Forums Development Perfect Entry or "Perfect Trader"?

Viewing 25 posts - 1 through 25 (of 75 total)
  • Author
    Posts
  • #5882
    gg53
    Participant

      Perfect Entry or “Perfect Trader”?

      The search for a perfect trade entry already produced countless number of indicators and “googol” lines of code.
      It’s about time to invest in a “Perfect Trader” – a trading EA that can statistically win and be profitable, even with random entry.

      Pre-conditions:
      1. It should adapt to current currency-pair and market condition.
      2. It should obey strict risk-management (SL & Lot size)
      3. Set initial SL by market and pair – not by “fixed” pips.
      4. It should minimize the risk as the trade continues (move SL by market condition).
      5. It should enforce a Break-Even at the right time.
      6. It should scale the position while in trend (most important and overlooked feature by most)
      7. To trail profit or not to trail (again, according to market conditions and not “fixed” pips)?
      8. Exit the trade according to pair and market conditions.

      Nothing in the above EA parameters should be “hard coded” – the “Perfect Trader” EA should adapt to market conditions and the currency pair “DNA”.

      My experience shows that a “Good Trader” can be profitable even with “not so good” entries.
      Pay special attention to point #6 ! scaling (adding to a position while in trend) has a HUGE effect, if done properly.

      If someone contribute an EA here – please do so in source-code, so that members can add/change and upload their mod version.

      Does anyone wants to join the ride?

       

      G.

      #5888
      simplex
      Moderator

        Pre-conditions …

        I love them! In my opinion, most of them are absolute musts for any EA.

        … be profitable, even with random entry

        This sounds radical and fascinating. Maybe I spent too much time studying John F. Ehlers’ papers to even imagine that could work. :whistle:

        Now for an important detail: What’s random in particular?

        • Trade direction?
        • Entry timing?
        • Pair selection?

        I think it would be important to outline a possible architecture of that Perfect Trader first. Does a ‘random entry strategy’ require a special design? Or is it sufficient to find some well-tuned equilibrium of the ingredients you mentioned under ‘pre-conditions’?

        And how is this thread supposed to work when it comes to coding? Everyone working on his own and uploading prototypes for discussion, or going for a joint project as a group of architects / coders?

        At least it’s an interesting idea worth to be discussed. I’m absolutely in for that, and maybe more.

        simplex

        A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)

        #5889
        gg53
        Participant

          Pre-conditions …

          I love them! In my opinion, most of them are absolute musts for any EA.

          … be profitable, even with random entry

          This sounds radical and fascinating. Maybe I spent too much time studying John F. Ehlers’ papers to even imagine that could work. :whistle: Now for an important detail: What’s random in particular?

          • Trade direction?
          • Entry timing?
          • Pair selection?

          I think it would be important to outline a possible architecture of that Perfect Trader first. Does a ‘random entry strategy’ require a special design? Or is it sufficient to find some well-tuned equilibrium of the ingredients you mentioned under ‘pre-conditions’? And how is this thread supposed to work when it comes to coding? Everyone working on his own and uploading prototypes for discussion, or going for a joint project as a group of architects / coders? At least it’s an interesting idea worth to be discussed. I’m absolutely in for that, and maybe more. simplex

          The main idea is to create an “Intelegent Trader” that takes the entry as an already established fact – and do its best to manage it, even if it leads to StopLoss.

          If we succeed with this “Perfect Trader” you can attach it to any other stand-alone strategy that just provide the Entry-signal.

          With such a “Trader” you don’t need to re-write the whole trade management algo into individual EA’s or indicators. Their “job” will be to provide the Entry – and that’s it.

          Everything else, from this point on, will be controlled by the “Perfect Trader”.

           

          G.

           

          #5891
          simplex
          Moderator

            The main idea is to create an “Intelegent Trader” that takes the entry as an already established fact – and do its best to manage it, even if it leads to StopLoss.

            A bit in the sense of Steve’s MPTM?

            see http://www.stevehopwoodforex.com/phpBB3/viewtopic.php?f=21&t=64

            A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)

            #5895
            gg53
            Participant

              The main idea is to create an “Intelegent Trader” that takes the entry as an already established fact – and do its best to manage it, even if it leads to StopLoss.

              A bit in the sense of Steve’s MPTM? see http://www.stevehopwoodforex.com/phpBB3/viewtopic.php?f=21&t=64

              MPTM requires pips parameters, It doesn’t scale trades, lot sizes, etc.

              I want the “Perfect Trader” to decide, based on the market and currency pair, on those values.

              G.

              #5898
              simplex
              Moderator

                MPTM requires pips parameters, It doesn’t scale trades, lot sizes, etc. I want the “Perfect Trader” to decide, based on the market and currency pair, on those values.

                Ahh, I see. I’m not so familiar with MPTM, it’s just the EA most guys are talking about related to trade management.

                I would say, that PT (‘Perfect Trader’) and the entry strategy chosen (either another EA or manual strategy) would have to be based upon the same library or indicator to analyze market mode. If e.g. a counter trend swing trade is being opened while PT ‘thinks’ the symbol is strongly trending, thus any counter trend entry being prohibited, that would lead to problems.

                Any entry strategy, manual or automated, would have to be perfectly in sync with PT. If entry strategy and PT don’t rely on that same market mode analysis, then they need an interface so PT can receive the info what an entry EA ‘had in mind’ when opening a particular trade: was that entry meant to be a trend trade, a swing, a scalp?

                In the end, they would have to act like one single EA.

                When looking for the ‘perfect’ trade management, it might turn out that entry, trade management, and exit are so closely connected that it makes more sense to combine them in a single, classic EA. I think it would depend on the interface. Certainly it could be done, and having a PT for trade management and exit would reduce complexity of the entry EA.

                Just thinking …

                simplex

                A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)

                #5902
                MTH2014
                Participant

                  Great Idea as always Brother GG53..

                  Years ago  I joining group of mql coders to create similar idea.. and honestly we failed, because we grow to ‘too many creative ideas’ stage and everybody ‘defending’ their ‘own’ bright ideas..lol.

                  the idea to create most complete EA modules consist of;

                  1. Scanner module, to scan market current situation and feed the information to the next module,

                  2. Distributor module,  that read the scanner module information, and decide the next step.

                  3. Sideways/Ranging module, that do the ‘trades’ according to our sideways trading rules.

                  4.Uptrend module, that do the ‘trades’ according to specific characteristic of uptrend (less risk)

                  5.Downtrend module, that do the ‘trades’ according to specific characteristic of downtrend (more risk)

                  6.Recovery module, that do the ‘recovery’ step specific to point 3,4,5 modules when the trades goes wrong.

                  7.Cleaner module, if that recovery module don’t work, and we should convert our floating risk to become real loss.

                  8.Watcher module, that ‘watching’ the job of the 2 to 7 modules, and feed the information to the scanner module on what to do next base on the current situation.

                  At that time, it is really ‘heavy and hard’ project for me because of my very limited knowledge in mql programming..and English Language (right now too…lol), so most of the time I just learning and not contributing.. lol.

                  So, if You don’t mind, please allow me to learn again.. from all senior coders here..

                  Happy Coding and best regards

                  MTH

                   

                   

                   

                  Intuition, Experiences and Common sense..
                  http://www.binaryoptionsedge.com/

                  #5904
                  gg53
                  Participant

                    Great Idea as always Brother GG53.. Years ago I joining group of mql coders to create similar idea.. and honestly we failed, because we grow to ‘too many creative ideas’ stage and everybody ‘defending’ their ‘own’ bright ideas..lol. the idea to create most complete EA modules consist of; 1. Scanner module, to scan market current situation and feed the information to the next module, 2. Distributor module, that read the scanner module information, and decide the next step. 3. Sideways/Ranging module, that do the ‘trades’ according to our sideways trading rules. 4.Uptrend module, that do the ‘trades’ according to specific characteristic of uptrend (less risk) 5.Downtrend module, that do the ‘trades’ according to specific characteristic of downtrend (more risk) 6.Recovery module, that do the ‘recovery’ step specific to point 3,4,5 modules when the trades goes wrong. 7.Cleaner module, if that recovery module don’t work, and we should convert our floating risk to become real loss. 8.Watcher module, that ‘watching’ the job of the 2 to 7 modules, and feed the information to the scanner module on what to do next base on the current situation. At that time, it is really ‘heavy and hard’ project for me because of my very limited knowledge in mql programming..and English Language (right now too…lol), so most of the time I just learning and not contributing.. lol. So, if You don’t mind, please allow me to learn again.. from all senior coders here.. Happy Coding and best regards MTH

                    Points #1 & #2 are not needed for this project.

                    The idea is to take the process of trading AFTER we got some Entry signal, and to manage that trade from that point, adapt to changing market condition and currency pair characteristics.

                    Imagine that someone gave an order, signal, or already entered a trade – and left the room, leaving you to handle it to the best of your trading skills.

                    G.

                     

                    G.

                    #5905
                    BalrogTrader
                    Participant

                      …At that time, it is really ‘heavy and hard’ project for me because of my very limited knowledge in mql programming..and English Language (right now too…lol), so most of the time I just learning and not contributing.. lol. So, if You don’t mind, please allow me to learn again.. from all senior coders here..

                      So, if Kiads is saying that then I’m going to “shut up and listen (read)”  :scratch:

                      Nothing has ever motivated me more than this...

                      #5906
                      MTH2014
                      Participant

                        …At that time, it is really ‘heavy and hard’ project for me because of my very limited knowledge in mql programming..and English Language (right now too…lol), so most of the time I just learning and not contributing.. lol. So, if You don’t mind, please allow me to learn again.. from all senior coders here..

                        So, if Kiads is saying that then I’m going to “shut up and listen (read)” :scratch:

                        :yes:   Please seat near me Brother, and we could read and learn together..

                        Best Regards

                        MTH

                         

                        Intuition, Experiences and Common sense..
                        http://www.binaryoptionsedge.com/

                        #5907
                        gg53
                        Participant

                          …At that time, it is really ‘heavy and hard’ project for me because of my very limited knowledge in mql programming..and English Language (right now too…lol), so most of the time I just learning and not contributing.. lol. So, if You don’t mind, please allow me to learn again.. from all senior coders here..

                          So, if Kiads is saying that then I’m going to “shut up and listen (read)” :scratch:

                          :yes: Please seat near me Brother, and we could read and learn together.. Best Regards MTH

                          Don’t “listen” to me… listen to this (math professor):

                          http://www.linkedin.com/groups/Random-Entry-System-matches-CTA-4394344.S.223752470?qid=7f9b89df-f262-4dff-b93d-058bed187560&trk=group_most_recent_rich-0-b-ttl&goback=.gmr_4394344

                           

                          G.

                          #5908
                          LearnAlways
                          Participant

                            Count me in, but I don’t have any programming skills, sorry to interrupt, pls carry on.

                            I only know I know nothing
                            Skype: [email protected]

                            #5910
                            simplex
                            Moderator

                              … listen to this (math professor)

                              Great link – thanks a lot!

                              Reading Garner’s posts on http://tradersplace.net/forum/thread/40/random-entries/page_5/ lead to this interesting paper:

                              http://arxiv.org/pdf/1303.4351v1.pdf

                              Didn’t read it in detail yet, their conclusion on p. 8 is enough to let me stay tuned.

                              A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)

                              #5911
                              simplex
                              Moderator

                                http://arxiv.org/pdf/1303.4351v1.pdf

                                Excerpt from their conclusion:

                                Our main result, which is independent of the market considered, is that standard trading strategies and their algorithms, based on the past history of the time series, although have occasionally the chance to be successful inside small temporal windows, on a large temporal scale, perform on average not better than the purely random strategy, which, on the other hand, is also much less volatile. In this respect, for the individual trader, a purely random strategy represents a costless alternative to expensive professional financial consulting, being at the same time also much less risky, if compared to the other trading strategies.

                                 

                                A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)

                                #5913
                                gg53
                                Participant

                                  http://arxiv.org/pdf/1303.4351v1.pdf

                                  Excerpt from their conclusion:

                                  Our main result, which is independent of the market considered, is that standard trading strategies and their algorithms, based on the past history of the time series, although have occasionally the chance to be successful inside small temporal windows, on a large temporal scale, perform on average not better than the purely random strategy, which, on the other hand, is also much less volatile. In this respect, for the individual trader, a purely random strategy represents a costless alternative to expensive professional financial consulting, being at the same time also much less risky, if compared to the other trading strategies.

                                  Take this statement, although true, with a grain of salt…

                                  Professional money managers and hedge fund managers are bound to some stupid indexes – in order to measure their “risk level”.

                                  So if they outperform their relative index – they will lose customers because the relevant rating agencies will mark them as “high risk”…

                                  Stupid, but that’s the actual situation.

                                   

                                  G.

                                  #5915
                                  Revolution
                                  Participant

                                    Hi,

                                     

                                    It is nice that you are going that way.

                                    While managing existing position (bad position)……only two option exist…

                                    1. Recovery

                                    2. Somebody called it “biting the bullet”…in the other words closing down…

                                    1a. Bad position – wrong timing or wrong direction (against the flow/trend)

                                     

                                    And personally I think that this is the ONLY way to go…so absolutely adore the idea, only problem is that no robot can substitute for human being in vastly changing conditions, however other part of me knows that it is possible as nothing is impossible.

                                    regards

                                    D.

                                     

                                    ps. there is one guy who was talking about it (first point above) and he was retired after 2x years as pro trader for major tier 1 bank (dealing with spot fx on top senior position)  as far as I remember he said that you have to understand:

                                    – martingale

                                    – Fibonacci progression

                                    – log arithmetic spirals

                                    …and that all secrets lies in the pi and its skew…he was applying those things to SIZE..not price..think about it..

                                     

                                    and most importante… it is about what market is doing…like gg said it, methods cannot be rigid as they have to adapt to market conditions…and market is not rigid place

                                     

                                     

                                    • This reply was modified 9 years, 4 months ago by Revolution.
                                    #5917
                                    Innate
                                    Participant

                                      I spent about a year trying to develop such a system. It wasnt a random entry system, it was in fact the ‘back end’ or ‘recovery’ component of a normal signal based system. It all started from a train of thought of running a system without a stop loss. Things go really good until the inevitable margin call.

                                      As stated above there are two options when trades go bad:

                                      1) cut your losses (ie stop loss) – but this is not in spirit of the thread…

                                      2) dig a deeper hole (ie enter a recovery trade at a better price point)

                                      I would always end up crashing the account due to the problem of: At what point do you enter a recovery trade and for what (lot) size. 

                                      The bigger the recovery trade lot size the quicker it would sink the ship as price moves further against you. However if you are in a counter trend trade the recovery trade lot size must be big enough to make enough money in the small amount of pips that is the pullback.

                                      I went in circles for a long time trying to overcome this issue.

                                      What's it all about? It's all about money.

                                      #5918
                                      simplex
                                      Moderator

                                        It all started from a train of thought of running a system without a stop loss.

                                        Scary … personally, I would always opt for no. 2 of gg’s precoditions.

                                        cut your losses (ie stop loss) – but this is not in spirit of the thread…

                                        That will happen from time to time. Even a ‘Perfect Trader’ can’t avoid ALL loosing trades. Preconditions 3 to 5 should minimize their count.

                                        dig a deeper hole (ie enter a recovery trade at a better price point)

                                        I never understood why to care about special ‘recovery trades’. If a system works, we don’t need them. After one trade has hit SL, the next 1, or 2, or more regular trades – depending on R:R – will act as recovery. Trying to recover directly out of a loosing situation can work on certain occasions, but it’s dangerous, just a ‘double or nothing’ bet.

                                        But I’m afraid that part of the discussion is drifting away from another one of gg’s preconditions: profitability at random entry. Planning recoveries would require a non-random entry strategy.

                                        A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)

                                        #5919
                                        Revolution
                                        Participant

                                          Don’t you think that there is an issue (contradiction) in what you have just wrote?

                                           preconditions: profitability at random entry. Planning recoveries would require a non-random entry strategy.”

                                          If random entry, how can you press the winners (scale to winning positions) without planning it? You want to scale at random??? You have to have some assumptions? So all entries cannot be random, can’t they?

                                           

                                          Innate wrote:

                                          It all started from a train of thought of running a system without a stop loss.”

                                          It is not about stop loss, as YOU have to take loss on sour position…part of the game…and originator of the thread mentioned it. I think that he meant that it shouldn’t be rigid rather preconditioned to market…current pair volatility would be my 5 cents here..

                                          #5920
                                          Revolution
                                          Participant

                                             At what point do you enter a recovery trade and for what (lot) size. “

                                             

                                            Not necessarily in the way you think as you can apply it in opposite way, that is 1, Fibonacci progression (1,1,2,3,5,8…) that is 2….90% of market repeats the prices (comes back to it…that is 3)

                                             

                                            Nothing in the above EA parameters should be “hard coded” – the “Perfect Trader” EA should adapt to market conditions and the currency pair “DNA”.

                                            Define “DNA”…it will be easier to know how do you understand it so we are on the same page? That is how I understand it…

                                            1. Volatility

                                            2. Speed

                                            3. Balanced/Unbalanced

                                            4. Market tracer or market follower

                                            5. Current trend

                                            6. Following or leading prime markets…(constantly changing)

                                            DNA is something dynamic …personally I think that.

                                             

                                             

                                             

                                             

                                             

                                             

                                             

                                            #5922
                                            simplex
                                            Moderator

                                              Don’t you think that there is an issue (contradiction) in what you have just wrote?

                                              Yes, absolutely! gg53 constructed an extreme goal in his 1st post: profitability at random entry. I hardly can imagine anyone around would consider testing that with real money. So I’m taking it as some kind of a mental experiment, set up to direct our focus more on money and trade management than on entry signals.

                                              So I consider it inevitable that our discussion will lead to contradictions from time to time. I believe that’s part of the process, as well as resolving contradictions and trying to gain some insight into possible ways to achieve the goal to define a ‘Perfect Trader’ as gg lined out in his 1st post.

                                              What’s random in particular?

                                              See the question I threw in for discussion in my 1st reply: what is it that’s random? I think that randomness is limited and has to be well defined. I think that if ‘Perfect Trader’ doesn’t act randomly, the strategy that enters our trades can’t either. There has to be some kind of synchronization between them, and that particular requirement will make any random entry strategy non-random instantly. A lack of synchronization between any two EAs acting on the same account and on the same trades will certainly lead to chaotic behaviour of the system as a whole.

                                              For me, the basic question is: Can Perfect Trader be designed in a way to manage trades profitably after random entries?

                                              If we should manage to set up a prototype working properly to a certain extent, acting as a proof of concept, the secondary question arises: Which modifications are required for that prototype to adapt to non-random entries?

                                              Now considering a more or less complex and time-consuming process of design and development, a meta-question is showing up: If our discussion leads to the conclusion that considerable modifications would have to be applied to PT-Random in order to create PT-Nonrandom, does it make sense trying to create a completely random version first?

                                              “Perfect Trader” – a trading EA that can statistically win and be profitable, even with random entry.

                                              So, in a way, gg’s approach is carrying that contradiction you pointed out as an intrinsic property. We have to be aware of that and consider what the implications for a process of design and development are.

                                              A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)

                                              #5923
                                              simplex
                                              Moderator

                                                Market tracer or market follower

                                                What’s your definition of market tracer and market follower?

                                                A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)

                                                #5924
                                                limprobable
                                                Participant

                                                  as far as I remember he said that you have to understand: – martingale – Fibonacci progression – log arithmetic spirals …and that all secrets lies in the pi and its skew…he was applying those things to SIZE..not price..think about it.. and most importante… it is about what market is doing…like gg said it, methods cannot be rigid as they have to adapt to market conditions…and market is not rigid place

                                                  Pi, Fibonacci and Phi
                                                  Here is a formula connecting the Fibonacci numbers and the golden ratio (Phi = Φ = 1.618…) in a formula for π:

                                                  http://www.maths.surrey.ac.uk/hosted-sites/R.Knott/Fibonacci/fibpi.html

                                                  or something like that?

                                                  What is the Fibonacci Sequence (aka Fibonacci Series)?

                                                   

                                                  • This reply was modified 9 years, 4 months ago by limprobable.
                                                  • This reply was modified 9 years, 4 months ago by limprobable.
                                                  #5927
                                                  Revolution
                                                  Participant

                                                    Market tracer or market follower

                                                    What’s your definition of market tracer and market follower?

                                                     

                                                    It is just my own term – some currencies will follow others let say…the way it works it simple law of economics that small economies fiscal policies will always follow bigger ones so:

                                                    USA->EU->EM….so market tracers would be EU,GU, UJ (depending on the day, one of those three will lead, others react or lag) and market followers are usually emerging markets currency crosses as they influenced strongly by foreign investments, on direct/indirect inflows and outflows of capital (and their CB reacting on the bigger economies to some
                                                    extent)

                                                    Hope that helps

                                                    ps. I don’t know why it come up in bold.

                                                    #5936
                                                    Innate
                                                    Participant

                                                      It all started from a train of thought of running a system without a stop loss.

                                                      Scary … personally, I would always opt for no. 2 of gg’s precoditions.

                                                      Its not that scary really, depending on account size. One must consider the entire account as your stoploss. Its simply an “all in” approach. It worked quite well, but was a time bomb waiting to go off. Getting massive growth from a small account is quite advantageous and one must have multiple smaller accounts.

                                                      Saying all that the approach is not sustainable.

                                                      dig a deeper hole (ie enter a recovery trade at a better price point)

                                                      I never understood why to care about special ‘recovery trades’. If a system works, we don’t need them. After one trade has hit SL, the next 1, or 2, or more regular trades – depending on R:R – will act as recovery. Trying to recover directly out of a loosing situation can work on certain occasions, but it’s dangerous, just a ‘double or nothing’ bet. But I’m afraid that part of the discussion is drifting away from another one of gg’s preconditions: profitability at random entry. Planning recoveries would require a non-random entry strategy.

                                                      Sorry I should have presented my thoughts a bit better. I was merely raising the difficulties to a Recovery approach for the Perfect Trader (“PT”) theory whilst still staying within the bounds of the initial stop loss (e.g. The Stop loss for the PT might be say 500 pips and remember how recurrent prices are.) Its quite viable in theory, just very hard to apply.

                                                      I say this because PT is a random entry. Random entry means in theory that one has a (with a big enough sample) 50/50 chance of success (less spread) of price heading in the desired direction. So half of all our opportunities are not being addressed in a basic Stop loss approach. GG53’s original description 4 of the 8 conditions use the phrase adapt to “market conditions.” When a trade goes your way its pretty easy. Why cant the PT adapt to market conditions when in a loss? How does the PT deal with losses? Stop loss only?

                                                      So if we use a stoploss only approach (which is perfectly fine with me  :good: ), then the back bone of the system is the R:R.

                                                      With a 1:2 approach you only need to win approx 35% of trades (ignoring spread) to start making money. However adjustable stoploss/target sizes (in pips) can confuse that statistically (in trading terms I agree that targets should be adjusted for volatility).

                                                      I remember reading someone doing something quite similar on FF a while back. Random entries. I will have a dig and see if I can find the thread…

                                                       

                                                       

                                                      What's it all about? It's all about money.

                                                    Viewing 25 posts - 1 through 25 (of 75 total)
                                                    • You must be logged in to reply to this topic.
                                                    Scroll to Top