10.2a Oct. 2012 Edition

[wBear]

Thanks Bob for all your hard work.

Sold NZDUSD 10 pips below DP. SL 10 pips above DP.

Please note reverse pin bar on daily chart on Monday.

Cheers,
Peter

Hi Peter,
Hmm...seems like you are going for a range trade with WP still above MP. I would like to ask:
1. if this was selected (to trade) based on the DP dipping below MP?
2. what is your TP expectation i.e. where did you set your TP level?

[wBear]

Hi Bob,

Need some help to do some post-mortem:
Yesterday, all the rules were met (WP is below MP, DP is below WP in all TF charts), so condition is a Sell AUDUSD. At that time, it was a full bodied bear candle @H1 chart & in fact, that candle cleared below DP. H4 was showing a little white bear candle. Yet, this trade failed. I did see a 6pips profit but PA sprang right back up -- strong! Other than medium impact JP news, there wasn't any for AU. Today, it was clearer PA wanted to go up with each pull back plus there was good economic data coming out of AU. So, I didn't take that dip below DP to Sell during my morning time here in Singapore (i.e. Sydney's session) -- once bitten twice shy

As all the 10.2a Oct 2012 Edition rules were met, yesterday's trade turned out to be a bad trade as it eventually hit SL, resulting in losses. The same thing happened with AUDJPY.

Appreciate if you could share your thoughts on
a. what could I have done better to prevent entering into a bad trade like this?
b. why wouldn't you have taken AUDUSD & AUDJPY Sell positions yourself?
c. is there something I missed?

I do hope by requesting for this post-mortem, whomever else may have encountered the same, can benefit in learning as well. Thanks in advance!

[thelearner]

I took the SL too at aud yesterday but I believe we wont sell AUD this day....H4 TMA slope is at 0.2-0.4...definitely against short. I hope others would colloborate on the yesterday though, cause I am clueless too XD. But today GC and EG totally adorable though. So maybe that;s just occasional loss in forex LOL

p.s NB thanks for the details at multilevel trades. I will try it out at demo first before jumping in.

[krisko1989]

I had the same problem with AUDJPY today with a trade I entered yesterday (see pic). Sometimes I really wonder if markets are completely random and unpredictable. These times are in occasions like this one. Or maybe this is one of the cases in which fundamentals are all that matters.
However we should bare in mind that no system is 100% profitable and accurate. More than that, I think that if a system is as accurate (right) as much as 60% of the times then it should be considered a good system. Of course if proper risk and money management are applied to that system.
Maybe we would need as much as 100-200 or even 500+ trades to really tell if 10.2 is a good one. I do not know. Maybe Bob does. What I can see is that Bob obviously uses his knowledge and experience to apply Multy-level trading which significantly decreases the volume of losing trades. This is something which some of us (me in particular) obviously aren't too good at, but aren't obliged to be, since the system is said to not necessarily need Multy-level trading as an implemented tool of use (correct me if I'm wrong, Bob).
I really hope that 10.2 alone will turn out to be a profitable system. I kind of look at it as my last effort in my 6-year forex experience. Maybe I ain't cut out for this. So I will hold on to it like a drowning guy to a piece of wood.

[nanningbob]

Nothing you could do differently markets are ranging in the mud. You can see that from Baluda's indi. The aud/jpy went back to almost last week's high and now is coming back down again. JPY announced they were going to intervene in the markets and the JPY did a small jump. The JPY love to make announcements and see what the market does. Everyone wants their currency to be the cheapest to keep their economy going. The questions are:
1. The euro bad news didnt happen so it looks like it will stabablize for now.
2. China economy is slowing but how much?
3. USA economy is slugging along but after the elections Then what?
4. CHF is happy for now.
5. Will the aud and nzd become safe haven currencies again?

I hate fundamentals but you cant ignore them either. Bottom line is look at this pic, except for a rise in the AUD which really wasnt that much all currencies are almost at 0

[nanningbob]

The bottom line is yesterday I took 0 trades and today I took 3. My biggest winner was 20 pips. My losers were 17 pips. It is just a YUCK week. I am up .004% for the week. I will take my wife out to dinner and forget this one. The difference between the high and low for the aud/jpy, aud/usd for the week is 140 pips and that was the currency that moved according currency strength meter. Not much to trade there.

[nanningbob]

Just to give you an idea of how dead the markets are the most volatile currency I trade and averages well over 300 per week is the gbp/nzd. The last 3 days it has move between its high/low 156 pips. Just not much out there.

[nanningbob]

I had the same problem with AUDJPY today with a trade I entered yesterday (see pic). Sometimes I really wonder if markets are completely random and unpredictable. These times are in occasions like this one. Or maybe this is one of the cases in which fundamentals are all that matters.
However we should bare in mind that no system is 100% profitable and accurate. More than that, I think that if a system is as accurate (right) as much as 60% of the times then it should be considered a good system. Of course if proper risk and money management are applied to that system.
Maybe we would need as much as 100-200 or even 500+ trades to really tell if 10.2 is a good one. I do not know. Maybe Bob does. What I can see is that Bob obviously uses his knowledge and experience to apply Multy-level trading which significantly decreases the volume of losing trades. This is something which some of us (me in particular) obviously aren't too good at, but aren't obliged to be, since the system is said to not necessarily need Multy-level trading as an implemented tool of use (correct me if I'm wrong, Bob).
I really hope that 10.2 alone will turn out to be a profitable system. I kind of look at it as my last effort in my 6-year forex experience. Maybe I ain't cut out for this. So I will hold on to it like a drowning guy to a piece of wood.

I　wrote program to trade, very simple actually, traded the 7 MA on the daily chart. Gave it a 50 pip profit and 15 SL. It won about 25% of the time and made a profit on low spread pairs but lost money on high spread pairs. As I played around with it I found out a simple formula. If I traded 2:1 win loss ratio it lost money. If I traded 3:1 or 4:1 it made money. 5:1 ratio and higher it lost money. What I learned was this. If you are going to play single stop trades your win to loss ratio becomes very important because it can determine whether your system wins or loses. The strong trends made up for all the losses during range time.

Second thing I found as I studied charts (It is very important that if you use the Empty4 tester you make conclusions from chart study not the final results page.) was many of the losing trades were winners at some point. Pulling your SL up would create about the same amount of losers but you eliminated most of the loss. The problem then would be you immediately reentered the trade and could create more losers thus defeating the pulling up of the SL.

Third many of the losing trades became winners if patience had been applied to the trade. OR many of the losers could be eliminated by a 2nd profitable trade crossing back into the trend.

So what am I doing with this program? Sitting on it because no matter how I change the basic simple trade program to something more that seems to solve the problem I see on the chart. The solution just creates more losing trades and it becomes unprofitable.

A very interesting dilemma.

[wBear]

Hi Bob,

Thank you very, very much for all your insights. I spend time up till 4am this morning -- studying 10.2a CTS system by coolncalm & co.

After looking at the CTS chart for AUDUSD, I could now see what I should have done & should not have done. I looked at AUDJPY as well & it told me the same thing. I then took a manual trade of GBPCHF just to see for myself. This morning when I woke up, I saw my position closed with profit as I had set trailing stop. Yes, I could have let it ride a little longer. However, I needed to sleep. That was my 1st manual CTS demo trade -- I'm totally shocked & excited at the same time!

Though there's a lot to read, I think it is worthwhile to understand coolncalm's rules & then apply them (at manual trading at this point in time). While I'm not 100% in total understanding yet & still need those rules beside me every time I look at a chart, it's certainly a start. And I think it has great potential. Here's the link to that thread:
ADAPTING NB10.2A FOR LOWER TF & RM TRADING - 10.2A CTS
http://www.stevehopwoodforex.com/phpBB3 ... f=12&t=875

Thank you harry45 for PM'ing me & educating me as well. And thank you everyone else whom PM'd me. I greatly appreciate the communication.

Have a good Friday ahead

[krisko1989]

Good morning to all,

Bob,

"I wrote program to trade, very simple actually, traded the 7 MA on the daily chart. Gave it a 50 pip profit and 15 SL. It won about 25% of the time and made a profit on low spread pairs but lost money on high spread pairs. As I played around with it I found out a simple formula. If I traded 2:1 win loss ratio it lost money. If I traded 3:1 or 4:1 it made money. 5:1 ratio and higher it lost money. What I learned was this. If you are going to play single stop trades your win to loss ratio becomes very important because it can determine whether your system wins or loses. The strong trends made up for all the losses during range time."

- This helps me come to e very important conclusion - the way I currently trade this system (using SL and TP in a 1:1 win loss ratio) would almost certainly guarantee that I will fail at trading it. And I say that because in my opinion what is maybe more important than a trading system itself is the object situated between the chair and the keyboard. Not even you, Bob can find a solution to that. I know that you aren't going to be holding our hand in trading this forever. This means that sooner or later we will have to make important trading decisions ourselves and those decisions will define if we would be successful or not in trading with what you gave us.

"Second thing I found as I studied charts (It is very important that if you use the Empty4 tester you make conclusions from chart study not the final results page.) was many of the losing trades were winners at some point. Pulling your SL up would create about the same amount of losers but you eliminated most of the loss. The problem then would be you immediately reentered the trade and could create more losers thus defeating the pulling up of the SL."

- I suppose everybody here knows the cons of the strategy tester and that it shouldn't be trusted when it comes to testing EAs. However it really helps if you want to study the way price behaves on every currency pair. It gives you a different (fast forward) view of price action. Something I feel is of great value to all traders.

"Third many of the losing trades became winners if patience had been applied to the trade. OR many of the losers could be eliminated by a 2nd profitable trade crossing back into the trend."

- I totally agree on that. "Many"... not all. For me this means a change in the way I approach a trade. Instead of using tight SLs (20-30-40 pips) I will set each trade to have a bigger SL (around 200 pips for less volatile and 300 pips for more volatile pairs) and then manage each one of them according to the current unique circumstances, by applying multy-level trading, etc. Maybe this is the holy grail - approaching each open order as if it is a unique one (based on circumstances like fundamentals, volatility, support and resistance levels) that would never again iterate itself. And successfully managing a losing order and turning it to a winning one for me is the holy grail - thus resolving the conflict between fear and greed that occurs every time in my mind.
...I got a bit carried away here.

"So what am I doing with this program? Sitting on it because no matter how I change the basic simple trade program to something more that seems to solve the problem I see on the chart. The solution just creates more losing trades and it becomes unprofitable.

A very interesting dilemma"

- Not sure if "If it ain't broke don't fix it" or "The simple things are always the best" would better fit here ::D



wBear,

"I spend time up till 4am this morning -- studying 10.2a CTS system by coolncalm & co."

- I see you started reading something that I decided to leave in the background as I thought that it would just complicate things for me further. Anyway your last post encouraged me to take a peek at it. Thanks.

Second, I had the same GBPCHF trade as you did - made some 45-46 pips

Anyway I wish you all a great day of trading !

Kris