Tag Archives: scrolling

Mid September back testing update

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Hello traders I thought I’d give an update on my backtesting of the MAX Standard method. What I have found really useful is to review the MAX videos in between sessions of back testing. This is really cementing the knowledge of the MAX into my brain. There are certain nuances of the Max that will keep you out of bad trades during periods of price consolidation. I had missed some of these nuances early in my testing and was recording losses when actually the Max rules state not to enter those trades. I can’t tell you what the nuances are as I’m swore to secrecy on pain of death.

What I can tell you is the Max system by design keeps you out of a lot of choppy action. It doesn’t always catch tops and bottoms but I’m not really a fan of knife catching or bottom picking. I have now scrolled through a few years of charts on 11 pairs and the system is looking great. See the charts below.

Win/Loss ratio by market (click to enlarge)

Win loss ratio across all 350 trades

The frequency of trades has dropped to about 1.5 trades per month per pair on average (on the H4) which means I have to be more patient when waiting for a trade. The Max mantra is Patience and Discpline and my back-testing has really shown me that I don’t always have to be in a trade – there’s always a nice trade around the corner. In the backtests there are some periods of two months where no signals are generated. This requires a lot of patience from trigger happy traders, but I understand why this is so important.

So far I have analysed 350 trades and want to do 1000 before I move on to simulated trading with the strategy tester. The results are looking really good and I can’t wait to start using the strategy tester to practise trading with scale-ins and scale-outs. I must be patient though, I don’t want to rush my learning but let it gently seep in to my mind so that after a few months it will become second nature, much like driving a car. At this point I will be ready to trade a demo account, and should have all the nuances of the Max down at this point. I have also joined the Max Application Room which is two two-hour sessions per week of applying the Max with an instructor. I am finding these sessions to be really valuable and will be attending all of them this year. It’s great to hear how the instructor is thinking when analysing a trade in real time in real market conditions.

UPDATE 19-Sept-2010

I’ve now analysed 500 trades on the H4 – I’m halfway to my goal, yay! Win rate is now 83%, loss rate 8%, rest B/E.

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Lots of scrolling has been done

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I thought I’d give an update as to how my research is going. I have decided with the advice of the MAX instructors (yes, they still give advice even though the course has finished) to learn the MAX rules by scrolling lots of charts instead of using the strategy tester. I am going to scroll through five years of the H4 chart on the following pairs:

  • EURUSD
  • GBPUSD
  • EURJPY
  • GBPCHF
  • CADJPY
  • AUDJPY
  • EURGBP
  • GBPJPY
  • USDCHF
  • CHFJPY

Each pair generates about two MAX trades per month on average, so with ten pairs I get the possibility of about twenty trades per month on the H4. That’s plenty for me. What I am starting to notice after having recorded about 200 trades into my spreadsheet (I’m not using MooDB for this exercise) is that I am starting to get to know the price action well. One of the MAX exits uses price action and indicators to confirm. But I am often finding that I have a pretty good idea what the indicators are doing without even looking at them. It seems as if the formulas for the indicators have been learned by my subconscious mind and it’s doing the calculations for me. I still do check the indicators because sometimes I’m wrong, but most of the time I can trade the chart just by looking at the price action and the MAs. I found that quite interesting because it required no mental effort on my part, my brain just learned it by itself without any conscious direction.

I will still use the indicators because I am still a novice trader and I want to be sure, however it’s very interesting to me that 90% of the time I can predict what the indicators are doing before looking at them. Has anyone else found this?

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