What to do…

Well, clearly FD2:s results this Monday was too good to be true. Yesterday it really crashed and burned a lot of my account in the process. It took positions against the Rallying USD and lost, several times. Just as it seemed that it had understood that the USD was in a rally it bought USD against the GBP (a 0.36 lot, huge for my account), only to close the position in minutes for a €4 win. Had it kept that position for just an hour more I would have been netting zero for the day, and had it kept it as long as its EURUSD positions (that closed this morning) it would have made lots and lots. Well it is a machine…

Also, there are some rumours on DonnaForex about the bot being optimised for backtests. Some Indonesians have apparently decompiled the ex4 and dll and found that it calls procedures in the dll with different parameters if you run a backtest than live trading (live or demo that is). If this is true of course this EA is a scam. Until this is proven I have put it on probation, can’t risk more of my hard earned €:s.

Update: I kept it running in Demo, this is one of the trades it did today. Excellent timing, except it is a selling order!

They just released a updated version that I’m going to try in demo for at least two weeks even if it performs amazingly.

Monday and Tuesday haven’t been great with the settings I was trying out. A lot of safety nets have been hit, some prematurely but most have stopped further losses. I’m going to drop some pairs and alter settings for others.

USDJPY:  LotSize 0.1, SafetyNet -300, trading between 18 and 3 GMT

So far this pair has 7 winners out of 7 (100%), so it’s a keeper, even thought about raising the LotSize, but I will not for now. Raised the SafetyNet since I trust it more now.

GBPJPY: LotSize 0.05, SafetyNet -150, trading between 18 and 3 GMT

Not as stable as it’s brother USDJPY in my trades. Has hit stafety net twice (once prematurely). I’ve put it on a smaller lot size and widened it’s safety net.

CHFJPY and EURJPY: LotSize 0.01, SafetyNet -30, trading between 18 and 3 GMT

These two are working out just as good as GBPJPY, might increase their lot size in the future, but I’ll wait for even more good trades.

EURCHF: LotSize 0.01, SafetyNet -20, trading between 9 and 3 GMT

This isn’t a clear winner, but it is ahead about €3 right now, so I’ll keep it. EURCHF is trading in a range very often thru out the day.

EURCAD: LotSize 0.05, SafetyNet -100, trading between 9 and 3 GMT

This is a clear winner in my book with €63 in profits and 32 winners out of 38. The other 6 trades were all closed with losses at 4:00 am. I don’t think I could have set another EndHour to stop those losses earlier, the orders we’re all put in during a bit of a trending market.

AUDNZD: LotSize 0.05, SafetyNet -100, trading between 9 and 23 GMT, 5 GridMaxOrders

This pair is trading in a range very often. I hit the safety net prematurely (the pair bounced back) on Monday, so I’ve widened it.  I’m also trying a grid with maximum 5 orders of 0.05 lots with it now, perhaps it can use the movements better.

USDCHF: LotSize 0.01, SafetyNet -13, trading between 9 and 18 GMT

GBPUSD: LotSize 0.05, SafetyNet -50, trading between 9 and 3 GMT

EURUSD: LotSize 0.01, SafetyNet -14, trading betweeen 9 and 15 GMT

USDCAD: LotSize 0.01, SafetyNet -20, trading between 11 and 19 GMT

EURGBP: LotSize 0.01, SafetyNet -20, trading between 9 and 14 GMT

AUDUSD: LotSize 0.01, SafetyNet -14, trading between 10 and 18 GMT

NZDUSD: LotSize 0.01, SafetyNet -14, trading between 11 and 19 GMT

GBPCHF: LotSize 0.01, SafetyNet -20, trading between 9 and 15 GMT

The pairs that ultimately was dropped was just to hard to set decent safety nets on. Some the grid bot almost always opened three positions in, against the trend, and they just hit the net or lingered as losers til EndHour was hit. I guess some of them can be traded during some periods of the day, when the market is less active, but it is very hard to set the correct parameters for this. I would like the GridBot to actually have some intelligence about trends and market conditions, not just blindly execute orders at the price levels in the grid and hope for the best.

GBPUSD showed the most promise of the dropped pairs, but with it ending two times in the Safety net during trends it just isn’t sustainable. And in both those cases the trend didn’t stop, so a wider net would have lost me even more money.

Anyway, I hope that this setup will make money, since I have lost quite alot with the experimenting right now. Hopefully EURCAD and AUDNZD can make it up to me in the coming days. Those pairs aren’t usually traded with this bot, but they’ve been winners for me.

After installing Forex Derevative 2.0 (FD2) on my live micro account at Alpari UK yesterday it was really raking in some nice trades straight of the bat, closing trades for a profit of €72. Now it seems to have woken up on the wrong side thou with a closed GBPUSD trade with a loss of €46, and three EURUSD positions in the red (total -€60 behind right now). Hopefully it’ll close them if the markets keep going the wrong way (like the GBPUSD position) or keeps them till they’re in for break even or profit. Update: They we’re just closed at small profits. FD2 seems to have excellent Money Managment strategies.

This is a screenshot of the MT4 chart for GBPUSD from yesterday. Sure the bot could have taken positions at even better times, but still it’s rather impressive I think.

Basically I think this bot got potential and I will keep running it. My current settings on all four pairs are default except that I’ve enabled hedging.

So, I’m currently using four different Expert Advisers (EAs) that are trading 15 (!) different currency pairs. They are FAP Turbo, Forex MegaDroid, Forex GridBot and Forex Derivative 2.0. The last one is the latest (and greatest?) addition to the line-up. As of this writing it hasn’t done any actual trading yet, but it does very very well in backtests so I am hopeful. FAP Turbo is still the only one that have been profitable over my 5 days of trade, but I will keep MegaDroid and GridBot for a while to see how things turn out. FAP Turbo uses DonnaForex settings for the pairs she trade, and my own for USDCAD.

As for GridBot I’ve analyzed last weeks trades and made some changes to virtually every currency pair. I was considering dropping a few, but resorted to constrict their trading hours instead. This way I can still get more data on them, if last week perhaps just run bad for some pairs. So what settings will I be running this week? Here’s the Line-up:

GBPJPY and USDJPY:  LotSize 0.1, SafetyNet -50, trading between 18 and 3 GMT (Alpari UK offset)

USDCHF: LotSize 0.01, SafetyNet -13, trading between 9 and 18 GMT

GBPUSD: LotSize 0.05, SafetyNet -50, trading between 9 and 3 GMT

EURUSD: LotSize 0.01, SafetyNet -14, trading betweeen 9 and 15 GMT

USDCAD: LotSize 0.01, SafetyNet -20, trading between 11 and 19 GMT

EURGBP: LotSize 0.01, SafetyNet -20, trading between 9 and 14 GMT

EURCHF: LotSize 0.01, SafetyNet -20, trading between 9 and 3 GMT

EURCAD: LotSize 0.05, SafetyNet -80, trading between 9 and 3 GMT

CHFJPY: LotSize 0.01, SafetyNet -20, trading between 12 and 3 GMT

AUDUSD: LotSize 0.01, SafetyNet -14, trading between 10 and 18 GMT

AUDNZD: LotSize 0.1, SafetyNet -60, trading between 9 and 3 GMT

NZDUSD: LotSize 0.01, SafetyNet -14, trading between 11 and 19 GMT

EURJPY: LotSize 0.01, SafetyNet -15, trading between 18 and 3 GMT

GBPCHF: LotSize 0.01, SafetyNet -20, trading between 9 and 15 GMT

So, hopefully it will work out with these settings, and I get more good trades than bad. I’ve tried to stop lingering trades by settings a little tighter working hours and lower safety net on some pairs as you can see. Some I’ve also started trading at bigger lotsizes since they’ve been performing very well. AUDNZD has hit rate of 100% as of now for example, so I’m trading it at 0.1 lotsize. This pair is characterized by often trading in a range, perfect for grid trading. Unfortunately the spreads are somewhat unfavorable, but as long as GridBot keeps getting winners here I’m satisfied.

Bought another Expert Advisor (EA) to the MetaTrader 4 platform this morning, before going to work. Read some very interesting reports on a forum about the Forex GridBot, where people where running it in broad daylight (most successful EAs run only at night, during the Asian trading session) with remarkable results. So I just had to test it. It is a ClickBank product so they offer 60 day money back guarantee, so if it doesn’t perform I just give it back (just as with my previous EAs, MegaDroid and FAP Turbo).

I put it to work immediately on all (!) 14 major currency pairs. I’m letting it trade 8am - 3am GMT, which is extreme of course, but since it’s a demo I’m pushing it. The GridBot started trading straight away and is racking up orders as crazy. I obviously used a too large lot size (default 0. 2) since I’m hitting my margin all the time today, but when there isn’t margin calls the bot really does well. I will reduce the lot size to 0.05 on the Demo account. I’m tempted to run it live as soon as I get back from work. Of course I’ll start with micro lots live (0.01) if I do that and I will probably only trade 2-4 pairs.

You can watch my demo account at Alpari here, but be warned I run four different EAs now with extreme settings and working hours, this is really a playground: http://patrickbateman.mt4stats.com/

Since today is Memorial Day I’m laying low, even in the open markets. Last week continued the decline after the move upwards in the beginning of the week (when it hit my stop-loss limits) and I stayed out for most part of the rest of the week after that. The OMX was closed half of Wednesday and whole of Thursday.

The USD weakened against all other currencies last week hitting a low of 7.44 USD/SEK. It will be very interesting to see if this trend continues, since it is remarkable that the both the S&P 500 and the USD declined simultaneously.  Gold is rising at about the same rate as the USD decline.

PA Resources went up again Friday, and really proving to be my #1 moneymaker. I liked the 11% interest in the convertible from start and now, when it’s up 60% since January, I love it. Hopefully it will continue trend upwards with the increasing oil price and then make a jump when the results from GITA is released, sometime this summer/autumn. A rumor going around is that it is a candidate for being bought out by some larger entity in the Oil industry. If this happens we are probably looking at a tremendous payday.

As for my ventures into the FOREX trade it didn’t start great last Thursday with a hit of -6.6%. I think it was a fluke, but I admit that it was really bad timing… But I am still intrigued with the possibilities of automated trading, and I really enjoy tinkering with the robots and their settings.

The only EA I run live is MegaDroid for the moment. I am testing FAP Turbo and Robominer in a demo account also, and considering starting the GridBot in demo also. I probably will start FAP Turbo live tomorrow night (don’t trade FOREX around holidays). You can follow my (or my EAs that is) trades at: http://tylerdurden.mt4stats.com

So, last week was negative (positive for us who where short…) on basically all exchanges over the world, with the American markets in the lead. The US financial sector is severely overbought, and I was anticipating a correction to take place. The downturn last week was only a fraction of the needed adjustment thou, and I am expecting the financial sector to lead the way downwards this week as well. I am therefore keeping my SKF and SDS positions and will probably take up some FAZ sometime over the week also.

In the Swedish market I now almost solemnly hold XACT Bear ( a 1.5X inverse ETF based on the OMXS30), lets hope the OMX follows the general trend down…

The USD has strengthened a little against the SEK, according to my predictions, and I think it will keep this trend (as long as the markets fall investors will inadvertently buy more dollars).

Tyler Durden has written an interesting piece on the future valuation of the greenback over the weekend. It is sufficient to say that this dollar squeeze has been a reality for quite some years, and It will be in effect again when the markets stabilize after the next low (I don’t believe that the low in march was the end of the crisis, there will be no V-shaped recovery, but more likely a W-shaped).

http://seekingalpha.com/article/138085-dollar-euro-short-squeeze-race

Personally I’ve gotten more interested in the FOREX market over the weekend after a friend gave me a link to some very interesting automated trading possibilities. After spending several hours reading about the market and trade in general and trading platforms and technical aspects in specific I am very excited about these possibilities. Expect me to start writing about these investment opportunities as soon as I’ve taken some of the first steps. Just to clarify I don’t think that the FOREX market is the holy grail to investments, I see it as a way to further diversify a portfolio, and probably will allocate no more that 5% of my portfolio to this market.

Read up on the basics of the FOREX market at: http://www.babypips.com/school/