Archive for the ‘ Forex ’ Category

The Future..


Okay, so the first real post in earnest. I spent a good couple of hours reading back through some old posts and it’s amazing to read some of the emotions and beliefs I was going through. So much has changed since 2010 that my trading couldn’t be any further from what it was back in 2010.

I joined a prop trading firm whereby the house stakes you and you take a percentage cut of your profits. I spent 3 months doing an online traineeship here on the Gold Coast and then fortunately I was offered a trainee position down in Sydney. The rock of my life, aka my wife, put in a huge amount of faith and trust into me and we agreed I’d go down to Sydney for 3 months. To add a little backround information, we had another child born in March 2012, Charlie, and I left for Sydney in November 12. I spent 3 months cutting my teeth learning the art of trading interest rate futures, specifically the 10 year US treasury note and the Australian 10 year bond. This is commonly referred to as the 10:10 spread. The idea is you buy one bond and sell the other and trade the inefficiency in the market and look to make a profit.

Being a rookie, they start you off incredibly small (naturally) and they were very honest and said I’d need 12-18 months before starting to earn any worthwhile money. Prop houses garnish a monthly trading fee, it varies from firm to firm but Propex was $2,500 a month to sit down. For this you got 24hr tech support, the fastest connection/s to the exchange and the ability to trade with very successful traders.

I started to build some consistency and by month 7-8 I was pulling a profit and the managers were starting to up my sizing and limits and I could see massive potential. I remember the night extremely well, I was skyping with the head trader in Sydney from the Gold Coast office and he had just bumped up my limits to 30 lots (10 lots in 3 clips) and a daily stop level of $7,500. The usual scenario of a spread is it’ll move in one direction and you look to fade the move to bring the spread back into alignment, one leg will profit and the other will lose but you make profit by the winning leg being greater. The absolute worse scenario for a spread is when you lose on both legs and October 3rd 2013 was the night the spread blew out by record levels and I got absolutely smashed and dropped around $10,000. Extremely shaken but not quite stirred I sat down for trading on the 4th October reasonably happy in the knowledge I had tried my best and even the bigger traders had got hammered the evening before. The 4th started gently and by the time the US session rolled round, the spread began to jackknife again and I hit the limit for my stop again. To be in a $20,000 hole by the end of the first week of the month was a horrible feeling and I knew it’d take at least 4-6 weeks to recover  but I equally knew time was running out to make it work financially as my wife was working two jobs to allow me to trade and build up equity.

I never truly recovered from those 2 nights and by the 16th December I left Propex. My head trader told me it was shitty timing being given extra size to only walk into the mother of all blowouts on the spread and if I’d had some money in the bank to cope with the losses it’d have maybe turned out differently but my timing wasn’t to be. Adding in the 2 months of fees at $2,500 I ended up leaving $2,000 in the red. I had clawed back $22,000 and change but time had simply run out. It was devastating for me to leave but the pressure of having to try and force the issue and make money and knowing my wife was breaking her back to let me trade was just too much and so I decided I needed to find a regular income to help ease the burden.

The reason for the backround is, those 16 months I was at Propex changed my entire perspective on trading and whilst I didn’t make it work at Propex, I had learnt lifetime lessons from some of the best futures traders in Australia and money can’t buy that sort of exposure. Since February 14 I have been working on adapting my forex trading and as of September this year I began again with a live account. I have no grand aspirations of making fortunes in short spaces of time, my risk management could not be any different from 4-5 years ago. I’ll elaborate further as I progress with the blog and trading but I’ll leave it here for now.

Flipfloptrader.

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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.

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..

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.