Random 1min EURUSD Scalper
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- This topic has 40 replies, 8 voices, and was last updated 6 years ago by Vonasi.
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02/13/2018 at 1:24 PM #6258902/13/2018 at 3:42 PM #62615
I’m afraid that the problems I encountered this morning are related to a code problem to define the direction.
So I decided to add a momentum associated with a bollinger. The results are better than V1.1 .
Below the new version V1.2 on TF 28s and on the AUD/USD.
02/13/2018 at 4:19 PM #6261802/13/2018 at 5:26 PM #6262502/13/2018 at 10:39 PM #6266302/13/2018 at 10:50 PM #6266702/13/2018 at 11:11 PM #62669Random/coin toss entries are fine as long as you understand that if you just randomly enter at a random time in a random direction then all you will be doing is giving money to your broker in the form of spread and other fees. Random entry is fine as long as you don’t have random direction. The direction has to give you an edge that is of a higher percentage chance that you are going to be right than the spread percentage says that you are going to be wrong. Even one filter, or one other edge such as seasonality is enough to turn a coin toss into a winning strategy. You may need big pockets though as your edge is likely to be small and your draw down periods big.
At the end of the day we are all managing risk rather than actually buying and selling stocks and shares in businesses. Never forget that the best manager of risk is your broker.
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02/14/2018 at 8:56 AM #62678Even one filter, or one other edge such as seasonality is enough to turn a coin toss into a winning strategy.
this is what we are trying to do here.
Any suggestion?
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02/14/2018 at 9:12 AM #62680this is what we are trying to do here. Any suggestion?
Choose a market that has a long term trend in one direction and only trade coin tosses in that direction. Only trade on days and a times that have been shown to have a long term and recent benefit as good times to trade. Only trade coin tosses at levels with historical interest.
Personally – although I understand that this may not be what you want to hear – I would ditch the coin toss element of the strategy! As you have found backtesting and developing on random entries is difficult – although if you do find a coin toss strategy that backtests with positive results on every run then you will know that it is pretty robust and not curve fitted. Better to write a winning strategy and then add in the coin toss element to backtest it – monte carlo style.
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02/14/2018 at 8:41 PM #62770As far as I understood the task it is:
- take a random direction entry
- define your money management rules for a trade
- trade with this
The goal is to prove (or not) whether money management rules alone (and only MM rules) can be profitable if your direction is random. The base for this are those calculations which say for example that a CRV of 2% needs a hit quote of 33% to be profitable. (Which again means, if your theoretical chance is 50:50 – what it is by random definition – a good MM should be profitable.)
No question that there are other approaches which are based on chance optimization (all kind of indicators are based on the assumption that you need to have a better chance), but as far as I understood that was not the original task.
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02/14/2018 at 9:52 PM #62777Which again means, if your theoretical chance is 50:50 – what it is by random definition – a good MM should be profitable.
Your chance is not 50:50 because the spread ensures that it is not and then slippage and overnight fees ensure it is not even more so. Ignoring slippage and overnight fees if you buy at A and B is 50% in one direction and C is 50% in the other and you choose to head randomly for A then the spread means that A is now more than 50% away and B is now closer than 50%. Just by moving A further away with a 2:1 takeprofit/stoploss ratio will not improve your chances. You are still more likely to hit B than A. More likely to lose more than you win. Your broker will love you. No money management will over come these odds against you. What you need is something that overcomes the spread disadvantage – an edge. You need to decide that buying or selling at a particular time gives you an advantage . Working out what that is and when that entry is is why we are all on here 🙂
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