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  1. #1
    Trader rinaji's Avatar
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    Stop Loss Only

    Hello all my fellow, this time I want to build a strategy, it is purely on the basis of the inspiration that I got from a content thread created by Value trader. But I forgot which thread is.

    I take an example: we made ​​10 trades, if 9 trades is ending with loss, Are impossible for us to change it into profit? As far as we still have a chance, we can still change the situation into profit. It is depends on our method in managing risk. If we put a stop loss 10 pips/ each trades, and take protit 100 pips. So the end result is, total loss + Total Profit = (9 * -10) + (1 * 100) = 10 pips profit.

    Compare the contrary, for example, we are a scalper, we take profit of 10 pips for each trade, and put a 100 pips stop loss. If we get 9 win trades of 10 transactions. Then the end of the results is: (1*-100) + (9*10) = -10 pips (loss).

    This is evidence that a high level of accuracy in the analysis is not a guarantee for profitable if we can not manage risk properly, in other words, is not able to set the ratio of risk: reward properly. 90% accuracy in analysis isn't mean profitable, and 10% accuracy in analysis isn't mean unprofitable.

    Okay, that is a simple logic of the system that I will build.

    Even so, I will start from zero, I will do a backtest for a few months back, or more than a year back, and then I will do a forward test.
    For a back test, I would not use the analysis at all, I just want to know the worst of this system, I just rely on the game of risk: reward ratio.
    Of course I would compare of 5 methods. So I will know which one is best, and what weaknesses and strengths of this system.


    It is my plan to build this system:
    1. Doing backtest in EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY, USD/CHF, USD/CAD, and EUR/JPY.
    I would compare 5 methods of risk: reward ratio:
    - Stop Loss 25 pips : Take Profit unset. or trade using stop loss only, no take profit. But close all profit positions in the last week or last month.(My system)
    - Stop Loss unset : Take Profit 25 pips. or trade using take profit only, no stop loss, But close all loss positions in the last week or last month.
    - Stop Loss 25 pips : Take Profit 25 pips. or trade with 1:1 Risk Reward ratio
    - Stop Loss 25 pips : Take Profit 50 pips. or trade with 1:2 Risk Reward ratio
    - Stop Loss 50 pips : Take profit 25 pips. or trade with 2:1 RIsk Reward ratio.
    In the back test, I would just use grid trading, (using robots), so I'm not going to use market analysis.
    I use buy stop and sell stop orders, the distance of each order is 25 pips. I do not use order limit, just order stop. And the distance of the nearest pending order to the current price is 25 pips. And will always add new pending order if the price move 25 pips or more.
    Just see the picture...


    2. Doing forward test. Here I will determine the appropriate analysis strategies, and then do some testing, maybe I can change the method of analysis if I am still getting unsatisfactory results. Then If I've got a good and profitable system, then I will make a thread for this system, this is my journey in building strategy. A system with use stop loss only.

    Thank you

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  2. #21
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    Quote Originally Posted by rinaji View Post
    Maybe there are jpy high impact news at this morning...

    Still... only buy.

    I'm just curious. If you still like the buy position then why did you your SL is too close to the price daily volatility? I mean you get SL too early if you ask me since you are still in buy position mode your SL should have a higher spread don't you agree? So that you will survive the daily volatility without worrying and end up getting too early SL.

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  3. #22
    Trader Hukam's Avatar
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    Great trading strategy mate actually you are saying right that we need a very good trading strategy and a very good use of risk management in forex then it will not be very hard to make money in forex market I personally like to use proper risk management which help me to make money in average with technical analysis

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  4. #23
    Trader rinaji's Avatar
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    Still about trading results on yesterday, trade only buy...




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  5. #24
    Trader rinaji's Avatar
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    Quote Originally Posted by Hukam View Post
    Great trading strategy mate actually you are saying right that we need a very good trading strategy and a very good use of risk management in forex then it will not be very hard to make money in forex market I personally like to use proper risk management which help me to make money in average with technical analysis
    Yeah mate, you're right, the first thing we should do is make a plan and rules to control the risk. Because the biggest problem for traders is lack of risk management, many people are afraid of losing money in forex, but they do not limit the risks properly, even daring to trade without risk management, and the most worrying is if we are willing to take high risks just for gain low profits.

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  6. #25
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    I like the trading strategies i always follow my own trading strategies but I wanna try ur strategies i think its profitable i will practice in my demo account but one thing i agree with the renaji the profit and loss ration is not good but having conseriding other thing everyone should try this strategies.

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  7. #26
    Trader rinaji's Avatar
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    Backtest (February 2012)

    daily chart



    max equity drawdown



    result


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  8. #27
    Trader rinaji's Avatar
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    Result on yesterday


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  9. #28
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    Quote Originally Posted by rinaji View Post
    Haha, that's right mate...
    Actually I've said before, Let me quote again...

    In the back test, I would just use grid trading, (using robots), so I'm not going to use market analysis.
    I will start from zero, I will do a backtest for a few months back, or more than a year back, and then I will do a forward test.
    For a back test, I would not use the analysis at all, I just want to know the worst of this system, I just rely on the game of risk: reward ratio.


    Doing forward test. Here I will determine the appropriate analysis strategies, and then do some testing, maybe I can change the method of analysis if I am still getting unsatisfactory results. Then If I've got a good and profitable system

    Please read carefully, It is not a thread for strategy, this is the thread for the journal, I am free to do backtest and forward test, free to experiment and doing trial and error.
    As I said previously, I will build a strategy from zero. The first stage is to determine the risk - reward ratio. So I would take samples without analysis. I use a grid robot, without any analysis. The goal is I want to know the profitable calculation for risk - reward ratio in the most adverse conditions. You can see the results of the backtest, I get oss trades several times more than the win trades. But this is a trade, win more than loss is not always mean profitable, and vice versa. Loss more than win is not mean unprofitable . I will always take the evidence in the form of a screenshot.

    And after I get profitable results without analysis (relying only risk - reward) ratio. Then the second task is apply the strategy of analysis.

    Thanks
    If its can be supported by three indicators and can triangulate some patterns and trends that has a strong point of opening a position that result to profitable trade some how I can say its can be done. Using indicators is already a type of technical analysis. More or less in my part if its not tested and proven I will always skeptical. I will always go for basics that is already tested and proven that can make me earn money.

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  10. #29
    Trader rinaji's Avatar
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    Quote Originally Posted by abul4220 View Post
    I like the trading strategies i always follow my own trading strategies but I wanna try ur strategies i think its profitable i will practice in my demo account but one thing i agree with the renaji the profit and loss ration is not good but having conseriding other thing everyone should try this strategies.
    Okay.. but dont forget to test it first..., because I still have not finished the building of this strategy, I am still trying to make the best setup for the risk - reward ratio. But at least this method can be combined with your strategy of analysis. I hope you can understand, and I hope you follow this thread from the first page, so you know how this method works, it will provide a better understanding of you, not just about the method, but this will change your mindset. Good luck.

    Quote Originally Posted by budado View Post
    If its can be supported by three indicators and can triangulate some patterns and trends that has a strong point of opening a position that result to profitable trade some how I can say its can be done. Using indicators is already a type of technical analysis. More or less in my part if its not tested and proven I will always skeptical. I will always go for basics that is already tested and proven that can make me earn money.
    Good advice mate, yup i totally agree with you, and I will try to find the best way to be able to have this good results, using three indicators are a great way. And I agree that we will always be skeptical if its not tested and proven. Thank you for your participation in giving advice, maybe my journey in building this system is still long, so all suggestions are the best for me.

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  11. #30
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    Jpy pairs are always uncertain and that's why I don't trade with them, whenever I trade with Jpy pairs then I lose a big part of my account, that's why I don't prefer to trade, we have seen that jpy pairs have crossed the historical limit, and broken down the years record. It may probably devalue the Jpy more, but it doesn't means that traders will not do profit taking, whenever they will take profit then we will see big retracement.

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