What to do…

I’ve let my guard down again, allowing scalpers to trade during chaotic markets. Basically all my scalpers have had a really hard time the last two weeks (of course not every night, but enough). There have been a lot of drifting in prices during the usually range bound fluctuations in the Asian session which have triggered stoplosses. Usually the price actually have recovered in time for London open, but that doesn’t matter of course if the stoploss have been activated.

I’m thinking about implementing a set of filters in order to weed out bad trading days for the scalpers. I think that it should be fairly easy to set rules for maximum movement during the day and prior days to avoid too crazy markets or trending ones. I found one article about the same idea(s), but they haven’t automated the process or even detailed it very much I think. What I’m thinking of is a EA that evaluates current conditions at a set time (say 19.00 GMT) and emails me if the conditions are right for scalping. If I want to act on it I log in to my VPS and start the MT4 sessions with scalpers loaded. It will be a semi-automatic approach and it will require a more active stance from me, but I think it might be very worthwhile. The EA will only be able to sort out the bad days to trade in chaotic markets thou, I don’t expect it to be able to catch the drifting in prices.

This week I will trade with reduced risk for all scalpers Monday and Tuesday and then turn everything off until next week. NFP is released on Friday and that usually means unpredictable movement and much more volatility.

This is not funny but again my scalpers failed and my manual (and long term) strategies gained. I’m starting to see a pattern…

AUDNZD really is behaving strange I think as it has descended substantially towards the 1.27 level during last week.  gain by it, but I don’t understand the motivation for a 500 pips lower valuation now compared with just three weeks ago. In my view nothing new of worth has come out of either Australia or New Zealand to motivate this huge drop, that doesn’t even seem to be stopped yet. Tonight there is a new RBA meeting and it is expected that they hike the rate by another 0.25%. That should of course send the AUD higher, but who knows right now. Seems that the market isn’t expecting a rate increase (as prices have been falling) but still this is what analyst sentiment is indication. IE, what happens if the rate is untouched? Even more downwards movement? Or is it fully priced in all ready? I have no idea, I just trade my simple system right now.

Total gain over the week was $108.20.

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This was another terrible week for the scalpers, especially Thursday when Forex Shocker and MegaDroid really wrecked havoc. Other than scalping this week was okay. Green didn’t make much since price was out of range most of the week, but my manual trades in AUDNZD got nice results (the same strategy that Blue is / will be based on).

Total gain was $436.41.

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I constantly keep a lookout for new promising EAs, but as you know most of them are garbage. Especially, it seems, the ones that is promoted the hardest (like FRWC and that new one right now Delphi). I think I’ve found a good one now thou, Forex Harvester. I’ve been keeping my eyes on it for quite some time, and it has performed very nicely over the last three months.

What makes it really interesting is that it isn’t another Asian session scalper (like FAP Turbo, MegaDroid, Forex Shocker and about 1000 other EAs), this is based on a unique strategy. It trades Sunday nights, the first few hours of the trading week and it trades if there are gaps in price from Friday close. The strategy is that the market will close these gaps and Forex Harvester places trades accordingly. I hope that FH will be an good addition to my automated setup, and at $147 it is a buy for me. I plan to use it at my Collective FX account.

Here is a live statement from the developers them self: http://www.myfxbook.com/members/MT4Trading/harvester-live/18004

Another nice thing is that one of the developers is very active in the forum over at DonnaForex, and very friendly and helpful. The actual site promoting the EA is the usual garbage thou, don’t pay attention to it.

We all love MyFXBook of course, who wouldn’t (if you don’t use it, you really should check it out. I don’t use any other stats service anymore). Now they got a small contest together with FXDD. The price money isn’t much and it is traded on demo accounts, but it could be a good motivation to finish my latest project, called Blue, and perhaps even get a new scalping strategy implemented (called Yellow). I don’t think Green is suited for a short period like a month and starting capital of just $1000.

Check it out: http://www.myfxbook.com/contests

I’m terribly late with this update. It was a terrible week so I haven’t had any motivation to write about it, but the idea with this blog is to force me to analyze performance and think about past results. So here is the post. The losses are in a great part due to a human mistake (mine). Like I wrote last week I put the wrong stoploss level in a lot of my hedges in AUDNZD, I set 1.3020 instead of 1.3120, losing me 100 pips in quite a few trades.

Also my scalping at JadeFX primarily (my main account for this kind of trading) was not very successful, a first for 2010 actually. Hopefully it recovers the loss in the coming weeks.

Total loss over the week across all accounts: $1775.40. Just terrible.

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Week 14 was really dominated, for me, by the rate hike decided by RBA which shot the AUDNZD above 1.32 again. This time I hedged my positions thou and closed the hedges on the way down. I had some left too long thou, which cost me dearly in the end. I miss placed the SL on quite a few trades so that they were not closed at 1.3120 as intended. Clumsy me put them at 1.3020. A very costly error (that will show even more in next weeks update). Mea culpa, no one to blame but me.

Total gain over the week was $228.28. Next week won’t be so nice thou, since a lot of the hedges are still open and in the red.

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I just realized that I didn’t make a weekly update during the Easter holiday. I was extremely busy during the weekend and it was a really welcomed break from work and trading. Because of the Holiday I only let my scalping EAs trade Monday and Tuesday.

The AUDNZD and EURCHF gave me real problems again. Both pairs trended outwards, minimizing my margin once again. One positive action was the massive selling of CHF the SNB shocked the market with on Thursday afternoon, catapulting the EURCHF up 240 pips. The AUDNZD trended higher thou as the market anticipated a rate change of 0.25% from the RBA (which was fulfilled after the Tuesday meeting).

Total gain over the week was a meager $62.69.

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I’ve been getting some questions about Forex Shocker and which pairs I trade and the settings to go along with them so I thought that I could post them. First of all I use both version 1.1 and version 2.0. I do because they trade different from each other and not during overlapping hours (with default settings).

With 1.1 I trade EURUSD, USDCHF, GBPUSD and EURGBP. I use default settings, but I trade fixed lot sizes. I haven’t tried the Money Management (MM) function in Shocker at all actually, I just prefer fixed lots in all EAs I run. The (conservative) lot sizes used currently for my $2000 account on JadeFX is:

EURUSD: 0.1
USDCHF: 0.1
GBPUSD: 0.05
EURGBP: 0.1

With 2.0 I trade EURUSD, USDCHF and GBPUSD. Default settings here too. Since it is summertime now I use the DST setting in v2.0. Fixed lotsizes of:

EURUSD: 0.2
USDCHF: 0.1
GBPUSD: 0.1

You can calculate the maximum loss in $ with a stoploss of 34 pips (I think it is 30-34 pips depending on pair). If a FS2.0 EURUSD trade would hit the stoploss it would cost about $68, which is 3.4% of the $2000. But it is important to understand that Forex Shocker often opens double trades (the default setting is to allow up to two concurrent trades, you can limit this if you like, but I have found it to perform better with the default setting). This means that you stand to loose double that, which would give about 7%. This is a lot, but with this account I’m willing to risk it, since I use it only for scalping.

Yesterday I bought a second license and will start to trade it on my $7000 account at The Collective FX. I don’t want to take high risks in that account so I probably will use about the same lot sizes there. The biggest risk then would be about 2% if double trades is taken by FS 2.0 in EURUSD. I will demo trade for a while before going live at CFX thou, Forex Shocker is broker sensitive so it is not guaranteed that the pairs I trade at JadeFX is the best at CFX. It’s even a possibility that it isn’t profitable at all, but that is a slim chance I think. I read in Donna’s forum that some people have been getting great results with USDCAD recently, a pair that I even stopped in demo on JadeFX because it was not doing very well.

Forex Shocker costs $129 today but they will hike it to $249 tomorrow, so if you’re interested, think about it. I still think it is worth $249, but I would personally hesitate on that kind of money for a product without refund possibility. Additional licenses costs $99 right now but will cost $149 tomorrow.

Another interesting week. It is really addicting to watch the charts and account statements nowadays. EURCHF is still plummeting as a result of worries for the PIGS debt situation, and it will probably take a while to restore faith here. Especially since a lot of the debt had been hidden by sneaky bankers (in both the EU and the US). Makes us wonder if really everything is on the table now. But eventually there will be a resolution to the debt crisis, even if it means that some of the PIGS is forced out of the Euro.

AUDNZD seems to have recovered a bit (trading below 1.2850 right now), but I fear it is just temporarily since there really haven’t been any news out of NZ that is supporting a higher valuation of the NZD vs the strong AUD. I still fully expect the pair to trade in the upper range until the rate difference is reduced or even zero (right now the difference is 1.5%).

Other than the AUDNZD and EURCHF I’ve been manually trading a bit in EURCAD this week. The EUR is weak and the CAD is steaming which makes it quite easy to spot the trend. Check the accounts below.

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