Trailing And Pyramiding Procedures Based On The Trend Score
In one of the last post I explained the new trend score calculation algorithms.
In this post I’ll explain more in depth how the new trailing feature (available only in the “Ultimate” version of Crescendo works)
We have seen that the trend score can go from -5 (strong bearish) to +5 (strong bullish) and we’ll use it to filter entries. By default we’ll enter only if the trend score magnitude is 3 or more: so +3 or more for a long trade and -3 or more for a short trade.
So let’s say we entered GBPUSD long with a +3 score. With a fixed take profit we’ll close when the total profit of all the long orders on GBPUSD is equal or greater than the “target_profit” (in US Dollars).
If we use the trend score based trailing procedure it’ll continue to keep the trade open until the trend score goes to a lower value than the one used to enter (in our case +3). For the orders to be closed the total value of them has to be equal or greater than 0, otherwise it won’t close even if the trend score decreases.
If the trend score increases, the new value is used as a limit.
So let’s say that we entered long with a trend score +3, and then the price continue to go up and the trend score increased to +5, then as soon as the trend score comes back to a value lower than +5, all the long orders will be closed.
Naturally the same applies to short trades and for trend score entry thresholds lower than 3 (1 for example).
This can let the EA ride trends in a very particular way. Depending on the trend algorithms used this can be more or less effective.
But also permits to close “bad” entries much shortly than using the usual strategy. Why that? I told you that not only the trend score has to be lower than the entry value or the highest value reached, bu the value of the trades should be at least 0 for the orders to be closed.
Suppose that we entered long with a trend score +3. The price then lowers and so the trend. So we have a trend score of less than +3 but the profit is also below 0. As usual, if there are the conditions it’ll open additional orders, lowering the breakeven level. If the trend score continues to be below the initial +3, as soon as the price touches the breakeven all the orders will be closed, letting the EA ready to eventually go short if the new trend score is -3 or less.
Pyramiding also works based on the trend score. Pyramiding means opening additional trades if the profits are positive and the trend is strong. How does it work. Let’s say again that we entered long with a +3 trend score. As soon as the trend score increses (and the total value of orders is positive) we open another long order. So if the trend is so strong that the trend score increased to +5, we open another long order. This works particularly well if we start to enter at magnitude 1 and even better if we use a trend score algorithm that has more steps (like the average of speed and acceleration one).
Hi Andrea,
I have come up with some nice sets for C unlimited etc… nothing close to default settings… Here is the issue we need to overcome imho… If you do not use close on countertrend… you expose yourself to catastrophic losses… A nice equity curve… but then the ea gets caught in a trend holding positions in the wrong direction and then attempts to buy or sell its way out… and then gets nailed bad with a huge loser. I see this time and time again… However, if you use “protection” as you label it “close on countertrend” it destroys the entire backtest by itself… We need to think of a solution to get us out existing losing trades which are caught against the trend… Please don’t see this as an attack… I’m wanting to find a solution but at this point I have none.
BTW… for those of you that don’t think I’ve tested default settings and wish to offer the solution “use default settings”… well, I’ve done that and the same occurs.
So I see this as the obstacle that must be overcome.
Thanks
How about small pip hedges…for those that can hedge…in between major resistance / support points in price. I was doing those types of trades manually to get out of the GBPJPY in Jan.
Andrea,
How is that document coming on ‘manual’ trading? I think I remember that in a post of yours a couple of months ago, might shed some additional clues.
In the past it was said to the old crescendo users, they would get all better versions of crescendo for free. only the unlimitted currency would effekt in a upgrade-payment. but know I read to my concern, that ultimate would need additional payments? I don’t like that very much.
As I have mentioned many times, any form of martingale is very dangerous and for suckers imho. I have a set file that uses default settings for martingale and the equity curve of the backtest is very nice… As I visually review the backtest it does help you get to your profit target quicker in many situations. However, you always have to remember that the situation will come when it puts the hurt on you. This has happened today for my forward test. I have a $30k demo acct so trades begin at .3 lots and profit target is $120… Today, I have woken up to see that I’m in the hole almost $10,000 on a $30k acct due to martingale… This is a perfect example of improper risk to reward… Taking on this much risk to make $120 is not acceptable to me. So I’m going to take martingale out of the equation… this is for my comfort. I’ve done backtests without martingale whereby I lower the profit tgt but increase the frequency of trade and get similar results… in this situation the sequence of trades are .3, .6, .9, 1.2, 1.5, 1.8, 2.1 lots… the risk here in this example is not manageable as the ea got caught buying at the high and the trend changed etc… So this is a nice follow up to what I discussed in my previous post… If you use close on counter trend then the ea would of taken me out… BUT if you use close on counter trend the backtests are no good… I’m almost thinking that there should be a parameter (not DD based) but a fixed dollar amount that is an option for the user… whereby the user says “If I get to a loss of x amount” take me out of the trades… So for me that might be say $600 on a $30k acct… It would be interesting to backtest an option like this… to see how many times this situation arises and to also see if it is more effective than using “close on counter trend” which ruins backtests… An option like this “might” avoid catostrophic losses but still maintain a nice equity curve. Anyway, these are my “thoughts out loud”
Thanks
Peroni,
Have you tried the exponential martingale with factor x1.2 ? This gives you a more gradual lots increase and still gets you to profit target quicker. Your 0.3 lots would increase only 0.4, 0.5, 0.6, 0.7, 0.9..etc.
True, you will hit the 30%DD faster than no exp. marty when the market takes a bad trend against you, but you will recover faster as well.
cheers !
thanks greg i’ll look into it and test… with or without martingale we still need to address a way to avoid catostrophic loss without using “close on countertrend”… some other method needs to be explored as I suggested.
Take Care
Hi – Ultimately the market WILL trend against you and you WILL hit 30% DD. IMHO grid / martingale system are a ticking time bomb in this respect.
I’ve managed to ‘survive’ Crescendo by using smaller lot sizes and larger order steps, but am now waiting for my GPY & JPY shorts to clear before turning it off in anticipation of 1.4
Cheers
well, I guess you never tried exponential martingale with x1.2 factor ??
Hi Andrea,
Just as we have a profit tgt… maybe we should have a “basket” stoploss… So if the culmulative loss of multiple trades = x dollars… the ea takes the loss. Furthermore, it might be interesting… assuming that the ea will have trend defined properly a majority of the time… say greater than 60-70% or better… it would be interesting to test setting the “basket” stop = profit target… thus we are essentially saying that we are never willing to take a huge loss and furthermore we expect that the ea will initiate trades in the correct direction a majority of the time. So far, I believe this to be true in my tests… Most of the time the ea gets it right… But by take multiple positions… when it gets it wrong… it gets it WAY wrong and that gets ugly. Anyway, still thinking outloud.
Ciao
Peroni
Yes that can be easily done and it’s a good idea. Thanks.
Andreas,
I’ve had V1.3 turned off now for a number of weeks. I did this after I suffered a SEVERE loss; all of my 42% profits plus the cost of Crescendo. Consequently, I have lost much of my enthusiasm for Crescendo. Everything was set up a recommended.
With that said, I have been patiently awaiting the release of V1.4 and I’m becoming very concerned with the delay. I’m puzzled as to why all of the blog activity here has slowed to a trickle. I’m also puzzled as to why you and Mark McCrae continue to promote this stuff out of South Africa knowing that so many people have had poor results with crescendo.
I’m disappointed to think that we may be left high and dry here. I do hope I’m wrong and I will continue to give you guys the benefit of the doubt.
Thanks,
Bill
NY USA
Hi All
I turned 1.3 back on a couple of days ago.
I am try to work at a little different angle then previous.
Working it as a tool not fully auto but using my knowledge of Crescendo and the markets. Also using very small lot sizes and aggressive settings. And to make sure I won’t get burnt bad I am only exposing 10% of my account. When I get more then 3 open orders I will look for support areas and place step accordingly. Double my positions and so forth. Turning trade back on and off to ride out.
Working it has saved me in the past and this time by lowering the lot size way low gives me a even more room to adjust.
Also by running low I have plenty of margin for other EA’s.
This should work out good for me till we get new version out.
What I love about this Ea is that it is not a black box but a tool.
Pip On
Todd
P.S I am looking forward for some new changes and more settings to play with.
Andrea,
I know you are busy, but can you give us a release date for V1.4, I’m trying to organize my live accounts, I’ve taken V1.3 off my accounts and waiting for v1.4 but would like to know if we are a week away, 2 weeks, a month or whatever for v1.4 release. It has been very silent here lately ??
thanks !
could we see some live statement of the 1.4v?
just have a look here
http://www.myfxbook.com/members/pimpmyea/crescendo/84605
I think, betatest since some month now is enough, please publish the new version. when will it happen?
Hi Andreas,
almost everything is on hold now due to my personal problems.
Sorry for that. I’ll update you all very soon, hopefully with good news.
Thanks Andrea, good luck with your problems !
all the best to you and family !
cheers !
Andrea
Hope you can over come.
Take care.
Pip On
Todd
Andrea,
On this Good Friday, I pray you may get through troubles.I wish you can find strenght to get over all problems! – Take good care of yourselve, sincerely
Juan
Andrea,
I’m hoping the best for you as well.
Weston
Ciao Andrea,
Hope you are finding resolution to whatever the problems are.
You know everybody supports you here.
I believe most Crescendinos understand the situation and will remain
patient til official release of v1.4.
Stephen
He must have upset the Japanese traders a lot and they send
Ninja on him and looks like that he chopped his arm off.
If he cannot find a one minute of time to post on his forum
well,it’s sad to see that it finished like this.
I believed that Crescendo was on a way to become No1 EA
PS. Maybe we could all chip in and hire him a secretary
so he can dictate the updates….he he he
Hi Andrea,
Just had my first successful trade testing Crescendo Ultimate. I’ve put Crescendo on AUS/USD and EUR/USD charts. I have reduced lot size to 0.01, profit target to $4.00 (maybe I’ll reduce it to $3.00 with AUS/USD) and am using the Parabolic Sars Algorithm. Just had my first successful trade on the AUS/USD. I also intend to try the profit trailing feature.
Many thanks for all the long hours of work. This product is incredible.
I am down 25 % using Crescendo with default settings which should be the best settings the developer has. I would like a clear cut answer to when Crescendo will be profitable. It is obvious it isn’t this version. I certainly am not buying another EA before that happens. I purchased Crescendo on 9-28-2010 and it has been underwater 90 % of the time. This isn’t a complaint. It is a fact. Please let us know what to expect going forward.
Andrea hope that you understand that the post meant to bring a smile to your face and cheer you up.
Anyhow I love the Cresc. even that I have blown my live acc. to bits
many times,”not using the recommended settings”
I’m senior/learner/beginner Forex trader but I will have to learn to
use the recommended settings or end up with a heart attack.
Hope you get back soon.
Regards
Hi Andrea,
Hope all is well. I’m still waiting patiently for V1.4.
Regards,
Bill
NY, USA
I was wondering when 1.4 was going to be released. I know originally it was going to be January of this year. Then it was delayed serveral times.
Just was trying to get some sort of idea.
Thanks a bunch,
Semika
I’ve been on hold with the development for many weeks for personal problems.
I’m trying to get back to it and hopefully you should all have news from me about that soon.
I would just settle for V1.3 trading another pair to replace GJ, like I suggested back when V1.3 was released. I’m pleased to say that C with only GU is still making monthly gains
we miss you Andrea !
wishing you all the best !!