Envelopes Strategy

newbieFX (9/27/2010)

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Thanks a million for your great explanation kalrainer. I have test run in demo account for 30 days, and it appears that EUR/USD 1hr 56 period 0.2 deviation works a whole lot better than 30 minutes. The results fluctuates even if i run the strategy one after another, it differs a lot as well, earning 30+ vs earning 180+. Sometimes the stop/limit positions fall out of range causing a fatal error as well. I supposed this strategy do require some human intervention and monitoring.

Looks like i got a lot more to learn on fundamental analysis rather then just applying strategies in ACT trader.

kalrainer (9/27/2010)

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YEs, we have to learn technical and fundamental analysis to support the strategies, and better yet to understand if they work or not.

You can even trade the envelopes manually and scalp some pips following the patern of the strategy. Buy when a candle close inside of the bottom band, set your limit at the top band and the reversal strategy for selling.

newbieFX (9/27/2010)

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Cool. I'll give it a shot at the real thing and watch how it goes. By the way, 0.5 lot doesn't work anymore it seems

seraphim (9/28/2010)

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This strategy can be run on any time frame? That is can we start running it any time?

kalrainer (9/27/2010)

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Hi, I am using the Envelopes Edited, the second version. I don't have file to support the difference between demo and real, how ever, I've been made testing only in real account and what I have found that results varies not if it is only in demo or real, but the numbers of days you are testing. for example, if you are making the testing today with 30 days history, you won't have the same results if you do it tomorrow of the day after trying on the same 30d period because of the indicator position. I've been makin several testing with several instruments and strategies and I have found that the EVELOPES is the most profitable, however, it needs the humand help, I mean, it needs you to make your technical analysis in bigger time frames, like 4, 8 and daily. I've also been mading some research about the algorithmic trading and I've been reading that it works only if the human factor is also engaged with technical analysis knowledge and, why not, fundamental advice knowlege. Running the stratey on its own can be usefull only if you have enough margin to support lost and several open positions. If you do not have enough margin, it will be called real quick. you might be able to run in real with a micro account (1k positions) with a margin of 250 USD and it might give you 300 USD in one month.

So, here are a couple of settings for the envelopes that works for me:
trading plataform:ACT Trader

EUR/USD
1hour
Periods: 56
Std Dev: 0.2
Lots: 0.5 (1K, but depends on your margin, you might run from .5 to 5 lots, it is on your own risk managment)
T. Range: 0

USD/CAD
30 min
Periods: 56
Std Dev: 0.2
Lots. 0.5 (1K) (1K, but depends on your margin, you might run from .5 to 5 lots, it is on your own risk managment)
T. Range: 0

in short words:

- I strongly suggest that make your own test with other instruments and different settings, but take note that you need to know that the starting test position will not be same with every new candle opened.
- Make your technical analysis. Long term, short and internal trend, posible reversals (crowns). When the mkt has a very strong trend (like the ralley of the bull that it is shown as of sep/27/2010) the trategies might fail unless youll be able to enter in C and scalp some pips.
- Search for Bull or bear Pathers in bigger time frames.
- learn and study how to interpretate the fundamental news
- you are your best strategy. this is the only way to gain pips and make a strategy profitable. At the end, it is only another tool.


Please if you have something to add to this lines, DO IT. we need to know about your experiences.

thank you.

seraphim (9/29/2010)

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Hi Kalrainer why did you put T. Range: 0? And is this settable from the platform or we must edit the script to change this field. What does the trader range represent?