Quote:
Dear IGor,
These are answers to your questions:
> So I would like that you explain your system to me.
First, I can send you a usersguide where you can read the logic behind the system; or you can open or download it here:
http://www.switch-funds.com/pointbre..._DemoGuide.PDF
> 1) what are the rules to take in a position ? Is it based on indicators ?
I use keltener channeal and ADX to determine the best time to start a position (I called it a cycle).
> Is it some sorty of a grid trading ?
You can called it grid trading, but not like the usual grid trading; its called pyramiding trading for multiple positions.
> Does it contain martingale elements ?
No. you can check the trading record I use the same lotsize until the equity up before adding the lotsize.
> Does it contain compounding elements ? If yes what makes them trigger ?
Yes. The EA start compounding when the equity up,
for example every 10% equity up then the lotsize will increase 10% up.
when the equity down to 10%, the lotsize will be decrease 10%.
> How much positions do you cumulate ?
Its depend on how choppy or how strong the trend move, usually betweem 10-80 positions.
IF the market become choppy, the EA needs more positions before close all with some profits.
> 2) What are your rules to take profit ? is it in pips is it because the exaust of a move is it in a fixed amount of pips is it a % profit?
The EA use % profit from the last equity watermark:
when all positions make 1% positive balance it will close all positions;
or the equity up 1% from last equity watermark, then the EA close all open positions.
> 3) Most importnat what is your stoploss rule ?..I see a lott of floating losses, so when or what is the stoploss on them ?
I use hedging technique and Pyramidyng technique:
-when the market going up, the system will add LONG position;
-when the market going down it will add SHORT posisitons.
> 4) What is your hitrate ? What is your average profit/trade ? What is your reward/risk ratio ? What is the Max drawdown on your account ?
The average profit trade 100$ per 1 cycle for $25,000 deposit.
The average time to close 1 cycle 3-8 days, although on very strong market 1 day can close several cycle.
The maximum drawdown ever achieved for the past 3.5 years is 35% (2 times in 2006).
> 5) You say that you made a very nice profit since Oct. but the market conditions are extremely good since augustus.
For version 4.0: There are LIVE trading records at my website since June 2007.
* The forward testing since October is for the new version (version 5.0) which produce more profit.
> You work with an EA so you should not have no problems to show some backtests over the last 3-5 years. There is enough data to get for free to proof how the system would have performed over a longer period of time. 1 day of sunshine doesn't proof it is summer.
I have full back testing reports on my website also the backtesting video (all running for 3.5 years).
Because I tested using 1 minute data which is the most accurate back testing method I know;
and I have 3.5 years history data for 1 minute.
This is the link for full 3.5 years backtesting report with all transactions included (you can open it / downloaded ~ 8 MB):
http://www.forexhope.com/Performance...02004-2007.htm
If you can't download from that link, just click the link at performance page (locate at the bottom):
A new hope in forex trading!
This is the link for some back testing video that I recorded (I have not got time add some commentatories):
Point Break Forex EA Videos
> So I will do a full examination of your system if you can supply an answer to all the questions asked.
I really appreciate your time.
Sincerely,
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Gagahlin aproached me to do an evaluation on his EA. I have send him some questions that he answered wich youn can read above.
The problem with this system is that is a catagory of systems that personally I do not stand behind.
It is some sort of a grid trading.
But my honesty demands me to look to it not in a persoanll way but in an objective way.
That opinion I can only give based on the information I received from gagahlin.
So I have 2 important elements that wory me:
1) It seems that there are 2 pointbreak systems out there. Wich one is the real one ?... I don't know. One of these 2 persons is claiming it is his and an other one is claiming uncorrectly it is his.
2) About the system itself:
After I examined his system from his internetsite and saw that is going toworths the grid trading I felt that my question about the stoploss was the most importnat one. Because grid trading system fall into pieces on the accumulation of hedging positions if price descided not to come back and stay away for many years from there initial entry price.
Devellopers for grid trading systems start of from the idea that price will MOST of the time come back.
But I have the tendency to ask the question what happens if it does not come back.
I explained this problem already severall times ( about the steinutz system that works with no stoploss) if price makes a major reverse for example on the GBP in oct 1980 or febr. 1985 it would mean that if this system is caught up in a reversall like that is would still hold on its hedged positions after 20-25 years.
I can ONLY conclude that if positions who loose will be solved by taking in hedge positions that one can be stuck with floating losses or hedged positions for many many years without possibility to close them.
So I have the tendency to say that one has to stay away from systems like this that could have floating losses or positions for many years. That has nothing to do with normall trading. It is outside of the box and my opinion is that it should stay that way.
Theoretical they look good and can perform very good but it is completely unrealistic to have floating positions for many years.
Or the system has to contain a definitive stoploss or at least some sort of a "pull the plug" rule.
Regards...iGoR