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Thread: Tropical Island

  1. #1

    Default Tropical Island

    Do EA's really work in the long run? Are there traders out there kicking back on some tropical island watching there account multiply everyday, all on autopilot?
    I have tried what seems like hundreds of EA's and they all seem to do the same thing, they start off great and you start to get excited and then BANG!! back to square one, or worse no account left.
    Most EA's have small take profit and a large stop loss, so really it's no brainer why they don't work in the long run.
    I haven't been trading for all that long and am by no means an expert, but from everything I have read and all the good forums/blogs I visit, I have found that the majority of professional traders trade the higher time frames such as weekly, daily and maybe the four hour, anything less is just noise in the market.
    They look for high probability trades with huge profit potential with small risk.
    Now Iím not saying that EAís are no good and a waste of time, heck Iíve made plenty of money with them, the only gripe I have is that I seem to always end up giving it all back to the market.
    I would be really interested to know if you are kicking back on that tropical island reading thisÖ..

  2. #2
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    I'm going to think that what you said maybe it's the truth.....
    still trying some scalpers presumed to be the best but risk/ reward ratio are not good, so if you hit full sl too often you lost all profit made and you sit at the same balance level for long time.
    I'm also trying some breakout droids but it's a short time to give an opinion.
    anyway I also think that swing trading on higher timeframes is the key success of the professional traders, but manual trades is difficult and I don't enough time for it.
    I hope to find a good breakout droid on h4 timeframe or higher.

  3. #3

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    Not on an Island for say, but your are correct. Higher timeframes make the difference between larger gains and continued profits.

    Problem is that there is not less risk. Well what I mean, is that on a daily chart you can not work with a 50 pip or even a 100 pip stoploss, not unless you are trying to scalp, which on higher timeframes is not likely.

    Price movements, on say the daily charts, are within the 200 to 300 pip range, and when you catch the trend properly, not really that hard to do, you can take 300 to 1000 pips easily.

    Making an Ea for the daily is also not all that dificult, but time and time again you hear , " it doe not trade often" and for some foolish reason most newer traders want it all now and do not have the patience to wait for a good trade, but would rather see something every day and or hour.

    As such more risk and more losses.

    Personally I have programmed EA's that trade on the daily charts and do nothing but make pips, but if they trade once a month I am lucky. so even I , like the others, get impatient and continue to play with 15m - 1 m - 1 hour - etc charts and wonder why it never turns out right in the long run.

    Funyoo himself has presented several good programs here that tarde the daily chart, but a quick look shows a lack of interest. Why?
    Simply cause they produce perhaps only a 300% plus gain over a few years period.
    Personally I would rather make a consistant 300% plus gain ove a few years rather than chase the "grail" that is not there.

    The trend as they say is your friend while the Market is always "Boss" and if you understand a trend it is not a 15m trend but an overall trend from start to finish which is normally a one month or more trend which can swing 300 pips either way while still continuing upwards or downwards.

    So until traders realize that long term profis are realized over longer periods we will continue to see others spend a lot of time playing with these short timeframes and settings that change from day to day.

    Just my two cents worth
    Pheniox

  4. #4

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    Just my opinion here since I don't have any real evidence, I do think there are traders using EA's that are making a good living from the Fx markets. But I don't think the $97 commercial EA's can make money in the long run because the edge they may employ will be eliminated by their overuse, as more of them are working in the market. This is especially true of the Asian scalpers like Primeval, EAKAIN, AccuScalper, Megadroid, etc. because they trade in a relatively quiet (low volume) period in the market. In addition, the forex brokers are pretty savy about EA's and try to widen spreads when they know a new and backtested profitable EA is being used on their platform, kind of like the blackjack dealers using several decks to remove a card counter's edge. The house wants your money! And even in this forum, if a great EA is created, the word would get out very quickly and its advantage would be nullified, as may have happened with the Donchian scalper. However, it may be possible to create a 'public' EA, one that trades infrequently for large profits, and obtain profitability over time, because it would require a lot of patience and capital to make it worthwhile, two factors that most of us lack. Daniel Fernandez over at Reviewing Everything Forex has produced a couple of very nice, infrequent trading EA's that have significant profits over a 10 year backtest. He basically gives these away for next to nothing. The trick is, do you have the capital and the patience to use them properly.

    My hope is that I can come up with my own EA, based on ideas I find here and in other forums, one that trades daily with relatively small drawdowns. Not asking for much, but that's my goal!

  5. #5
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    A good swing trading strategy would be the MACD Divergence system, it is one of the oldest and the most famous.

    We should optimize it on all the pairs, timeframe H4, D1 and maybe separately H1. The backtesting can be done with the open price mode to make the optimization faster. You will get the same results with the tick mode. You just need to enable the onetimecalculation option.

    The first parameters that require to be tested are fastEMA (start step end : 12-12-120), slowEMA (26-26-260), signalSMA (3-3-30), the trailing (10-10-800), stoploss (100-100-2000), takeprofit (100-100-2000). And finally mm/risk.

  6. #6

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    Yes Funyoo, this is what I have decided to concentrate on "swing trading" keep it simple and hopefully catch the big fish.
    Most full time traders all say the same thing, the trend on the higher time frame is your friend, why fight it? A simple 20 or 50 MA on a weekly/daily time frame and even just using CCI or Stoch to help get in at the right time is basically all you need to be successful.
    This type of trading requires plenty of patience, but we're looking to risk 50 - 100 pips to catch 200 - 300 pips or more, not risk 50 - 100 pips to catch 10 - 20 pips.
    The biggest problem we face is “patience”, we may only get one or two trades a month swing trading, but we don't like waiting, we all want to double or triple our accounts in a week....lol
    The way I look at it is this, would you rather two trades a month making 500 pips and risking 100 pips.
    Or 100 trades a month for the same 500 pips but risking 5,000 pips?
    I’m off to test MACD div, and dream about that tropical Island.

  7. #7
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    the problem in fx5 macd ea as for any long term strategy is large stoploss so you need big account and for demo forward test it's not sufficient just one month but probably you need several months to test.
    I'm wonder if after backtest and optimized settings I could straight put it live on real account at 0.01 fixed lot to minimize possible lost.

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    first i would like to say that i am some time now manual trader and i think that forex market is so dynamic and fast that is not possible for eas to trade successfully in eternity. the best way to use them-as i see it- is to have a portfolio of a variety of different eas (breakout, trendfollowing, ranging etc.) that will help you trade by switching them on and off, depending on what you see on chart (current situation of the market.. )

  9. #9

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    Quote Originally Posted by mili hal View Post
    first i would like to say that i am some time now manual trader and i think that forex market is so dynamic and fast that is not possible for eas to trade successfully in eternity. the best way to use them-as i see it- is to have a portfolio of a variety of different eas (breakout, trendfollowing, ranging etc.) that will help you trade by switching them on and off, depending on what you see on chart (current situation of the market.. )
    I agree, the thing is most people who are new to trading think they can just turn on an EA and walk away, they could get lucky and triple there account or they could be unlucky and blow it all.
    The trouble with EA's is they can't adapt or change the way they trade depending on the market, they basically have a set of rules and when everything lines up they trigger a trade, but as you said we can manually intervene and decide when, where and which direction to trade.
    A good example is the now unavailable commercial EA, FXEB, which made a killing last year while EUR/CHf was very much range bound, but towards the end of last year and up to now that pair has fallen hard and would have wiped a lot of accounts out unless you had manually changed the EA to only place sell trades just before the big drop.

  10. #10
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    yes.. you are so right.. eurchf is the best example.. .also in order to deal with eas and understand when and why to switch them on/off is a game that requires deep knowledge of the market.. as i see it, it is impossible for somebody to be successfull with eas if he/she hasn't passed lots of hours infront of the screen...

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