One more try…

Ok, I thought I’m not going to touch forex for a while… cos I can’t find any system with good odds…. Anyway, today, for no particular reason… I opened MT4 again… I think I just wanted to check the USDSGD rates…. but I’ve decided to write any EA… this time, I use the most basic definition of trends to try and program a scalping system… higher highs, higher lows….

Another of those “I’ve not blogged for a long time” posts…

Well, I’m back again… 4 months since the previous post… Most bloggers are typical; they start a blog enthusiastically, and then eventually get tired of updating the blog… reminds me of a logarithmic graph… starts off with a steep gradient and after a while, the graph eventually “flattens out”… ok, never mind my nonsense, must be my erratic sleep cycle creating havoc… But I’m planning to revamp this blog soon…

Anyway, I’ve not bust my account nor have I withdrew from trading… quite the contrary, ever since I started selling options, I’m growing  my account at a steady, albeit, slow rate… Hit some losses last month due to the sharp reversal… so currently taking a break from real options trading… but I’m ready to get back very soon….

I’m constantly working on perfecting my trading skills… now busy with developing more EAs… have 2 in progress that’s doing pretty well…. need more testing… and then I’ll launch them on a forward test… if all goes well, I’ll probably post some indicators that I use on this blog soon… and if USD weakens a bit more, I’ll start trading forex with a real account….

ya, and if USD further weakens to my target level, I’ll sign up for this options trading course … I’m pretty addicted to the mathematical way of trading… so, trading options by the numbers is perfect for me… My philosophy is this: “If even Warren Buffett does not try to predict market direction, why should I?” Unless I can travel to the future and back, I believe the only way to trade the market is to trade only when u can be sure the odds are in your favor… I’m only interested in trading strategies where I know where my edge is… just like what I mentioned a few months back, I’ll trade like a professional gambler… and professional gamblers do not gamble… ;-p

Btw, I’ve just bought a HTC Dream, waiting for it to be delivered tomorrow… well, actually today… a few hours later… quite excited about this new gadget… fought a long mental battle before I finally bit the bullet and bought the phone… It’s not an expensive phone, but it is real fugly… I’m really worried about being stuck with an ugly phone and a two years contract… so eventually, I decided not to trade in my current phone… and spend a 100 bucks more to buy the Dream… I think all geeks would love to play with the HTC Dream… The phone seem to have an unexplanable attraction force on me (yeah, alrite, that officially makes me a geek…)… so much so that I finally bought it against all my logical sense… despite the fact that HTC magic is coming soon… despite it being an ugly phone… never mind that Android is too new and may not be stable… Or that the phone is too heavy, bulky…and totally uncooool… I JUST WANT THE PHONE….!!!! But anyway, not sure what I can do with the phone tomorrow, with my mobile broadband account not set up yet… dun wan to delve into details here… but pretty pissed off with my telcom company… what to do… just got to wait for them to get back to me…

Another Strategy

1) RSI exceeds 65 / 35

2) RSI crosses back into band

3) RSI reach 50 (and current value compared to value when RSI is out of range is in the right direction)

Stop Loss:

Extreme of the bar which first results in the RSI to exceed 65 / 35

OR

Fixed value (e.g. 100)

OR

RSI falls back out of the channel on the same side and position is currently losing money

Strategy Tester Produces Vastly Different Results

I tested my EA on two different laptops and was totally perplexed by the vastly different results. On my Acer running Vista, I get a profit of …… drum roll pls…… 215562.22! On my eeePC running Linux, I get only 46772.18….. about 5 times different.

I analysed the two result files and soon realised that the historical data used for testing differs on the two laptops, even though they were both downloaded from Alpari. I have no idea why the discrepancy… and which is a better reflection of my EA’s earning power…. Anyway, I reinstalled the data file on both laptops, using exactly the same procedure… and re-tested the EA… This time, the results were the same…. So, can I consider problem solved?

Maybe not… Cos I have yet to test the EURUSD pair, since I was unable to download the zip file from Alpari just now… seems like the server’s down…..

In addition, I remember my EA caused MT4 to crash when I tested it on a third laptop, running Windows XP…. but I’m going to ignore this at the moment, cause I highly suspect the crash is due to the limited virtual memory on that laptop… I’m not quite prepared to run the test on that 512MB RAM laptop again….. the frustration…

Ok, so, what to do now?

1) Download EURUSD from Alpari and test again….
2) Set up a forex and a VPS account to forward test the EA
3) Try running the EA on a forth laptop and see what happens. The EA is a bit ‘dangerous’, cause it produced too extremely difficult results…. It’s not robust… so how much can I trust the Backtesting results?????

Indeed… too good to be true

Ok, I was right… the two lines of code that I wrote in the previous post was crap… It basically means that once I reach a certain profit, I’ll sell only when the price drops to zero…. Yes, stupid mistake… but it leaves me a question….

Obviously, when I set my stop loss price to 0, my profits soar…. this is of course due to the bullish trend in EUR/USD now (I tested it on all the XXX/USD pairs)… so, if that’s the case, why don’t I just Buy and Hold…. Whenever I need spending money, I can withdraw a portion of it… I believe the overall profits will still be higher than getting in and out of trades…

I can’t answer that question, neither am I able to evaluate the risks… but here’s my thoughts:

1) This trend following strategy is extremely profitable if I enter at the start of the trend…. now may be a bit ‘late’… can test this out….

2) This is … ummmm …. a bit boring….
3) In addition, how often do I get such a new trend…. once in a few years? Given the limited pairs I can trade….

Anyway, I’ve done some more changes to my code and managed to rise the profit and the percentage of profitable trades. Basically, I programme the EA to sell whenever a 20 Pips profits turn into a loss.

Ok, I’m going to test out whether I should be a turtle (trader) now…