We all are used to doing the same things day after day.
Every day, leaving home, we expect to see the inviolability of physical laws, more or less the same weather (in the range of liquid water temperatures), and maybe faster mobile Internet. Just a little bit.
All the same in trading. We hope to meet repeating patterns and meta-patterns, but, at the same time, do we really remember the trading history?
My name is Daniel. I am co-founder project Wait4Trade with my friend Andrei.
We have a lot of experience, negative experience.
We backtested hundreds of strategies.
We coded about 1, 000 indicators.
And nothing work in the long term.
Strategy can be profit 50 trades, maybe 100, but after 1, 000 trades most of the algo strategies fall in zero mines commission.
The best of them returns zero after the deduction commission.
But we know traders that make a profit for many years with over 500 trades.
How do they do it without martingale and average down?
Answer is their own neural network in the head.
Risk management, target/stop ratio, psychology and etc means nothing without a good trading neural network in your brain.
If a trader cannot define the right place for trade nothing to help, in long-term deposit will be ruined.
We made brainstorming after this insight and the result was to begging developing algorithm of recognition similar days.
Why exactly this algorithm?
Traders make decisions based on past market data (exact, and one only way) with the expectation of repeatability market patterns.
Profitable traders somehow remember the right price scenarios that may be.
We decided to display the top 10 most similar price scenarios on the chart.
Our algorithm searches days, similar to yesterday on 10 years history.
More details at this link.
It gives the whole picture of historical scenarios and lets traders concentrate only on price scenarios with no useless indicators.
We think it’s the best way to train our brain, train our trading intuition.
We hope our project will be useful for the traders community and contributes to the appearance of good strategies on Collective2 for investors.
I will post screenshots of my trades here.