What to do…

Just a quick post about two free experts that seem interesting enough to start demo trading with. Both are written by Quicksilver. Perhaps the most interesting of the two is called Quik MACD as is based on the LMT trading system (that is praised on some forums I hang around on). The other one is based on a break-out trading system and named Quik DBS.

You can get the EAs here:

http://www.forexnirvana.com/f27/quik-macd-hot-770/

http://www.forexnirvana.com/f27/quik-dbs-v2-802/

I will start a new demo account at Alpari UK for them and register a MT4Stats page. I’ll post it when it’s done here with a update. There are links to statistics in the threads posted above. Perhaps nothing really convincing, but that is not surprising since these are long term strategies and this is just released. Backtests are very convincing, but as we all know that is not the same as a profitable EA, but of course it is a good start at least.
I really would appreciate finding a EA that is trading long term. All the short term EAs I have (that is supposed to be in the market for a few hours at most) are very sensitive to spreads and data stream quality. This makes them very broker sensitive and some of them erratic in their performance. Orders with the LMT system can be open for weeks if I understand it correctly. But we’ll see how the EA does, hopefully we have enough trades in a month or so to at least draw some conclusions.

There’s a lot of hype going around for the “new” version of FAP Turbo dubbed FAP Turbo (Limited Edition) Swiss. It is not a MT4 EA, which is interesting. It is written for the JFOREX platform used by Dukascopy in Switzerland which is a ECN broker with, in comparison to MT4 brokers, very low spreads and huge liquidity. The FAP team states that the platform is much better in terms of order execution.

So the price is going to be $599. Yeah, that’s four times the regular versions price. But it doesn’t stop there since Dukascopy have a min deposit limit of $10,000. So this is a rich man game for sure. The current planned release date is 14th of July, and the rumor is that it will only be on sale for three days. We’ll see about that I guess.

Cashbackforex.com is offering 30% cashback on commissions at DukasCopy, so be sure to sign up with them.

Even with these high financial requirements I am very tempted. This is going to be a limited release (according to the team) and the platform at Dukascopy is much more professional than at the MetaTrader brokers. So my strategy is to buy the Swiss edition and stick it on a demo account for awhile. It will come with a 60 day refund guarantee as it is a ClickBank product. If I don’t trust it enough after 60 days I won’t fund the account and I will return it.

On a side note it is also rumoured that they have developed a middleware (they call it a bridge) that enables MT4 EAs to run on the JFOREX platform. This would mean that you can run your other EAs on the same account. I would love to run MegaDroid with those low spreads and excellent order execution… The Bridge will cost $199 it seems, quite expensive, but as I said, this is a rich mans game…

Got my refund approved for Forex Derivative 2.0 today. It really wasn’t working out. To its credit it did some (3-4) great trades, but 50 not so great ones also… With a few hundred hours of more development perhaps they can sort it out. I hope so, would like a non scalping EA that catches trends and breakouts.

So this means that I am only running FAP Turbo, MegaDroid and GridBot now. MegaDroid is still my favorite, it is so stable. FAPT is kind of a mix for me, it does kinda well, but I always feel that that big draw down is just around the corner… GridBot is the same, works nicely and then it explodes. Hopefully my hedging helper EA is stable enough soon to help GridBot out (the demo where I run it have gained 37% this week trading GBPJPY, EURJPY, USDJPY and EURUSD, but it still have a few things I have to sort out), or the developers release that long awaited version including hedge trades.

I just started writing a small guide for beginners interested in automatic trading in the FOREX market. Check it out here or click the big “FOREX” button in the menu list above. I will be working on it the next couple of days, updating with step by step setup of MegaDroid, FAP Turbo and GridBot (as I use them).

First of all, I got some comments after my post about AutoHedge EA last week. All positive I’m glad to say. However I won’t release it to the public, at least not right now. I think it is better for everyone (including me perhaps) to wait for the v2.9 of GridBot. It will surely be very nice.

So what new functions have I implemented? Well other than some efficiency enhancements and ECN broker support I have implemented a function that monitors when GridBot opens a order and sends an inverse one immediately. The inverse order has the grid spacing as T/P (take profit). This means that the inverse order will T/P exactly when the GridBot wants to open another order.  I currently am limiting it to just open this one order, but it could be more general with some simple adjustments. It’s in demo testing right now

It is real fun to write EA:s I’ve found. Probably will try to make some more on my own, using other strategies.

I was a bit bummed after sacking the GridBot from my live account this Thursday. The reason of course is that it once again hit the Safety net, losing me money. But since it really makes money when the market conditions are good I felt that it was time to try to write my own hedging EA to help GridBot out a little. So I did. Of course I don’t know if it will make me money in the long run, but at least it will reduce the risk of huge draw downs.

Basically what I have written is a EA that monitors all open trades in a currency pair and calculates the running profit/loss. If this running profit goes under a defined threshold value my EA opens a inverse hedge order in the pair, the size of the open orders. It then continues to monitor the price and closes the hedge order if the market reverses back into the grid. When to close the hedge is also definable of course.

In the picture the AutoHedge EA (silly name I know…) monitors AUDNZD, GBPJPY, USDJPY, EURJPY and EURUSD orders made by the GridBot. It is currently hedging AUDNZD because the running profit there is worse than -100. With the cost of opening the hedge the loss is now locked in at -136 (AUDNZD has huge 20 pips of spread making it expensive to hedge). If the running profit of the GridBots orders improve to -75 EUR the hedge would be closed with this configuration.

So what does this cost? Well if the market never returns to the exit threshold the hedge order have a cost of the spread. If it does return it costs the spread and the difference between entry and exit. I feel that this value is the one that will be difficult to set. Too small we may be whipsawed into opening several hedge orders during one session (expensive with the spreads of some pairs), too big we just pay to much for the hedge, taking away profit from the GridBots orders.

Pairs with tighter spreads will be much better for this function as the hedge won’t cost as much, so I think I will primarily test it on USDJPY, EURJPY and EURUSD with Alpari UK demo. I will also open a demo with Forex.com UK.

So as I said, I don’t know that this will save money in the long run, only that it will effectively limit the huge draw downs with the GridBot. Instead of hitting that Safety net of $500 one could have been hedged at a $100 loss, with the possibility of the market to reverse and making a small profit (closing the GridBot orders with profit but  paying for the hedge).

I am thinking about hedging every order individually with a inverse order and use the OrderCloseBy() function instead in combination with the corresponding GridBot order (this saves one spread) if the market doesn’t return and the GridBot is about to close the orders (I would then jump the gun and close them say 1 minute before EndHours). But that would close the GridBot order, with the current implementation the GridBot isn’t affected at all by the hedge orders. Also I know that the  GridBot developers are working on a real hedge implementation in their EA (can’t wait for it). This is just a substitute for the Safety net feature, not a real hedged grid trading strategy. But I’ve been meaning to check out writing some MQL4 for some time, so I saw this as a opportunity. Perhaps it will evolve into a stand alone grid trading EA also, I am quite tempted to just write it all myself…

Oh, and yes, I have been tempted to let the hedge order be open after the GridBot closes its orders, with a gliding take-profit. If the trend is good this could make some money, but it really isn’t the whole point here, so I won’t implement it like that right now.

Been evaluating my EAs. The only one that I’m ahead with now is MegaDroid. FAP Turbo and GridBot lose some more yesterday. GridBot hit the safety net on GBPJPY. FAP Turbo did more damage in EURCHF.

It is clear to me now that I have been overlooking the performance and stability MegaDroid have been giving my account (although it didn’t trade yesterday). It only trades once in a while, but it is very profitable. I am forcing it to trade a little more by running it on three charts. I am also considering experimenting more with it in demo, trying it on M15 timeframe to start with. Read on DonnaForex forum about a guy doing this with nice results. The trading logic in MegaDroid seems very solid, so it would be nice to have it trading more, even though one of the strengths of MD is that it doesn’t necessarily trade every day, just under the right conditions. I’ll run it in demo for a while.

I’ve made the decision to increase the risk taking with MegaDroid a little, and at the same time reduce it with all the other EAs on my live account. I will stop trading GridBot entirely until they release the version with the hedging (expected sometime in July). They will release a new version tomorrow, but it is presumably only sporting a new automatic time zone function. Nothing that will help the actual performance of the EA. I am really looking forward to the hedging function, as it really is sad do deactivate this EA. I have enjoyed watching it trade, but the reality right now is that it is to risky. Others may make lots of money, but I am not. Will keep it running in demo of course, so if it does convincingly well I can always put it back, with small lot sizes (0.01).

For FAP Turbo I will follow DonnaForex settings, but I won’t use the high risk setting in EURCHF again. We’ll see in her news letter on Saturday if she will reduce it herself. If she doesn’t I will.

I am currently trading FD2 live with a fixed lot size of 0.02. It hasn’t made any remarkable trades, in either direction, so I will leave it like that for now.

So with this new setup of reduced risk I am hoping to make some of the losses back. But since I need 100% profit to get back I decided to fund the account with another €500. This hopefully gives me a better chance I think. I am still hopeful.

Crap. After the losses Monday with GridBot my account really needed some winners to start marching upwards again. It looked promising with gains from all the EA:s last evening and this morning. One lingering trade by FAP Turbo in EURCHF was behind -€20 when I left for work. I was considering closing it manually, but since it is against my rules I didn’t. I wish I had now… FAP Turbo closed it for a loss of €123 a few minutes ago.

The trade was only taken in the live account and at FXCM UK demo (where it was closed for a much smaller loss early in the morning). The demo account at Alpari UK didn’t have it at all. It’s a real shame that the accounts isn’t trading in sync.

So, I’m thinking about implementing a new rule. If FAP Turbo has lingering trades right before the London open I manually set a much tighter S/L. I really don’t think that a scalper should have positions open that long in the first place, and I don’t think the logic in FAP Turbo is adjusted for trades in the London session. It is programmed to scalp in the Asian session. Perhaps I should investigate using the Swiss Army EA for this, so it is automated.

With this loss FAP Turbo is probaly not in the green any more. Will have to calculate it when I get home. Seems scalping is harder and harder. Perhaps I should check out Xtreme EURCHF instead, but it costs $299.

So, when I went to bed yesterday (at about midnight GMT+2) my live FX account where I run all my little bots at had about €810 equity. It had made some nice profits during the evening, most notably six profitable trades in GBPJPY and USDJPY by the GridBot EA. When I woke up this morning and saw my balance as €616 I was kinda surprised. Seems the markets turned at about 1 am GMT+2 and the GridBot opened three positions in both GBPJPY and USDJPY against the trend raking in losses for €187 in the process.

Exactly this behaviour is why the GridBot is dangerous. It keeps adding fuel to the fire if there is a trend. If that trend doesn’t reverse during the grids working hours, we are in for big losses. If it does reverse we are in for small profits. The risk vs reward just isn’t good enough when there’s such a strong move like that last night.

The developers of GridBot have stated long ago that they have a hedging implementation, but they haven’t released it yet. We don’t know the details of this implementation. I would like the bot to open a inverse position when the market moves outside the grid. If the price reverses the hedge position will close breakeven and the grid can take profits. If it doesn’t we just take the loss that have been incurred inside the grid, the hedge will protect the movement outside.

So basically I am tired of this bot screwing up my account. FAP Turbo, MegaDroid and even FD2 is doing much better right now. I’m thinking about placing GridBot in suspension, only to trade demo until there is another release, which include the hedging implementation. But I’ll give it one last chance. I’m changing the working hours to 18 - 1 GMT+2 (Alpari UK account time). This is the time slot from one hour after London close right up to Tokyo opening. I’m also lowering the lot size. GBPJPY will only get 0.03 lots from now.

If they don’t release the update soon, I’ll go for a refund…

Back in May I bought a small post in Malka Oil, a Russian oil dwarf traded at the OMX Exchange in Stockholm. The company have been going through some very very serious trouble in the wake of the credit crisis and semi-crash of the oil price. Once traded in the range of 4-5 SEK this company was on the brink of bankruptcy and I got in at 0.12 SEK (the lowest traded price was 0.04 in march, but then it was a real lottery ticket). So what has happened since the low point? Well, there’s been private security (mercenaries) occupying the oil field (!) and other exciting actions like that. The company’s pipe line is still blocked by a disgruntled previous vice chairman that claims Malka Oil ow his construction company millions. Legally this conflict was closed last Monday by a Russian court, that ruled in favor of Malka Oil. Since then the price of the stock has risen to a high of 0.23 SEK and closed this Friday at 0.20 SEK.

So, what will happen in Malka Oil now? Well today there’s a share holder meeting (it was postponed to wait for the Russian court ruling). It is expected that there will be much information released about the company’s state, and it is expected that it is good news.  So, I think we will see another nice push after the meeting. The proven oil reserves are really cheap here. If they can get production started again (after the mercenaries were there) and is able to use the pipeline I think the market will recognize this with a fair price based on the current oil price, which is in a upwards movement in itself.

That said I only have a small post in the company myself. Don’t put your life savings into it

In general I think we will see a price of 75 USD during the summer, just as OPEC wanted.

Gold and silver got hit last Friday after a very nice two weeks. I which I had been more active and got out, but I didn’t. I will sell off half my positions today because I don’t see a clear trend right now, just as I don’t at the exchanges in general. Summer is here…