Countdowns and Roundups

Weekly Roundup – 6th to 10th January 2020

Oh my days! It’s time for the first weekly review! Fireworks! Pom poms! Hopefully not buckets of tears and self-loathing! I need to make a fancy graphic for this and the CountDowns really, don’t I?

Since this is the first one, I’ll highlight just this once how this’ll work week to week:

  • I’ll tell you when I was able to trade
  • I’ll tell you my results clipped from my trading journal (not the full thing, just the relevant bits to my trading)
  • I’ll go through my highlights and mistakes
  • I’ll try and break down losses I think were unavoidable (situations affected by news for instance)
  • I’ll explain what I think the next steps are in terms of system or strategy development (if relevant. I’m not changing a damn thing if I made 3000% profit and no losses in a single week)

I’m well aware I have not yet published an article on my strategy or current revision of the algorithm so I’m sure profit and exit points won’t make a lot of sense to you, but bear with, that’s coming shortly down the line.

Without further ado then…

Trading Times

  • Monday: Off on my prediction – I had a full day of trading in mind whilst dealing with all of my work admin bits and pieces but there were a handful of impromptu meetings and some rustiness getting back into the groove of trading. I was all off and missed quite a few entries (which might be a good thing), but still got stuck in. I took a whopping 5 trades across all of Monday.
  • Tuesday: Quite a bit more trading time than I thought thanks to a cancellation of a work meeting early in the day (at close of play, basic trade management was used to encourage trades to be closed either in profit or at break even where possible). Of course, I only had 1 trade so whatcha gonna do?
  • Wednesday: No new trades, maintain any pre-existing open trades
  • Thursday: Traded in the gaps (at close of play, basic trade management was used to encourage trades to be closed either in profit or at break even where possible)
  • Friday: No new trades, all positions to be closed before 1pm GMT

With these times in mind, my personal target would be 15% profit on the week (5% per day * 3 tradable days). I know this seems high but my algorithm shouldn’t be giving me any more than 3 to 4 viable signals a day, so I shouldn’t find myself over-leveraged at any time. Famous last words.

Here’s how things looked. Ooooo shiny tables.

DateTimeInstrumentDirectionResultProfit as % of daily starting bank
6-Jan9:00AUDCHFShortBreak Even+0.23%
6-Jan11:45AUDCADShortBreak Even+0.10%
6-Jan 13:15EURNZDLongBreak Even+0.50%
6-Jan 15:15NZDCHFShortBreak Even+0.19%
6-Jan 15:30USDCADShortWin+4.63%

The week started off with a bumpy start but accelerated into two solid losses. It’s hard to complain with a +10% ROI straight off the bat. The raft of break even trades that started Monday caused me two problems – firstly, despite my pleas above I did find myself over leveraged at one point, and unable to take another signal (which would’ve turned a profit), and secondly gave me some major unexpected hassle in management when a good 3 hours of my day were taken up by work at short notice. This happens sometimes and is something I have to accept, but I need a better way of managing them.

Tuesday proved the point about a lack of signals too, as…

In terms of next steps, there isn’t anything I would change about the system right now. I smashed my 15% target and my money management has proven to be tight enough to get me in and out of trades at break even smartly.

There are two points I do need to consider, though.

  • Planning with the CountDown posts. It’s going to be difficult for me to write these out at the weekends. Indeed, this week’s CountDown was written on the 1st January. Yes, before the US killed the Iranian General. Problematic in terms of the impact it could have on the markets. That should’ve been factored into my trading approach which it was not. I’m not in the game of being dishonest with any of you either. Any article I write from this point will have a scheduled date on which it published, but if the article is relevant to trading or something within my system that is subject to change, I will be adding a note at top of the article to state when I originally scrawled it. If it turns out to be a CountDown or something in my system and a major event happens that would affect the market, I will try and find the time to update these things – but I can’t promise that, so ensuring there’s a confirmation of the original time of writing will help you make informed decisions from it.
  • I have three propitiatory indicators in my system at present. I know how they work which is good, but I only have ex4 versions of the files and not mq4 (and to my knowledge, the mq4 versions have not been released). This is bad for many reasons, the most principle of these is what happens when my broker discontinues support for MT4? I would be dead in the water. Either I have to find open source indicators that provide the same or similar results to the propitiatory ones I’m using, or I have to find entirely alternative ways to provide the kind of information I need to make informed trades. Believe me, even if this algorithm produces 5% a day, it’s no good to me if the tap is turned off by a technical rather than a fundamental issue.

I need to add a news indicator as well. That one is easy though.

Hope you all had good trading weeks. Enjoy your weekend!

CountDown – 6th to 10th January 2020

I think it’s time to start the trading year. This kinda goes against what I want to practice (in terms of needing smart money in the market to want to trade, which it won’t be for another week or so) but also, I have some new ideas to test on my algorithim.

So – what’s occuring?

Well, I’m trialling a new entry method. My current method is powerful but repaints, and is also a propitiatory indicator with no open source version. If I wanted to modify my entries in some way, I’d have significant trouble – and you never know when support for this kind of indicator is going to die off entirely. It makes sense to find something more understandable that gives entry signals. I’ll run both algorithms together to see what gets taken and what doesn’t.

I’ve added a stochastic from nanningbob’s 10.7 system over at Stevehopwoodforex, known as STO7. This stochastic has a very specific setting (7, 2, 2) but also carries a setting for higher timeframes of 2, 1, 1. It’s the higher timeframes I’ll be looking at – for now, the D1 and W1. When both are aligned (and all other elements of the algorithim line up), the trade is taken, and vice versa.

My decision to add this has been the result of a lot of work over the Christmas holidays where I devised 26 alternative strategies for my current rules to help me filter out bad trends. You know, instead of playing with the kids. I will clarify these and the process in a later post, but the abridged version for now from those I was able to backtest, the STO7 kept me out of a bad trade in the last full trading week of December but put me in two winning trades.

Highly scientific, I know, but deep backtesting is a largely pointless pursuit. My backtest to put the system into a forward test was entirely based on “will it keep me in these two good ones and out of this bad one”. It did. Therefore, it’s in for forwarding testing.

I’m also weighing up a future idea of just trading the overlap between the US open and the London close as this is by far the most liquid period, but I think for this week we’ll stick to a full calendar. Just might be something I pick up and consider as results from the two different sessions occur.

What about the markets themselves then?

As always we need a news analysis. Major market news looks as follows (GMT times):

6th Jan 3pm – ISM Non-Manufacturing PMI (USD)
8th Jan 12:30am – Buildiding Approvals m/m (AUD)
8th Jan 1:15pm – ADP Non-Farm Employment Change (USD)
9th Jan 12:30am – Trade Balance (AUD)
9th Jan 12:30pm – ECB Monetary Policy Meeting Accounts (EUR)
10th Jan 12:30am – Retail Sales m/m (AUD)

Although all of these are major news angles, it’s pretty light up to this point and I’m not expecting much in the way of direction changing reports. As usual, stay out of the times around the high impact news but don’t let a good signal go once the market has settled again.

The afternoon of 10th January, on the other hand, has quite a bit of high impact news releases planned for the afternoon with the North American currencies so I’m probably looking to avoid trading much past lunchtime GMT. Nice early end to the week in general.

As far as fundamentals go, there is a big, BIG one coming up on January 6th and that would be Trump’s Senate trial starting up. It’s not likely that Trump will be chucked out of office thanks to Republican control of the Senate, but watch events and affairs carefully and don’t be afraid to yank yourself out of USD positions if things start getting choppy.

Heh, yeah, and… if you hear a snip of Brexit news check on your EUR and GBP pairs. As ever it could go either way.

Finally, a question that any professional trader should not have to answer, but I do. When will I be trading?

The optimum answer would be whenever there’s liquidity in the market, but unfortunately I have one of those day job things so the life of a day trader filled with Ferraris and bagels isn’t quite mine yet. That said, my job can be quite cushy. As I’ve said elsewhere, I’m a digital trainer, so if I’m not delivering a course, workshop or one-to-one I’m usually developing course materials or admin on my own, and those are the times I can trade best.

The first week back after Christmas is always quite light, so Monday and at least some of Tuesday will be open for me to trade. However, Wednesday I’ve got one of those horrible all-day meeting’s about how 2020 will go (the same as 2019 went, what’s the point?). Thursday’s an in-and-out kind of day – some delivery, some admin, so I’ll take my pick as best I can. Finally, Friday I’ll be delivering all morning – and given the avalanche of high impact news at mid-day, I think I might be better off not taking a trade at all.

Must go. The missus has decided I am to blame for one of the kid’s touchpads on their laptops isn’t working. Of course. It’s got nothing to do with the kids accidentally pressing Fn+F7 together. Of course.

Fucking twat.

Good trading everybody!