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MANUAL TRADES (Fin Fx) (By Wayne )

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MANUAL TRADES (Fin Fx) Discussion

Wayne (SunnyDays)
Apr 22 2011 at 20:39
152 posts
Hello Everyone,

I have to write an unpleasant post. First though, a note about the fix fx chart. It is totally distorted and fxbook is not making progress telling me why. This is quite disturbing. About 3 days ago my chart when from its correct reading of being up 35% with 7% drawdown to instantly saying I’m up 53% with 67% drawdown. Additionally, the whole visual look of the chart is distorted. I’m sure things will be corrected eventually but this is very frustrating.

Now to the even more unpleasant talk that I feel I owe those who are invested with me. Let’s say I have good news and bad news.

THE GOOD NEWS is that I have matured a lot over the years regarding my manual trading. 2 years ago I would trade with large sizes, hold on to trades like going down with the ship, take big losses, etc. Now I am at the point where any manual trades I do are for small sizes, like 1 or 2 mini lots, and I often only allow a few pips SL in most cases and up to 50 pips in rare cases. My strategy is that if the trade does not go my way early on I’m looking for the exit.

THE BAD NEWS is that I not a very good manual trader. I think I'm improving, but I'm not there yet. This is why I spent the last 3 years developing my EA. My EA took my accounts up to decent levels, but over the last 5 days I have engaged in frequent manual trades over frustration with a couple bad EA trades (that I actually cut our loses with by my manually closing out early).

The point is I have bled away 3% additional losses from my manual trades. If you look at the closed trades you’ll see all the many small losses, but they add up. This has been irresponsible on my part and can’t continue. I will be giving a credit of my performance fees to my investors as talked about in a PM you will get.

I write this post to vow in public to try my best to no longer do any manual trades on the managed accounts. It’s hard for a trader like me to admit that I’m not a good manual trader, but as I’m making my charts look bad it’s a good time to state the truth. I was not manual trading like this on these accounts before. My attempt to help profits is not helping. My EA would have the charts looking much nicer.

So I will confine my manual trading to my fxOpen account, and where I feel the EA is missing trades I would put us in manually I must seek to improve the EA instead.

Let me be clear though that I will manually intervene in the EA’s activity where I feel I should: take profit early, cut losses before hitting SL, cancel pending orders. I don’t do this often but I will do it. I don’t consider this manual trading.

I was going to write a post about some very exciting progress being made on the EA but I will save this for the time when the charts have got back the 4% lost and we are at new highs.

I view this post as a gesture of good will and faith in establishing long term relations and trust with my present and future investors. I am a disciplined person. It just takes baby steps to get mastery over this temptation to manual trade (even though with small sizes) where I shouldn’t. That will not continue. I may have only lost 3% manual trading, but if i was managing a million dollar fund this would be a lot of money lost. I'm thinking big and thinking for the future. Every percent is important.

P.S. Thanks a lot Speki for your warm comments. That really made my day...

Have a great weekend everyone
Wayne

A strategy must significantly profit in a 10 year backtest to have a chance in Live trading - Mine Does!
GrusCapital
May 01 2011 at 18:56
17 posts
Hello Wayne,

Have been checking out your work. Good to see people understand what MANAGEMENT is all about.

Keep working hard and, as Steve said: keep hungry, keep foolish.

Kind Regards

Chikot
May 01 2011 at 19:19
2299 posts
Wayne, I like your style and risk control.
Good work!

Wayne (SunnyDays)
May 01 2011 at 20:04
152 posts
Thanks for the positive words, Chikot and Grus Capital,

I’m doing okay as I have a conservative foundation established that is producing modest gains, but my current focus now is on getting the EA to recognize more powerful moves taking place and when we are already in winning trade in this context – already going in the direction of a trend continuation, etc. – the EA needs to increase profit targets and let the winners run further.

So I MAY run one instance of mt4 with a strategy that will lock in break-even when up 20-30 pips and either get break-even out of the trade or hit a much bigger profit target. I’ve seen too many trades that we have gotten only 30 pips out of that we should have gotten 100+

This is not a change to my overall strategy, only an idea I am developing, having coded, and beginning to do backtesting with. This is a multi-stage development feature I’m doing. If everything looks good then I may implement this strategy as a part of the overall conservative strategy that has taken us this far.

Don’t get me wrong, my EA has the ability to hit larger profit targets already, but the stops are too tight sometimes and the probability of hitting these larger targets is often too low. We need to let the winners run better than we do. This will take a couple of weeks, however, to fully implement.

Stay tuned, and thanks again. Good to hear from everyone,
:)

Good luck to us all
Wayne

A strategy must significantly profit in a 10 year backtest to have a chance in Live trading - Mine Does!
GrusCapital
May 01 2011 at 20:22
17 posts
Dear Wayne,

It is a pleasure. If you allow me a suggestion. It is good to see that you can stay in the positive, while having a low profit trade. So, you have just cope with a very difficult point. Therefore, from my point of view, instead of trying to get more pips per trade, I would look at how to increase positive trades. That provides a better overall performance.

For us, this is one of our most important parameters, and we take a lot of care for it not to go never below 80%.

But, of course, it is just a suggestion. I still believe you have a consistent trading system, just let's give it more time to see how does it work in a longer term.

Kind Regards

Grus Capital

Wayne (SunnyDays)
May 06 2011 at 06:40
152 posts
Hello Everyone,

I want to document the date of a change in things regarding my risk management on the managed accounts, and then share some exciting news. As of May 4, I reduced overall account risk from 6% to 3%. I hope to accomplish three things by this, 1) consistently hit a minimum monthly profit target of 5%, 2) reduce my stress from trading with sizes too large, and following from this second point, 3) To completely stop manual trading on the managed accounts.

I believe a clear picture of how I can successfully manage larger equity over the long term is now in focus. I need to reduce overall account risk so I will stop interfering with my EA and trying to manual trade. I was not doing this a couple months back.

In one sense I have been pulled into manual trades, and equally important, manual interference with my EA because I’ve been risking too much and I keep trying to hedge positions, scalp, and close out EA trades before my stops are even close to being hit. This has just been a reaction to risking too much and stressing out over losing too much of the account in one series of trades (remember I only trade one pair so risk is based on one series of trades, main order and pullback position(s).)

I have to allow the space of my stops to go negative 150 pips as I do in back testing, because this is what both back testing and forward testing has shown will ultimately produce the most profitable trades.

Reducing risk size, so I am not stressed when we are down 100+ pips will, I believe, produce the profit my EA and strategy is well capable of producing. I’m also destroying my charts and distorting my statistics with a slew of manual trades that I often close for a loss when I’m down 5-10 pips. I have now moved this “It has to go my way early on” manual trading strategy that is not working very well to my fxopen account. I’ll track it at some point.

So one final time I ask for your patience as I implement this new risk management strategy, that I must say, feels right. Since reducing my trading size I feel very comfortable with leaving things along and can actually sleep at night (instead of waking up every 2-3 hours to look at my monitors). I’m happy that I’m finally figuring out how to reduce stress and stop manual interference with this career path I’m trying to walk.

I know it’s not a smart business move to share that I have been struggling with the issues I have cited, but I will always be known for honesty if nothing else. Soon, I hope to be honest about the great accomplishments we are achieving. This brings me to the exciting news I want to share.
---------
First though, parenthetically, I have to note that we missed the short today only in the FIN FX account because in changing my settings a key feature was inadvertently cut off and the trade was missed (I have over 80 inputs in my EA and I messed up, sorry). A move like today is just the type of move my EA loves.

The exciting news is that after almost a year of frustration and continuous work trying to figure out how I can get my EA to catch the bigger moves like today without putting me into bad trades by ignoring the rules that keep me out of what I call extended trades, I believe I have figured out the answer to this dilemma.

It was a little over a month ago that I realized I could measure the speed of ema movement and create features using this information that would make the EA realize the strength of a movement in a new context and accordingly know when to ignore certain key rules that keep me from being put in extended trades.

Today I believe I have concluded my long term study and have figured out the features that will allow us to catch powerful moves in the market and even multiply trade size when such moves are taking place. Any currency trader knows this is when you make the important money, when big moves are taking place. This is when pips come the easiest.

I estimate in about 2 weeks from now we will see my EA coming into its own and producing more profit than ever before. Stay tuned for the future.

Thanks for reading my friends
Best Wishes to us all

Wayne

A strategy must significantly profit in a 10 year backtest to have a chance in Live trading - Mine Does!
primevalreturn2
May 17 2011 at 16:45
4 posts
Last Update: May 12 at 20:12 😲

Wayne (SunnyDays)
May 29 2011 at 06:39
152 posts
Hello Friends,

I have been silent for a few weeks as I am been deeply involved in extensive backtesting and development - going through my many EA features, one at a time (I still have a ways to go), reviewing my strategy, optimal settings, etc. Obviously the performance of the last two months is unacceptable. This is why I have declined to take on any new clients (for a short time), until I progress in the development of some new features I believe will turn things around and produce more consistent profit.

I believe I understand the challenges my EA faces better than ever before, and I am working out highly creative solutions I never envisioned just a couple months ago.

Most people would be amazed at the amount of time and energy I put into things like studying visual backtesting - watching my system trade - and analyzing the reasons for losses, and finally creating features to hopefully stop the losses and produce higher probability trades. This project goes on 7 days a week for me. I have several important features left to implement and I am highly optimistic of what will result from this work. I have never been more optimistic for the future than I am now.

Some issues have been related to my settings, like the 6% loss recently that was from 2 trades that would have been profitable but got stopped out by 10 and 15 pips. After doing extensive backtesting regarding my stops (with the aid of my new fast quad core computer), I found out that my stops have been too tight all along. I can get a lot more detailed work done now with my new computer.

In short, I have been producing 1-2 new features for my EA per week for the last 2 years (and developing my EA for 3 years), so my EA is a monster EA (30 k lines of code) that some very skilled programmers have given up trying to work on. They don't even want to talk to me any more… lol..

Luckily, I have one coder who is incredible and can make almost any concept I throw at him happen. What a ideal relationship I have with this skilled artist.

Unfortunately, most of the features I create fail in backtesting (never make it to live trading), and I go on to my next idea. But every once in a while backtesting says GREAT JOB! - this idea helps - and all my work seems worth it them.

So all I can say is stay tuned and in the very near future I believe things will turn around in a more consistent manner.

Deeper and deeper into the rabbit hole I go (for us Matrix fans), working to conquer the beast of forex.

Thanks for reading friends
Wayne

A strategy must significantly profit in a 10 year backtest to have a chance in Live trading - Mine Does!
Wayne (SunnyDays)
Jun 14 2011 at 18:14
152 posts

Hi Friends,

Sorry I've been on radio silence for awhile. Life if tough some times in this forex world.

Several weeks ago I asked those who were invested with me to pull their funds as I felt my EA needed further development in order to profit in the forex market. I thought I was ready to manage accounts but I decided that I actually didn't have all the tools I need, and I didn't want to risk anyone's money.

After all funds were pulled I increased my risk size and as bad timing would have it I took a couple of losses for about 10% of the accounts. I then entered some manual trades and I've been stuck in the long on Euro Yen, hedging in and out, for a week. I've worn myself out and frankly this is no way to live. Hopefully this experience will help me get more organized and do the things I need to.

To be successful in forex I must do 2 things. 1) I must improve my EA so it can trade completely on its own, with no baby-sitting. 2) I must move some money to a separate account to manual trade with and get into the habit of keeping EA and manual trades separate. I believe I'm pulled into manual trades - in particularly bad spots and in bad timing - because my EA has not reached its mature development.

I am making big and, I believe, important changes to my EA, culminating 3 years of work, and I believe this will significantly improve my situation over all.

So when Items 1 and 2 are successfully implemented I will again track my trades, and this time you will see only my EA where indicated - not EA and manual trades together. I haven't given up. I just realize it will take longer than I thought to make a success of this.

I am very optimistic about the results my EA can produce when my current list of work is done, but things are moving excruciatingly slow as my programmer is struggling with some of the extremely complicated work I am asking him to implement. Someone had made the comment to me that I need a simple approach to trading with my EA. I respectfully disagree. I think the reason most EAs don't work is because they are simple and there is nothing simple about the forex market. An EA needs to be complex in that it must be able to change strategies, profit targets, stop losses, etc. as market conditions may quickly change (usually as a result of fundamental news). This is some of the complexity I'm trying to add to my EA. I'm also changing the way entries take place and stop losses are set.

I hope to have good news some time in the next couple weeks.

Good luck to everyone
Wayne

A strategy must significantly profit in a 10 year backtest to have a chance in Live trading - Mine Does!
Chikot
Jun 14 2011 at 23:13
2299 posts
Wayne, why do you need EA?
You have been doing great. believe me, do not change things and do not listen to no one if you are profitable.
I decided to change things too last year fall and got myslef into the worst losing streak I ever had.



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