thank you...

I have noticed recently that there is a strong trend between traders to depend on EAs, I can’t blame them, personally I love to try things from time to time, and I use EAs from time to time.

Also I have noticed that eventually every EA comes to a point to prove it doesn’t work and takes the accumulated profit with a big portion of the account balance.

Everyone wonder why a profitable EA in backtest and demo fails big time on live account, or why after so many profitable months such a winner EA turn to a loser ?

The answer is very simple we are so focused and dependant on the EAs, we live in the samll time frames and we don’t look at big picture, we forget the abc of trading.

We don’t take notes of the S and R levels we just depend on the EA, we hope the EA will take care of that.

In the market there are turning points as I said eariler, in which we either stop the EA or change the setting.

In the weekend I will write about some of the market turning points, and later in another week I will try to explain how to be ready for these points.
Wish you lots of pips

MiniMe

__________________
“Risk comes from not knowing what you're doing”
“Never argue with an idiot. They drag you down to their level then beat you with experience”

MiniMe, you are absolutely right. I don`t know any EA that worked more then a year. And thanks for this very interesting thread.

In engineering there are two way to solve a problem, theoretical and practical, sometimes we get lucky using only one method to solve a problem but mostly we need both.

For example, if we want to design an aircraft, we make all the designs on papers assume best conditions, and then step by step we introduce problems then at the end when we are satisfied with our mathematical approach we make a small design and put it in the wind tunnel for testing to simulate real live conditions.

Programming an EA is an engineering work and should not be different, I will introduce some facts to support my point of view:

- When designing an EA we don’t consider, the news where we have wide spreads and big market moves
- When designing an EA we rely on backtests results we can’t see the future nor and the market turning points
- When designing an EA we depend on the backtests results where our orders are always filled

Now lest see what the situation is on a live account:

- We are exposed to the market conditions, and we are affected by the price change during the news ( wider spread)
- We can see the future as there are known market turning points ( support and resistance ) Fib levels, and news events
- In live accounts the orders are not always filled even when the price hit, simply its supply and demand while on demo and backtests the orders are always filled

Another strange yet funny thing I found is that, there are some EAs that doesn’t use any indicators they work on the price change ( Like Grid EAs) , to have the same results for those EAs we need to start them at the same time with the same broker otherwise if there were 1 min difference we will get totally different results, yet, I see loads of backtests on forex-tsd.com, and honestly I don’t see any use for those backtests, they are misleading information.

From the above I hope it’s quite clear that any EA no matter how good the results were on demo or backtests, should be tested on a live account then modified according to the live tests, and honestly I found it very stupid for people to buy an EA based on demo testing or on backtests.

Not just that, an EA should be modified from time to time to cope with the future market conditions (what I refer to market turning points) as there are points in the market where we know the price is going to bounce, it would be quite stupid to leave the EA on buy and Sell if we know the price is going to bounce from these points.

I am having a bad flue, I will stop here, and next week I will talk about some of the market obvious turning points.

Wish you lots of pips.

MiniMe

__________________
“Risk comes from not knowing what you're doing”
“Never argue with an idiot. They drag you down to their level then beat you with experience”

Big Boys :
When i refer to the Big Boy, I mean Interbanks, Commercial / Investment Banks, Corporations, Global Funds, Fat Cats ( guys with more than 1M$ monthly Salary)

Interbanks are worlds largest commercial banks they deal directly with each other based on credit relationships, 75% of the trades in forex are between interbanks

Just imagine, if you want to win in forex, you need to be smarter than those guys , it's possible if you play by thier rules.

__________________
“Risk comes from not knowing what you're doing”
“Never argue with an idiot. They drag you down to their level then beat you with experience”

I will go through some of the basics in forex that will help to understand the market turning points( I am not the best so if I made a mistake please guys correct me)
The first market turning point to which we have no control is the is news released by Central Banks, although we can’t control these news but these news mostly released on specific time of the year so we can avoid these news.

- news that is expected is not going to move the market , it’s the news that is unexpected that will move the market

- Rollover : Countries experiencing rapid growth often increase interest rates while countries experiencing slow growth often decrease interest rates.

- Central Banks there are the one who impose the interest rates
United States: Federal Reserve Board (FOMC hold 8 meeting per year)
European monetary union: European Central Bank ECB
United Kingdom: Bank of England
Swaziland: Swiss National Bank SNB
Japan: Bank of Japan
Canada: Bank of Canada BOC
Australia: Reserve Bank of Australia
New Zeeland Reserve Bank of New Zealand

Although the FOMC will determine the interest rate, the US treasury is the one who will determine if the US dollar is overvalued or under valued so they will instruct the NY Federal Reserve Board to intervene by Buying or Selling US Dollar ( therefor affecting the value of the Dollar in the Froex market.

Bank of England : Bank of England act ( 1997) Gave BOE ( Bank of England ) independence in setting monetary policy, Monetary Policy Committee MPC is the one responsible of interest rate decisions

Swiss National Bank goal is to keep inflation under a 2% annual rate

Bank of Japan: Japan is an export based economy ( BOJ want the YEN to be low at all time )
- Ministry of finance is in control of foreign exchange policy and BOJ executes all Japanese FX transactions at the direction of the MOF ministry of finance
- BOJ apply strong pressure in to keep Yen weak in order to keep export prices competitive so people in other countries can still afford buying those products

The trick is that (80% of the times) central banks revel their intensions way before their meetings and before they issues any statements, hoping this will push the currency to the level they want when they publish their decisions / statements

__________________
“Risk comes from not knowing what you're doing”
“Never argue with an idiot. They drag you down to their level then beat you with experience”

The channel in the first post video file was broken long time ago, as I still belive we are heading down with EU/US.

The line shown in the first video file was a market Turning point, thats why trading MiniMe/Blaser ( Channel trading for the last 30 days ) method won't work here, as we hit a stong monthly market turning point.

Please note just because the price has reached its all time high or its all time low, it doesn't mean it can't go further it only means it will be more diffiuclt to break previous levels, and on the monthly charts the chances are 70 to 30 it will bounce back from the level reached.

__________________
“Risk comes from not knowing what you're doing”
“Never argue with an idiot. They drag you down to their level then beat you with experience”

hi

very informative thread thanks minime.

Thank you for your analysis. It seems so straightforward. Wish the sound was there or was there any?
TY and looking forward for some more insights

thank u for sharing minime. Very insightful for me, being that im a newbie. the information u posted paints a more complete picture. Knowing where we're at, but not knowing where we're going is like being handicaped, in a way. and if we are aware of both the short term and long term then we are properly equiped. and able to addapt accordingly. and we will have the advantage over those who neglect the long term outlook. We will take their monies HEHE. well thats just me thinking, but ima noob. i havent even traded yet but one day i want to be a successful trader.