Get to Know My Own Trading System (1)

Yeah, this is an exciting time for me. I manage to put my own trading system onto a "expert advisor". And I am able to learn more about my own strategy/system performance than never before.

All this while, I used to take any of its first signals which caught my attention, and for that I had mixed results. But I always believe in its potential.

Here is a brief overview of my system:
- It is neither a trend following nor a breakout system.
- It assesses only price action.
- It signals market 'turning' points (could be either a price reversal or continuation)
- It tends to enter trade near the high or low of the day

After some backtesting, I learn more about its ability, strength and weakness in greater detail. Here are some of its performances:
- It issues about the same number of long/short signals in a month
- It could be a winning month already with a 50% win-rate
- It performs better in a sideways, ranging month (e.g. Sept & Oct, see below)
- The system performs poorly in a strong trending month which leads to record high/low (e.g. July)
- The system can withstand wild price actions and market abnormalities (e.g August)

Below are the backtested results for the GBP/USD market in the months of July, August, September and this month so far.
Sideways of smaller day range ~100-200 pips (13 up days, 8 down day, 1 doji so far)

Sideways of greater day range ~ 'unusual' 200 - 300 pips (11 up days, 9 down)

Market 'panic' with sell-off & bottom fishing modes (10 up days, 12 down, 1 doji)

Strong trending month (13 up days, 8 down, 1 doji)

Metatrader 4 Expert Advisors

I am a keen user of metatrader forex trading platform. Stumbled across this website with a nice long list of free metatrader expert advisors. Expert advisors are the real deal of automated trading. There is currently an ongoing automated trading championship in searching for the most profitable, stable and reliable expert advisors.

Over the weekend, I got hooked on developing my own expert advisors from my own existing strategies. I already have some success and will be putting them on live trading this week. Same time next year, I would like to compete in the same championship.

Week 1 Trading Results

Week 1 trading summary is now available.

Total accumulated pips for the week:+22 pips
Total accumulated pips (if excluding GBP/USD): +173 pips
System win-rate: 53.8%
Pips breakdown/ win-rate/no. of trades taken:
USD/CAD +105 pips / 75% / 4
USD/JPY + 64 pips /100% /2
USD/CHF +4 pips /50% /4
GBP/USD -151 pips/ 0% /3

Trading Results

Day 4 of system testing. I am up 66 pips so far. My indecision today was purely a violation of the principle of 'Forex Trading Made Easier' with a trading system.

fx-millionaire on Zulutrade (1)

fx-millionaire is a short-term trading system that trades exclusively the GBP/JPY cross.

With a win-rate of 97% over 1000 trades, I am certainly impressed. However, subscribers should expect and be warned against big drawdown (occasionally) using this auto-trading system.

My first demo trade is currently one of 'it' with a -223 pips drawdown (still open).


The last time we saw this magnitude of drawdown (-241) is about 2 weeks ago. The system managed to salvage the position for 8 pips.


The system had similar drawdowns (-231) & (-318) about 5 and 6 weeks ago and it still salvaged 33 pips and 36 pips.



The monster of all drawdowns was the following unusual trade which eventually lost almost 700 pips.


On its proven track record and given the extreme price volatility of this currency pair, I would assume that a position would be beyond repair only if with a drawndown of over 300+ pips.

And hence, I am expecting my current demo trade to be a profitable one. Prove me wrong?

Related Posts:
Analysing System on Zulutrade (2)
Live Testing on Zulutrade (1)

The 3SMA Trend Following System Trade Entries

Here are some interesting forex charts I want to share with you from time to time, by Hector from HectorTrader.com. Based on his unique 3SMA System, simple moving averages of 30, 50 and 100 are applied to trade different price patterns and breakouts. See the following charts which describe this strategy:

(1) For spotting a healthy trend


(2) For trading a breakout


(3) Further assisted by own proprietary indicator & stringent trading rules


Here is a brief video introduction by Hector about searching the best quality trade setup as mentioned above. Feel free to visit his site for more information about his offered forex education program. Here are the list with over 17+ hours worth of videos.

HectorTrader: A Brief Intro

My new buddy, Hector, is a consistent forex trader and the inventor of the 3 SMA Trend Following System. His inspiration:

It doesn’t matter what system you base your trades on. A system is nothing but a work-frame to structure your daily decision-taking routine. What is actually truly important is to make sure you spot and understand healthy trends and swim in the direction of the flow. No matter how smart you are, no matter how talented you are as a trader, if you don’t trade in the direction of the overall main trend you will never achieve any type of consistency.

The time, patience and commitment he put in for maintaining his forex training course could not be faulted. With his daily email and video briefing, he makes sure you learn something new about forex trading everyday.

I would recommend his teachings to be used along side every trading system/software you have.

4-Hit Wonder

It did excellent in today's trending conditions.

Four out of four. I just managed to follow two of its signals.

'Nirvana Forex' in Trouble

'Nirvana Forex' of Zulutrade is currently in trouble by having too many open short yen positions during today's massive carry madness unwinding.

After 1 week of live testing, I managed to guess-estimate its entry strategy, but could not really figure out its exit. Maybe there isn't one. I really don't know.

An exit plan will certainly come in handy during unforeseen circumstances and if you have a limited capital. Preservation of capital is always the key to trading success.

At least, we got something out of it, click here, here and here for some nice looking charts.

Related posts:
How Nirvana Make Pips on Zulutrade (3)
Analysing System on Zulutrade (2)
Live Testing on Zulutrade (1)

Zulutrade: Sign up a free demo account. (Demo data delayed by 60 minutes)

Live Autopilot Forex Trading

Check this out. Forex killer autopilot trading ~ going live !

My Botched 'Nirvana' Trades

Hey, it's 'nirnava' type setup again!

AUS/JPY 5 min


EUR/JPY 5 min


However, I managed to botch them up due to my early entries. I only risked a very little on them. I always know that this kind of setup is speculative type but of high return.

A wiser thing to do is to enter half position first at 100 EMA (red line) and then another half if the price really shot up to 200 EMA (gold line).

Let's keep learning.

Forex Killer Autopilot Trading

(For all the latest updates: please visit my daytrading blog)

Due to its popular demand, let's put forex killer trading software on the spot and begin to tap into its trading potentials. The software is a perfect tool for swing trading.

My trading approach will be swing trading the major currencies. As detailed in my previous post, the strategy will involve: finding breakout + folowing trend moves + using H1 chart + with the latest forex killer software addition.

I will do my best to post live trading signals and their results generated by the forex killer signal software on my new forex killer autopilot trading blog. If you are a user of this signal software, you can help me evaluating the software together.






Related posts:
More Thought on Forex Killer Trading Software
Trading the News Via Forex Killer
My First Impression of Forex Killer Automated Trading Software

More Thought on Forex Killer Trading Software

I wish to give my more thought and support on how to best use the forex killer signal software.

After a few days of testing, and I might have some slight worries for anyone who just simply adopt the software and follow all the signals generated by the software. As we know, no trading software is perfect or holy grail.

From what I have observed so far, the signal software excels in the following scenarios:
1) Strength begets strength
Example (as used in my first posting):
GBP/USD H1 Chart - Long at 2.o396


2) Breakout from sideway range
Example (as used in my second posting):
USD/CAD H1 Chart - Short at 0.7921


However, since you are required to input a chain of data, the end results might be somehow different for different users, as they might begin their data input at the 'wrong' set of time, without knowing that they might be missing an early signal/action. As a result, they might be picking the 'top'/'bottom' of the price channel, and hence reducing their overall chance of winning.

Therefore, in my opinion, some visual pointers on the technical chart would be useful in order to attract your attention and to begin the manual data input/calculation process. The indicator should work along side with the forex killer signal software algorithm and should be applied to the scenarios mentioned above.

The new software version now includes an automated data download feature as well as an additional long-term signal algorithm for reducing risk and trend exploiting.

Related posts:
The Updated Forex Killer Software
Trading the News Via Forex Killer
My First Impression of Forex Killer Automated Trading Software

Charts of Interest: 'Nirvana'

USD/JPY 5-min


EUR/JPY 5-min

Trading the News Via Forex Killer

I have been running my usual trading platform along side with the new addition forex killer software this morning. Scanning across the five major markets, i.e. GBP/USD, EUR/USD, USD/CHF, USD/JPY and USD/CAD and here is the first signal of the day by the signal software.

SELL USD/CAD at 0.9721

(For the sake of simplicity, just enter last 3 digits of the closing price. Updated: the new software now includes an automated data download feature)

This short USD/CAD signal happened to be coincided with the release of CAD CPI report. Hence, the signal could be win or lose in a matter of minute, given the price volatility during the news releases. But, it managed to make the right prediction based on the system's unique calculated probability of 78% on the sell side. Forex killer produced an instant 60-pip profit!

USD/CAD H1 chart


I can, for one moment, forget about the technical indicators and chart patterns and just follow the price action. I will log more trading results and various methods in my new forex killer Autopilot Trading Blog.

Related postings:
The Updated Forex Killer Software
My First Impression of Forex Killer Automated Trading Software

MalibutFX, You Are Next

MalibutFX is currently under my radar since fx-millionare appears to be on hiatus at the moment. I think MalibutFX adopts a swing trading approach with positions typically last from 1 - 5 days. All markets appear to be tradable. And most importantly, it takes profits and losses consistently. The one thing I do not understand is that the system decides to accept a larger loss than its projected profit (approximately 2x). Anyhow, the system has a win rate of 66% and I going to subscribe for a real live testing.

Zulutrade: Sign up for a free demo account. (Demo data delayed by 60 minutes)

My First Impression of Forex Killer Automated Trading Software

Here is the story. I have been getting a lot of visitors recently on this site searching for the newly released, automated trading signal software named Forex Killer. I have no idea what it is about and of course have no clues about the system. So, a few questions immediately on my mind. Can the system really perform and issue reliable good signals as it claimed? What type of signals will be generated, on what time frame, and based on what type of technical indicators? All these questions made me very curious and hence I have decided to give it a test run.

I made a purchase myself, although I think the sale pitch is a bit overdone. So, let's get straight to the system. All you have to do is to enter the last 10 data (closing prices) of the time period you've chosen, e.g. either hourly, daily or weekly. The system will help you estimate the trading opportunities (i.e. to generate buy, sell or no trade) based on the its unique method of probability.

Let check out this example I used for my first evaluation of the forex killer system.
GBP/USD in hourly chart


I entered manually the last 10 closing prices as requested and I received a 'Buy' signal at the last price of 2.0396.


And here is the actual result at few hours later. It was a 100-pip mover in today's market.


The system seems to work. Please take a closer look at the simple chart pattern formed by those arrows in the signal software. It monitors price action and makes you 'see clearly' and forget about the complication of complex technical indicators. And to be honest, this system is quite similar to my H1 breakout strategy I used in the past, which I am quite confident about it.

No matter what, every trading system should still be subjected to skeptical worries. Therefore, I am going to further evaluate the system and possibly share with you a few tips about using the forex killer software in the upcoming posts. But for now, I have to say I am truly awed by the simplicity of the software.

(Updated: The new software version now includes an automated data download feature.)

How Nirvana Make Pips on Zulutrade (3)

After 1 week of testing, I think, this is how 'Nirvana Forex' system make money in forex trading. I wrote about its trading method here.

And here are the final results of the two examples of trade setup which I illustrated earlier:

Short GBP/USD
Sold 1st lot at 2.0334, Covered 2.0305, Profited 29 pips, Drawdown -49
Sold 2nd lot at 2.0369, Covered 2.0306, Profited 63 pips, Drawdown -13
Total pips: +92.
This was a straight-forward winning setup.

Short EUR/JPY
Sold 1st lot at 165.12, Covered 165.09, Profited 3 pips, Drawdown -137
Sold 2nd lot at 165.12, Covered 165.09, Profited 3 pips, Drawdown -137
Sold 3rd lot at 165.35, Covered 165.05, Profited 30 pips, Drawdown -113
Sold 4th lot at 165.41, Covered 165.04, Profited 37 pips, Drawdown -108
Sold 5th lot at 166.18, Covered 165.46, Profited 72 pips, Drawdown -31
Sold 6th lot at 165.71, Covered 165.31 Profited 40 pips, Drawdown -40
Total pips: +185 pips.
Eventhough the overall drawdown at one one point was -380, still, the 'system' managed to pull it off. Very impressive.

Overall, it is still a high risk strategy and you probably need a fairly large bankroll to maintain your positions as there could be 15 - 20 lots being opened across various markets at one time. If you prefer this type of adventurous style trading, I would suggest $3000 -$5000 for a mini account. Last but not least, let hope for its long lasting 'golden' performance.

See also:
Nirvana Forex in Trouble

Zulutrade: Sign up a demo account. (Demo data delayed by 60 minutes)

'Nirvana' Trend-Following Type Setup

If you have been following my earlier post, we will be right in the money in this morning London session. Check out the following 5-min charts. (The light-blue region depicts the London session.)

Short USD/JPY


Short USD/CHF

Analysing System on Zulutrade (2)

Since I have already been trialling the nirvana forex system, I might as well try to figure out its strategy. We knew that it is a system based on S & R, Fib during the trend following & range periods. But, what support and resistance levels are being used, on which time frame and how many positions will be opened based on one setup?

From what I have observed so far, I might have some clues about the system:
1) The use of 5-min chart
2) The use of 50, 100 and 200 EMAs (hence 1st, 2nd and 3rd sup/res levels)

Below are some examples:
1) Short GBP/USD (yesterday's setup)
The trend was down. Price retraced to 50EMA (blue). Short at 2.0334. Price retraced further above 100 (red) and even 200 EMA (gold). Short again at 2.0369. Finally, the down trend resumed, yielding 29 and 63 pips on each position. The trade paid off!


2) Short EUR/JPY (today's setup)
The trend was down. Price retraced to 100 EMA (red). Short 2 times at 165.13. Price retraced further to 200 EMA (gold). Short the 3rd time at 165.35 and 10 mins later short the 4th time at 165.41. These trades are still open at this point of writing. Current price and drawdown: 165.85 and -250 pips!!! Updated: Short the fifth time at 166.19. Current drawdown: -380 pips.


I have no ideas about its exit strategy yet.

I will be trialing the most successful system on zulutrade - fx millionaire next.

Zulutrade: Sign up a demo account. (Demo data delayed by 60 minutes)

NEW! - Forexyard Daily Analysis

16/10/'07 - Crude oil and the Greenback are flying in opposite directions.
Economic News
USD
Yesterday the greenback slipped sharply against the EUR on the back of significant US stock market losses. Nevertheless it managed to gain back some much needed ground against the EUR. The USD was trading at 1.4241 against the EUR yesterday but it managed to rally later on and break the key 1.4200 mark. The main driver of this small greenback recovery was the release of the Empire State Business Conditions Index which surprised on the upside coming in at 28.8, beating the expected figure of 13.0. This Index measures the general business conditions of manufacturers in New York State and it was the only significant US economic event that was released yesterday. This positive data also helped the greenback find some reprieve against the GBP, as although it did not strengthen against the British currency it did manage to hold its ground which is a positive sign as the GBP has been on a sustained bullish rampage against the greenback. On Friday, there was also a string of positive US data, however the greenback fell sharply as the unexpectedly strong PPI figure once again raised inflation concerns for the Fed. However it will be important to monitor inflation as the previous rate cut by the Fed seems to already be bolstering producer prices, so it will be a major concern for the US economy if this results in a significant rise in consumer prices. On the back of last week's FOMC meeting the Fed was expected to once again slash its key interest rate. However, this expectation has been offset by the latest string of robust US data. Yesterday's strong Business Conditions Index reinforced the sentiment that the Fed will not cut the interest rate at the end of this month thereby boosting the greenback.

Looking ahead to today, there is more significant news to be released from the US, kicking off with Industrial Production which is expected to release slighlty lower than last month's figure of 0.2% at 0.1%. Also, Treasury Secretary Paulson will speak today about the housing market, which will be closely followed by investors for hints on the Fed's future monetary policy as a another monetary easing may be what is necessary to help the struggling housing sector. If the recent trend of US data is anything to go by then today's news events, including the Capitalization Rate and the NAHB index, may very well spring another surprise on the upside. However with the current negative USD sentiment and with the ever rising Oil prices, the greenback is likely to remain under pressure.

EUR
Yesterday, the EUR maintained its bullish surge against the USD and the JPY in particular; however it did lose some of its gains on the back of the positive US data. The strong EUR is definitely beginning to be a concern for the European economy as it will dampen growth in the long run and it seems that this topic will be raised in the upcoming G7 meeting. The main reason why the strong EUR will dampen growth is due to the fact that European exporters are finding it harder to compete against the US and the Chinese in the global trading market. Therefore cracks are beginning to appear in the European economy as indicated by recent data because the German economy, which is a major player in the EU, is heavily dependant on exports. Today, the most significant news to be released from the Eurozone will be the German ZEW Economic Sentiment, which measures institutional investor sentiment, this figure is expected to release lower than last month's figure of -18.1 at -22.0. However any negative data is unlikely to cause the EUR to reverse as it has shown its resilience in recent weeks and with the greenback under pressure, the EUR should stay on its bullish path.

JPY
The JPY experienced a whipsaw trading day yesterday, as it fell to 117.91 against the USD on the back of stronger equities. However as stocks began to experience significant losses the JPY recouped and it touched the 117.09 level against the greenback. The US stock market took a tumble yesterday after fresh concerns were raised about global credit. The way the JPY traded yesterday gives a strong indication that there is once again a correlation between equities and the JPY crosses. The fall of US stocks caused investors to drop their carry trade strategy and seek a safe-haven investment, thereby causing the JPY to rally after being sold-off sharply. However in the longer term all the JPY crosses should remain bullish as it seems that carry trades will remain the preferred strategy by investors, as the BoJ is no position to hike its interest rate in the near future. Nevertheless, traders should closely monitor the performance of equities as the correlation between stocks and the JPY crosses has been evident over-and-over again and the future direction of the JPY may very well depend on the performance of US stocks.

Forexyard online Forex Broker

Live Testing on Zulutrade (1)

I am currently trialling nirvana forex from zulutrade with my mini account. Its return looks pretty amazing on the performance page so far, and its strategy is claimed to be:

...based on S & R, Fib & COT report suitable for both trend following & range periods.The system trades 16 pairs--some exotics with wide spreads. Please be advised to use low leverage & large accounts to withstand drawdowns as the system is based on longer time frames which also helps to generate some fantastic returns

However, I have set some restrictions when using this signal provider as there could be many positions (lots) being opened at one time. At this beginning phase, I am only allowing 1 lot being opened at any one time. I have also increased the take-profit limit from 60 to 80 pips.

Below is the actual results traded via FXCM broker:


No. of trades: 6 (4W, 2L)
Pips so far: +50
P/L: +$43.17

Zulutrade: Sign up a demo account. (Demo data delayed by 60 minutes)

The Tipping Point

Quote of the day
Malcolm Gladwell, book author of "The Tipping Point: How Little Things Can Make a Big Difference"

What is The Tipping Point about?

It's a book about change. In particular, it's a book that presents a new way of understanding why change so often happens as quickly and as unexpectedly as it does.

I think that The Tipping Point is a way of making sense of the world, because I'm not sure that the world always makes as much sense to us as we would hope. I spent a great deal of time in the book talking about the way our minds work--and the peculiar and sometimes problematic ways in which our brains process information. Our intuitions, as humans, aren't always very good. Changes that happen really suddenly, on the strength of the most minor of input, can be deeply confusing. People who understand The Tipping Point, I think, have a way of decoding the world around them.

Charts of Interest: Double Tipping Points

GBP/JPY 5-min


USD/CAD 5-min

Commodity guru Jim Rogers's Views on US Dollar

Watch video.

Some of the points being made: FED should raise interest rate, not otherwise. Bailout is wrong. Let people fail. Inflation will be the the problem. Dump US dollar and do not sell China. Shunt oil and gold for now. Own Asian currencies, and etc.

Quote of the Day

Brett Steenbarger, Trading Psychologist

Less successful traders trade the same way across various market conditions. Worse, when their ideas and patterns stop working, they become frustrated and try to force the action. The more successful traders know that markets change: they shift their trending, and they change volatility. When their ideas stop working, they become risk averse. When their themes are paying them out, they're not afraid to put money to work.

(Source: "Such an Important Key To Trading Success", Traderfeed Blogspot)