Quote:
Originally Posted by kanakorn  |
How are you planning to manage the uncontrolled risk, and the massive drawdowns this robot continually accumulates?
This has been my biggest problem when looking at the Steinitz. I like the basic theory of entering trends on a pullback, but the robot seems to err in its entries more often than not, either entering the trend late following a quick pullback, or entering on the pullback as the trend reverse's.
This could be a successful robot with the proper manual guidance, but it needs to be monitored and directed almost constantly. The problem results from the use of smoothed Heiken Ashi candles for the entire signal. This is the same as trading a smoothed moving average. Its a great device for holding a trend long term, but its a poor timing device for entries and exits. Generaly slow moving averages are coupled with fast moving averages and ocsillators to generate and confirm signals and improve the timing.
I would like this robot a lot if there where a way to master exiting failed trades at a small loss, rather than holding massive drawdowns on the hope that the long term trend pulls us through. Unfortunately the robots entries are so inacurate that by the time a short term trend failure is detected the drawdown is already quite large.
This problem is common when trading moving average crossovers without taking into consideration the actual price action. With a heavily smoothed average, such as this one, by the time a signal is generated the price is usually already doing something entirely different.