Archive for the ‘Smart Trader’ Category
If you’re looking at some stellar results on mt4stats, you may think the results are too good to be true!
3 Things, 2 Pages, 1 Fallacy…Then, It’s Time for Pie!
First things first:
- MT4Stats is a 3rd party website. Windsor Park does not own/control/influence/etc. any content there (We also do not endorse any of their ads). They provide all mt4 users worldwide with 3rd party verification and give honest, live results straight from the mt4 trading station.
3 Things to pay attention to while reviewing results on mt4stats:
- Duration of the account
- Open Orders
- Equity is the most important indicator. It is how much money you actually have in the account if you stop the EA and close all open trades. You can find the account’s equity at the bottom of the Statement page.
- Duration of the account is how long the account has been running. This will help you determine how stable a strategy is. This is also available on the Statement page.
- Open Orders will effect the balance of an account, positively or negatively. Therefore, Account Balance doesn’t matter nearly as much as Equity does. You guessed it: Statement page.
2 Pages: Statement and Analyses
There are two tabs at the top of an mt4stats webpage.
- Statement shows every trade (closed and those still open), as well as the account Equity at the bottom of the page.
- Analyses, yes the plural of Analysis. The Analyses page shows the total number of trades (P/L), as well as a pie chart at the bottom of the page showing the distribution of profitable trades among the different currency pairs you are trading.
The Fallacy of Gain in %
On the Analyses page, you’ll notice “Gain in Percentage”. This number can be close to the mark, but unless there are no open orders and the account is “flat”, the gain in % is incorrect. Gain in % is based on Current Balance divided by Initial Balance. You’ll remember from earlier that Equity is the most important indicator of the amount in your account. Therefore, in order to determine the correct gain in %, you must take the Equity and divide that by the Initial Balance. This will provide you with the correct gain in percentage.
Example: Current account equity of $12,000 divided by the $10,000 initial balance (12,000 / 10,000 = 1.2 or 20% profitable increase).
What Time of the Day is My Strategy Working?
Here is a graph showing the total amount of orders opened during the 24 hours of the day. The correct way to read this is: since the beginning of this account, on April 4th, the account has opened an order in the 2100 hour about 27 times. This is a great help to those people who run multiple strategies on the same account. It helps them determine when they can safely run a different strategy, while not losing the benefit of running Smart Trader 1 Pair.
A Pie Chart of Stability
In the first pie chart below (ST4Pair), notice that the two Japanese Yen pairs, (EURJPY and GBPJPY), account for more than 2/3rds of all the trades placed. Compared to many other strategies (King’s Cross shown below), this is a very well balanced strategy. Watching ST4Pair for weeks showed that the four pairs fluctuated from 38%/31%/16%/15% to settle at 32%/32%/18%/18%. Very stable.
And you can see that the Kings Cross 1 strategy is heavily weighted toward the GBPUSD, not only in lot size but also in the amount of trades placed. King’s is still an excellent strategy after all these years, but Windsor Park is always on the lookout for other strategies with great returns, low risk, and good stability. We’ll keep you posted!
And don’t forget, you can get your own FREE mt4stats page for your demo or live accounts (even a vps account)! This allows you to share your own results with your friends.
(Please note: Practice demo accounts don’t last forever. Therefore, the link in this blog to ST1Pair is now connected to a new account.)
Have you noticed a pattern from this year’s Smart Trader results?
Smart Trader really grooves on certain currency pairs in this market. On other pairs, not so much. But remember, one of the greatest benefits Windsor Park provides is the data from over 100 trading stations running day and night! Having access to this information allows us to narrow our testing focus. Therefore, since any particular strategy will excel on certain pairs, we are able to tweak our settings to accommodate those specific pairs.
As currency traders, you and I need to assess the market conditions to determine which of the vehicles at our disposal will work best. If you’ll forgive the analogy, our strategies are similar to an SUV. You wouldn’t take a sports car off-road, and you wouldn’t take a big semi-truck just down to the corner grocery. But there are some SUV’s that you could use for both situations. An SUV will get different gas mileage off-road than it will on the highway. In the same way, our strategies provide different returns based on the market conditions. And remember, no matter which strategy you choose, you are still the driver. You’re in charge!
So, take a look at the GBPJPY with Smart Trader here. I’m calling it st1pair. It has less than 2% losing trades! (Running since April 4th, this pair was chosen for its consistent top 5 Smart Trader ranking on the blog)
Also, don’t forget that all of you members are an integral part of the testing process!
Setting up the Smart Trader – 4Pair strategy is VERY straight forward. But, you should only choose the 4Pair strategy if your account size is greater than $20,000 at least. If you are beginning with an account size of $5,000 or $10,000 you may choose to start with a single pair, like the GBPJPY.
So, setting up 4Pair takes only 5 steps for new traders, and even fewer steps for all the experienced traders out there.
- Step 1: Download the MetaTrader 4 platform and Smart Trader software from here (This is also available at step 1 on the main page). Watch the first training video here. It covers installing the MetaTrader 4 platform and initial setup.
- Step 2: Install Smart Trader into the same file folder where you installed the mt4 software. After installing Smart Trader, be sure to close the mt4 program. Then, restart the MetaTrader 4 program (there should be a shortcut on your desktop).
- Step 3: Load four (4) new currency pair charts. Feel free to choose your favorite pairs, but you might want to look at which pairs have performed well over the last few weeks (See “Weekly Trading Results” on the blog).
- Step 4: Next, load the Smart Trader template on each of the 4 currency pair charts. Click on Charts>Template>Smart Trader for each chart.
- Step 5: After you click on the smiley face on each chart, you ONLY NEED TO CHANGE THREE SETTINGS. Change the lot size to 0.05 per pair for a conservative setting on a $20,000 account, set the different Stop Loss for each currency pair, and change the Max Order setting to 5 on each currency pair. (On Smart Trader v0.6, the max order setting is a global setting. That means, 5 max orders for the account, not each individual currency pair.)
You’re set! Don’t forget to leave your computer on, and the program running. This will allow the software to place trades and close them at a profit!
Keep watching this blog…we’ll cover more advanced settings at a later date.
Past performance is no guarantee of future results.
Remember a few weeks ago, we mentioned at the meeting that we were trading Smart Trader on every pair, in order to find the best pairs to work with? Well, last night we showed some results that are VERY encouraging. A few weeks ago, I started a trading trading station with a group of 4 currency pairs using Smart Trader. Once I set it up, I let it run without any supervision. After about 4 weeks trading the Smart Trader – 4 Pair account balance was up 68%! It has zero (yes, zero) losing trades!
…pause for effect…
Now for those of you who want to point out that there may be current open orders, you’re correct there probably are some open orders. For everyone else, go to the Statement Tab and look at the open orders at the bottom of the page. You’ll find (as of this posting) that some of the open orders have been hanging on for quite a while. This provides an excellent opportunity for all of us to review one of Philip’s classes regarding “closing orphans”. Following Philip’s training, any member running this on a live account would have checked the account daily or every other day to determine whether any trades were being “orphaned”. By employing Philip’s great pointers, this account would have a higher return. So, to recap, the account’s equity increase (as of this posting) is 48%.
— UPDATE —
This ST4Pair account was started with the theory that we wouldn’t close orphaned trades in order to see how it would react to changes in the market. The orphaned trades had a detrimental effect on the account, and it took almost 6 weeks for that effect to overwhelm the account’s growth. Now, you and I both know that there’s not a trader out there that will ignore a live account for 6 weeks! So, if you follow the strategy suggestions we have listed here on the blog (click on Strategies on the right), your ST4Pair account will behave differently.
As you can see by the pie chart here, trading with 4 pairs provided more stability in the strategy. You’ll notice the EURJPY and GBPJPY were more than twice as active (active in the particular way that Smart Trader prefers) than either the EURUSD or USDCHF. And of course, this activity may adjust as the market changes. So, a few weeks or months from now, other pairs may produce that same activity that Smart Trader prefers. But don’t worry, Windsor Park FX will continue to provide you with updated results on the individual pairs we trade on Smart Trader.
See you next time!
Here are the settings for Smart Trader strategies currently being tested at Windsor Park. We encourage all members to demo and share their own changes and tweaks.
All of the results listed on this blog are using these settings. All accounts are leveraged at 1:100 and the settings may be quoted in micropips (15 pips = 150 micropips).
Smart Trader Strategies
- Rule of Thumb:
- Use 0.10 lot per $10,000 account.
- With the ST4Pair strategy, use at least a $20,000 account and 0.05 lots on each of the 4 pairs.
- Limit max orders to suit your trading style
- Set the Stop Loss to 2 times the Average Daily Range (SL=2xADR)
- When choosing a currency pair, check out the weekly results on the blog.
Demo Account Settings for Smart Trader:
- $10,000 / 0.1 Lots / 1:100 / SL = 2x(ADR) / Limit Max Orders to 5
- Choose a pair that stays consistently in the top 5-10 week after week.
- Check out the link to the right for Smart Trader 1 Pair results!
- $25,000 / 0.05 Lots / 1:100 / SL = 2x(ADR)
- Limit each pair’s Max Orders to 5
- On each pair, change the magic number so that each pair has a different magic number.
- Then, set each individual pair’s Max Orders to 5.
- Choose 4 pairs that stay consistently in the top 5-10 week after week.