The question for me was this: How do I make longer term day trades when I cannot be at my computer and wait for these trades to happen? Any of you that have a day job, know that there is no easy answer to this. And is one I hope I will not have to struggle with any longer.
This journal has a few goals in mind:
- Accurately Charting Possible Points on a Daily Chart where Trades Could potentially Reverse Direction.
- Accurately Choose potential Profit Targets that Could be Reached if the Trade does Reverse Based not on a Pip movement, but an Actual Price Value Target.
- Stretch to the Limit our Risk/Reward Ratio
- Take these Reversal and Profit Target Points and Enter them Into an EA which would from there would manage our trades based on a precisely calculated management strategy while we did other more important things.
Okay....so the cat is out of the bag. Yes....we are going to be forward testing an EA with this system. I am sorry, but it is impossible to backtest this EA because the EA only works on values the we input for it and those values will change each and everyday. In fact, they will most likely differ slightly per person who uses the EA. Incidentally, the EA is not quite ready yet even for the testers.
I am sorry, but right now the EA is not available to the public. We will be choosing a handful of people who would like to test this EA with us on a demo account only and post their resuts and evaluations here on this thread. Whether and to what extent we make it available later, we don't know yet, but one thing is for sure that all testers who actively contribute with charts and evaluations will be given a version for only their live account whenever they want. Our reason for doing this is to keep testing in a controlled environment and we will not be able to do that if everyone had a copy. Please do not ask us to make an exception, because at the onset, there will be none granted.
So, as stated, this thread will be used by the testers and whoever else wants to contribute to chose the input values into the EA on a daily basis at the end of every day. I hope that all of you following along will also learn something about plotting charts. Regardless if you have a copy of the EA or not, there will be a tremendous amount information here that you will be able to learn from.
Testing Parameters: It is safe to say that all testers may have other criteria in which they make the decisions for their trading. Initally all my trading decisions will be made off the daily charts only.
Trendlines - I will be using high points and low points for drawing trendlines. A high point is described as a point that has at least on lower high on each side of it. A low point is a point that has at least 1 higher lows on each side of it. many times I will draw these lines at the open of the bars to get a reference a to where price may bounce from. Updated 03/07/09
Support and Resistence Lines - I will be using a version of Murrey Math lines to determine horizontal support and resistence points. I will be setting my TimeFrame to 10080
Pairs I will be Trading: - Here is a list of pairs I will be trading along with a current template for that pair and some of the more constant settings within the EA. I will get to the EA in a bit. I will put all the templates in a .zip file when I get this 1st page caught up.
Updated Templates 03/19/09 -
EurUsd
- Threshold = 75
- EntryMargin = 1
- ExitMargin = 10
- Max S/L = 50
GbpUsd
- Threshold = 100
- EntryMargin = 1
- ExitMargin = 13
- Max S/L = 60
EurJpy
- Threshold = 100
- Entry Margin = 1
- Exit Margin = 13
- Max S/L = 60
GbpJpy
- Threshold = 150
- EntryMargin = 1
- ExitMargin = 18
- Max S/L = 70
UsdJpy
- Threshold = 60
- EntryMargin = 1
- EsitMargin = 8
- Max S/L = 40
GbpChf
- Threshold = 125
- EntryMargin = 1
- ExitMargin = 15
- Max S/L = 60
Okay.....Let's get to the workings of the EA:
The purpose of this EA is to help you (and me) become better traders. It will ask you for specific target points for entry and exit for the EA to work right. Random guesses may not work and many times exact pinpoints will not work either. It will probably take some time to master this EA, but in the end, I think it will free up your time considerably and make us all better traders.
I will now go into the settings in the properties area.
- Upper Range Value (UR) - In this setting you will put in the price that you think the pair you are trading will turn around and start heading down. This does not mean that when this price is hit, the pair will open up a short trade, it only means that the EA will start looking for a short trade when this value is hit. If it does not find one, the EA will not open a trade.
- Lower Range Value (LR) - In this setting you will put in the price that you think the pair you are trading will turn around and start heading up. This does not mean that when this price is hit, the pair will open up a long trade, it only means that the EA will start looking for a long trade when this value is hit. If it does not find one, the EA will not open a trade.
- Threshold (TH) - This is a very important feature to the EA. Your threshold will vary based on the pairs volitility. The more volitile a pair, the larger the threshold will be. The less volitile a pair, the smaller the threshold will be. The threshold is the amount of pips beyond your UR or LR that the EA stops looking for reversal trades. Let's say that you are trading EurUsd and your threshold is 80 and your UR is 1.2500. If price gets to 1.2580 with no short trigger, the EA will no longer look for short trades as you have determined that past an 80 threshold, the pair will not reverse it's direction. Simple right?
- BuyTakeProfit (BTP or LTP) - This is a price value that you would enter where you would want you trade to take profit. 100 pips will not work. You need to enter a price value for this editable field where you want the EA to take profit for you.
- SellTakeProft (STP) - This is a price value that you would enter where you would want you trade to take profit. 100 pips will not work. You need to enter a price value for this editable field where you want the EA to take profit for you.
- CloseOppositeTrade - Many times you will set both a UR value and a LR value. If one of your trades triggers, you can choose to have the other signal be removed by setting this to "True" when on signal is triggered. Leave the setting to "False" if you do not want any subsequent trade to be removed
- Lots - If MoneyManagement is set to false, the EA will open up orders based upon any lot size that you input.
- Risk - If MoneyManagement is set to true, the EA will open up orders based upon the difference between the open price and the stop loss price and the available margin in your account.
- EntryMargin - This is the amount of pips below an entry bar or the amount of pips + spread above an entry bar that a pending order will be placed. Default is set to 1. I will leave it at the default setting unless it proves valuable to raise this amount to a higher number. You should never have it lower than 1 however.
- ExitMargin - This is the amount of pips below an entry bar or the amount of pips + spread above an entry bar that a pending order will be placed. Default is set to 1. I will change this based upon the volitily of a pair as it is important to give your trade a little extra breathing you to move in your favor. If you check out my individual pair settings, you will see what I am placing each pairs amount at to start with. You should never have it lower than 1 however.
- GMTOffset - If your broker is GMT 0, you can just leave this setting alone. If your broker is GMT -2, you will have to change this to -2. Another words, if your broker is not GMT 0 you will have to change this setting accordingly.
- TimeToTrade1 - This is the time of day you want to be able to open up new trades for the next day. This is set in GMT time and default is GMT 0. You will want to set this based upon when your broker opens up a new bar for the day.
- TimeToTrade2 - This is the time of day that you want all left over pending orders for that day cancelled. Remember that if you set it to 15:00 GMT, the EA will quit looking for trades at 15:59 GMT. This is where I am at the moment. Updated 03/19/09
- Friday Close - This is the time in GMT that trades will be closed on Friday's as many times you will want the EA to quit looking for trades a little earlier on Friday's. Remember that if you set it to 15:00 GMT, the EA will quit looking for trades at 15:59 GMT. This is where I am at the moment. Updated 03/19/09
- Max S/L - Sometimes the EA will because of the movement of the market determine a S/L that is too far out of reach. To avoid this from happening, we have added this Max S/L feature where you can set this and if the system determines that the S/L is greater then the Max S/L setting, then it will use the Max S/L setting by defualt. The Trailing stop system will work as normal.
- For now, this is all the settings within the EA. For the most part, once you get them set, most of them you will never have to re-adjust.
Inner workings of the EA:
This is the behind the scences stuff that is not public knowledge.
- Just because the EA hits your range targets, does not mean that the EA will open a trade. After the range is hit, certain other criteria kust be met for a trade to be executed. It is also advisable the no one places trades blindly at these ranges without the EA.
- Just because you put in a Take Profit Target does not mean it will be hit. The EA has built in formulas to move your stop closer in a ranging market if it can and trail you trade in a trending market.
- The EA will also determine your S/L level for you based on the current price action of the market. Sometimes it may be 25 pips and other times it may be 50 pips. And as stated above, it will adjust this price as the EA deems necessary.
That is all I can think of for tonight. I will be around so if you are interested in testing or have questions, please ask