Buys act differently than Sells

Posted By black Tuesday, January 19, 2010
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black
 Posted Tuesday, January 19, 2010
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It seems that the market behaves differently with Buys than it does with Sells. Because of this, traders should have different parameters for trading Buys than they do for Sells. Settings in strategies should reflect the differences as well.

What I, or anybody else, need to do is to build Strategies with different settings for Buy and Sell. This way, in a market that is adverse for the one, the other will be actively making money... hopefully enough money to at least offset any losses produced by the other.

For example. In a RSI strategy, the Overbought line is usually "80" while the Oversold line is usually 20. It might just be that the Overbought should be 81 while the Oversold should be 21 for Buys, and the Overbought should be 79 while the Oversold should be 19 for Sells, non-symmetrical. Or maybe the strategy should run with a RSI of 13 for Sells and a RSI of 15 for Buys, all at the same time.

Just a thought.
Tuesday, January 19, 2010 by black
analyst
 Posted Wednesday, January 20, 2010
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Very interesting thought :-)

However, I am a little surprised. I have never observed buys acting differently than sells (in my one strategies and some others'). How did you notice this, black? I believe this is an important topic for further research.





br,
Phil Richter
mexican
 Posted Friday, January 22, 2010
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What is the difference, black? Any examples? I am really curious. Thanks in advance Wink
black
 Posted Monday, January 25, 2010
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analyst (1/20/2010)
Very interesting thought :-)

However, I am a little surprised. I have never observed buys acting differently than sells (in my one strategies and some others'). How did you notice this, black? I believe this is an important topic for further research.


I have used ActTrader with 3 different brokers. I used the previous WinTrader. In the Strategy tester, in all cases, the tester seems to be biased in favor of Sells when trading at 1 minute, 5 minutes, or 15 minutes - and in some cases, with some scripts, every time frame. You can see this in the charts of a Strategy being tested. The chart numbers do not always line up with the positions of the little triangles that mark the opens and the closes of Buys and Sells. Almost never will you see an open position near the low point of a candle. But you will see many near the high point of a candle. Test a Strategy that opens lots of positions during a run, and you will see what I mean.

In the demos, however, the Strategies act differently. If they DO favor the Sells in the demos, it is almost unnoticeable - except if you are looking for it.

I think I have read somewhere that most folks are still accustomed to "buy low, sell high." They still don't have the idea that they can make at least as good money with "short sell high and buy out low." So there is a difference in the numbers and types of people who buy and who sell. This just might be reflected in how a Strategy would react when buying or selling along with the two different "crowds."
elvin
 Posted Thursday, January 28, 2010
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I probably guess where this effect might originate from. In the charts, only the Bid rate is plotted (Ask values are not used in the charts at all). In the startegy tester, if a buy position should be opened, the price is historical Bid + Current spread. For this reason, when you see the triangles of Buy positions in the chart, they generally are positioned higher than the triangles for the Sell positions, and may never reach the very bottom points of candles. They might even be displayed above the candles in some cases? becasue of the spread.
black
 Posted Friday, January 29, 2010
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elvin (1/28/2010)
I probably guess where this effect might originate from. In the charts, only the Bid rate is plotted (Ask values are not used in the charts at all). In the startegy tester, if a buy position should be opened, the price is historical Bid + Current spread. For this reason, when you see the triangles of Buy positions in the chart, they generally are positioned higher than the triangles for the Sell positions, and may never reach the very bottom points of candles. They might even be displayed above the candles in some cases? becasue of the spread.


Perhaps.

Yet in demos, this doesn't seem to happen. If it does, it is very reduced from the tester.

I made a little Strategy called Candle.act. All it does is to Buy, Sell or both, Buy and Sell, every candle depending on how many positions are allowed to be open at one time, and how the trader has the other settings set.

There aren't any indicators. It simply Buys or Sells every candle. It doesn't matter if the price moved up, or if it moved down, from the beginning of the candle. It just buys or sells or both, every available candle.

Test it in the tester every which way. And then demo it. My results are excellent returns for Sell, disaster for Buy and disaster for both Buy and Sell together. But, I haven't demoed it. If the demo and live worked as good as the tester for Sell, we wouldn't need any indicators.
 Candle.act (251 views, 4.68 KB)
bobby
 Posted Sunday, February 14, 2010
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That's very interesting!
Actually, I have tried your strategy on a couple different instruments, and on one of them, buy resulst were better than sell all the time, on the other one the sell results were better than the buy. So I suppose that your observation could be erroneous.


---------------
Bob Farlow
NeroKoso
 Posted Tuesday, March 23, 2010
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I've seen same thing long time ago when I was testing entry orders strategy.
mwitamath
 Posted Sunday, October 10, 2010
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I have this problem with my new strategy that I made, The settings are the clear, but when it comes to buy, the robot buy not at the price that I want according to my strategy, may be there's a problem with actfx itself!! we need to contact developers!
mwitamath
 Posted Sunday, October 10, 2010
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The difference between buy and sells is spread=))

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