Forex rebates on every trade - win or lose!

OK Hils

There's talk of a large fiber option struck at 1.5500 in the market. Either for a $20m or 20m payout if the price is above 1.5500 at expiry. To add further to the confusion, there's uncertainty as to whether expiry is 3pm London or 3pm NY.

If it was 3pm London,it expired worthless. If it's 3pm NY, it ain't gonna rally today.

:o)

Times Shadow MPC sees split on rate cuts as recession bites

Trailing stops have always struck me as a tricky issue.

Parabolic SAR's are OK, but they have a habit of accelerating into the back of the price as it pauses after a strong move. There are times when this suits me and I'm happy to come out of the market, but that isn't always the case. The other problem with them is that they reverse as soon as they're triggered whilst the other indicators don't say the same thing. Anyone trading on SAR's alone will get whipsawed to hell and back.

This last week or so, I stumbled across something called ATR (Average True Range) developed by J Welles Wilder. The range is derived from a formula to do with highs and lows, etc during the period. You then multiply the range by a factor (typically between 2 and 5 from what I can gather) and use that to set the trailing stop. It also uses the close price of the bar to decide whether to trigger the stop, thereby eradicating the major issue with Para SAR's.

There are various derivatives of ATR Stops such as Chandelier Stop and Volty Channel Stops all available as custom indicators for MT4 and they're also available as MTF's.

This is today's 5-minute cable chart.



The stops are shown by the stepped magenta and aqua lines. The indicator is a MTF stop using a 15-minute period. I've played about with the settings to get something that looks like it might be workable.

I wonder if anybody else uses ATR Stops and, if so, what their experience of them is.

07:41 GMT, May 05 2008 | Posted by Mark Mitchell from London
Former MPC member warns of mortgage rationing

Stephen Nickell a former member of the Bank of England's monetary policy committee and now an adviser to the beleaguered PM Gordon Brown, has warned that the main lenders are now rationing their mortgages and that good borrowers are finding it difficult to obtain mortgage lending. Both Eur/Gbp and Cable are flat-lining at the moment as the UK holiday drains the life out of the FX markets this morning. Cable currently at 1.9780 and Eur/Gbp at 0.7820.

07:52 GMT, May 05 2008 | Posted by Mark Mitchell from London
Greenspan refuses to retire quietly


Former Fed President is now giving us his prognosis on the US economy more often than when he was in office. He has said that the US is in an "awfully pale recession" and that the economy may remain stagnant for the rest of the year. Eur/Usd has enjoyed a steady grind higher since the Far east open to stand at 1.5455. With London and Tokyo off on holiday a couple of option expiries due at the NY cut are capturing market attention at 1.5500 and 1.5525.

Nevertheless, Mr Wilder wears a cat for a hat - or is it a pug for a rug?



And he comes from the planet Delta.
Tom H's mentor, dontcha know.
But his indicators are certainly worlds apart from his prognostications :o)

I thought Winston was the cat with the hat, Chocopops.

:o)

Indeedy ma p'tite cerise - along with you, my son was one of the 5389.
But then, living where he was for a short time in leafy Brixton - he had to pump some muscle fast ;)

I am thinking of taking a couple of weeks off in the next month or so and playing with Forex !

I had a little dabble with fx a couple of years ago without much success.

I tend to trade stocks based in trend, support and resistance which works OK for me but OK means I havnt made a loss for a couple of years but I havnt made much profit either (I have made about 7%PA including in the last 12 months).

So would anyone like to share their basic trading strategy with FX? also how do you trade fx? when I did it a couple of years ago i was spreadbetting but thats probably not the best way!

Hi Spaceman,

Welcome to the FX thread. I've dabbled with FX trading for a couple of years now, but only recently decided to focus on it in a more professional, virtually full-time capacity, so I'm still learning all the time but managing to be pretty successful nonetheless.

I attempt to get the 1 or 2 main trends of the day in a currency pair and ride them for maximum profit. There is a discretionary element to my trading style which I am trying to cut out as I want to make it more automated and objective so I don't have to sit in front of the screen all the time. It bores me !!

In fact, only this week I have opened an account with Tradestation (as well as ODL Markets -spreadbets) which have very extensive automated trading strategies which you can develop and program yourself. I'm hoping to program a strategy that I can just leave running in the background making me pips. That's the theory anyway. At the very least I'll enjoy the challenge as I love programming (use to be an IT Consultant in a past life!) and developing my own indicators/strategies.

Just got to come up with some good rules that make money .... easy :-)

Others on this thread, trade on smaller timeframes than me and trade each time a trade is signalled by their indicator settings, but not managed to find any that work consisting for me yet. I keep studying and learning ... at least until I can program the Holy Grail !!

FreemanFox, thanks for that, when I dabbled a couple of years ago what kept catching me out was my stop loss strategy, I was trying to set fairly wide stop losses but they kept getting taken out by spikes, probably ignoring them would have been a better strategy but I was using SL's to try and limit my risk, it meant I didnt make much or lose much but I want to do better than that.

Your pattern for the day strategy sounds interesting. I am also a IT person although I dont like programming !

On question on Tradestation, can you trade dircetly from it? if so how is that done? do dealers provide tradestaion as an add on?

Give us a call when you're spammed up, Spacie :)

Spaceman,
With Tradestation they are a broker as well, though I believe you can nominate other brokers to go through if you wish. They are rated very highly though, voted number #1 with Barrons (see this link http://webreprints.djreprints.com/1911390585556.html) so I'm sticking with them, at least initially to see if they are as good as they are rated. Incidentally, I also have an account with number #2 on the list, ThinkorSwim so I will let you know later how I think they compare, once I've used Tradestation a bit, still going through all the tutorials. It seems very powerful and configurable which suits me down to the ground.

I know what you mean about SL's getting hit on spikes. That's the main reason I navigated away from trading short term timeframes, though plenty of others on here seem to be able to make it work. Maybe I'm not disciplined enough, not sure, but hopefully if I can program a successful Tradestation strategy that is fully automated I won't have to worry about it :-)

What I do a lot nowadays, is effectively when I initiate a trade I put 2 positions on. I take half off when I have a reasonable profit and move stop to breakeven and leave the rest to ride to what I calculate is a reasonable target level. That way, if a trade spikes and hits my b/e stop loss after I've tightened it up I don't feel so bad as I have often taken something out of the market for that day.

Spacie,

This may sound like it's obvious, but I'll say it anyway.

Firstly, trading FX is no different to trading any other instrument. The rules of the game are exactly the same. If you can trade stocks or commodities or even fruit and veg from a wheel barrow at a street market, then FX will be a doddle. IF YOU CAN'T DO THAT, THEN DON'T EVEN BOTHER TRYING! Sorry, but it had to be said.

I said the rules of the game are simple. You simply buy it when it's going up and sell it when it's going down. You just need to put a system in place that tells you clearly which way it's going according to your preferred timeframe and then trade what you see and not what you think. That system could be anything from a ma crossover or a signal from the macd or some form of signal from an overbought/oversold oscillator or a combination of two or more indicators. Straight lines drawn on a chart with no indicators whatsoever also work well.

The important thing is that you stick to the rules. Don't worry about trying to buy the bottom and sell the top. There's an unpleasant story concerning people who pick bottoms.

If you don't break the rules, you'll do fine.

As for the automated trading through MT4, this is something that I'm very interested in. There's nothing that I would love more than to just leave the computer trading away for me while I laze around the pool and jolly off to a tapas bar for lunch. There's an awful lot written about it on the internet.

Unfortunately though, it's way, way over my head. So far over in fact, that I fear even if I were to ascend to the levels of the geeks who talk about their 3,000 pip/month profitable EA's, I'd need an oxygen mask and cylinder for accompanyment.

For now it's just a dream, but if anybody here can talk me through EA's in words of one syllable or less, I'm all ears.

I did have the details of a chap in the Ukraine who does clever things with MT4. I filed them somewhere safe. So safe that I can't remember where it was.

:o)

Hil, I can give you the Chocopops (how do you do that little TM?) rendition of The Entertainer for accompaniment any time ;)

Oh, and I can give you the details of a Polish chap who does clever things with bricks if you like.
And I'm just about to find out how nifty he is with a paintbrush.

This little TM, Chocopops?

:o)

'Tis easy. You've just got to insert the superscript html taggydoodaas.

Typing this:

^Superscipt

Produces this:

Superscript

Btw. I hope you'll be deducting tax and NI from your Polish chap's wages.

:o)

And adding VAT.

Morning ladies.

hey that's dinky

Ta ever so, Hil :o)
And indeedy, I shall - 20p isn't it?

I'm operating a poundstretcher scheme.

Hils,

In order to program EAs successfully (and more importantly robustly) you need more than a rudimentary understanding of how they work. In fact a little bit of knowledge could be dangerous.

In essence the concept is easy; absolutely any objective and quantifiable condition (eg. MA crossover, MACD turning positive, etc.) can be programmed so that when it occurs you can enter or exit orders. You can even get clever and use trailing stops, scaling into/out of positions or anything else you could possibly want to do in a trading plan including logic to perform money management and lot sizing.

When I replied to Spacemans post I mentioned coding an Automated Strategy in Tradestation, not MT4. Im just ploughing through all the tutorials and getting to grips with the programming before doing it in a simulation account. When Ive come up with some trading rules to code that is!

As for MT4, Ive done loads of programming of my own indicators in that and there are loads of EAs that do automated trading for you. I consider myself pretty good at that now, but havent used it for live automated trading. A good site to go to for EAs is Forex-tsd where you can download them. In fact, recently I subscribed to the Elite section they have and they have loads of EAs they continually monitor the performance of. At the bottom of this post Ive included last weeks league table. Makes interesting reading. I like you just would like to get in the position of leaving my computer running just making money, hence why I want to start programming a strategy in Tradestation.

If you want something doing in MT4, let me know and I can search to see if there is something similar already in the members only Elite section. I could then modify it to do what you want.

27th of April - 04th of May winners
________________________________________
Winners for the above mentioned week are the following EAs:

EURUSD:
1. TrendEnvelopeExpert_v2.2 with 443 pips.
2. Scalp_net_v1.3 with 239 pips.
3. MaChannel with 210 pips.
4. Scalp_net_v1.3 with timefilter with 82 pips.
5. SBS_1.21 EA with 61 pips.
6. SBS_1.23 EA with 61 pips.
7. Envelope 2.11 with 55 pips.
8. DayTrading3, timefilter with 20 pips.
9. Brainwashing 1c. M15 timeframe, dynamic iTrend levels with 12 pips.
10. Brainwashing 1c. M15 timeframe, 8-18 timefilter, dynamic iTrend levels with 12 pips.
11. KSRobot_1_5_eur_m15 with 9 pips.

GBPUSD:
1. SBS_1.23 EA with 365 pips.
2. StepMAExpert_v1.45 IBFX mini broker with 148 pips.
3. SBS_1.21 EA with 80 pips.
4. 20PipsExpert_v2.1 with 80 pips.
5. TPE EA, IBFX broker with 33 pips.
6. Brainwashing 1c. M15 timeframe, dynamic iTrend levels with 14 pips.
7. Brainwashing 1c. M15 timeframe, 8-18 timefilter, dynamic iTrend levels with 14 pips.
8. Alpha9v1.19 with 14 pips.

USDJPY:
1. TrendEnvelopeExpert_v2.2 with 214 pips.
2. easyLMA_v6 with 65 pips.
3. Electra v1.11 with 17 pips.
4. Brainwashing 1c. H4 timeframe with 12 pips.
5. Brainwashing 1c1. H4 timeframe with 11 pips.
6. Firebird v0.65, timefilter with 9 pips.
7. Alpha9v1.19 with 7 pips.

USDCHF:
1. TrendEnvelopeExpert_v2.2 with 202 pips.
2. SBS_1.23 EA with 95 pips.
3. MaChannel with 88 pips.
4. Firebird v0.65 with 84 pips.
5. SBS_1.21 EA with 61 pips.
6. DayTrading3, timefilter with 40 pips.
7. TPE EA, Alpari broker with 33 pips.
8. StepMAExpert_v1.45 Alpari broker with 10 pips.
9. StepMAExpert_v1.45 Fibo Group broker with 6 pips.