What to do…

I put up another demo account yesterday trading FAP Turbo (all pairs), MegaDroid (three EURUSD charts with 1 hour offsets and small risks), GridBot (GBPJPY, USDJPY and EURJPY) and FD2 (all four pairs). This demo is at Alpari UK and I funded it with €1000. You can follow it here: http://jasonvoorhees.mt4stats.com/

This new demo is really trading like my live account at Alpari UK, so perhaps the trades there actually will be useful in finding optimal settings. FD2 is making some really nice trades, hopefully it continues and proves that the defects from last week is ironed out and I can put it on the live account.

Unfortunately AUDNZD and CHPJPY isn’t offered at the Demo account, I still trade these live with the GridBot thou. CHFJPY is strongly correlated with the other Yen pairs of course. AUDNZD is both “Comdolls” (Commodity trending dollars) and is therefor very nice to trade with the GridBot. They usually trade in a range over the day and GridBot can get multiple small trades in. I keep out during the Sydney session.

I will keep my old demo (at Alpari US) running for a while, but the account there really was trashed by RoboMiner. I would not run that bot on a live account…

Update: This setup has made 40% gains in just two days now. Let’s hope FD2 continues to convince me to run it live next week.

I really mean it. Can’t believe I haven’t realized this before. A old class mate of mine have been trading FX for years now, but I never really got it. Seemed so arbitrary how the whole pricing worked. I totally understood how other financial instruments were valuated (okay, some of them at least, have been learning most of them, including the weird CDSs, the last year or so). At least, now I realize the potential. The market is so liquid that there just is no comparison with other markets. Perfect for trading since there really isn’t any difference in going long or short, it’s all trading one currency for another, no difference.

So now I am committed to really learn some manual trading system. Check out http://www.surefiretradingchallenge.com/ if you’re interested in some systems that seem very promising. FAP Turbo Steve have been sending me “spam” promoting them today. I will check them out tomorrow.

On the EA front (automated trading) there’s not been much changes to my line up. I’m still running FAP Turbo (DonnaForex settings, she knows whats she’s doing), MegaDroid and GridBot (GBPJPY, USDJPY, CHFJPY, EURJPY and AUDZND as stated in other posts). FD2 is doing good this week, but I’ll keep it in demo trading for the week at least.

Also been reading up on writing my own EA this weekend. The MQL4 language is real easy and I have some ideas I would like to test out. I will base it on a Grid trading system using pivots and hedging positions. It will be more long term than GridBot (probably D1). Still annoyed that the GridBot team doesn’t release their version using hedging. Perhaps I’m just having hubris, but it seems quite easy to implement…

After another day of grid trading I’m once again changing my setup. One of the most successful, unorthodox, pairs in the past have been EURCAD. Well, that changed yesterday when, for some reason unknown to me, the EUR started to rally against the CAD, effectively destroying the GridBots selling trades and hitting the Safety Net. I know this was a risk of course, but I clearly had put a way too high Safety net, it should have been stopped earlier when it was starting the trend. But just this is really the weakness of the GridBot implementation since it’s completely trend unaware. So, after this experience I’m stopping the EURCAD pair for now, will have to collect more data in order to set a safer Safety net.

Other than that pair yesterday was a good GridBot day actually. It closed 4 out of 4 trades in GBPJPY in profit, and 2 out of 4 USDJPY in profit (but still made €6.06 on this pair). It also made money in AUDNZD trading 9 -23 (basically letting it be when Sydney is open). The other pairs made some and lose some, but nothing out of the ordinary. So if it just hadn’t been for EURCAD…

I’m going to keep running GBPJPY/USDJPY/CHFJPY/EURJPY at 18 - 3 GMT. I might adjust the lot sizes downward a few notches, because of the smaller account I have now (see “FD2 crashes and burns…” post earlier today, and EURCAD losses above in this post). I basically lost 1/3 of my account yesterday, and have to reduce risk, even for overperforming pairs.

I have seen a trend the last week where I think I can make alittle more by using a 4 level grid in GBPJPY. It would have made me one extra profitable trade every day trading as of yet, so I think it can be a good idea. Probably will try it in demo account for a few days before activating it in the live account.

I really hope that the developers of GridBot enables their hedging function (they have stated in their forum that they have it developed and that it is doing better than the current implementation, but hasn’t relesed it because of the NFA regulations about hedgning. That regulation only affects brokers that are regulated by the NFA. Alpari UK ofcourse isn’t), I think it would make the bot capable of handling sudden spikes better. I am also tempted by using the Swiss Army EA to modify the GridBots orders, setting S/L per order and in some cases increasing the T/P. As it is now we always get punished when a trend forms “the wrong way”, but never rewarded when it goes the right way (beacuse the T/P is to tight). I would like to see a gliding T/P in these cases when there’s a big move in the right direction.

Enough rambling now. I’m still believing in the Grid trading system, when used at the right market conditions.

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.

I’ve been quite inactive this week, I think it’s been hard to see a clear trend at the exchanges, I still think we are going to be trending downwards from here until the autumn, but it is not shown in the prices decisively as of yet.  So I turned my head to the commodities and bought gold, silver and oil, as I saw a trend there still.  I used the 2X certificates by SHB offered at OMX, but any vehicle is good I think. As of earlier I have the GLD ETF at NYSE in the portfolio for example (that when considering this weeks weakening of the SEK against the USD has done very well). So far I’ve been right on the money, with BULL GULD up 5.6%, BULL OLJA up 15.86% and BULL SILVER up 12.98% (as of this writing).

I’ve written about silver before and still my analysis is the same, it is in for higher prices this year. The reasons are mainly two, the weakening of the dollar and increased demand versus availability (stores and production is down). The Gold market is driven more by the uncertainty in the worlds currencies, but should not be underestimated. Lastly oil is going up from a very very historically low level this winter. OPEC has cut it’s production in order for it to go up, so why not play along?

As for the broader commodity ETF’s some are getting close to their 200-SMA’s. DBA (Agriculture) has already crossed it. DBB (Base Metals) is just shy of it, but has been trending in range for a month. DBC (General commodities Index) looks better, it is closing in on the 200-SMA with a upwards trend. DBE (Energy) is still quite a bit from the 200 day moving average, but it is in a strong upwards move (most certanly because of the Oil price of course). All in all I think that there will be buy signals in these ETF’s in a month or two.

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