Constructive Criticism on the new strategy

[Tlahuicole]

Hi Friends and Brothers,

I am currently taking a new combine with TST and am recording my trade logs here for future reference, I have started it as read only just to ensure that I can go through it in future without any distraction, but as a trader I need to keep my ears open for constructive criticism always.

I would be happy if you could provide your views on my strategy. I take swing breaks in 1 min tf in evidence of strength and in case of heavily trending markets I would take trades in case a mother candle is formed or aggressive pivot is formed.

http://www.traderji.com/members-dis...-trading-log-forward-testing-30k-combine.html

Let me know what you think. I have an existing strategy for the indian markets that works well but the win rate is very less but Risk:Reward is better, unfortunately for pro firms we have to adapt our existing strategy to meet their rules to get funding. I tried to modify my existing strategy lst year and it didn't work, so I have created a new strategy that would suit within the TST framework.

Please let me know if there is any room for improvement as you see.

I trade only gold, 8PM to 11PM IST in 1 min tf without any higher tf reference.

I request seniors like ST, tp, augubhai, madank and many others to provide your inputs if time permits. Thanks again!

 

[Tlahuicole]

I analyzed my trades so far and have seen the result that moving the stop to breakeven after price moved in favor for 6 ticks has been reducing the no: of profitable trades rather than reducing the no: of loosing trades.

breakeven trailing stop loss against vs for:
against: Trade 2, Trade 6, Trade 11, Trade 13.
for: Trade 8.

 

[augubhai]

Hi Tlahuicole,

You have traded very few times to arrive at any reliable conclusion about the system.

If possible, backtest your system on a significant amount of historical data. That will give you a more reliable idea of the system reliability, than ad hoc conclusions.

 

[Happy_Singh]

Hi Tlahuicole,

You have traded very few times to arrive at any reliable conclusion about the system.

If possible, backtest your system on a significant amount of historical data. That will give you a more reliable idea of the system reliability, than ad hoc conclusions.

Moving SL to BE after few ticks of favorable move, will definitely reduce win/loss ratio even over a large sample size . . .

On an aside:
There is an interesting way Tuna re-frames his trading data,
he first eliminates the scratch trades (within range of +/- few points)
after that he calculates his win/loss ratio,
maybe, if you do that you will be happy with shifting the SL to BE

Happy

 

[Tlahuicole]

Moving SL to BE after few ticks of favorable move, will definitely reduce win/loss ratio even over a large sample size . . .

On an aside:
There is an interesting way Tuna re-frames his trading data,
he first eliminates the scratch trades (within range of +/- few points)
after that he calculates his win/loss ratio,
maybe, if you do that you will be happy with shifting the SL to BE

Happy

Hi Tlahuicole,

You have traded very few times to arrive at any reliable conclusion about the system.

If possible, backtest your system on a significant amount of historical data. That will give you a more reliable idea of the system reliability, than ad hoc conclusions.

Hi bros,

Yes, but backtest is also showing that moving to break even has reduced the no: of winners rather than the no: of losers.

I have not changed the strategy's money management methods yet, but I have to think deeply about this over the weekend.

For instance, As per backtesting strategy on last 3 month Gold Futures CME data, I have concluded that moving stop to break even has reduced the no: of losers by 30% but also reduced the no: of winners by 70% and around 40% of the trades were break even trades in the list of back tested trades which amount to 160 trades. Only 33 trades were losers, 63 trades were winners and 64 were break even trades.

So, the expectancy in case BE is neglected,

e = 63/96 * R - 33/96 * R
e = 0.65625R - 0.34375R
e = .3125R

The expectancy when break even is removed,

e = 108/160 * R - 52/160
e = 0.675R - 0.325R
e = .35R

Does it seem like a big difference? Do you think I should use break even stop or leave the strategy as it is for few more days of forward testing?

I have to reanalyze my trades, I have not broken the rules anywhere that am sure but I have to see if there is any room for improvement from my end.

 

[varunkochhar]

Instead of using BE concept, you can double your initial trade and take compulsory profits in half the size just enough to cover your original initial stoploss. That way you will not have to tinker with your initial SL. Sl should only be moved up logically not arbitarily. And you would be eliminating risk (and effectively achieving BE status even if your original SL hits)

 

[varunkochhar]

I have adopted this strategy in Crude and Nickel where i have starting traded in Crudemini and NICKEL Mini. So instead of buying one mega lot at signal, i buy 10 minilots. You can adopt the same approach in Gold where you can switch to mini if doubling your size is not an option.

 

[varunkochhar]

In stock futures i employ the same strategy. So if i were to buy say Tata steel Future, i would sell 1000 Shares at the right price(Say 2 rupees above the current price if my ISL is 2 rupees away in future) to cover my risk of SL. One can also tailor the future size this way to ones choice. Say if you want to trade future of Tata Steel intraday but are only comforable if its size was say 800 then you can sell 1200 shares in cash at the time of buying the future. Now you would say what is the logic of selling shares in cash and why not buy 800 cash shares well you can do that. But by doing this you can part book your profits also by selling 100 shares say at an increase of 1 rupee till you exhaust 2000 shares(Lot size). Sounds complicated, well then leave it just some food for thought.

 

[Tlahuicole]

In stock futures i employ the same strategy. So if i were to buy say Tata steel Future, i would sell 1000 Shares at the right price(Say 2 rupees above the current price if my ISL is 2 rupees away in future) to cover my risk of SL. One can also tailor the future size this way to ones choice. Say if you want to trade future of Tata Steel intraday but are only comforable if its size was say 800 then you can sell 1200 shares in cash at the time of buying the future. Now you would say what is the logic of selling shares in cash and why not buy 800 cash shares well you can do that. But by doing this you can part book your profits also by selling 100 shares say at an increase of 1 rupee till you exhaust 2000 shares(Lot size). Sounds complicated, well then leave it just some food for thought.

Hi Varun,

Scaling in and scaling out is my preferred method apart from pyramiding as they use it while trading my own account. Since, I am now trying for a funded account I have to abide by the firm's rules and it is difficult to do the same with the current account restriction as my back testing was showing not encouraging results while trying it. So, I am currently trading this method with the predefined entry and exit techniques.

 

[varunkochhar]

You do not need to sacrifice your trading style for this. Just blend this approach in your trading and you would be good. This is essentially for money management. It is not a setup to trade. (earning decent amount on half the size is far better than encountering frequent SL's because of bringing sl to BE)