Manually stepping in to stop Z systems?

I'm pretty new so forgive me if this sounds dumb but...

Z12 is currently shorting USDCAD, I'm wondering whether it's a good idea to stop it and whether stepping in to nip potential bad moves of the Z systems is a good idea in general?

Given the oil stuff going on and the continuous upwards trend of USDCAD, it seems really odd to short it. I have a feeling that Z12 is likely following Z2's mean reversion signals right now (is there a way to check that? What is the "HP" algo code? Are these documented?) but the news around CAD indicates to me that mean reversion isn't likely to happen in the near future.

On the one hand I have a nervous voice in my head telling me Z12 doesn't have all the facts and can make mistakes that I should correct.

On the other hand I feel like this is just nerves and drawdown making me panic and act unreasonably.

What do people think?

EDIT: The Z system docs document that HP does indeed belong to Z2, which means Z12 is currently betting on mean reversion on USDCAD. Maybe a good idea to block USD/CAD:HP?

In my opinion, the worst things you can do in algo trading is to manually stop trade. I know its difficult, I have done the same mistake. If you are not confident in the system you are running stop the system. Vice-versa you should accept the decision taken by the system you have started.

my2cents

I understand that but it's hard after watching it hit the stop loss on what looks like a no-brainer.

I'm retraining it, hopefully the last month's data will wake it up.

I am not quite sure that if you close manually trades from a automatic system, it will be a bad idea. I mean: where is the proof of it? or is it just a believe or idea based on logic but not in solid data results? If the strategy goes down afterwards, can we ensure that it is so due to manually handling the trades? To proof so, one should have two accounts and act manually in one of them while the other keeps running without intervention.
Maybe if one does something with the system, it can help it to reorganize itself better for the current market conditions.
Another way to proof it is by inserting two random variables into the system while backtesting. The panic variable and the random manual intervention variable. The panic defines randomwly how much loss or win do we accept before closing the trade. The random manual intervention decides when the trades are closed, which is to say a random manual invervention. Playing with this and other variables we can see the effect of manual intervention. Maybe some conclusions can come from it. Maybe the DD and PF do not change much which can mean that manually intervention wont affect the long run meaning that if one really knows that the system is not adjusted to the market, the manual intervention can save losses but it wont affect the wins in the long run. Just an idea.

What nobody should do is to close trades due to panic because the trader does not like to see trades loosing. The system was already trained, so if maybe that that lossing trade will become a win one. The question maybe: Is this current market situation similar to those from the training period? If not, maybe the system cant adapt to the current market and to step into it can be helpful.

So it is possible that closing trades manually is good or bad depending on the market conditions. For that, two paralel systems should run. One with intervention and other without it but in different market conditions to see when it makes sense to close trades manualy, or if it does at all.

The system could have an alarm as well. For example: If the oil price or gold, or SPX500 or whatever or all of them are lower or higher now than the highest high or the lowest low of all the prices during the training time, the zorro window could prompt a message like: Not similar conditions haven been observed in the historical data used in the backtest. Manually intervention can now be considered.

Well Nanitek, I can share my experience. All the trades that I have closed ended with a better result than when I closed them

Thanks for the comments. I ended up letting Zorro do its own thing and it hit the stop loss and lost ~1000p. However the USDCAD fell drastically today and would have been a 3000p profit had the stop loss not hit.

I think I'm just going to trust it for a while and see what happens.

That could not be!!
Yesterday my Z12 has open a LONG USD/CAD (and close it later with a loose) and your Z12 has open a SHORT
Very strange That could explain Z's different performance
Looking at Ticket Nr. 09463508
FXCM-Report

Could you show us your Report?

Here's an MT4 report. Some of those are Z7 though: http://dev.guymac.eu/atexar

USDCAD loss is transaction 2283459.

OK. The Trades are almost the same (second line,my Z12)
REPORTS:
Ticket...Open Time..........Type Size..Item..Close Time
2283459 2016.01.18 10:04:02 sell 0.06 usdcad 2016.01.20 10:26:04
09457265 1/18/16 3:15 AM......................1/20/16 3:31 AM

BUT:
Your Report show only 1 open Trade (USDJPY) at that time
My Z12 but has 17 open Trades

That means:
You have massively intervened by manually close Trades
Any discussion is therefore lapsed

Therefore, we should cease to compare Z12 systems
If one has no confidence in Z12 then let it be. Manual intervention, no strategy can be successful

As I see Z12 used a type of hedging. If you close manualliy
"one side" then: "it could go in the pants"

JayKelly, I agree. I do not know if z12 is hedging, but I could confirm that a draw-down occurs every-time I have manually closed a trade.

If you are not confident, for any reasons, on z12 stop it or run it in demo.

No, I didn't manually close trades. I only started running systems a couple of days ago and it seems to take a while to start them. I gave you the entire history of my account and it very very clearly shows that only two other trades had been entered after my initial deposits, both of which ended profitably. The USDCAD trade hit stop loss. If I'd closed other trades manually you'd have seen the buy and sell entries there.

Stop being alarmist and look carefully before making baseless accusations.

As for:



If USDCAD had been mean reverting during the training period but an anomaly pops up during live trading, does it not make sense to close the trades and/or retrain?

I'm not suggesting blindly panicking and closing trades that look like they'll lose money, I'm suggesting that we reason about the systems we're using, know their weaknesses and step in if it looks like they're making a mistake they can't know about. Z-systems aren't magic and you shouldn't "trust" them blindly.