[OAC]

Originally Posted by phreddy »

I must admit to not being able to understand the thrust of this thread for a long time. Now, I think that I have solved the riddle of ‘ IF IT IS GREEN GO LONG, IF RED, GO SHORT’

At the risk of being entirely wrong I believe that the major part of this thread is concerned with the premise that PRICE is attracted to the PSYCHOLOGICAL numbers 00, 25, 50, 75 and the next 00 etc.

It is ironic that TRO has hundreds of his indicators published on the internet and dazzle us with all the bells and whistles on his charts that he can't just come up with something like the following to explain his strategy without leading his readers astray for some 16 pages:

If Open(H1) < Last(H1) and (Last(H1)=00 or Last(H1)=25 or Last(H1)=50 or Last (H1)=75 or Last(H1)=00) Then Prepare to go Long

If Open(H1) > Last(H1) and (Last(H1)=00 or Last(H1)=25 or Last(H1)=50 or Last (H1)=75 or Last(H1)=00) Then Prepare to go Short

[lateeda]

agree, trading is easier than many make it out to be:

key 1: develop an edge, money management means nothing with a losing strategy.

key 2: fearlessly pull the trigger with stop loss in place and a good idea on where to exit with profits that transpire.

key 3: see key 2.

[atto]

Originally Posted by OAC »

It is ironic that TRO has hundreds of his indicators published on the internet and dazzle us with all the bells and whistles on his charts that he can't just come up with something like the following to explain his strategy without leading his readers astray for some 16 pages

Additionally, since the strategy is so mechanical and easy, it's also easy to backtest.

3 month backtest
EUR/USD Win rate: 73.37%, Profit factor: 0.84, Net Profit: -6.79%
AUD/USD Win rate: 67.19%, Profit factor: 0.60, Net Profit: -35.33%
USD/JPY Win rate: 68.46%, Profit factor: 0.68, Net Profit: -22.10%
GBP/USD Win rate: 69.51%, Profit factor: 0.69, Net Profit: -29.72%


Let's say, however, that the backtest was flawed (against him, of course), and that using trading intuition, TRO is able to cut losses significantly and have substantially more accurate trades. Only fair, since I don't trade this system, and we've never seen actual trades (sans annotated charts, which mean little), so we don't know how bad (or good!) it really is.

Let's be nice, and say the average stop loss is more like 15 pips (verses 20). But wait! There's a spread to worry about. Let's factor in a 2 pip spread (on the low side). Risking 17 to win 3. Shucks, slippage. Let's pretend he never gets slippage.

So, to break even on this trade, he needs to win 85% of the trades (nearly 6 wins for every loss). If he can beat that, with all the generous assumptions I've made, he'll profit.

[phreddy]

Interesting figures Atto.
I suspect that there are some additional rules that we have not been able to detect.

Suspect that TRO would not publish something that loses as often as you show.

It seems strange to me that the people who say that they use the system have not come forward to demonstrate their knowledge. Mary Pippings wrote a supporting post. I have sent her a PM asking for her to explain the system to me but no reply as yet.

I am thinking of starting a thread asking people to explain TRO's system. Don't want to upset him but...

[atto]

Originally Posted by phreddy »

Suspect that TRO would not publish something that loses as often as you show.

That's the thing: It does win more than it loses, which makes this appear wonderful to a new trader. Unfortunately, it doesn't seem to win enough to cover for the losses that after commissions are MINIMALLY 6 times the wins (once you actually trade this for money and run into slippage, you'll run into even bigger problems). It is up to the reader to decide if the system as presented could beat the ridiculous assumptions -- in TRO's favor -- that I made, and be profitable.

With that, I'll let TRO continue his thread in peace...

[ZOSO]

Originally Posted by BlowFish »

Zoso this is presented for currencies. You will see that TRO sometimes mentions that any line (even random ones) will do. For ES you might try a line every 10 full points or perhaps every 50 ticks. As theses are 'psychological; lines Id go with the former.

Thanks. I'll toy around with this in sim to see if this works with ES, but it's an academic excersise.

[Nipper]

Originally Posted by atto »

Additionally, since the strategy is so mechanical and easy, it's also easy to backtest.

3 month backtest
EUR/USD Win rate: 73.37%, Profit factor: 0.84, Net Profit: -6.79%
AUD/USD Win rate: 67.19%, Profit factor: 0.60, Net Profit: -35.33%
USD/JPY Win rate: 68.46%, Profit factor: 0.68, Net Profit: -22.10%
GBP/USD Win rate: 69.51%, Profit factor: 0.69, Net Profit: -29.72%


Let's say, however, that the backtest was flawed (against him, of course), and that using trading intuition, TRO is able to cut losses significantly and have substantially more accurate trades. Only fair, since I don't trade this system, and we've never seen actual trades (sans annotated charts, which mean little), so we don't know how bad (or good!) it really is.

Let's be nice, and say the average stop loss is more like 15 pips (verses 20). But wait! There's a spread to worry about. Let's factor in a 2 pip spread (on the low side). Risking 17 to win 3. Shucks, slippage. Let's pretend he never gets slippage.

So, to break even on this trade, he needs to win 85% of the trades (nearly 6 wins for every loss). If he can beat that, with all the generous assumptions I've made, he'll profit.

To be fair, backtests using Metatrader are notoriously unreliable, even with a 90% modeling quality. The ones sited here are at less than 60%, meaning the results are practically not even worth mentioning. I haven't traded this yet, but manual backtesting seems to show a pretty consistently winning method.

Thanks, Rumpled One, for sharing this.

[TheRumpledOne]

Originally Posted by OAC »

It is ironic that TRO has hundreds of his indicators published on the internet and dazzle us with all the bells and whistles on his charts that he can't just come up with something like the following to explain his strategy without leading his readers astray for some 16 pages:

If Open(H1) < Last(H1) and (Last(H1)=00 or Last(H1)=25 or Last(H1)=50 or Last (H1)=75 or Last(H1)=00) Then Prepare to go Long

If Open(H1) > Last(H1) and (Last(H1)=00 or Last(H1)=25 or Last(H1)=50 or Last (H1)=75 or Last(H1)=00) Then Prepare to go Short

Leading astray?

I am not sure what you're on about.

Bump:

Originally Posted by phreddy »

Interesting figures Atto.
I suspect that there are some additional rules that we have not been able to detect.

Suspect that TRO would not publish something that loses as often as you show.

It seems strange to me that the people who say that they use the system have not come forward to demonstrate their knowledge. Mary Pippings wrote a supporting post. I have sent her a PM asking for her to explain the system to me but no reply as yet.

I am thinking of starting a thread asking people to explain TRO's system. Don't want to upset him but...

People can post their results on this thread, we don't need another thread.

What the "backtesters" are missing is that NO ONE TRADES 24 HOURS A DAY!

Try trading the London or NY session only and see if that improves things.

Not to mention, how many total pips per day do you need?

Once you hit your daily goal, QUIT!

Also, in the challenge, I am just taking 5 pips. But why leave pips on the table if you can SEE what price is doing?

Bump:

Originally Posted by atto »

That's the thing: It does win more than it loses, which makes this appear wonderful to a new trader. Unfortunately, it doesn't seem to win enough to cover for the losses that after commissions are MINIMALLY 6 times the wins (once you actually trade this for money and run into slippage, you'll run into even bigger problems). It is up to the reader to decide if the system as presented could beat the ridiculous assumptions -- in TRO's favor -- that I made, and be profitable.

With that, I'll let TRO continue his thread in peace...

Hey, I don't mind debate/discussion so long as it's ON TOPIC and polite.

Once again, the new trader needs to learn how to identify and execute winning entries. After they master taking a quick 5 pips, then they will see
win they should have stayed in longer and when exiting with 5 was smart.

Thanks for posting and being polite.