Yet another newbie system!

[sr2]

Originally posted by Skorpion
Thanks for sharing. Appreciate people who openly share their systems. Good luck with it.

Thanks Skorpion

[sr2]

Originally posted by tim_nn
This looks rather interesting sr2.

Well done with it so far thank you for posting it.

Could I ask a couple of questions (three actually)?

1. What made you use WMA's rather than EMA's for this system?

2. What proportion of the time overall is it "in the market" i.e. with an open position?

3. Do you think it might be viable to relate your figure of 100 (for the imum difference between the two WMA's at the point of the crossover of the PAR the long MA I mean) to the ATR of each p rather than taking it as a flat 100 for all currency ps?

(I agree entirely with TLB's comments above also).

Hi tim_nn

Thanks for your reply. I will try to answer your questions as best I can. I am still a newbie

1) I found that the WMA moved closely with the market which I suppose makes sense as it is weighted. Also the profits were higher. Some may call that curve fitting I would probably agree but if over time WMA generates more profits than SMA or EMA then surely that is the better approach.
2) Not sure how to answer this. The image above shows the time the trade was taken exited so you can get a rough idea of how long the I am in the market. Most of the trades would probably be overnight. I think the average time for a trade is probably about 30 hours with some weeks not generating any trades.
3) Not thought about that. Will have to take a look see. Basically what I am trying to do at present is create a very simple set of rules for entry exit of trades which can be set left to play out. I did at one stage try different SL TP for different currencies but then decided to try create a universal set of rules. Over time I may find this is not the best approach so may try other values. Also I am only looking at 8 currency ps at present but obviously there are more which may actually be more profitable.

Hope that answers your questions. yes I agree with TLB also.

I know it is so easy to fall into the curve fitting mode whereby you create a simple set of rules back test using whatever then modify to improve your back test results. I suppose luckily for me this was not how I started. I watched the charts thought that crossover was a good way of jumping into the market. But obviouisly due to whipsaws spreads the trades were often losses. I then noticed that often when the price had crossed over gone past a certain point it tended to continue in that direction. I used this premis to back test manually. I did not change the rules deliberately as that would be curve fitting.

I hope that sort of explains how this system came about.

Also a quick point about drawdowns. My SL are set at 100. Which means roughly $1000 per trade. The imum number of trades I have had going at any one time so far is 3 so basically you are looking at drawdowns approaching $3000 on average at present. This will no doubt change if I add more currencies.

SR2

[tim_nn]

Thanks for your reply sr2.

Originally posted by sr2 if over time WMA generates more profits than SMA or EMA then surely that is the better approach.

That's for sure. Was not trying to "imply" anything with that or my other questions. I noticed recently that "BunnyGirl" had switched WMA's to EMA's for her MA crossover system which I believe she has traded quite successfully for quite a long time; hence my question.

Originally posted by sr2 I think the average time for a trade is probably about 30 hours with some weeks not generating any trades.

I see; thanks. My experiences with such systems lead me to suspect that the higher the proportion of time that such a system is "in the market" the less reliable the results will be overall. I'm all the more interested now that your answer's confirmed what I imagined about this system comprising something closer to "occasional trades".

Originally posted by sr2 Not thought about that. Will have to take a look see.

Understood. Hopefully you're not going to be too influenced anyway by any "casual comments" on an internet forum people you don't know. But (there had to be a "but" didn't there? ) my guess is that in the long run it's both better easier to relate variables like the imum permitted distance between the MA's to the ATR than it is to use a universal figure. The volatility of various ps is such that trying to "fix" it universally will result in unnecessary compromise somewhere which will reduce profitability; it's not _really_ any more any complicated or difficult to say "double the 4-hourly ATR(10)" than it is to say "100 pips". It might make a surprisingly big difference to the overall results I suspect.

SL TP IMHO are a different kettle of fish altogether not something I'd want to lay down myself without looking at areas of probable support resistance; but of course that's inevitably "discretionary" rather than "mechanical".

Originally posted by sr2 know it is so easy to fall into the curve fitting mode whereby you create a simple set of rules back test using whatever then modify to improve your back test results. I suppose luckily for me this was not how I started. I watched the charts thought that crossover was a good way of jumping into the market. But obviouisly due to whipsaws spreads the trades were often losses.

Sounds like you've come at this a different point of view most "newbies". My money's on you.

Originally posted by sr2 I then noticed that often when the price had crossed over gone past a certain point it tended to continue in that direction.

I feel pretty certain that that's a completely almost universally valid observation principle (as well as one that JetHeat BunnyGirl people trading their systems would certainly agree with).

Originally posted by sr2 I hope that sort of explains how this system came about.

It does indeed. thank you for posting it for your further explanations. I wish you very well with it look forward very much to hearing about your progress with it.

Originally posted by sr2 Also a quick point about drawdowns. My SL are set at 100. Which means roughly $1000 per trade. The imum number of trades I have had going at any one time so far is 3 so basically you are looking at drawdowns approaching $3000 on average at present. This will no doubt change if I add more currencies.

The 8 currencies you're looking at are probably plenty to be going on with no? The spreads will also be higher on others I think though that may not be very material?

[It sounds the above as if you're looking at "stard lots" which surprises me slightly since you're UK-based like me. You should perhaps look at trading these by spread-betting instead especially if it becomes profitable which it looks like! No point in paying a lot of tax unnecessarily or dealing with not-so-well-regulated brokers. But that's another matter altogether ...]

[tim_nn]

one more question (sorry!) ...

Interesting that so far the EUR/GBP p should have such strikingly worse results than the others. Do you think there's anything in that or is it just because of the small sample-size?

[sr2]

Originally posted by tim_nn
one more question (sorry!) ...

Interesting that so far the EUR/GBP p should have such strikingly worse results than the others. Do you think there's anything in that or is it just because of the small sample-size?

Hello again tim_nn

thank you so much for your comments. I really appreciate it. I love the fact that I can post something on a forum within days get feedback new ideas.

Your point about Spread betting is great I have already thought about potentially going down that route.

I think re EUR/GBP its a combination of both of your points. I found in some of the ps there is a struggle to get the profits without suffering drawdowns of up to 61 pips (which has been the worse so far if memory serves.) Like I said I did think about having different criteria for different ps but then I thought how difficult it is to watch all the currencies so decided on a fixed criteria of 100 for now. It could be that I drop EUR/GBP for now try one of the other ps coming up with a list of 8 or so profitable .

In all hty what I will do for now if just use the system as is following the old philosophy of "if it is broken don't try to fix it" The true test will be how the system fs over the next few months.

I hope the system continues to be successful that others can possibly use it. I think MT resets demo accounts every month(???) in which case I will open a new $10000 for Feb. I will post the results good or bad

Do you think it may be worth while demoing on Refco or GFT as one of these is likely to be my real brokers? Also probably bets to use a mini account if when I go live?

Thanks again
SR2

[sr2]

Thought I would share with you how I came about creating this system initially.

Basically I attended a seminar on stocks shares. At this seminar one of the houts mentioned MA's crossover how if these were followed could be very profitable. This stayed in my head for a few years but I did not do anything with it until finally deciding to jump into forex.

Anyway the point I wanted to make was that sometimes good ideas come the most unlikely sources which in this case was a chap by the name of Mr Darren Winters!!! For those of you in the UK who have heard of him or been to one of his seminars you will underst what I am trying to say.

Hope that does not scare anyone away

[tim_nn]

Originally posted by sr2 I love the fact that I can post something on a forum within days get feedback new ideas.

I know what you mean; but take care that your main problem doesn't become spending too much time answering fatuous questions heckling people like me who spend too many hours a day sitting in front of a PC chat here when they should be working/trading!

Originally posted by sr2 Your point about Spread betting is great I have already thought about potentially going down that route.

It's worth it when tax becomes relevant. Many people in internet forums are strongly opinionated about ( opposed to) spread-betting usually rather ill-informed out-of-date but IMHO the more successful traders here are gradually realising that it's both better regulated more profitable than anything else. Enough of that anyway.

Originally posted by sr2 It could be that I drop EUR/GBP for now try one of the other ps coming up with a list of 8 or so profitable .

Find "products" that fit your system rather than curve-fitting your system to fit them? There are advantages disadvantages both ways.

Originally posted by sr2 I think MT resets demo accounts every month(???) in which case I will open a new $10000 for Feb. I will post the results good or bad

I don't even know what MT is sorry. Someone else will answer though; this "MT" has many followers users here I gather.

Certainly looking forward to seeing some forward-going results wishing you well with them.

Originally posted by sr2 Do you think it may be worth while demoing on Refco or GFT as one of these is likely to be my real brokers? Also probably bets to use a mini account if when I go live?

I'd say yes. Always better to do demo-trading on as close as you can get to the real platform you'll be using for real money trading. (This is actually quite an important point which many people ignore IMHO).

(Slightly curious about why you're mentioning Refco GFT rather than FXCM or CMC but again that's another matter perhaps not very important anyway.)

Originally posted by sr2 Basically I attended a seminar on stocks shares. At this seminar one of the houts mentioned MA's crossover how if these were followed could be very profitable. This stayed in my head for a few years but I did not do anything with it until finally deciding to jump into forex. Anyway the point I wanted to make was that sometimes good ideas come the most unlikely sources which in this case was a chap by the name of Mr Darren Winters!!! For those of you in the UK who have heard of him or been to one of his seminars you will underst what I am trying to say.

I know exactly what you mean.

I've also been to a Darren Winters free 3-hour "performance" about 4 years ago ( which I did learn a few things actually was surprised how much stuff it contained that only quite a small proportion of it was spent promoting the longer paid-for courses).

My sense of MA crossovers now is that they don't ever work long-term on their own but need an awful lot of filtering (for example in the BunnyGirl or JetHeat ways). This is certainly the first time I've seen exactly your method though I'm intrigued. Will be watching eagerly.

[tim_nn]

while we're (not?) on the subject ... I'll explain my interest in your system ...

A couple of years ago I came up with a system of 3 13 39-period EMA's on 4-hour /or 3-hour currency charts. Entry signals were 13/39 crossovers filtered by various combinations of DMI/ADX (definitely the most promising) MACD (less useful) RSI (ditto) using various different settings criteria. Exits were mostly re-crossovers of the shorter 3-EMA. Initial stop-losses related to ATR then trailed.

This system was "in the market" quite a bit more than yours (which was perhaps its problem or one of them).

To cut a long story short although initial back-testing following it up looked extremely encouraging I couldn't find a way to make it work consistently or reliably enough to trade it with real money eventually stopped trying to tweak it have since then acquired a greater interest in trading without indicators (as you might gather my other posts around here). But a system like yours brings back mostly happy memories. So I'm very interested.