What to do…

There’s a excellent article by Tyler Durden at ZeroHedge about the current state of the American economy. It covers basically all the relevant statistics that is used by economists to predict the future. It doesn’t look good, at all.

Read up: http://seekingalpha.com/article/151427-the-end-of-the-end-much-needed-perspective-on-recession-is-over-debate

So what does this mean? Well, I’m suspecting both the American markets and the USD should be hit by this in several stages over the years to come. Sure, last time (this fall) the USD strengthened as the crisis worsened. I’m predicting the opposite now as the majority of investors is starting to doubt the greenbacks long term value. I don’t think USD denominated equities and bonds will be seen as the safe haven it have often been in the past.

I’ve been demo trading RoboMiner since beginning of June with very nice results (this of course depends heavily on the movement in AUDNZD). I’ve signed up for the subscription service since the price for the full license is just way to much money to invest. $40 a month also adds up of course but at least that can be taken from monthly profits I hope

I have started it on my existing Forex.com/UK account trading 0.03 lots in AUDNZD and 0.01 lots in EURCHF. I’m prepared to add more funds if needed to weather out draw downs. I might also add more and up the lot sizes depending on other investments fall out or not. We’ll see.

Cashbackforex.com offers 15% rebate on purchases of RoboMiner, so check them out if interested.

Okay, this is really getting annoying. Third week in a row ends bad. But this time there’s really a huge difference in the results between my live accounts. Enough to just stop MD on Forex.com/UK now. It still crashes almost daily and now it isn’t even doing as well as Alpari UK when it doesn’t crash.

Alpari UK live account

As you can see the week started of nicely with about a 10% gain up til Thursday night. The problems started when MD had open positions during the day and the trend was going the wrong way. If I had manually intervened and closed the positions early Friday morning the account would have made a profit of about €40 instead of a loss of €20. But I don’t want to close orders opened by EAs, that’s their job. I’ve also learned now that MD closes order after exactly 12 hours if still open, regardless of the current profit/loss. Had I known that I would probably have put a trailing stop on it say and hour before… Perhaps I should do that in the future.

FAP Turbo didn’t do much at all this week. It just managed to break even. It was MD that did all the trading in the account.

Forex.com/UK live account

This is we’re the real losses start. For some reason MD did much much worse on this account than on Alpari UK, with the exact same settings. I am running it without Stealth mode since MD crashes so frequently. I am not saying that the broker have used this information to manipulate prices to hit S/L:s, but there is definitely something going on here. I am going to stop trading MD on this account. As I have been demo’ing MD Pro on a Forex.com/UK account without crashes I will try out Pro on this account starting next week. I will trade EURUSD, EURCHF and USDCHF. If that doesn’t work either I don’t know about this broker…

So all in all, terrible week, again. Third in a row. Starting to loose faith in these bots… On the bright side thou, cashbackforex.com paid me my cashback for Alpari UK account this week. $144 free that I wouldn’t have gotten unless I used them as affiliate. Great stuff. When running bad it softens the blow, and when running good it’s just extra money. Don’t trade on accounts without rebates when they’re available

Hope so. I’m stuck with short positions because of MegaDroid. Here’s the chart. Can you also see the head with the shoulders? I hope it is forming and the downward push is starting imminent and continues through out the New York session

We’ll see what happens. But at least I can see the pattern… Please other speculators do the same and start selling

I am currently, since just a few days, trying a free EA that I’m actually quite excited about, the Gartley EA. It trades price patterns instead of just indicators and does very well in backtests. Very refreshing to see. There are a few different versions, but I’m actually trying the first one (v 1.01). The newer ones incorporate a special MACD indicator to filter trades and a news reader. I’ll try those versions later.

As for the other free EAs I’m running in demo there was a update for Quik DBS v2 this week that seems to behave very nice. It is a daily breakout trader by QuikSilver that I’ve written about earlier. If this weeks performance continues for 2-3 weeks more I’m very tempted to put it live actually. Of course I would only trade it with micro lots to start.

I’m also trying a free scalper found here: http://volatily-scalp.blogspot.com/. Seems quite good actually. Of course I have scalpers already (FAPT, FAPT Evo, MD and MD Pro) but I wouldn’t mind running another profitable one. Diversification is always very important.

Last but not least I’ve actually written my own EA, called TrendEAr, that I’m forward testing with quite good results this week. I had a few duds that I will try to filter out by adding a RSI indicator to gauge overbought/oversold market. It is a trend trader (I know, such a overused word) that tries to catch the bigger movements. In backtests the most profitable trades are open for days following the big trends. It is very heavy to run backtests with it because of the indicators used, so my optimization runs take about two weeks right now. As always I am struggling with the proper timing to enter and exit the trades, but it is starting to work nice I think. I’m currently demo’ing it on EURUSD, GBPUSD, GBPJPY and EURJPY using M30 timeframe.

With the disappointment, for me, with the new version of the GridBot I’m also considering restarting my AutoHedge EA that i wrote some time ago. I think I can make it into a hedged grid trader in a matter of hours. I’m thinking of a number of different approaches (pivots, Keltner channels (ATR), Fibo levels and so on) to adjust the grid positions and sizing. Since I will be writing a hedged trader I won’t have to worry about trends as much (since we’re trading with the trend also). The market movement that we will try to catch is the 100% retracement of course, then we make money both on the up and down movement with a hedged grid. I’ll keep you posted.

So, all in all I really think there are some high quality free EAs. But of course one have to run backtests and forwardtests before running them live. And when live, better start out small. I’m seriously thinking about funding a micro account and put them on soon. I’m tired of all the commercial EAs BS sales pitches and phony results.

The new version of GridBot was released a week ago. I was not impressed. After running backtests the entire weekend trying to find anything good with it I put it on demo accounts and hoped that the backtests we’re wrong. Well, it didn’t end well and I finally went for the refund. The money hit my Paypal yesterday. I’ve lost quite a lot of money and time on this bot. I really think it is possible to make a profitable grid trader (just look at Robominer), but not this one. Very disappointed actually since the developers are very inactive in their own forum also, not answering questions. (I still wonder where the hedge function in the new version is… I never saw a hedge of any sort).

FAPT Evolution is still running on demo, or at least I think it is, I’m not getting it to trade much at all. Reading forums the Dukascopy demo server really seems to give different performance for most of us. It is quite worrisome I think as they’ve stated that it should give very close to 100% matching performance with their live server (difference of course being the liquidity). The ones running it live seems to have a smoother ride although EURGBP apparently hit a S/L this week. I’m looking forward to Donnas update this weekend as I tend to use her settings for both regular FAPT and Evolution. She is very knowledgeable about these products.

As for MD Pro I put it up on a demo Forex.com/UK account and it has traded quite a bit (compared to regular MD), but is actually a few dollars behind for the week. EURGBP is the main culprit. Perhaps this pair isn’t really working out for scalping at all right now (as it is the same with FAPT and FAPT evo). The other pairs have done well. I’m thinking of replacing my regular MD on Forex.com/UK live account with the Pro version for next week. I still experience daily crashes with regular MD. The Pro version at least haven’t crashed the demo account once running it without MT4 restart all week.

After running Robominer on demo since June 1st I must, again, just state how impressive it is. They just released a new version that is updated to work with NFA regulated brokers after the new rules about FIFO is enforced, and they state that is is even more profitable with these new changes. Sounds good. I must buy it now and put it on a account somewhere. The developers are currently recommending Forex.com/UK, I have a account there already of course. I am also considering FXCM/UK bacause of their advantage in lower spreads. However they only allow trade with 0.1 lots, Forex.com/UK trades 0.01 lot size. The smaller lot size of course allows lower risk taking, but I’m so confident in this bot now I’m considering trading it at 0.1 anyway (think they recommend a account size of $35000 (updated see comments) to do this, but as long as you have funds to put in there in case of a sustained DD you can fund a smaller amount to start with).

Received spam email from FAPT Steve yesterday about a new bot they’re impressed with (they’ve promoted MegaDroid apart from FAPT before, and some manual systems) called IvyBot. It’ll be released next week and have a webinar planned for Monday. I’ll check it out. Could be something, but there’s so many new bots being released I just don’t know

Oh, I almost forgot. The Joury EA bot I’ve written about have been found to be a free EA by a guy called TrendChaser. The developer himself doesn’t consider it to be a good strategy (it can work for a few months only to wipe the account he says). So hope no one bought it. It is available free if you want to play with it, I’m thinking about doing so a little this weekend, just for giggles.

I’m going to make charts for my live accounts later tonight or tomorrow for the weekly update. I can just say that it doesn’t look good now, and that the Alpari UK account have been doing much better than the Forex.com/UK account. The markets have really punished MD yesterday and today.

I know I stated that I would post my backtest findings for MD Pro this weekend (Sunday). I’m sorry, but it is taking forever to get the backtests done because of constant crashes on MT4. I haven’t experienced this type of instability before. Funny thing is that it was working for several hours straight Sunday morning (I could complete EURUSD and EURCHF optimization runs then), then it went back to it’s normal crashes. So the situation right now is that EURGBP with aggressive=false isn’t tested at all. I have run optimization runs for all the other pairs both with and without the aggressive setting.

The method I’m using is to run a optimization run YTD (2009.01.01) to find the good prospects. I am focusing on settings that give a profit factor of more than 1.5 with no more than 10% DD YTD, so if a setting is profitable, but gives say 20% DD, I adjust the risk down to give 10%. If a setting is giving less than 10% I don’t turn risk up. Then I backtest that setting since 2008.01.01 also, just as a verification. I really wanted to run the full 10 year test, but so far the crashes have hindered me.

So far I have found all pairs to be profitable. EURCHF is really good actually, even better than EURUSD I would say. The DD is real low with risk setting 0.1. USDCHF seems to be the weakest, but still profitable with the right settings. The weirdest thing is that EURGBP (with aggressive settings) is clearly the winner YTD. It more than triples the account with very low DD (and this is with risk 0.1). It is so amazing that I can’t really believe the result.

It is clear that the spread on your broker is a very very important piece of the puzzle here. I have been using Alpari UK history in the backtests. Of course backtests are only indictive. Forward tests on a demo account is better, but even that isn’t quite like a live account. When I’m done with the tests and the evaluation of the results, I will setup demos at a few different brokers I think. Probably throw in the usual suspects of Alpari UK, Forex.com/UK and FXCM UK together with some ECNs. Suggestions of good ECN MT4 brokers is happily accepted. Of course all suggestions of good brokers are accepted, regardless of type. I am really looking for new ones.

Remember my prediction last week about a bullish breakout if a triple bottom formed in Brent oil? Well it happened exactly as predicted.

Brent crude oil 4H chart

Also the same pattern have formed in Gold and Silver. So now all of them are in a rush upwards. Look here at the small charts.

Silver 4H chart

I am riding the upwards push in Brent (via oil certificates and in the oil producers PA Resources and Malka Oil on the OMX Exchange) and Silver (via certificates). I actually think the silver push will go the highest. I predict resistance for Brent at $70 that will stop the push (and then slow down at least for a while). For silver I see first resistance at $14.40. If that breaks the next level is the current yearly high in the range of $15.50 - $16.

As for Gold I’m not trading it right now, but we will probably see another attempt at breaking the $1000 barrier. If it does, I will buy. But before that there probably is resistance at $960.

We’ll have to keep watching those charts. These commodities are very sensitive to the predictions for the general recession, and the market manipulation in them are enormous. The prices does in no way reflect the actual supply and demand.

Another disappointing week, this time with huge losses with S/L:s hit by both FAP Turbo and MegaDroid.

Alpari UK

In total the week at Alpari UK stopped at a loss of €162. The biggest single loss was a EURCHF trade by FAP Turbo with -€105. MegaDroid had a biggest loss of -€56. Terrible when bad trades happen almost at the same time like this.

Forex.com/UK

On Forex.com/UK I lost $194 in total, with the biggest loss (ever) of $279 on one MD trade. So, if that trade hadn’t been took the account would have made a huge week. But it is still good to see that the other trades where doing so well generally.

So, I’m still positive. I have made some changes to the setup the last days (turned on OneTrade on FAPT on both EURCHF and USDCAD for example) and I will make more tune ups tomorrow when I’ve hopefully completed my backtests of MD (Pro) and EURUSD.

It gives me terrible results in backtests. Wiped account on default settings on GBPJPY running from 2009.06.01. Lets hope that it perform better in forward tests…

They use limit orders now, good I think, makes the grid lines visible on the chart and it is more likely that our orders get executed without slippage. But they put sell orders over and buy orders under the price. Where is the hedge in that? A hedged grid puts buy and sell orders on every grid line.

This would give the same behavior as version 2.73, just now they’re using limit orders and we can set the grid spacing. Also, they mentioned some kind of trend awareness, but I don’t see that in backtests either.

I’ll continue some tests now (running a ~40 hour optimization run to figure out optimal grid spacing and max orders) and put it up on demo account (with default settings), but I must say that I am not very impressed right now, can’t imagine it to perform better than the previous version. And in that case I have to go for a refund.