My dilemma

Hi all.

I have this EA that produce 99% backtest results from 2007 to current that are so amazing I have never seen before.(and its not grid/martingle)

Problem is I had to trim away a whole lot on this EA to make it so profitable and now it trades very infrequent +/-6 trades a month. I also had to minimize its tp to 2 pips.

Now it only pays traders with big $$$ to trade with it. The best I can get it with acceptable drawdown and $1000 is +/- $10 per month. Which is way too little. It only really starts to mean something when you trade with 50k. Here in South Africa that is over half a million rands, which isn't possible to obtain without surety.

I also don't want to sell the EA, because it will be educated and distributed amongst many. I am trying to market a myself as a signal provider, but who will want $10/$1000? Some that I provide signals to, I have told not to use this as a stand alone.

What am I to do?

Oh and please, I didn't pose this question to advertise or anything. I really need advice, so if you are not giving advice, please rather don't post anything.

What thickens the plot is that it has 100% success rate on all trades, and it doesn't cling onto a trade with the hopes of the market changing (the longest duration is 2 weeks and in 7 years there has been 4 such trades)

Any advice?

Believe me... in real account You won't get 100% successful trades.

You should try to make it run on a real account first and see how it goes 6 months later, if you still have your account then you can ask yourself all those questions.

Thanks. Will do..

Well, it's almost six months later and I am still going strong.

Maybe it needs some work in the sl area, but I believe there is merit to the system. Yes the RR ratio is maybe not of the best, and it takes a bad trade here and there where manual intervention is required to hedge etc, but overall this is the first EA that makes it so far on my real account without being trashed.

I want to start making money with this. I had a look at being a signal provider (as this would be easiest) but the tp is too small. So I have to look at either selling the EA - which is a resounding no-no or offer a pamm service.

A bit about the system :

It only trades 5 pairs. I have done 99% backtests on many pairs and only the select 5 produced favorable results. I have cut out certain sessions and days to reduce the risk of reacting to false signals. If in the event it does, I will look at higher timeframes and make a decision whether to hedge/get out/ride it out.
I am not a newbie trying to make a quick buck or thinking forex will make me sip pina coladas on the Bahamas.
I know markets can change and render the EA absolutely useless in time to come, but this has not happened in the past decade and doubt it will in the future. The EA is not based on technical indicators, or reliant on other information to trade - it makes it's own trading decisions based on price action.

I know there will be many posts that will dissect my account, as I say - I know it needs work, but feel the basic groundwork is there.

I am hoping for partnership in this venture. Someone who can bring knowledge to the table and help set this up. Perhaps start a joint pamm account or something. PM me with why you feel it should be you.

Let the comments begin!

I would suggest fine tuning it for smaller accounts. Investors won't want to put their money down to test your EA... they want you to show them your own real account test results. And they won't look at $10/$1000 (1% return, 99% risk) unless you give them a guarantee, and that usually means something like putting your own assets down as security hedged against the risk (you would stand to lose 99% of your assets because that's the risk you provide them, they will not invest with more than 99% value of your assets... worth the risk?

xgavinc posted:
I would suggest fine tuning it for smaller accounts. Investors won't want to put their money down to test your EA... they want you to show them your own real account test results. And they won't look at $10/$1000 (1% return, 99% risk) unless you give them a guarantee, and that usually means something like putting your own assets down as security hedged against the risk (you would stand to lose 99% of your assets because that's the risk you provide them, they will not invest with more than 99% value of your assets... worth the risk?

Thank you, this is the kind of constructive criticism I need. I just want to mention (if there are newbies who might not understand this)

The above test was based on 0.01 lots per trade on a $1000 account - This was used to get to an acceptable dd of 30%. So although the whole $1000 was used for the trade - the worst trade only used up $300 of the $1000. It only entered such trades 4 times in the past decade. I must also add, this DD is based on spread that is twice as high as in reality (another broker) and involves no hedging or anything, just ride-it-out.

When I posted the 16 Nov 2014, I only traded one pair - I have added four more and believe it will be able to rake in 70+ pips a month. Currently I am also testing it to trade on all pairs with a trailing stepping sl - will see how that goes, but so far it looks promising.

I went back and had a look, the above backtest was done with 0.06 lots on $1000, since then I went live with this and used moderate lot sizes (depending on account size) just click on my name to see my accounts.

If you chceck my website you will find a good way to market your signal without giving your strategy away. Something like creating stock out of a strategy. Investors can follow your strategy with as little as 50 bucks then.

Looks interesting mavericks... I will be taking a closer look at this.

From what I know about investors is the following (if you get private investors):

1. Drawdown less than 15%
2. The will not invest more than your own capital, and are more than likely going to hedge their funds in the form of assets / stock / equity.
3. Minimum investments from private individuals is usually US$10 000, international investors US$100 000 and hedge funds US$1mil
4. Performance record of at least 3 years.

That is why most of us (myself included) find that the only flaw in our strategy is capital, we don't have capital to match investors and before we can build up a 3 year profitable record our accounts are wiped out because we lack enough capital for large movements... it's a continuous circle of funding our accounts in the hope of breaking the capital barrier to prove our strategy.

The other problem I find with your strategy RSTrading, is that your returns are less than for example a money market account at a bank or unit trust... so that is something you will need to look at, reduce risk and increase returns... a very fine balancing act I know.

You are on the right track of building a Low Level of Entry Strategy. As you are well aware, 2-3 years track record are needed for serious investors or a strategy with very safe R/R ratios. After a peek into your system, you risk substantial capital for 2 pips of profit. Once you reach your first loss, it will be apparent that your RR factor is skewed not in your favor and your backtests could have been over optimized. Once you recover from your first loss , the inherit risk factor is still there. To put this in perspective, - https://www.myfxbook.com/strategies/caesar-signal-forex-ea-7/77269 - system sustains profits every month for 7 years in a row, but its also risking 30% every day to earn a small daily gain. As soon as I go live with the system, I experience the high drawdown that is likely to happen every 7 years. Over optimization? Maybe, or purely the market got the best of me.

If we both need substantial amounts of risk capital to sustain life in the market, then we are saying we don't have a good strategy solely from a risk/reward perspective and we should redesign based on that important characteristic.

Increasing the winners and reducing the floating dd is difficult to do and that's the balancing act as @xgavinc states it. It's not easy!

Thanks guys. I appreciate your input. I should have started a new thread, this one was started months ago. I have changed my view on this.
As mentioned earlier, I have tried to make it a bit more rewarding by adding four pairs. I am now looking at offering a pamm for small investors (3k+). These four pairs have their own set files based on the last ten years' trading.

In the last ten years it has taken four bad trades (as in 100+ pips in the red). The avg trade length is +/- 4 hours, if it is stuck in a trade for longer than a day I consider it a bad trade and look at the higher timeframes and consult other investment sites etc. to get an idea of what my move should be regarding that trade.

I also try to conclude all trades before weekends as trading doesn't necessarily continue on a Sunday eve where it left off on a Friday eve.

RSTrading posted:
I have tried to make it a bit more rewarding by adding four pairs.

This is an illusion. If you don't divide lotsize by 4, all you do is increasing risk.

You don't upgrade reward, in theory you just divide time by 4.... but the greed has a cost to cover, as you know you take the risk to be in red with 4 bad trades simultaneously. This can affect your hypotetical DD * 4 in case you don't divide initial lotsize by 4.

If I were you, with such strategy I would do another way to make fast money.

CrazyTrader posted:



If I were you, with such strategy I would do another way to make fast money.

Please elaborate.

RSTrading posted:
Thanks guys. I appreciate your input. I should have started a new thread, this one was started months ago. I have changed my view on this.
 

Doesn't matter, your 'months' ago is another trader's 'today'. 😁

RSTrading posted:
Please elaborate.

Budget: €1000

4 pairs = 4 accounts of €100 each. (Highest leverage)
Depending on leverage, calculate max lotsize you can open with desire SL (30 or whatever)

Run them and see what happen after 1 month... if your strategy is still doing 100% profitable trades well you should be up on all accounts.

Anyway you still have €600 left in case one account goes wrong so you can restart 6 times.

Try one month on demo with max lotsize... and you will see how fast the account should grow. (why would you care about DD, here you are looking for fast growth)

Then you will get capital so you will do as you do now.

This reminds me a lot of how some traders traded martingales. Set all the risks to the max, trade it on a small account and withdraw profits regularly, until the account goes bust, then start over.

I don't know. I am more in for the long haul, but considering the bad RR......

I am going to increase my lot sizes on this account and invite you to watch https://www.myfxbook.com/members/RSTrading/99-win/1126738

I will have a total disregard for DD, just to see what the EA is capable of doing. This account has a trademanager that trails profits in a stepping fashion. The trailing step kicks in when the trade goes in the green and immediately places a sl.. Many trades are then stopped out prematurely, but it also does wonders in a spike - in the last few trades it made enough pips to 'breakeven only' 10+ times.