Quote:
Originally Posted by bossxero
Hi MTardif
First of all... a warm welcome to this board... hope you will enjoy your stay here
As for your theory... well, you wrote it so beautifully and it indeed make me think a little more. Why not try this type of trading on a demo account and see how it does. Maybe its a good idea and maybe its not. But there are concerns though, such as, will you open long and short positions at same time or only trade in a single direction? Indeed your thinking differ from most of us and this is really wonderful... I would like to hear more from you.
All the best
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Hi bossxero,
Thanks for the warm welcome!
I did whip up a quick MetaTrader 4 Expert Advisor to test this out (Double Long.mq4). All this EA does is open two long positions, set the SL and TP targets accordingly, and wait for those targets to be hit before opening two new long positions. No indicators are used.
I back-tested using the GBP/USD pair on M30 from March 2006 to present. Results are in the attached files. On a 10,000$ deposit, it yielded a profit of +2,435$. As you can see from the attached graph, the performance is jagged. The drawdowns are occurring when the market was in a prolonged bear market, where the -150 pips outcome was occurring more frequently. The gains are being made when the market was in bull mode, where the +200 pips outcome was occurring more frequently.
I suppose a way to improve this would be to set the EA to only open long positions if the trend of the weekly chart is up. That way we could possibly eliminate a lot of the losing long trades. I'll have to play around with it some more, but I don't want to get into too many indicators because then the probabilities will become diluted.