Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
During my time off I have had some time to reflect on my automated trading system. I have had success with it and started thinking about why it works while all the other systems I built have failed. I believe it comes down to focusing on a single "event". Most systems builders try to catch every single move. This is nearly impossible. I liken this to picking winning lottery numbers for the powerball or mega millions; it can be done but your chances are very slim.
On the other hand if the focus of the system is to capture a "event", specifically a repeatable event which only occurs once a hour or even once a day, depending on your time frame, then you can build the code around it to capture the event and add in indicators to filter out false positives.
Below are the steps I am going to follow to test this theory.
Decide on a chart and time frame: Example: 5 minute chart
Find a repeatable event. Example: a reversal. There is more to this than putting indicators on a chart. I think the answer is partly in the bars on the chart not just in a simple indicator crossing. The automated system that I am using now relies on both indicators and price action. I believe this is what makes it successful.
Determine if there is a viable exit strategy. This is a tough one. How do you determine if a strategy will be successful without testing it with real trades? I think it is more of a visual at this point; look at it and ask if I enter here where can I get out with a profit?
Create a simple strategy to identify the "event". Example: color the bars blue where the event occurs. I am going to keep this simple. I will attempt to use the NT7 wizard to write the base code and then unlock the code and add the more complicated stuff later
Analyze the results. This will involve looking at the charts and all the possible entry points to make sure the strategy is capturing what is suppose to. This can be boring a tedious scrolling through a years worth of data but it is necessary to capture different market conditions.
Add indicators to filter out the false positives. Example: ignore entry when Stochastic is above 80
Setup trades with live data. Backtesting is ok, but watching the strategy in action can give more insight how it will work in the real world.
After all this is done I should have a pretty good idea if I have hit the mark. If not then it is back to the drawing board
Fast moving market last night. Trade was opened and closed before I got out of bed.
I added some code to my strategy a couple of weeks ago to allow only one trade per day. It failed. A second trade was entered. I closed it out +9 pips to keep with the strategy.
Overall +92 pips
+ 83 first trade
+ 9 second trade.
Reached a milestone of sorts today; I had to look to see what my account balance was. This is huge for me. I used to be obsessed with it. I could tell you on any given day what it was down to the penny.
On reflection I realized: Its not about the money, it is about the trade. Money is the byproduct of the trade. Make a good trade and the money will follow. Words to trade by...
Agreed on both counts. I have been really focusing on the charts and price action of late. I find myself trying to figure out the mechaincs of the trade or whats going to happen next instead of how much money I have made or lost. For the first time in my trading career I am truely happy with what I am doing.
I managed to control my emotions tonight and did not jump the gun. I really wanted to enter the trade @ 1.4788 because I felt it was going down. The key word in the prior sentence is "felt". I have lost more money this way. Instead I waited for the support break for confirmation and then entered the trade.
Thought I would share: I noticed a while back that the CCI-20 crossing zero on 5 Range chart generally corresponds with trend line break. See attached chart.
