Study agenda Thursday 8/7 five-hour timeblock

• Study Van Tharp's high-expectancy/low-risk formula; write out how/where it will be applied to my strategy
  
  • reference 1
    
  • reference 2
  
  

  I think expectancy calculation is critical to an overall successful strategy. The correct time to apply this formula is after trade rules are written. Use historical testing to perform a minimum 30 trades (preferable 100-200) and then calculate the expectancy based on those trade outcomes. The expectancy figure tells whether or not a strategy could be profitable in the long run, and what the average take would be.

  
  
• Study equity crossover ideas; write out how/where it will be applied to my strategy
  
  • reference 1
  
  

  Equity Curve trading is a theory that says the trader should stop trading or reduce lots when the equity curve crosses above or below its moving average and to resume trading on a crossover in the opposite direction. It is unknown whether this would be useful or not for manual trading. One possible indication is that it could flag a trading strategy that no longer works. This needs more research. I think I would like to analyze the equity curve during each trade, and when the crossover below the MA occurs, switch to paper trading so the strategy could continue to be monitored. Upon a crossover above the MA, begin live trading again. My theory is that a failed strategy would continue to perform in a substandard way, thus keeping equity below the MA.

  
  
• Write out specific/formal survey (testing) procedure
  
  • reference 1
  
  

  Prerequisites: a) identify trading markets/hours to test; b) identify currenc(ies) to be tested; c) identify primary chart timeframe that will be studied; d) identify core strategy style: breakout, scalp, counter-trade, trend-following; Objectives: a) to observe how each indicator (or chart behavior) performs around a potential trade entry and exit; b) survey all stats for every trade; Post-analysis: after sufficient number of trades exist in the database, analyze database for indicator correlations which can then be used to solidify trade rules

  
  
• Research and identify a mind-mapping tool that will work for my purpose (web-based)
  
  • reference 1
  
  

  I've tentatively selected Mindomo as the best fit.

  
  
• R&D to locate classification of indicators: leading vs. trailing needed
  
  • reference 1
    
  • reference 2
    
  • weed out any that are not available in both FT and MT4
    
  • read-up on some and see if any look useful; start a list of those I'd like to survey
    
    • On-Balance Volume
      
    • Average Directional Index
      
    • ZigZag indicator
      
    • MACD
      
    • RSI
      
    • Stochastics
      
    • CCI
  
  
• Rob Booker / InterbankFX free webinar at 6pm (will watch the recorded video later)