Quote:
Originally Posted by billbss
It won't work. Your math is off.
These are the actual probabilities:
(1) Position 1: +100, Position 2: +100 / 27.28%
(2) Position 1: -50, Position 2: +100 / 36.36%
(3) Position 1: -50, Position 2: -100 / 36.36%
This does not factor in the spread. If it did it would look even worse.
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Thanks billbss, I figured there was something wrong with my math because there is no way the market will yield a "probability-based advantage". That is a fact we unfortunately cannot escape...
Which means we therefore would need to rely on signals that work out at least 50% of the time and make sure that our profit is at least twice the size of our losses.
Ah but, signals, signals, signals, a million ways to make a signal, where do you start? In my experience, signals coming from anything less than a weekly chart are not dependable.
I modified my Expert Advisor to fire off double positions based on the momentum of the weekly chart. Stochastic (13,3,3) is used to measure momentum. When the weekly momentum switches from negative to positive, open long positions. When the weekly momentum switches from positive to negative, open short positions. This is a start. I am sure there are many refinements that could be made.
In the test I did on the daily chart of GBP/USD from 2005 through to 2007, the EA yielded a profit of +6138.70$ (based on mini lots). This is the most consistent long-term performance I have been able to come up with so far.
As before, any feedback is appreciated.