss Circle with a cross : Trade was breakeven Cross : Did not take the trade due to presence of liquidity (equal highs/lows) behind the stop loss Variables Avg winner = 1.6R Strategy : wait for market structure break, then trade the retest of that zone. Zone is drawn using the first candle which crossed the pivot high/low to begin trapping the traders.
by makuchaku
ICHIMOKU AND RVI BEGINNERS PLAY BOOKNow ichimoku is relatively simple look for buys above the cloud and look for sells under the cloud. so when we backtest that over our 5/5 winners with rvi we get two less entrys, however as a beginner to avoid them whipsaw movements that isnt always a bad thing. The cloud itself offers dynamic support and resistance based of averages. price breaking through the cloud signals a breakout and a change in the trend usually. if new to trading I recommend learning about ichimoku on youtube, its not the all time great plan but if you have no plan its better than that. to keep discipline and entry requirements.
TVC:USOILEducation
by UnknownUnicorn6102956
EURGBP (4H) Backtest : 48% win rate across 21 trades => 10 RBacktest results : prnt.sc Non-looser = 71% Icons on the chart Thumbs up : Trade was a win Thumbs down : Trade was a loss Circle with a cross : Trade was breakeven Cross : Did not take the trade due to presence of liquidity (equal highs/lows) behind the stop loss Variables Avg winner = 1.6R Strategy : wait for market structure break, then trade the retest of that zone. Zone is drawn using the first candle which crossed the pivot high/low to trap the traders.
by makuchaku
USDMXN (4H) Backtest : 61% win rate across 23 trades => 15.4 RBacktest results : prnt.sc Icons on the chart Thumbs up : Trade was a win Thumbs down : Trade was a loss Circle with a cross : Trade was breakeven Cross : Did not take the trade due to presence of liquidity (equal highs/lows) behind the stop loss Variables Avg winner = 1.6R Strategy : wait for market structure break, then trade the retest of that zone. Zone is drawn using the first candle which crossed the pivot high/low to trap the traders.
by makuchaku
USDJPY (4H) Backtest : 67% win rate across 24 trades => 19.6 RBacktest results : prnt.sc Icons on the chart Thumbs up : Trade was a win Thumbs down : Trade was a loss Circle with a cross : Trade was breakeven Cross : Did not take the trade due to presence of liquidity (equal highs/lows) behind the stop loss Variables Avg winner = 1.6R Strategy : wait for market structure break, then trade the retest of that zone. Zone is drawn using the first candle which crossed the pivot high/low to trap the traders.
by makuchaku
EURUSD (4H) Backtest : 52% win rate across 25 trades => 13.8 RBacktest results : prnt.sc Icons on the chart Thumbs up : Trade was a win Thumbs down : Trade was a loss Circle with a cross : Trade was breakeven Cross : Did not take the trade due to presence of liquidity (equal highs/lows) behind the stop loss Variables Avg winner = 1.6R Strategy : wait for market structure break, then trade the retest of that zone. Zone is drawn using the first candle which crossed the pivot high/low to trap the traders.
by makuchaku
EURCHF (4H) Backtest : 63% win rate across 16 trades => 14 RBacktest results : prnt.sc Icons on the chart Thumbs up : Trade was a win Thumbs down : Trade was a loss Circle with a cross : Trade was breakeven Cross : Did not take the trade due to presence of liquidity (equal highs/lows) behind the stop loss Variables Avg winner = 1.6R Strategy : wait for market structure break, then trade the retest of that zone. Zone is drawn using the first candle which crossed the pivot high/low to trap the traders.
by makuchaku
NZDUSD (4H) Backtest : 46% win rate across 26 trades => 10.2 RBacktest results : prnt.sc Icons on the chart Thumbs up : Trade was a win Thumbs down : Trade was a loss Circle with a cross : Trade was breakeven Cross : Did not take the trade due to presence of liquidity (equal highs) behind the stop loss Variables Avg winner = 1.6R Strategy : wait for market structure break, then trade the retest of that zone. Zone is drawn using the first candle which crossed the pivot high/low to trap the traders.
by makuchaku