Welcome back Meta-Traders.After a few rocky weeks, we finally made some good money in the land of the robots this past week.
First up, is Megadroid Demo which hasn't had a single loosing trade since the demo was restarted back on 9/1/2010. This account continues to defy gravity, and is now up an amazing 56.9% for the year.
Demo Droid's sister account Megadroid Live recovered somewhat from some recent drawdown and picked up +3.7% for the week. At this point, its up +19.5% for the year but is still in "recovery" mode. This means the lot size is doubled trading roughly 20% of the account equity per trade, and is therefore subject to further steep drawdown until it takes out the old equity high just above +30%.
A bright spot of the week was Atinalla #3. After starting this demo account back on October 10, 2010, this account has been in drawdown from the start and at one point was down about 6%. This week it finally came back into the black and is now up +1.15%, +2.4% if you consider open trades.
Another bright spot was Atinalla #1 Live which I started trading live back on November 16th. This account went into drawdown immediately and was down as much as 3%. It took some good profits early this week, then got chopped up in a few trades as the week went on. It went into Friday's Non-Farm Payroll report long EUR/USD and that one trade put it in the black. Even though the account shows down -2.8%, its up about +2.3% if you consider open trades.
God's Gift Duo Live had a similar experience and had 5 trades this week, 3 losers and 2 winners, but still came out on top up +68 pips for the week.
Finally, FXDD Twin Scalpers went straight into in drawdown from when I started trading it back on 11/9/2010. This system would be up if I dropped Scalper X (EUR/CHF) and just traded the Megadroid EUR/USD. We'll see how it finishes the year before deciding how to go forward.
I'm finally getting a taste of trading the Asirikuy systems live. Its an altogether different experience than trading the scalpers. The table on the left summarizes it nicely. I think there's something to be said for both styles.The fact that the market ranges much of the time benefits the scalpers. But we do see some pretty good trendiness also. Take a look at EUR/USD which at one point was down about 2.3% for the week, then turned around and rocketed higher making back those losses and then some.
Trading the trend-followers is much more of an exercise in faith because you have to believe they will come back, and that's where the research comes in. I recall a story about legendary trend follower John Henry who started trading a system which was still in hole after 13 months of live trading. But he stuck with it and it came back and showed many years of profitability after that.
With only a few weeks left in 2011 things are coming together nicely. Things get really slow around the holidays, so in a few weeks we're going to wish we had as much action as we saw this past week.
Check back later for my next review in the Watukushay review series where we will cover Watukushay #4 (aka Teyacanani) which is arguably the best system up on Asirikuy
Also, more to come on my own EA called FX-Regression.
Enjoy your weekend.
Hello Chris,
ReplyDeleteThank you for another great update :o) I would have to say that you are probably underestimating a great difference between "trend-followers" and "scalpers" which is the reliability of simulations. Scalpers cannot be reliably simulated in Metatrader 4 and therefore you might be greatly overestimating the profitability of your strategies or - even worse - greatly underestimating their draw down potential. Broker dependency is also another VERY important factor.
Another thing I wanted to mention is that putting all the systems in a box and calling them "trend-followers" might be an over-simplification. For example the USD/JPY and GBP/USD instances on Atinalla No.3 are in fact counter-trend systems and therefore wouldn't fit the definition.
I have always stressed that the low pain index, broker dependency and unreliable simulations of scalpers are a VERY dangerous combination since you simply don't know how deep draw downs can go. There is NO real statistically sound worst case scenario. For example, Monte Carlo simulations on Megadroid show that you should expect at least 7 consecutive losses sometime in the future, which means that in order to know that the system isn't working anymore (8 consecutive losses) you would need to wipe your account.
I know, you have made your commitment and you want to test these scalpers but it is very important not to underestimate all the above problems, they are the main reason why I do NOT consider scalper trading within MT4 a viable option. Knowing accurate long term profit targets and having non-wiping worst case statistical criteria is - in my mind - a MUST for long term success.
Thank you very much again for the update and keep up the great work ! :o)
Best Regards,
Daniel
Daniel-
ReplyDeleteThanks for the comments.
You are right - the table is a major oversimplification. In terms of the trend followers, I was referring mostly to the 3 systems in Atinalla #1 which I think its fair to say are all trend followers. I haven't started live trading with Atinalla #2 yet and i'm still debating about what to do with the remaining $2000 I need to allocate to get myself up my goal of 10K under management by the start of 2011.
You are right about the reliabily of back-testing Megadroid as well. I back-tested it for 2010 and found it down -47%! I compared the results to my live trading and found I missed a lot of trades including some big loosers. This was probably due to spread-widening - preventing the system from trading during its activity window.
So its also possible that live trading results can be better than back-test results as in my case. All-in-all, it doesn't inspire confidence.
As for the risk of an account wipe-out that is definitely a possibility, but i've accounted for that already by putting only a very small percentage of my total assets at risk.
So we'll see what happens going forward. I can always adjust my approach based on live trading results.
Thanks again for the comment,
Chris