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If I can help you just a litlle bit with some simple common sence.
Lets say that you go for the 5 pips (wich is the max we can expect). We need to deduct the spread (oanda) = 1.5pips. Is an average win of 3.5pips. Now the stoploss (because this one is the most important-- not the profit). The smaller you will make your stoploss the lower your hitrate will be. Lets say that we take a stoploss of 10 pips (2x times as big as your profittarget if you want a positive hitrate higher then 50%) that brings us to the following total profit that you can expect. Lets say that you would have a hitrate of 75% (wich is very high) 75 x 3.5pips = + 262 pips 25 x - 10pips = - 250 pips total profit after 100 trades = 12pips. For all this effort only 12 pips loss I think it is not worth the effort. So we need more profit. The only way to achieve this is to make the stoploss smaller. BUT if we make the stoploss smaller the hitrate will drop dramaticly. Lets say that we take a stoploss of 5pips (that is even without the spread) At this moment stoploss and profittarget are equal. At this moment we expect a positive hitrate of +/- 50% (wich is again very high) 50 x 3.5pips = +175 pips 50 x - 5pips = - 250pips total profit after 100 trades = -75 pips. Last example Lets say that we make our stoploss even smaller (wich is a bit absurd). So lets say that we take a stoploss of 3 pips (and this is again without spread). At this moment you can not expect a hitrate higher then 33%. 33 x 3.5 = + 115pips 66 x 3 pips= -198pips total profit after 100 trades = -83 pips. Conclusion= systems that go for very small gains are not profitable. And thinking that you could keep your hitrate at 75% with a stoploss of only 3pips (without spread) is compleet unrealistic and not achivable. Lets face it, we took already the highest profit, we took already the smallest transaction costs and we did not count the spread on the stoploss. And important we did not take any slipage in our calculations (if one wants to be realistic the slipage is at least 1/2 pip/transaction ). regards...iGoR |
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Thanks for your input Igor, but I would like to still go through with the testing of this. I know the hit rate will be high, exactly what percent who knows but I would estimate it over 75.
Also takeprofit could be higher especially during certain times of the day when the market is more active. Stoploss can be at 10 pips. The EA can tell us more because you just can't trade this 24/7 manually. Right now it's at the most simple form, that is why I brought it here, for others to see, test and give their input on possible making it better. So if there is anyone willing to help on this still it would be greatly appreciated! |
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colnc,
If you believe in something you have to go for it... But like I said I only want to try to help. Because there is no bussines like trading were one is cheating himself. So 1 important thing, you need to stick to the rules. You can not go over a chart and say.."well here I would have taken the 10 possible pips and there I would have gone for the 5 possible pips"... Or it is always 10 pips or it is always 5 pips profit. If you go over your chart (without the help of an EA) over severall days history you will see that you will absolutly not make your 75% hitrate if you go for the 10pips profit (even with the spread included). And most important that you may not forget is your stoploss. People have the tendency to look to profits when they build a system or strategy. You need to look to the losses. With the strategy that you have and you would wait till both signals turn the opposite direction before you get out then losses of 20pips are completely normall. By this way you will shift the number of pips that you win and that you lose to higher levels then what I explained but the end result wil stay the same. But like I said, you need to examine this for yourself because you will learn important lessons from it... friendly regards...iGoR PS. An important tip I can give you is, when you make your EA (or let it make) make shure that the EA only trades between 07.00cet and 19.00cet. Otherwise your possible profit per trade will drop even more. |
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