What to do…

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.

I wrote about decreased cashback at Alpari UK about a month ago, when Cashbackforex stated that it would only pay 0.1 pips back. Now they’ve increased it to 0.25 pips. This is still down a lot from the original 0.42 pips of course, but this was enough for me to reevaluate my decision to close the account. I will keep trading it now. Performance of FAP Turbo and MegaDroid is good enough to justify it. I probably will fund the account at FXCM UK also eventually, but now I’m not in as much of a hurry.

It might seem like nothing, but cashback is serious money when trading scalpers. Don’t underestimate it.

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.

Read more…

Another trading week closed. The movement downward in EURCHF is putting some serious strain on my Alpari UK and Forex.com/UK accounts. AUDNZD moved down to, and even below, 1.29 this week which really helped my CFX account. I have some open buy positions caught up there thou, didn’t expect it to reverse quite so quickly. Read more…

This week most of my profits actually come from manual trades, as opposed to automatic ones that usually make up 100% of my trading. I am by no means a manual trader, but I have been making some manual buys in AUDNZD as hedges to my open positions. I still have a few open (that is negative now, but I’ll keep them til we’re at 1.2850, which feels “safe” or hits 1.31 again).

There was no trading on my JadeFX account this week as it has been moved to the new liquidity provider. I’ve gotten a new VPS from Jade, which now sports 2 gig ram instead of 1 gig, and have been demo trading from it during the week. I will keep demo trading only today and start easy with just a few charts live tomorrow. Read more…

Just found a nice angle on debt and creation of money. Lets hope the bankers find a way to scale out of their practices rather than the inevitable Armageddon that would ensue if more people understood this.

http://www.telegraph.co.uk/news/features/7280559/Our-world-balances-on-a-sea-of-debt.html

This must have been the hardest week of my brief Forex trading career. As AUDNZD rose well above it’s 10-year high the two biggest accounts below was stretched very thin. The account at CFX was just a few hundred dollars away from getting positions stopped out, luckily my deposit from the week before eventually made it there, in time for the push above 1.31. Because price is above 1.2967 (which I used as trade cutoff) those accounts really haven’t been trading much last week. Read more…

… and it really breaks my main accounts right now. I’ve been grid trading this pair with RoboMiner since July 09 and gradually increasing the funds traded because it seemed a solid system. AUDNZD hadn’t been above 1.30 (or 1.2967) for 10-years. During January this year I spent 80-100 hours making my own gridtrading EA based on the same principle (but with quite a few improvements I think). They both break when price moves above ~1.30 thou, and this week it did, with a bang. I put my own EA, called Green, live just one month ago with a safety margin of 200 pips, IE it wouldn’t trade as soon as there wasn’t enough equity to cover a move to 1.2967 + 200 pips = 1.3167. Right now we’re at about 1.31. IE I only have about 70 pips left of margin before the margin calls start.

So, what to do? I can’t do much I think. I won’t fund the accounts with additional funds to cover even more margin. I am contemplating a hedge trade, but I feel that I should already have done this when the range broke, but I didn’t. So I might put in a smaller hedge now (for perhaps just 1/3 of the short positions) just to extend the upper limit I can handle. If we’re lucky NZ have been catching up to AU before my margin is out or at least AU have released some news that shows their growth have declined. The next high impact news out of NZ is scheduled for next Wednesday and Thursday, but analyst doesn’t really anticipate any improvements.

So what was my main fault? I didn’t diversify enough and went in with to much money into the same, somewhat flawed, strategy. Again. Also my timing was awful. Just one month ago I funded my CFX account and started trading the AUDNZD range. Had I waited just one month I wouldn’t have an additional $7000 on the line right now. What I should have done, and really was my original idea, was to trade multiple pairs with low correlation and I should have started out with smaller amounts. But the growth curve of trading the AUDNZD compared to the other pairs was too tempting.

So what does this mean for the future of AUDNZD range trading? I don’t know yet. If NZ catches up quick enough price should move down again and perhaps the cycle will continue for years to come, but with a higher historical high. Perhaps they don’t catch up and price goes up a bit more and starts ranging at a considerable higher range. It really shows that there is a need for more safety margin than 200 pips also, but when simulating with 500 pips the profits really isn’t to impressive anymore. One thing is for sure, next time I will be more careful.

I got a email from the guys at Cashbackforex stating that Alpari UK have lowered the cashback for them, so now they are just able to give 0.1 pips / lot back. Alpari is motivating the change by saying that they’ve lowered the spreads. Sure they we’re lowered a bit last fall, but not really 0.32 pips in average I think. This unfortunatly makes Alpari UK quite uninteresting as a broker (it was just okay before).

So, what’s the best alternative? I would say FXCM/UK via Cashbackforex. They offer microlots now (at least if you sign via the guys at Cashbackforex and deposit at least $1000. Follow the instructions at the site). They have good spreads and you get 0.6 pips / lot back. FXCM also has great support. I will start an account at FXCM/UK and start unwinding my Alpari UK account.

This was a great week. I was a bit afraid of the AUDNZD breaking into the 1.30 range, but it backed off and closed the week down at 1.28. Good news for my grid trader. Read more…