Designing an Automated Trading Program

[expiated]

The expert advisor (EA) that generated these results is more in line with what I originally envisioned. It is designed to work in the context of a five-minute time frame as opposed to four hours.

The system definitely has the potential to be much more profitable than it was during this test run (and steadily climb higher) but it would have to be prevented from repeatedly giving back so much of its temporarily realized gains.

This cannot be done by setting a “reasonable” take profit target in that such instructions prevent the program from letting profits run, so if I get around to it, I might look into whether an EA can be directed to lock in the potential gains realized during a given trade as soon as it is in danger of giving back too great a percentage of what has already been made available for the system pocket.

 

[expiated]

I was watching a children’s educational video on YouTube when an ad from EMET Programmers popped up. I think I’ll write up my ideal automated trading system and send it to them for a quote just out of curiosity—even though it’s almost sure to be way beyond my budget at this time.

EMET stated that the price for coding an average project normally ranges from $500 to $2,000 USD, which includes programming, alpha testing, debugging, and ongoing technical support. (It looks to me like EMET Programmers is basically some guy named Vadim Epstein operating out of Jerusalem, Israel.)

 

[expiated]

You don't have access to the source code of the first program to show to the second programmer on how to print the indicators on the chart?

If I am providing the second coder with some type of resource that he can use to increase his knowledge and skills, then he should be paying me instead of the other way around, or at least offer me a discount (since he DID claim to be able to do the job as I originally described it).

In any event, I guess it took him five days to track down the "how to" information on his own, because today he delivered the EA I asked for—one that displays the associated indicators on the chart—so now I have to figure out how to access my original review on fiverr so I can go back and raise the guy's previous score.

 

[expiated]

I modified my second expert advisor using settings that resulted in the following outcome when trading on a one-hour chart.

But the principles on which it was based were a bit bizarre. So I'm wondering if I can maintain the same results using the same principles but in a slightly more rational manner?

 

[expiated]

I modified my second expert advisor using settings that resulted in the following outcome when trading on a one-hour chart.

This might work, but the time frame is to long for me and the trades are too infrequent. I like to walk away from each day with more change in my pocket than I started with, and this approach does not look like it can be adapted to lower time frames, so I'm going to have to abandon it.

 

[expiated]

Having failed in any attempt to find a means of utilizing my second expert advisor in a way that overcomes the problem of “chop” in a decisive and practical manner, I’m thinking I should perhaps come at the problem from the opposite direction—the way I understand (whether rightly or wrongly) a master of aikido can use an opponent’s own movements against him.

I have therefore initiated the process of “shopping” for a third coder whom I hope to commission to create yet another expert advisor based in large part on the observations I made when testing my first two.

 

[expiated]

I have therefore initiated the process of “shopping” for a third coder whom I hope to commission to create yet another expert advisor based in large part on the observations I made when testing my first two.

I never found that third coder, but have nonetheless finalized my NPP setup, and upon testing it using the previous two EAs with 0.01 sized Lots, found that the finalized system was still profitable even with all the glitches inherent in the EAs I'm using—like not executing every trade which qualifies (not to mention the things the EAs are too unsophisticated to do, like remaining in positions during consolidation, and reentering positions when markets are trending, etc.).



Hopefully this should make it rather difficult to mess up the approaches' otherwise successful strategies when trading manually, where taking advantage of the more subtle and nuanced aspects of the system should eliminate the declining sections observed in the above automated trading (i.e., back testing) charts.

 

[expiated]

Unfortunately, fxdreema does not provide and instruction manual.

 

[expiated]

Tuesday / August 11, 2020

In developing an automated system, I will be looking to convert only the preeminent aspects of my methodology into code that my computer will understand and run by looking for trades that strictly adhere to the corresponding rules and automatically placing orders with a broker. I am starting this new thread to keep track of my personal thoughts and anything else related to this endeavor.

Three years after I initially began posting here to help me finalize my Forex trading strategy (August 12, 2017) I am finally doing little more than simply trading the system. But I don’t think it is very automatable. In its final configuration, it involves monitoring several baselines, envelopes/price ranges and signals, with a different protocol for each specific setup and for different situations and conditions.

Part of the appeal of automation was to scale profits generated by the system’s application without having to teach it to others. But, this is no longer such a concern given that its final version has several proprietary indicators on which everything else depends—measures that your typical run-of-the-mill trainee/retail trader is probably not going to be able to replicate.

And if the system really is good enough for professional application, by the time I reach that point, if ever, I will probably have enough money to afford to develop my own platform, one that does not label the “out-of-the-box” indicators (not pictured above) as MetaTrader 4 and 5 do (and enough capital to pay for the corresponding data feed required to operate it as well).

 

[expiated]

Sunday / November 22, 2020

Thanks to my participation in a demo account trading competition where my (revised) goal was to realize a 50% ROI in one week, I arrived at a version of Numerical Price Prediction (which took $10,000 to $15,641 trading Sunday evening through Friday morning) that can be automated to generate alert signals easy as pie...

Using this system, I could train anyone anywhere to monitor a display for any given currency pair, and then notify a supervisor, chief trader, or whoever when the system triggers an alarm. It would basically be a simple matter of telling the software to generate a buy signal whenever equations A, B, and C are below a certain value and equation D is greater than zero; or trigger a sell signal whenever equations A, B, and C are above a certain value and equation D is less than zero.

I'd be hard pressed to make trading any simpler than that!

My preference would be for the chief traders to not even know how the signals are generated, so they would have to be able to analyze the charts and rely on their own expertise for exactly when to enter and exit positions using strategies along the lines of what Brad Gilbert described in Your Trading Edge Magazine...

Trading Forex is very simple and uncomplicated (or at least it should be). The more factors you incorporate into your analysis, the more difficult your analysis is going to become. For that very reason, FX traders at the banks don’t use the complex mathematical indicators you may imagine.

Another reason banks do not use complex mathematical indicators is that these indicators have a two- to three-hour time lag, and bank traders don’t have the luxury of sitting back and waiting for all the ducks to line up.

So what do they use? I believe it all boils down to simple support and resistance trend lines, and that support and resistance are indeed the most important technical indicators.

If it’s simple, why do so many people struggle to make consistent profits? There is a simple explanation: the market is run, and to a certain extent controlled, by the traders at the banks. If you don’t know what they are looking at and how they assess the market to make their trading decisions, then more often than not you will be trading against the market and losing money, instead of running with it and profiting.

For example, given the above alerts from last week (the black boxes in the lower panel) I would think an experienced trader should be able to draw the support and resistance lines I plotted on the chart and make at least the three trades I indicated with the red and green boxes, if not more.

By the way, not all of the black boxes represent valid signals, because they are only taking equations A, B, and C into consideration—but not equation D.