Wow. Do you use the same strategies for every stock/index/Fx pair? (Not sure what you trade). Or do you get more specific for each thing you trade? Do you use backtesting? Do you think it's possible to try a strategy in the present and judge it based on just a few days/weeks/months? Do you think backtesting has inherent flaws that are impossible to overcome?
I trade forex and commodities. The models are relatively similar. If it doesn’t work on one, it probably doesn’t work on the other either. However, there are obvious differences when it come to volatility and so forth, as well as positionsizes. But they are very similar. Started backtesting, but gave it up very early. My experience is that it is a wate of time, and it leads to overfitting. So when I come up with a new idea I just test it out with real money. Obviously, I only use very tiny positions, so that my losses are tiny if it doesn’t work out as expected. But my main focus is always risk control. By the way, the first year or so I traded on a realistic simulator account. But after that, I have traded live with all new ideas. They are thought thru. It is not like I just throw up anything that I can think of
Study some machine learning especially about overfitting Then you will understand why most ea are useless You will also slowly understand what a huge undertaking it is to design something that is systematic and robust
What kind of annual ROI do you expect now? And do you continuously compound your profits? (Risk a % of account per trade, rather than a set number of lots/contracts).
One of the most important aspects in EA development is overfitting. You might not be able to grasp what's overfitting and what's not. But once you have mastered it, you will be on the right path to consistent profitability. Some might say all strategies have some amount of overfitting. That might be true. You have to know how much is too much, how much is just nice.
Starting simple is good, although I wouldn't bother with a TP myself. You also need to define what you will do if a trade gets closed, but the system then wants to put the same trade on again. But be careful about costs. Such a simple strategy isn't going to produce massive returns, so you need to make sure your costs aren't excessive. How are you trading the FX market? I've always found costs to be mostly too high outside of IMM futures for FX. What is the average holding period for your trades? What is the expected annual cost of trades? How much will it cost to hold your positions (daily funding costs)? GAT
Most years have been within the 40-60% range. This is the first dismal year, where I ended up on the wrong side of a few trades back in March when the market went bonkers. So I am only up around 9 % so far this year....
I am not all convinced that is the best way to trade a momentum oscillator like RSI or other momentum oscillators like ADX or Chande. The link did not allow me to read your entire text. For me, momentum oscillators have always been about convergence or divergence.