Forex rebates on every trade - win or lose!

I sent you over an email over the weekend explaining the problem, MM.

Meanwhile, back at the ranch, I thought I'd paste this chart up to demonstrate how MT4 can be set up to strip all emotion out of trading. Aside from the 2 ma's, I've removed all other indicators and instead have set the chart up to display different types of arrows to represent different ma crossovers. The thick red and blue arrows represent the centreline MACD crossover for Chocopops settings.

I'm not saying that this is necessarily the most successful trading strategy (although it will certainly make money), but I am using it to demonstrate how emotionless trading should be, as this idea removes any prospect of thinking about which way to trade.

Morning all. I got my broadband back today which is a blessing. You don't realise how much you need it until you don't have it.

I am still banging away trading the signal line cross of the zero line Hilary.
Apart from the points you make about removing the emotion i've noticed the following.

1. In the last couple of minutes before you approach the zero line the momentum traders kick in trying to anticapte the cross. Another load of people come in just as it crosses.
2. There is a level of nervousness around the cross enhanced if the signal line does not have momentum heading for zero. I would guess that the scalpers who come in in anticipation of the cross when realising it might not cross close thereby creating added tension.
3. so sometimes the signal line goes straight through, sometimes it has a bash, fails but then comes back for a second attempt 5-15 minutes later and succeeds and sometimes it reverses very close to the zero line. I don't think it's easy to look at the chart and on every attempt at the zero line anticipate what's happening so that's why just trading a signal regardless is a good idea


Clearly the point of this excercise isn't to overanalyse the signal itself but to understand that if your signals make money on average then that in itself is enough just to trade the signal whatever your brain is telling you at the time (well excepting nfp and some other news perhaps)

thurs - some nice price volatility after interest rate decision 3 trades +15, +37,
+7. Total +59
Fri - market stuck in a 90 pip range but the trends were choppy. 12 trades.
-2,-15,-15,-15,-10,-20,-8,+4,-20,-2,+4,+18. -81 pips

After 2 days the loss is -22. my mt4 demo has a 3 pip spread on this pair so that would be reduced in the real market. 1.5 days data isn't a proper sample.


Anyway the interesting part is that after looking at the results I am persuaded that my gut feel for what the results would be is quite a bit different from reality in that the mind tends to focus too much on all the losers rather than giving a good estimate of how the system is actually doing.
Turtle power. Just trade the rules like the turtles and stop thinking. Thinking is only for building the system beforehand.


I'm not sure what to do now as between signals there is lots of time for me to play around with setttings and backtest. Not entirely sure where to put my energies though and not entirely sure i'm trying to run before i can walk again.

I wasn't up early enough this morning to catch the initial drop on Eur/Jpy but jumped on the short bandwagon eventually for +24, reversing at 160.20 and 159.99 for +33 on the long tack. Looking for another possible short entry now in the region of 160.60 (Fib level and earlier morning support (praps now Res)).

So, what are the chocopops magic numbers?

I'm glad to see that you're banging away those trades, CC, as it's the discipline thingie that I feel needs to be instilled ahead of anything else.

There's nothing wrong, however, in moving towards the next step. I feel that the next step should be an analysis of all of your trades to work out a way of getting rid of the losers yet keeping the winners.

The only way of analysing the trades is through having a sufficiently representative sample for it to mean anything. I guess you'll therefore need to carry on banging away at the signals for a bit longer yet.

Probably the best way of getting rid of many of the losing trades is to only trade those signals which are in the direction of the trend. This would cut out around half of your trades and will almost certainly involve looking at charts with a different timeframe.

I don't want to confuse matters until the discipline thing is sorted out, but using today as an example, the trend on the 15-minute chart has been down from between 7am and 12:45. It would have made sense therefore to have only traded the market on the sell signals between these times and to have used the buy signals simply to close out and not to reverse. To complicate matters further, the 5-minute chart suggested an uptrend between 9:45am and 11:25. As this was contrary to the trend of the 15-minute chart, it would make further sense to have not traded any of the signals between these times and to have sat on your hands instead.

If you are still keen to try running whilst still mastering the walking phase, can I suggest that you spend some time looking at oscillating indicators on the 5- and 15-minute charts in an attempt to identify trends. Note that these indicators are purely to identify the trends - the entry and exit signals will still come from the 1-minute charts. As I suggested in a post above, you will also need to "think out of the box" as the bog standard indicators will need their settings adjusting if they are to be of any use.

6, 11, 15, 18, 34 and 45 were pretty magic for somebody on Saturday night, Jeffie.

:o)

Took my short for +5, not really sure at the moment, so sitting out for a bit.

Actually that was the second of two 'shorts', it was only when opening the platform to place the second trade I realised the first was a long - oops :) Closed it for +15 anyway.

Waiting for the US to get going: M15 tells me this might be a long, M5 possibly the same M1 isn't doing much at all and it's sat right on a Fib level. Oh and M30 might be showing signs of long as well. Guess that all means it's a short then :)

To illustrate the point that I was trying to make above about sitting on hands while M5 and M15 trends were in conflict, here's another M1 chart for today.



I've drawn vertical red lines to indicate the approximate start and end of the period during which the M5 trend was in conflict with M15. There are quite a number of false signals showing during the period between the two red lines. That would represent money saved.

CC,

I've pasted up a couple of more charts to help steer you towards what we're ultimately looking for here.

The first chart is an M15 today with a trending indicator added which we're looking to use for direction of trade.

At 7:00am it starts to head down with the vertical green line, so we're looking to trade the sell signals. At 12:45 it starts to head up with the blue line, so we're looking for longs. Remember, the entry and exit signals are coming from the M1.



I've also pasted up the M5 chart with the same trending indicator added. Between 9:40am and 11:25am (slightly different times from the chart in the post above - I scrapped my work in between posts) and again between 14:35 and 15:40 the trend direction on the M5 was in conflict with the trend direction of the M15. That's when you ignore the signals on the M1 and sit on your hands.



At all other times you're looking to bang away the M1 signals in the direction of the M15 trend.

I hope that makes sense.

Here we go all in one chart.

Bottom 2 indicators must be in agreement then trade in same direction.
Comments in detail tomorrow

You've probably grasped the basics of it now, CC.

If you could just let me have an address so that I can send you my bill. Alternatively, I could be persuaded to waive my fee if you tell me how you get the indicators for the different timeframes all on the same chart.

:o)

The concept is generally referred to as "multi-time frame" (MTF) indicators.
Such indicatos are not standard in mt4 but have be loaded in the same way we loaded the 2 line macd plus histogram and that arrow indicator you got from elsewhere.

MFT indicators for most things like RSI and Moving averages and stochs can be found relatively easily on tsd-forex. However, a 2 line plus histogram (my 2 lines are in black on the above chart) macd, I tell you this took me ages to get hold of. It isn't anywhere on tsd or forexfactory or google or whatever. On and off over the course of a week I spent ages looking for this.
I managed to get hold of it in the end by finding someone who seemed to have every indicator under the sun and sending him a pm.

You can get it here.
http://www.forex-tsd.com/indicators-metatrader-4/87-indicators-alert-signal-113.html
Post 1123

It still has the alert for crossover etc. You will need to set the timeframe in inputs in minutes. 5 for M5, 15 for M15, 240 for H4 etc.

It does not work if you load the MTF indicator for a low timeframe on a higher timeframe chart only the one way round . It will display results but they will be WRONG. i.e M1 MTF on a M15 chart will be wrong.

I guess the most interesting thing is that most people seem to be putting up with the horrible standard macd chart from mt4. This I cannot grasp at all as the way we like displays more information and is easier to read and understand.

EUR JPY testing 160 support

Think we might just be there now or on the way at least

That's so funky, CC, many thanks.

I've just Googled the MTF thingy and it appears that any MT4 indicator can be simply turned into a MTF. Apparently there's something called Coder Guru's MT4 Programming Guide (don't know if it's a book or something on the web) which tells you how to do it.

I might have to have a word with GatorMan if he ever gets out of the swamp.

Quicky scalp EUR JPY 159.80 to 159.90 +10.

well if you know 'C' programming these indicators is probably pretty easy. I don't.

I did read the first few chapters and it's not that hard to follow if your objective is to amend someone else's code. Say you've found something you like but it's been hard coded for cable but you want to use it for say eurusd. that's easy enough to sort. i've done that and i have no programming experience.

What else do you want MFT's for Hilary? I've got loads of them and any normal indicator just go and search tsd-forex. It's highly unlikely you need to get anyone to write anything.

Now if he's capable of say writing code good enough such that it could show say a macd based on say n periods and then adding an extra period which is assumed to be say the same as the existing period (or even better where the line might go based on say the last 3 periods or whatever) then we could have a macd on our chart which had some predicting power rather than just an indicator based on history.
Or simply take the usual macd and apply higher percentage weightings to the last few periods than happens with the exponential algorithm. The maths isn't so difficult and i've got a feeling maybe you can do this without any programming.

I've got lots of ideas, lots of things i'd like to backtest but all that is on hold until i can make a living out of this. All these ideas take far too long to persue when firstly i have to turn a profit.

+5 from cable

Gotta go to see the Quack now

In truth, CC, I probably don't need MTF on anything else. It was just an idea that I had this morning to combine a couple of indicators into one and simplify my desktop. I'm all for keeping things simple as there's a tendency to think if things become too complex.

I've got a problem with a bug in one indicator though which I'm hoping GatorMan can solve. If not I might find a copy of Coder Guru's MT4 Programming Guide for my son so he can give it a go. It may as well be Dutch to me.

I is back ;)
Still re-loading all the guff at the moment.

Like you, Hil, my motto is simply simple - and one of my present goals is to persuade the cap'n to stop fiddling about when he gets bored :o)

Great charts, btw - good of you to go to so much effort.