Trading probabilities

Discussion in 'Educational Resources' started by oilfxpro, Jan 12, 2012.

  1. 50,375 trades were tested using 44 automated systems.The analysis says avoid taking the first two trades in the morning and first two trades signals in the afternoon , there are almost 20 trades a day , these first trades are the least profitable.

    Why are the first two trades the least profitable?

    If first 4 trades are avoided ,the profitability increases by 30%

    Why ?Any opinions and comments.
  2. ammo


    the program is making a deduction after the first 2 trades that it didn't have enough info to do before ?
  3. This is manual analysis after the back testing over 10 years.Each of the forty four systems churns out trades independently.We did not have enough info or software code system to do this trades rejection/removal automatically.

    The first two long trades and first two short trades are omitted for each session , in total up to 8 trades daily are rejected.
  4. ammo


    how could you pick those 8 trades out of 1000's of trades
  5. The first trades by time of entry i.e earliest entry time.Just made a list of trades everyday and removed the first two/four longs and first two/four longs/shorts of the session

    In the analysis below are presented all trades , the removed trades are shown below.

    There may be a simple answer to this.The first trades fight the initial resistance or support on trend breakouts and market may be uncertain, secondly the vast majority of trades within 1/2 atr trend my be noise or not strong confirmed trades , or might be a load of false breakouts/trends in early entries.The latter trades may be kosher.Just IMHO.
  6. What market are you trading?
  7. ammo


    what other ones did you try and remove put back, like lunch hour chop,dont know if that happens in currencies
  8. Originally I thought the first entry/entries would be the most profitable so I tried to eliminate the later entries , but found they were more profitable.If you get into a trend early , you make more profit in theory ?

    All of them are daytime entry systems .

    Loads of different formulae used in these systems , and other info like 3/4 atr entry ,full atr entry and loads of different combinations.
  9. How are we to help you if we don't even know the rules your systems use to enter and exit trades?

    Right off the cuff, it sounds like a curve-fit to me..i.e., you took out the first trades in the backtest and the results all of a sudden look better...try it in a forward test and see what results you come up with.
  10. ammo


    you mention 1/2 3/4 and full avg true range,what do you do theoretically at 1/2 or 3/4, reduce, fade
    #10     Jan 12, 2012