Are There Any Forex EA's That Actually Work?

[Are There Any Forex EA's That Actually Work?]

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Personally I think the only people making money with forex robots, are the ones who sell them.

 

But I know from chatting to others that according to their experiences Forex Megadroid has done well for them. Depends on the broker you use, I think one is finfx.

 

But I don't really trust robots as unless I know what the robot is looking for when trading. And since no one offers that from these robots, I would stay away from them all. Rather trade manually then at least we have ourselves to blame for losing anything....

You have yourself to blame for any choice that you make. The first steps to developing a systems approach to trading is understanding that there are no victims.

 

I have been using both Megadroid and FAPturbo52 for a good while.

Both are excellent in getting you into a good trade....but...I will never...ever....walk away from my computer and rely on it to spend my hard earned money.

 

Therefore, instead of watching both programs go up & down looking for an exit, I monitor them and manually exit my trades. This gets me out of the trade and allows the programs another shot at getting you back into the hunt for a new trade.....otherwise, you may sit and watch it for hours wishing you had exited on that last spike. Neither program is idea for "turn it on and leave it" operation.

Regards,

Jim

 

I suppose everyone has their own trading style, but what's the point of trading a robot you do not trust? You cannot trust something you do not understand, in which case, why would you be using it. You can jerry-rig it or hack it, but isn't it easier over time to build something that does work like you want?

[Is 100% Mechanical Trading Possible?]

A number of fascinating posts and feedback here. I will therefore weigh in just briefly.

 

My take has been in trading for the last 20+ years I can get about 90% of the way mechanical. But unless I deploy about 10% trading instinct and adjustment - however moderate, I will not maintain consistent trading over any longer period of time. A few months? No problem. But the longer the data series, the more likely a 100% mechanical will break-down. Which brings me to my second point, even where I've been locked in on rules 90%+ -- I have had to "tune-up" the trade plan on occasion since I have yet to find a market that literally never changes its pattern/behaviors.

 

So, I have found going for 90% mechanical far easier to find than 100%.

 

MMS

 

Maybe the other 10% for MadMarketScientist is the pulling the trigger part? Forces you to be there and feel the market. Realise the current nuances and demonstrate awareness of potential system weaknesses. That way, you are quicker to adjust. Maybe. Lol.

 

If you can automate 90% of the strategy (which is obviously better than 0%, what is stopping you from automating the other 10%? if this "discretion" that you speak of has specific rules, why can't it be automated? Perhaps you are afraid of what pure objectivity will reveal about your strategy.

[Is 100% Mechanical Trading Possible?]

Just remember that just because you haven't seen something, or think something is not possible, does not mean that this is impossible.

 

Imho think this is a common misconception that people think successful traders are profitable because they use intuition or have some magical gift. Some probably do, but I would venture that they are in the minority. When I created a trading plan with strict rules, my trading turned around. When I don't follow the plan and follow my "intuition", my account very quickly tells me why I have a plan. I think having a solid plan provides you with much better odds to be successful than trading on intuition/gut feel/seat of your pants.

Intuition is mechanical as are your feelings; they are simply a reaction to your environment. It is our assumptions that we wrap around our feelings and how we judge our intuition that distorts everything we perceive. But I do see what you are getting at. The magic bullet / secret sauce is in knowing that there is no secret sauce. Nothing exotic is needed to succeed in automating your strategy.

If you are going the full mechanical route it might be wise to run a couple (or more) systems on several instruments. This approach is more robust.

 

There is a bit of an art (so I am told) knowing when a system needs tweaking when it needs a rest (some stop working then start again) or when it needs retiring.

Why the need to run on multiple instruments? what is the end goal. When you are experimenting on demo account, this might be ok, but when creating automated trading system, everything in the system must have a purpose. It is a systems approach and needs redundancy built in after the fundamental parts of the TC are acquired

[Automated Strategies Risk/return Profiles Examples]

Tams, I would be curious to know exactly what you prefer to look at in evaluating a viable system?

 

Thanks,

James

 

I guess I cannot speak for Tams, but I would like to see that the fundamentals of the system are solid and properly implemented. In short, there should be no mysticism. The reasons for entry/exits should be clear, and reproducible, given the same conditions. The same is true for any other mechanical system in nature. How does your car engine distinguish between the first 100th revolution and the 10000th revolution? It doesn't. Neither should your trading system.

[Instutional "Shredding"]

No Sir Futs don't work that way.

All trades are cleared directly on an exchange as far as I know.

Yes. and guaranteed through the clearinghouse. Futures also works on FIFO order filling, so the institutional trader gets the same filling order as joe trader

[Three Steps in Trading System Design]

TS's new walk forward system was based on their acquisition of The Grail - a product that had been purchased by a hedge fund several years ago and then the new owners stopped releasing it for new retail customers. It may prove to be a great advantage to system designers now that it is back in the public domain.

 

From my experience, the only automated (day trading only) strategies that I have written (and I have well over 1000 of them) are based on longer time frame charts like 15 min or 30m. Anything shorter time frame including advanced bar type have not stood up over time. The lack of automated success over th epast 3 years suggests that either I have no idea what I am doing (probable) or it's not that easy to develop a robust strategy (even more probable), or both. I just find it easier to be profitable on a discretionary basis than relying on my automated strategies. There are many pitfalls besides curve fitting.

 

I would like to know

1. what timeframe the original poster is having success with and

2. whether his original premise is market price action based or indicator based.

 

Good luck with your trading.

 

i'm sure the original premise is market price action-based. Indicators are secondary consideration. if the foundational aspect of the system is not adequate, the system will fail instantly. Time should not be a factor. You must look beyond the time differences to see what core factors allowed the system to win or lose.

[Three Steps in Trading System Design]

You sound experienced. Welcome to TL! which markets do you trade?

 

Right now i am focused on forex, due to higher leverage and easier ability to position size. i will most likely be releasing an indicator that will help chartist remove time and focus exclusively on price action. This is difficult to do and take advantage of without the use of a script of some sort.

[Three Steps in Trading System Design]

Hi,

 

My trading is yet mostly discretionary. I have been trying to automate my strategies since several years. I tried a lot of 'system design' books and tools but was never really able to code a satisfactory system. Recently I had success in automating one of my intraday strategies and it is trading live profitably. It has shifted my perception that system design may not necessarily be a complicated process. On the higher level it can be broken down into three steps.

 

 

Step 1: Start with a set of premise

A premise is just an observation about market behavior, for example: http://www.traderslaboratory.com/forums/technical-analysis/10620-technical-trading-axioms-candidates-approval.html

It can be very hard to discover a premise through backtesting. People who have been trading long enough will have set of premise as a 'just know' thing, without requiring any proof whatsoever. Any profitable trader is likely to have more than 10 premise. There is no recipe for discovering a profitable premise, however, a lot of real time observations and interaction with experienced traders can help.

 

Glad to see you took the first step towards automation. It seems you clearly see the benefits of automating repetitive tasks that frees your time up to oversee your system. You cannot do this glued to a bunch of charts and having to manually pull triggers. Automating the triggers helps greatly in making the user manage systems, instead of being a worker.

 

The first step is to have the fundamentals of market movement in place.

Step 2: Take your premise to market

This is the step in which backtesting will be useful.

- Turn your (set of) premise into an indicator/model. Define it mathematically.

- Test exception market conditions in which the premise will not work.

- Frame entry and exit rules around the (set of) premise.

- Be careful not to rely on backtest results on data history where there have been regime shifts

 

Step 3: Create a Trading System with the strategy

- Analyze performance metrics such as Losers vs Winners, Exposure %, Drawdowns..

- Validate for implementation errors. This will be a tedious process to manually go through a lot of trades to assure that the system is trading as expected.

- Modify, but do not optimize. Improve your strategy by finding more stable parameters, scaling in/out, positions sizing, diversifying. Improving a system is always an on-going process.

- Perform sensitivity analysis with the set of conditions. For example, a change in exit strategy by scaling out may generate totally different set of results. Play around with system code and parameters but 'respect' the original set of premise; finding a new system by hit and trial will likely not as robust as the 'original' code.

- Validate again using your common sense and trading acumen. For example, a particular modification which significantly reduces the no. of losing trades while keeping the Avg Proft/ Avg Loss the same may not be robust.

The biggest hurdle is the frustration that comes with building your system, whether yourself or using a programmer. In the validation process, it helps to record desktop for several hours. The good news is that despite having hours of video, you can skip through many of the videos quickly and focus only on the relevent footage using a decent player like VLC player.

 

There is a video here that assists in setting up recording remote desktops This is important because many automated trading programs will be running in the cloud for maximum uptime. I usually use BSR screen recorder.

[ame=http://www.youtube.com/watch?v=SoybUfW0VdY]Live broadcast your remote desktop screen unattended - YouTube[/ame]

I know a guy who was doing a PhD in quantitative finance. He developed a system using neural nets and support vector machines (SVM). What the program actually did was backtest all possible combinations of over a 100 technical indicators, again with all possible parameters and trade using the ones which are most stable. He showed me rolling backtests results and they looked very impressive. However, when he executed the system live it kept losing consistently. I do not have the technical know-how to comment on what was lacking in his system, but I did not like that he had no previous experience in trading, and hence no observations about market functioning prior to trading system development.

 

Good luck!

 

From my point of view, the core problem of his systems approach is that he did not follow steps 1 or 2 from your approach. If he did, he would have the core aspects of the trading system (determining factors for entry/exit, and the physical entry/exit). From your article, it looks like your friend was seeking to accomplish finding the core aspects by chasing the secondary characterists (indicators, et al). In other words, he sophisticated-ly managed to combine needless inputs bullsh** that ended up confusing himself.

 

As you mentioned before, backtesting [with tick data] is good for helping to establish that your system logic is feasible. That is "works" in the sense of whether mechanically all of the gears turn correctly. Profitability comes second. Big second, of course, but we must make sure our plane has LIFT before we worry about a stronger engine.

 

Once the fundamentals are in place, then you take action. And a systems approach allows for repetition in action and scalability; two important features that are impossible to implement manually on a rapid basis. The conceptual aspect of a system should not be difficult to explain. After all, price only has two directions to go. Up or down. One of the biggest ironies of this automation business is that it does not take complex algorithims to make it work. If you read the interviews of metaquotes Automated Trading Championship of the top 10 contestants, the majority of them mention that it wasn't a complex system that allowed them to win. Other type of trading championships if you look at their trading strategies, the majority of them use position sizing (e.g. bet it all in) and took their chances.