MF Global

I had an account with MF Global Canada, they went tits up as you are probably aware.  I actually got 100% of my money back, KPMG handled the deal!!.  The account was with the Canadian branch so I was covered under the Canadian protection fund that was set up years ago to deal with this type of non-sense.  So if you look at my forex performance, you'll see it has stopped trading.  I will be set up with a new broker and funded account by Christmas but I wont trade until January when liquidity is up.

Tipster Trendlines for MT4

I use the Forex Factory and the Steve Hopwood forex forums mostly.


If your looking for the MT4 Tipster Trendlines code, go to Steve's site as I'm not posting it at Forex Factory any longer.


www.stevehopwoodforex.com


You have to sign up to be able to download files.

Forex Contest

Alpari UK started up this years forex contest.  It's free and offers 20K of prizes.
I've already signed up for it, under the name AnotherBrian, account number 28353.
If you want to see where I stand in the league table, here is the link, enter the account number in the search box.

Here's the link to register.

Alpari Forex Contest

Good luck!

Tipster SR

So I made a system a while back for MT4, based on support and resistance.  I backtested it and studied it to learn the strenghts and weakness.  I've been demo testing it for about 4 months with good results, its not the grail but it trades without causing platform errors and long term produces some gains. 

On MTI Live, it was running on Anotherbriandemo, you can see it in the comments of the published statement on the MTI site.  It's now running on my real account.  I've adjusted the published statement start date of the Anotherbrian MTI Live account to be the same time I started using it.  I also use two other trading strategies on this account.  ForexMorningTrade and dicretionary trading based on Sam Seiden. 

FMT - I use this as more of a scalper with small lot size - this is like a real account test - I didnt back test it.  I watch it the day it trades to see if I should close it or not. 

Sam Seiden - I usually use a 1 or 4 hour chart for this.  This strategy requires patience.  In order to help me with that, I found having a robot running kills most of the urge to trade, so I can wait as long as it takes.

So, time will tell.

See the right side bar for performance or visit these links
Demo MTI Account
Live MTI Account

For the longest time I've been breakeven or losing slowly.  For the past severla months I've been working on EA's and watching them, and trading myself.  I think I found what works for me, as overtrading is a problem.  Let's see what happens!!  Join the MTI competition for some fun.... it's outlined in the post below.

UPDATE (July3, 2011):  The MTI Live website doesn't seem to show things as they really are unless you include ALL history.  I haven't figure it out yet (how to correctly show stats from a certain day forward).
The Tipster SR EA is LIVE.  It's one of the 3 EA's running on my live account.

Calling All Robots v2

This is a re-post.  The first competition had some technical issues with the rules I set up so I stopped it and created another one.  Join in!!

If you use MT4 (or MT5) and trade forex I invite you to join this free contest. The winner gets bragging rights.

I use MTi to track my performance of both live and demo account. My demo account is running a robot and MTi allows me to see the trade stats. They recently added a new feature called "Competitions". I've started a new competition and I invite you to participate. It's called "Calling All Robots"

To enter you need MT4, and an account with MTi. It's easy to sign up. Once you've signed up you download this and install, it installs automatically. You disable the FTP feature in MT4 options as this new file will upload all the trades to MTi. It's pretty slick.

The competition is scheduled to run from Fri, 27 May 2011 14:08 GMT to Wed, 1 Jan 2020 16:00 GMT
Basically, forever!


Rules The competition is open to both live and demo accounts.

• All accounts must be in USD.
• The maximum size of any individual order is 5.00 lots. Competitors will be disqualified if they place an order larger than this during the competition.
• The maximum volume traded during the competition is 10.00 lots. Competitors will be disqualified if the total volume on trades during the competition is larger than this.
• Competitors must not make deposits or withdrawals during the competition.
• Performance is measured from the first equity figure published by your trading software after the competition starts to the last equity figure published before the competition ends.
• Competitors must publish from the same broker account throughout the competition.

ENTER HERE

Leader Board

AnotherBrian is my real account.
AnotherBriandemo runs a robots, or robots, on test.  Most robots are of my own making.

I also have started another competition, "Perpetual Trading", its for real accounts only and runs for a long, long time.

BOJ Intervention

What happens when a countries bank intervenes on the currency market? This happens...

107 pips in 10 minutes USDJPY

218 pips in 3 hours USDJPY

USDJPY 1 Minute Chart

I was lucky on this one, real lucky. I had an order in on two different pairs and got in right at the bottom of the move.

For this trade, I waited for price to breakout of the down sloping trendline, then placed an order to buy when it returned to the same line. The little arrows on the chart is the pending buy limit order changing with each new bar. Timing is everything? I think it was just luck this time.

This trade was planned days before the event. I watched price approach the trendline and thought about cancelling the order as a move this fast was sure to run out of energy. I quickly looked at the forex calendar for news releases and there was none. Then I checked headlines, BOJ intervention confirmed. I left it to enter and was rewarded.

The red lines on the chart are my stops that were moved up to trail price action. I had to call it a night so I moved it closer. Nice!.

Final result:

EURJPY 229 pips captured

USDJPY 66 pips captured

It doesn't really matter WHY at the moment, trade what you see. This morning I found out WHY. BOJ stuffed 17 billion into the currency market, and really the only currency that moved were the JPY crosses.

Did anyone else make any pips? Let's hear your story.

USDJPY

In the coming weeks I'm going to be following the forex pair USDJPY from a purely technical perspective. It has been said that the government may step in to balance the currency as it approaches the low it set in April 1995. Below is the chart I've marked up with trendlines and the 1995 support zone.

I will be trading two different timeframes, the daily (with the weekly as reference) and the 4 hour. The four hour will attempt to capture small moves. The daily, I'll be looking to enter in the blue zone on a retracement. I'll be using my IB account for the longer term trades and MT4 with my forex broker for the smaller moves.

Metatrader Forex Data and back testing

I finally found a source for free forex data that is complete, and FREE!

Here is the link to the file - Metatrader Free Forex Data

And the recommended set-up to back test your EA on MT4, follow this link

Set up for back test

There are other helpfull articles on that website also. I took a look at the two systems they are offering for sale and they don't fit my style. I like smooth equity curves. One of the systems has a 30% win rate, I like small gains with high win rates.

EURUSD

The last post on EURUSD talked about some basics and a short update as price was playing with the trend line. I am currently long and I plan on holding for the ride.


WEEKLY CHART From the weekly chart we can clearly see that price has entered an "air" zone, there is no meaningful resistance on the way up to the top of the yellow box.

Daily Chart - Long History The last time price had to overcome resistance it popped through the orange trend line on the third attempt (yellow circle). Price followed the upward red trend line and is still following it. More on this line later on.... We just broke the blue trend line, and as it happens, on the third attempt just like the prior break. No we are into the yellow free air space.

Daily Chart - Closeup Price just broke through the blue horizontal trend line, on the third attempt, same as the last horizontal trend line break. The pullback after the breakout above the orange horizontal trend line came to the upwards trend line and the 50% retracement. Note that it did not come back to the orange trend line, indicating a strong upward trend following the red line. Keep this in mind when looking to enter on the recent break.








Intraday The yellow area is the S/R "zone" from the weekly chart. It looks like we are clear for now. A good area to place a but LMT order would be at 1.4790 to 1.4844 for a low risk opportunity.







What's next?


Breaking the upward red trend line - This would only mean that the rate of increase or rise in price has slowed. Once it breaks through, look for it to come back to it and test it, then fall. No telling when this line will break.


Pullback - look for a pull back to the upward red trend line or the blue horizontal trend line. The best choice might be whichever one of those area also lines up with a fib level and a round number. I might even load up more on a pull back.


Be patient and wait for the pullback. If you need some help with pull backs watch this Pullback Video.


Do you have a position right now? Are you planning on geting in on this move?

EURUSD

UPDATE
Looks like a false breakout to me. It could also be a shakeout but I dont think a shakeout is that easy in forex and given this is a well watched trandl ine, there are too many participants at this level to do that.




Original Post
I was looking at the EURUSD chart today, deciding how to play pair as it nears long term S/R. My son came into the room and asked me what I was doing. I explained the bar chart and told him that we could make lots of money if our prediction was right. I asked what he thought the chart would do, first taking no more than one minute to show him how prices bounces off previous S/R levels, showing him the trend lines and S/R lines I drew. His 30 second view into the future is attached below and I have to tell you, its as valid as any other.

I'm playing this as a breakout for one reason only, this level has acted as resistance four times already and there is upward pressure from a very long trend line. There are three outcomes I see in the next week or so;

1: Breakout and huge move to the upside because of the long term nature of the two trend lines.
2: Breakout and a failure within a few days, price will move back below the 1.4821 area in a classic 2B move and then tank over multiple weeks if not longer.
3: Price will bounce off this area and head lower, below the uptrend line, then we are moving sideways. until a low is broken.

BTW - I have used Tipster Trendlines to place my trades. Check out this AFL for Amibroker for placing error free trades. "Error free" refers to the task of placing the trade, it does NOT refer to a trading system. the AFL also offers a risk management tool.

In short - this is a great place to watch price and place a trade. In other words, don't waste your time trading in between S/R lines on your chosen time frame.

Not sure about the long term, I'm focusing on the weeks ahead. Just for kicks, I'm posting what a 9 year old boy thinks of this market.

Forex Volume

If you have traded forex for more than a day you will now that there is no volume data since there is no central exchange. There are ways to guess at volume, which by the way will help you even though its an approximation. Since trading isn't an exact science, any data for volume is better than no data. When volume is read on a chart, say for stocks, we look for increasing or decreasing levels, or a spike on a breakout, and not a particular number.... only comparisons.

Forex data can be derived from tick data. I use this right now, the number of price changes from the IB data stream is counted and added until the bar closes, the afl uses the ibc.getrealtimedata function.

You could also use forex futures volume data, Amibroker will let you do this easily, but the market hours aren't the same from what I understand. I've never looked into this, so don't consider this as fact.

I ran across a site where forex futures data is taken from the CME website reports that are posted and available via ftp. The website is call evolution. I read some post at forex factory and it seems the site has been up for a couple of years. There doesn't seem to be a huge following, (which is good if you ask me).

I'll be taking a closer look at the max volume levels for the past week and keep an eye on them. Use this with your support and resistance and we will probably find more clues to where the next bounce will happen.

Take a look and leave a comment here on the site, as well as your thoughts on forex volume.

USDCAD - Trade update

I closed my open short position on USDCAD the other day. I guess I didn't think that price would go as far as the completely obvious support level, shown below in red. The area between the two blue lines is void of any support/resistance.

I netted 461 pips on the trade.

Looking at the chart, you can see more totally obvious S/R levels. How about 1.3000? Two times it bounced off that level. See how the price looks sharp, quick up, quick down the first time it hits 1.3000? This tells us it's an important level. I missed both opportunities.

So whats next for this pair? If it blows past the red support line it should continue to the next red line. On the other hand, if it bounces off this red line it could move up to the top blue line.

I'll be ready.

USDCAD - Look out below!

I've entered a short position in USDCAD. Why? Why not. The pair is at a major support level, a daily support level. I entered a few days ago, so I'm in profit and waiting to see what happens, and the best part is that I'm giving the market lots of room to move around, waiting for the decline.

Here are my previous thoughts on this pair, and where it would go

USDCAD Post 1

USDCAD Post 2

Notice on March 9, 2009 how the pair did penetrate the 1.3000 level and faked out breakout traders. Didn't I mention using a tight stop in an earlier post? I hope you didn't get caught on that one.

As I stated in an earlier post, I think the run up was due to the need for USD. Hedge funds had big clients who wanted out of the market, they could see the domino's falling after October of last year. To cash these guys out, the holding needed to be liquidated to some extent, including holding on non-USA markets. When they liquidate those holdings, the currency must be changed back to USD, so that drives up the price. There are clearly more forces at work than this, but I like the simple approach, all I need is in the price. And as I also stated before, understanding why something is happening is the downfall of many traders. You will know why many months later.

Credit Crisis and PUT option
If you do some creative searching on Google, you will find that there were those that shorted the market using PUT options before the credit crisis was public. Click on the link above to get started. So here is what I'm saying, you might have noticed this happening, and allot of traders did. How many acted? Notice the forum article, the writer is trying to figure out why? Who gives a rats ass why. Keep that in the back of your mind, like a dart in your back pocket, take it out when you need it. If you saw the market take a shit kicking like it did on November 8, 2008, you might have thought to wait a few days for a bounce, and pick up some PUTs. Or, you might have not because you wanted to know WHY? and didn't make a killing like the traders who sunk billions into PUTs. So, why ask why?

Looking at the charts below, notice on September 8, 2008 the USDCAD started to rally. Is this the impact of liquidating large amount of holdings? The pair tops out on October 28, 2008. So what do you think about that? At the time you would be asking yourself, why is it running like that? Stop asking, and make the trade. Even the hammerheads on CNN, BNN, and all the rest don't know what is going on. If they did, it would news.

Back to the USDCAD. It doesn't matter why it went up so fast. All I know is that the chart is telling me to short it. Be careful, manage risk, keep your capitol for another day if you are wrong. But if it cracks this support line, where is the next support? Keep looking down.

The other possibility of course is that it bounces a little and stays in this channel for the next 80 years. I'm playing the decline.

Here are the charts. Notice the daily support level at 1.1463 TO 1.1350.

Above = Daily chart

Below = Hourly chart

USDCAD Poll

Previously I have posted my thoughts on USDCAD forex pair.

First USDCAD Post
Second USDCAD Post

Shown below is the recent chart. Using all your skills, vote on which level you think will be breached first, the 1.3000 zone or the 1.1800 zone.

Vote on the poll - it's located at the top right side of the blog. Also, feel free to say your piece on the pair, commenting on this post.

Breakthrough

It's been a while since I posted. Here's what I've been doing, and not doing....

I haven't been working a whole lot on the updated version of Tipster Trendlines but it is close. I sent the code to a reader (David) who is testing it. David had some good ideas to improve the flexibility of the code. For example, the ability to submit a bracket order, or just a buy/sell order, or a buy/sell with a stop. Also, the menu's have changed with everything on a single pane.

Since the beginning of the year I thought I'd concentrate more on actually trading than coding trading systems reading/writing blog posts, and actually gain more experience trading every day.

Also over the past few months my frustration with IB's data feed has grown so I decided to try another broker for forex trading while still not closing the IB account. My issue here is that you cant get tick data. If I use another feed to Amibroker and IB to trade forex the two may not jive enough to scalp and/or place my stops. So I think we are kind of stuck with IB's crappy data feed.

I've opened a new account with MFGlobalFX to trade forex. I think they are an affiliate of FXCM since I can log onto the dailyFX website for news and signals (more on that later).

Their simple little platform is really all I need, I found to my surprise. I plot a few MA's and display a daily, H4, H1, M1, and tick chart to trade. Once I figured out what I wanted to see and what indy's I wanted to on my screen, trading was more simplistic. I only use price, MA's, slow Stochastic, and a table of ATR values. The platform is FXTradingStation by CandleWorks, does anyone else use this? The indicators are written in a language called LUA. I'm not about to dive into another language to port some indicators. So back it is to Amibroker. How do I get this new brokers data into Amibroker? ... more on that later....

Using this little platform made me think a little after I has some successful trades. Amibroker allows us to over complicate things. This simplistic approach helped me get my head around the trading plan that I needed to simplify. My plan was more than 10 pages and I really wanted a 2 pager, something I would memorise without even knowing it, something short. Also during that time I listened to a TraderInterview. This particular trader made up a simple "table", I call it a matrix, of his set-ups. He would detail the set-up for the applicable time frame and how to initiate a trade and possible profit targets. It is well known that a trader needs a few set-ups to draw from in order to flatten the equity curve, and this is a good visual tool to do that. This trader also scored the set-ups for each trade, promoting good set-ups and "firing" the under performers. Promoting just refers to increasing position size for the set-up. So this was my road map to simply my trade plan and my charts.

Back to the new forex account.... After I opened the account, I tried trading on the demo to figure out the platform. Easy stuff. Trade right from the charts. Then I went back to IB's TraderWorkstation and tried demo trading from the chart trader. Again, this was easy but the charts are not as nice but I can see through that by adjusting the colours. The worst part of IB chart trader is the lack of a tick chart. I have found scalping and setting trailing stops as my position moves to be so much easier with a tick chart.

Today I fired up the DDE link to FSXM with Amibroker and the data is now streaming. So at least I can set up some alerts to email me when price is getting close. If you are using FSXM and the FXTradingStation application let me know what you think of it. I was also wondering about sharing templates for that app, haven't found anywhere that does this.

This is the breakthrough. I ready to dump back tests and auto pilot systems for now. I've got risk management under control and I know my limits. A have some set-ups that I'm comfortable using. I have two issues left to solve and one is data availability / easy charting package, the other is to get comfortable with larger stops. The second will come , I think, with a larger account size, its all about percentage on the irsk side. The frst issue, charts, should be completed by Sunday night once the streaming quotes start to come in. I'll probably use Ami to look at tick data and some home grown indy's and use FXTradingStation for all other time frames and to place the trades. Tracking trades on FXTradingStation is also easy. I'd post chart shots bu the app wont open on the weekends when the servers are offline.

I'd be interested in knowing if anyone else uses a combination of Ami and FXTradingStation or Ami and FXCM to trade forex. What has your experience been?

Currency Interest Rates

Now that I'm using the daily and weekly charts, with an entry planned off the 4 hour chart, I need to think about the interest rates of the various currencies.

Many brokers will credit or debit your account on overnight forex positions.
Interest is calculated using the difference between the two currency interest rates. For example if you trade Euro Dollar, the ECB (European Central Bank) and FED (Federal Reserve) are the banks you would need to look too for the current rates.. If the ECB's rate is 2.25% and FED's rate is 4.25% the difference is -2%. A long (buy) position on Euro Dollar will generate a 2% debit interest on your account, a short position will generate a credit interest of 2%.

To show you the impact of this, here are a few examples and a link to use this currency interest rate tool. This is also know as the carry trade.

You need to know what will have an impact on your trade, and what the impact will be in order to make an informed decision. Using the chart below yo can see that the interest is minimal for most small trades, but of coarse this depends on the pairs, the rates, and the length of time you are holding the trade open.

I'm using this tool to narrow down the pairs I will be trading, and noting in my trade plan the desired trade to be on the right side of the interest rate. This will help me make my decision to trade the pair without having to goto the tool every time. Part of the weekly ritual is to update that table, for the pairs I have chosen to trade.

1 week for $30,000

1 weeks for $100,000

4 weeks for $30,000

USDCAD

Remember this post of the USDCAD?

Price dropped to resistance that can be clearly seen on the weekly chart. I've shown 3 support / resistance levels with the white lines. After the third push to 1.3000 price fizzled down to the middle white support line and bounced.... twice. We are now in a channel. There are several ways to play this. Here are a few ways to play it at the 1.3000 level.

1. Buy once price goes over 1.3000, stop just under that level to your taste, and depending on how much of a bet your placed.

2. Buy as price approaches 1.3000 looking for it to quickly snap through 1.3000 for a quick profit, riding the momo and using a trailing stop. This method would work for you if you think it will be hard to get in once it snaps through the level.

3. Wait for the break, then the pullback. I won't be doing this since I don't see the USD and CDN being more lopsided than it is right now. But the market doesn't care what I think.

4. Don't play the upside. I'll be waiting for the upside break, but I don't think it will happen. I expect the bottom to be the favoured direction.

To get past 1.3000, there will probably need to be some sort of catalyst. Having said that, watch for the bottom white line to be broken for a downside move.

I should note that this is based on daily and 4 hour charts. I will not go deeper than a 4 hour chart now trading forex. I have scaled down my position size and will trade based on daily and 4 hour time frames. To scale down my position sizes I've had to open up another forex account at a different broker since Interactive Brokers minimum size is too large for me to use with wider stops.

USDCAD

Interesting chart pattern on the USDCAD. Triple top with an ascending wedge. A triple top gives it a bearish feel but the pattern is not valid until it breaks lower support. The ascending wedge gives it a bullish overtone. Since we don't have volume to add to the clues, we can only use price action. Notice the buyers were not waiting to buy shown by the lower lows. Also the lower lows get closer together, so they are also not waiting as long to jump in. On the other hand, look how fast price jumped off the top resistance line, telling us all kinds of sellers came in, plus its a big super fat round number (1.3000).

Buy on a break over 1.3 with tight stops, it either goes like a f'n canon, or fakes out and reverses back into the channel.


On a break out, you could also put in a short stop order below the 1.3000 line to catch the fake out on its way back to the bottom of the channel.

This is the type of pattern I would use breakkouts on, not channel trading. The converting to USD might be over, then again it might not. Use price action to guide you. Don't enter at the middle of the channel, enter at the top or bottom, this allows you to use tight stops, control risk, and have an edge.

New Links

I have updated the links on the left side of the blog with some sites and tools I use often. One link to check out is the news calendar. There are four video's by the Knight that I have posted below to show you how to trade the news after the initial pop. This is less risky than trying to guess the direction of the pop or chasing the intitial spike. Try it on your demo account first, but remember, demo accounts do not mirror actual fills you would get in the real world.

Delayed Entry


Using Fibs to enter


Multiple Targets


Re-Tests: Resistance Becomes Support

Correlation and Sentiment

This post includes some useful information I found at Mataf.net. An interesting feature they have is called the sentiment calculator that allows the user to determine sentiment of the various pairs by looking at different time frames of charts and selecting up, down, or sideways trend. Once you pick all the choices it tells you what you entered. An easy way to determine the trend yourself without any bias.

The chart is the last one in the post. This correlation table supposedly update with time as it is a link, not an image.