Archive for July, 2010

Tuesday Flashback


Excuse the naff titles but I’m on a roll so bear with me on that one!

Yesterday was a pretty remarkable day trading wise and whilst my TUFXP method missed trading I did manage to secure several decent trades and a handsome profit was made, it’s brought July well into the green zone and it’s always a good feeling to get on the winning train.

The original TUFXP method had a win but not before a big scare when Moodys downgraded Portugal’s status. Here is the chart:

I didn’t enter this trade as the 50 SMA was still trending down but I suppose an excellent entry was possible when the trade went to -25 or so before rising all the way back up. It seems to return to my dilemma last week when I was questioning whether to avoid invalid trades or take a significantly better entry. On this occasion I didn’t take advantage of the better entry but I have made annotations in my results.

I’m finding my results are an invaluable part of my trading as when I need to find something I know exactly where to find it. I’ve always been big on keeping strict results and it stems from my racing days. Ask your average punter their P+L and they’ll 9/10 reply with an inconclusive answer. I imagine it’s the same for a lot of traders. If anyone would like any help on how best to record trading results, just let me know, I’d be happy to help out.

So the scores for July for the TUFXP method are -25 pips for the original method and -14 for my method despite not trading yesterday.

Advertisements

Monday Rewind


I did initially have some worries about trading on Monday as prior to 6.30 AM there was precious little movement and GBPUSD was looking particularly ugly. A couple of strong sell candles formed and a trade signalled on TUFXP and not for the first time lately, a discrepancy was found between different users of TUFXP. My stochs, whilst heading down, were still okay for an entry but for another user the stochs were well over the oversold line. It is a little worrying how different the data can be at times but at least we got the same signal this time!

1.5000 was also a major concern and when it bounced to 1.5027 I thought my goose was cooked but thankfully strong selling pressure won out and a nice victory was gained and I also managed to hang onto it for +33.

I’ve always questioned the wisdom of TUFXP employing a sole company to providing a data feed and they swear blind they do not receieve any commissions off IQFeed which I find extremely difficult to believe. Why is it the likes of Fxpro, FXDD, Alpari, OANDA can all provide excellent feeds for no cost yet IQFeed charge over $88 a month for a sub-standard service that regularly drops out which in turn affects the outcomes of PTPs.

A friend in the trading room, Mike, mentioned you can request to pay 12 months upfront and you can receive 50% discount on your subscription. Thanks for that Mike!

I hope everyone enjoyed Graham’s first post, he’s still having a few problems logging onto the blog but I’m sure he’ll get around the technology soon 😉

Onwards and upwards..

Introduction


So here we go. John has brought me aboard the good ship FX-Fun as a tester/reviewer and I will be looking to do the business on any systems that happen to catch my eye. It’s great to be here and I thank John for his kind words of welcome last week.

 I will look to run an initial test of one month, with the possibility of extending that run for those that show promise.

 It will not necessarily be those that flood your in-box which come up for testing but those which have caught the eye for some reason. Maybe they’ll seem to offer some new twist on an old idea, or perhaps something which seems to offer something completely new. Who knows. All I can say for sure is that the tests and reviews will be completely fair and impartial – no affiliate connections here – and if I like something, you will be the first to know.

OK, down to business… First up for us is an indicator from Terry Brooks called FXSmooth.

Note that I said indicator, not system. This is not a complete plug-and-play system which holds your hand as you trade…nor is it a bot. It actually requires a bit of thought and attention.

 Terry sent me the Platinum package, which comes as a .zip file and includes indicators for the EURUSD, GBPJPY, GBPUSD, USDCHF and USDJPY. As well as these currency pairs, there are also indicators for Oil and Gold and an exit indicator.

It is very important that the indicators are attached to the MT4 charts they represent. They are optimised for those pairs. Having said that, you also get a platinum indicator, which can be used on any pairs other than those listed. As well as the main pairs, I have attached platinum to the EURGBP, EURJPY, USDCAD, EURCHF and AUDCAD.

There is no particular reason for this, other than I wanted to test an equal number of smooth and platinum charts and I had these charts already open on the account.

 I didn’t use the gold and oil indicators, as I have never traded these markets before. Maybe later.

Also included in the package is a brief installation manual and up-to-date statements for the currency pairs traded.

 Downloading and installing the indicators takes no more than a few minutes, however if you need more info on installation, there is a link to youtube, where you can view a video of the process.

All-in-all, a no-nonsense product, which is fine by me.

 Before getting started I fired off a few questions to Terry and without fail, he responded extremely quickly, often within a couple of minutes. After-sales support, therefore, gets a big thumbs-up.

 Terry recommends IBFX, Alpari and FXDD as the brokers to use and I used an account with FXDD, however I see no reason why the indicator wouldn’t work with other brokers.

Once you add FX-Smooth to your charts, you will have your candlechart and the entry and exit indicators in separate windows for each pair.

The indicator is optimized for the 1-Hour time-frame – and that is what I have used for the test – however Terry says that any timeframe can be used. I would say straight away, that I feel it works best on the H-1 and upwards, purely because no indicator, no matter how good, will always tend to lag – even a little – and on the longer time-frames this will be less of a factor. Stick it on a 5-min or 15-min chart and you will immediately see how frantic it gets. Not for me, I’m afraid.

 Having said that, from what I have seen so far, FX-Smooth does indeed seem to have very little lag. I will get to the little quirks that it does have later on throughout this test.

The first thing I did was to customize the appearance of my charts. The indicator default colours are green and red. Green for buy signals, red for sell. I changed these to blue and red. Ditto for my candle chart. Purely personal, I know but when you’re going to be looking at something all day, you should at least protect your eyes from garishness! Sorry, Terry!

 On first viewing, you may be a little disappointed, as there are no bells-and-whistles here. The indicators consist of an angular snake of blue-and-red lines. Entry in one window, exit in the other. The idea is you go in when you see the colours change on the entry indicator. You will also get an audible alert when a trade is looking likely and a note of the recommended entry and stop-loss. The exit point is more of the same, with an audible warning and a colour change. That’s it.

The original plan was to start the run on the 1st of July, however due to the Independence Day holidays, I decided to knock it back, beginning instead on Tuesday the 6th. I could have let it run, just to see what happened, however I never trade that week myself and I like to run a test under as close to real conditions as possible. I don’t see the point otherwise.

I left the one day (the 5th) as a buffer afterwards and then let it run.

I have set up the account with a $3000 (USD) balance and will be starting off at 0.5 lot-size. This equates to around $5.00 per pip. As a slight departure from the norm, I will be giving results as profit/loss figures, rather than +/- pips. This saves any confusion over the different pip-values and shows at one glance what kind of profits (or losses) in hard cash you will be looking at…and ok, it saves me having to continually translate from abstract numbers to cash. If we’re all honest, the first thing most people want to know is how much cash can I make with this? Can I live off it? etc, not how many pips does it average.

The 0.5 lot is, I admit, slightly aggressive for an account of this size, with 0.25 perhaps being more suitable, however I have to come clean here and admit that I have been using FX-Smooth very successfully over the last month on one of my accounts, so I know what it can do and the draw-down levels to expect.

The caveat to this is that I have added my own twists to the indicator and am not using it straight out of the box. I’ll avoid muddying the waters for now and will keep these additions out of the picture until later in the day. Even without my add-ons though, I feel confident that we can handle the lot-size.

Terry is very open to suggestions as to future directions, so maybe these add-ons could be something to talk about in the future.

 There are no recommendations as to trading times and trades can and do trigger at all times of the day and night. This is not ideal. Most – if not all – serious traders only work the main open times. You will most certainly miss many set-ups, especially using the longer time-frames and this is something I will come back to over the month.

 I will run the test using profit figures from trades taken only, if I miss one and it goes on to bag big pips, I’ll mention it here but it will not be added to the figures. You will have to be around your screens all day to catch the alerts and in the real world we all know this is not possible. Real life has the habit of getting in the way.

However, for the last month I have been running my own personal test on a bot and this is going to be a long-term thing, so my screens will be on 24 hrs-a-day. This means that if I see a set-up at any time, then I will take it.

I will also let the trades run from open-alert and entry all the way to the indicator exit signal. I won’t deviate from the exit signals other than closing it when I first see the chart the next morning if a trade has signalled close overnight. I will not manage the trades in any way.

 Right – at last – some of those figures (all times are GMT and on the pair, ‘fx-s’ is an FX-Smooth chart and ‘fx-p’ a platinum one):

Tuesday, 6th July

 1501 Sell USDJPY fx-s

0707 close +$108.62

1601 Sell GBPJPY fx-s

 0707 close +$382.98

2101 Sell GBPUSD fx-s

 1105 close +$145.00

 The last two were closed manually in the am, with the official exit alerts having come slightly earlier but still ok.

This felt incredibly strange to me, to leave a trade running with no trailing-stop. Ok, I did have a hard-stop in place but how frustrating would it be, to have crawled out of bed only to find that a nice overnight profit had disappeared – perhaps even reversed to stop out – in the hour or so before wake-up time, in a pre-uk opening move.

 Again, however, I am running this as it comes, straight out of the box, so that’s what you’d be doing.

 Wednesday, 7th July

 0235 Buy USDCHF fx-s

1102 close -$146.34

1001 Buy USDCAD fx-p

1203 close -$127.62

1204 Sell USDCAD fx-p

 0714 close +$549.45

 1502 Buy GBPUSD fx-s

0714 close +$90.00

1602 Buy EURUSD fx-s

1848 close +$30.00

 1702 Sell EURGBP fx-p

1854 stopped -$174.94

 1903 Buy EURUSD fx-s

 0714 close +$30.00

 2007 Buy GBPJPY fx-s

 0910 close +$600.29

2103 Buy EURJPY fx-p

1002 close +$306.43

 2109 Buy USDJPY fx-s

 1003 close +£226.94

 Yes, that first trade was opened at 02.55 as I was up and about. I must admit, it didn’t feel right but I obeyed the signals. Hey ho..

. Letting all those trades run over night was a real struggle for me but in this case, it certainly paid off! To give you some idea what I was looking at, the profit figure stood at +$452.71 at 00.28 before taking off big-time, to peak at +$1131.42 at 01.11…I’m guessing you can already see the kind of decisions you could make to increase your profits even more.

 Interestingly, there was a trade on the AUDCAD (12.00 till 13.00 the next day) which FX-Smooth didn’t pick up. This closed at + $765.00, from a high of +$935.00, so not so hot there.

I also missed two, on the EURCHF (06.00 till 00.01) +$380.00 with high of +$525.00 and on the USDCHF (13.00 till 03.00) +$380.00 and high of +$480.00…

 Thursday, 8th July

 0807 Buy USDCHF fx-s

 1008 close -$104.44

There was a bit of indecision on this trade, with the trade coming on a moderate zoom-candle. The indicator will flicker from one colour to the other in these situations and you must wait until the candle has closed before pulling the trigger. Even doing this here, however, didn’t help any, as it reversed on us. The indicator then gave a quick succession of conflicting signals, first sell, then an immediate buy. I chose to stay out. See what I mean about decisions?

 Anyway, first week over, as nothing happened on Friday and I had already planned to only take an entry if it came before noon, uktime. As it turned out, there was nothing going, with a lot of the pairs centipeding along their 20-day average.

 So, after all that, we are sitting on a new bank of:

$4909.74

+$1909.74 in clear profit over three days and an increase of +63.66%.

I have to be out for the day on Monday, so no update till Tuesday but watch this space to see if we can continue on in this way.

 Graham.

How to guide


So the end of the week is fast approaching and whilst I’m waiting for a trade I thought I’d get down what I’ve been trying to do for a few days regarding the indicator I’ve  been using with TUFXP.

TUFXP officially had a loss today but I didn’t take it for two reasons; UK news was due out in 20 mins and I didn’t fancy getting into a trade only to be whipsawed straight back out on the news, and secondly the indicator I’ve been using showed there wasn’t much room to the upside for a profitable trade.

Firstly here is a s/shot of a very important level shown by the indicator which I’ll call cam levels:

Through talking to Steve and doing some of my own research and watching how it performs, we agreed that ideally a TUFXP trade needs at least 25 pips between an entry and the cam level. Here is the TUFXP trade:

Entry was at 1.5185 which gives only 15 pips of room between entry and the cam level. Target was past the notorious 1.5200 for this week also. So how can you benefit from this tool? Wait for a pullback from entry and then enter to get your 20 pips. It would have worked perfectly on this trade and you’d of got the full 20 pips despite it not reaching the scalp target.

GBPUSD has done a repeat of the last 3 days where it tested 1.5200 and has been heavily rejected for the 3rd straight day, surely it’s only a matter of time before the pressure becomes too much and it crumbles hard to below 1.5000 and targets the June low.

Have a good weekend everyone, Graham has been in touch and should be making an appearance over the weekend hopefully.

Rebate Awarded


So a pleasant surprise today when I was checking my rebate account with cashbackforex. I’m extremely glad I made the effort to open my trading account through them as it seems it’s a worthwhile venture.

It’s not going to set the world alight but neither I am trading huge amounts. I traded 126 lots over the course of June which lasted longer than the minimum of 5 minutes required to acquire the rebate. Also my broker isn’t the friendliest for rebates only offering $2 per round lot but their spread makes up for the low rebate compared to other brokers. As I hopefully keep increasing my account each month it means my rebates will also get bigger and even if I stayed at the same level for a year, an extra $3,000 isn’t to be sniffed at for doing absolutely nothing different.

If you’re interested in looking which brokers offer rebates then you can look here. Yes it’s an affiliate link through me which means if you sign up through that link I’ll get a tiny portion of whatever you trade but it doesn’t cost the user anything. If you prefer not to use the affiliate link the standard link is here.

Paid.


After a slow start to the week things are beginning to pick up and a nice win today for TUFXP and a personal trade that I’m feeling satisfied with. For several days now GBPUSD has being trying to pass 1.5200 successfully and each time it’s been rejected heavily without a meaningful close above 1.5200. Whilst previewing today’s markets I read some good articles about future resistance ahead for GU and agreed that 1.5242 would be the next test for GU should it clear 1.5225. It isn’t very often you get two fairly big resistance points within such close proximity but when they arrive, it is quite a powerful thing.

Using my newest, most favourite indicator, it also clearly signalled a reversal was possible right at 1.5230-1.5240 region so with this information I decided to take a small risk of 1% and set a sell limit order at 1.5235 and target 2% gain. GU climaxed at 1.5241 before setting about wiping all of yesterday’s gains off pre BOE release which could either send it below the strong support at 1.5080 or fire it right back up into 1.5200 territory.

TUFXP was eerily quiet for the first 3 and a bit hrs and I was wondering if it had had a malfunction overnight! But it seems it was working for some and not others as a short was signalled at 800AM for at least person in the trading room but didn’t appear for the rest of us. Thankfully a nice looking short arrived at 955AM and triggered just after 1000AM. There was a little debate as to whether it was valid as the rules state finish trading at 1000AM but I am of the school that the signal arrived before the cut-off and the difference of 1 minute is neither here or there and I doubt the forex gods flick a switch come 1000AM.

I’ve intentionally left my daily S&R levels to be set off local time as time and time again they indicate good areas of reversals or bounces and a classic case today with R1 being shown at 1.5235 which coincided with my own short at that level.

Let’s hope tomorrow rounds off a mini recovery.

Success!


A relatively straight forward trade this morning for TUFXP that managed to supply a nice win. It was pretty much picture perfect in terms of my filters with the stochs turning down from the overbought area right on entry. The indicator I’ve been using as an additional filter also lined up nicely. Everyone who asked for it should have it by now and at some point this week I’ll do a little how-to PDF so you know how best to use it with TUFXP.

I’ve been working on an idea which stirred in my brain whilst in the shower this morning about how it seems most TUFXP trades go into some sort of profit. It was first brought to my attention by Steve in the trading room as he mentioned doing higher lots but less pips. We  agreed that that sort of money management would be incredibly risky but today I went about testing a theory. As with a lot of TUFXP things, the backtesting looks promising but I believe the theory is sound and I have set about live testing it. In backtesting it seems to return around 25-35% a month based on 5% risk and it was nice to see a first winning live trade today. I’ll track it live for several months and if still performing well, I’d like to implement it into my trading.

A blogger has been arranged to test my updated e-book so hopefully within a couple of days the test will begin. It’s not an ideal time with August fast approaching but I’m confident enough for it run through this period and hopefully secure a profit.