Why doesn't Sentient Trader make any trades?

If you find that Sentient Trader is making no trades (whether when working in real time or when building a trading history), then you should look at the Trading Journal to see what is going on.

Note that in order for the trading journal to include all information pertinent to the trading process you should first make sure that the option: Tools > Options > General tab > Store full commentary to trade journal is CHECKED.

If you see references in the trading journal along the lines of "no trade - insufficient equity" then Sentient Trader is not making any trades because it doesn't think that you can afford to with your current trading settings.

In this case you will need to change the Trading Settings for the chart. Go to Tools - Trade Settings and do one or more of the following:

• either change the "Monetary Value of 1 Tick" setting to a lower number;
• or the "Tick size (minimum price move)" to a higher number (which will change the display of the chart, so probably don't change this);
• or increase the size of your equity;
• or change the leverage settings of the instruments, to make the average trade more affordable.

The reason you should change these settings in this way is that Sentient Trader is not trading because the stoploss of the trade would lose an unacceptably large percentage of your equity.

How do you work out which setting to change, and to what? Follow this process:

Look at the trading commentary/journal. Where it says “insufficient equity” – it should give you details for the trade, as in entry point, and stoploss level.

Then take that stoploss level, and work out how much actual money you would lose at that level per contract (in other words if you bought at the entry price and the market moved down to the stoploss price, how much money would you lose per contract?) – let’s call this value LOSS. I’m assuming that you know this – if not, then look at the exchange websites where they usually have examples and explain this in detail. Another source for this information is your broker.

Now work out where Sentient Trader is going wrong, which you can do by mimicking the calculation that it performs:

• Calculate value A = (entry price – stoploss price)
• Then value B = (1 point represented by) as you have set in your trading settings.
• Then value C = (Monetary value of 1 point) as you have set in your trading settings.
• Then calculate this: X = A / B * C. If you are using a calculator simply enter your entry price, subtract your stoploss price, then divide the result by the (1 point represented by) value and then multiply the result by the (monetary value of 1 point) value.

Now, how does the value X that you calculated differ from the value LOSS, that you calculated earlier, the amount you would lose per contract?

Usually the difference is a multiple of 10.

So here is how you fix your trading settings:

• if X is 10 x larger than LOSS, then EITHER:
  • MULTIPLY the 1 tick represented by value by 10
  • OR DIVIDE the monetary value of 1 point by 10

If the ratio is not 10, simply substitute the appropriate ratio into the above.

Now perform the calculation again, and you should get X = LOSS. If you can afford to enter this trade, according to the percentage of your equity that you are willing to risk per trade (in other words LOSS is less than the maximum amount of equity you are willing to risk per trade), then Sentient Trader will make the trade.

Bear in mind that the Sentient Trading methodology requires that the two cycles shorter than the trading cycle have harmonic ratios to the cycle above them of 2:1. No trading will take place (using the Sentient Trading methodology) if the harmonic ratios of the two cycles shorter than the trading cycle have harmonic ratios other than 2:1.

If you are using the Sentient Trading mehodology there is an additional way to force Sentient Trader to make trades, and that is by adjusting the trading matrix. On the front (basic matrix) page of the matrix editing page there is a checkbox that allows you to "Ignore profit targets (force trades)". By checking this box, Sentient Trader will take trades regardless of the profit potential of the trade, but still considering the cyclic situation (and so for instance it will take a trade which is in the correct direction according to the analysis, but which might not yield a large profit).

Remember that the inner workings of Sentient Trader's thought processes are revealed in the trading journal, and so the reason why no trading is taking place will be revealed there.

For more information take a look round the Hurst Cycles Trading Academy. There is also more information to be found in the Online User Manual.