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Manually trading SAFT to see if its profitable
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Author:  dakuki [ Sat Aug 18, 2012 2:12 pm ]
Post subject:  Re: Manually trading SAFT - sorta/kinda
Thanks for all this. LHDT with smoothing on??? Did you not say you do not like smoothing on it earlier?
Author:  slipshod [ Sat Aug 18, 2012 2:34 pm ]
Post subject:  Re: Manually trading SAFT - sorta/kinda
No I was referring more to other ideas in the FF thread (post 168 in particular) where people were talking about smoothing the actual OBV indicator line, so it has cleaner crosses with an MA applied to it I guess. To me that's not the same as Evaluator's original concept & my extensive experience trying to get things like that to work reliably without false crosses leads me to believe its a waste of time. Sorry, I should have been clearer as to what I meant!

The LHDT is a bit different - its smoothing is applied to the volume part of the OBV equation, and it does seem to have a beneficial effect as its a better indicator than the standard OBV. I can see why you like it :)

Edit: On a side note, if smoothing the OBV and adding a signal MA is the way to go, then why not go the whole hog & add bollinger bands to it as well - in effect, make a TDI based on OBV? At one point in the past that's exactly what I would have tried to do, but now I'll just stick to drawing lines.
Author:  dakuki [ Sun Aug 19, 2012 3:04 pm ]
Post subject:  Re: Manually trading SAFT - with some other stuff tacked on
http://codebase.mql4.com/2294

and here we have another volume indicator to evaluate :)
Author:  slipshod [ Mon Aug 20, 2012 1:01 am ]
Post subject:  Re: Manually trading SAFT - with some other stuff tacked on
Heh, someone else can do that one :) There's also accumulation/distribution, Money Flow Index, Chaikin Money Flow & probably many others...
Author:  slipshod [ Mon Aug 20, 2012 2:02 pm ]
Post subject:  Re: Manually trading SAFT - with some other stuff tacked on
Well today hasn't been a great start to the week. The kind of day that makes me glad I'm trading a demo rather than real money.

To begin, EURAUD, EURGBP and EURUSD all broke trendlines to the downside on both price and OBV. I entered short as required, then they all with one accord turned on the spot and ran up to hit my stops. Ouch.

AUDUSD looked like it wanted to rally, and I entered long on the breaks even though there was a host of open sell orders hanging above it. I made 20 pips, but that was all before it turned and fell. Shorted when it broke its new up trend, but made a miniscule gain when it stopped me out near breakeven. Caught shorts on EURAUD (again) and USDCAD, both stopped out near breakeven for tiny gains. Took a short on XAUUSD when it broke its uptrend, but was afk when it dropped $10 from my entry point - by the time I returned it had bounced back. Aggressively moved my stop down while it dithered, then it decided to rally further & I took another loss.

USDJPY had 2 short entry triggers. I entered on the first and held it even though the price refused to drop and spent several hours with it in loss wondering if it'd run up to hit my stops. Fortunately it created the second short entry trigger, and as I write this its moving into profit at last. If anyone would like to see screenshots illustrating any of these trades please let me know.

So unless UJ performs miracles I'll be down on the day, and near breakeven for the 4 days I've been trading this method. Am running at around 45% profit trades, which is potentially good enough to make a decent profit provided the winners are larger than the losers - so far that hasn't happened.

Our beloved forex market loves to pretend. It sees a trend, or a support/resistance level, breaks it, waits for you to enter on the breakout, then laughs as it turns and runs like a maniac in the other direction. As this method is based on breaks of trendlines its susceptible to this kind of whipsaw behaviour. I love the simplicity of this trading method, yet I think it needs something more to act as a bit of a filter, else the fake breaks will turn it into an account drainer. What that something is I'm not sure yet...
Author:  SteveHopwood [ Mon Aug 20, 2012 10:28 pm ]
Post subject:  Re: Manually trading SAFT - with some other stuff tacked on
slipshod wrote:I love the simplicity of this trading method, yet I think it needs something more to act as a bit of a filter, else the fake breaks will turn it into an account drainer. What that something is I'm not sure yet...
It could be not trading in August. Most of Europe is on holiday. The bit of it that isn't on hols is catering for the rest that is. For sure, it ain't trading.

I have one live trade outstanding (an AUD buy so I can take the swap), and am doing nothing else for the next fortnight.

:D
Author:  slipshod [ Tue Aug 21, 2012 12:35 am ]
Post subject:  Re: Manually trading SAFT - with some other stuff tacked on
Hi Steve, yes you're probably right, lack of liquidity could be a big issue right now. Quite a few pairs - EU, USDCHF, Cable, Gold ... are in a triangle consolidation now on H4/Daily timeframes, which is contributing to the jerky & directionless nature of the markets. I might try to restrict trading to just the pairs that have an obvious trend about them - AUDUSD, AUDCAD, USDCAD & USDJPY.

Edit: I think I've found something to help validate trade entries & hopefully filter out bad ones. Nothing radical, and it fits with the SAFT methodology. Will discuss in a few hours when I have time. A much better day today, profit of over 100 pips without catching all the moves & even taking a few losses. With a little practice and more faith in the method I'd have done better still. Its hard to throw your hat in the ring when it was badly burned the day before ;) Even so my average gain in pips is now larger than the average loss, and that's including the 100 pip loss in the account that isn't part of this experiment.

If I start doing well at this I'll be very tempted to trade it live, however I've committed to a minimum of 2 weeks of dedicated demo trading, must stick to it!
Author:  slipshod [ Tue Aug 21, 2012 2:10 pm ]
Post subject:  Re: Manually trading SAFT - with some other stuff tacked on
Ok there's so many successful SAFT trades today that my head's spinning. I only got onto a few of them as like an idiot I'd sworn off Euro pairs :shock:

Anyway, I mentioned an addition that I'm using to help filter trades, and its quite a simple one - CCI with a period of 40. I draw trendlines on it, same as on OBV and on the price. An entry now requires a break of all 3 in the direction of the new trend (CCI nearly always goes first like an early warning bell), or it needs CCI to already be on the right side of zero (above for a long, below for a short) and moving the right direction.

As an example, here's AU today...
au20120821.png
I entered long on the trendline break shown by the green circles. The Enhanced OBV (1st indicator) had already broken out to the upside, and the CCI had just done so as well - and was above zero for good measure. This was quite a rewarding trade today.

As you can see I again entered long on the potential breakout from its consolidation (blue circles). The OBV was still above its uptrend line from earlier today, but had broken above a short-term downtrend, and the CCI has also broken above its downtrend during the consolidation period. Unfortunately the break turned out to be false this time & my stop was blown soon after :|

Obviously CCI is not part of Evaluator's method, but then neither is use of market depth data from the likes of Oanda, nor use of chart patterns other than basic trendlines. Hence my method, while based on is SAFT concept, is inevitably diverging even though its founded on the same idea.

What I think I'll do is start documenting the rules I'm following into a PDF that I'll attach to the first post.

Lastly here's a daily chart of EU. Its formed a massive bullish Wolfe Wave with a target line extending up in the high 1.2s. The price has broken out of the falling wedge to the upside, and its break from the recent consolidation period has also been emphatically up. You can see on the OBV that it jumped above the downtrend a couple of weeks ago, and the CCI has followed over the last 4 or 5 trading days.
Author:  dakuki [ Tue Aug 21, 2012 2:27 pm ]
Post subject:  Re: Manually trading SAFT - with some other stuff tacked on
Good stuff slipshod. Looking forward to the PDF. What timeframe is your first chart?
Author:  slipshod [ Tue Aug 21, 2012 2:29 pm ]
Post subject:  Re: Manually trading SAFT - with some other stuff tacked on
First chart is M30.

The PDF will be as much for myself as anyone else. I have a bad habit still of taking trades outside the rules, also of forgetting what works & why. Its one thing to have a system that gets you into good trades, another altogether to learn to trade it properly as this thread illustrates very well - although I did ok today, there's a bunch of good trades with SAFT entries that I didn't take.
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