I wasn’t supposed to be trading this week (I was supposed to be writing the software to do the trading for me), but this trade on the EURGBP came up and I couldn’t resist.

EURGBP, Daily (Click to Enlarge)

EURGBP, M30 (Click to Enlarge)

Looking at the EURGBP on the daily chart, it has been trending up the last two months.  In the last two weeks, it has retraced significantly, breaking through the daily 20 SMA and EMAs (orange and yellow lines, respectively) and on 10-21, smacked against the daily 50 SMA and EMAs (purple and medium purple lines, respsectively).  Looking at the EURGBP on the 30 minute chart:

At 1, three 30 minute candles actually managed to close below the 50 SMA, but price managed to rebound and close the day above the 50 MAs.  This was the first test of support.

At 2, the candles retested the 50 SMA and then rebounded with a 10 SMA/EMA cross. This was the second test of support, a double bottom.

At 3, I placed four buy stop orders at 0.9051 at 13 PIPs (10 PIP buffer plus 3 PIP spread) above the signal candle.  I set the stop loss below the low of the day (at least, at that time) and seeing that the previous day had tested 0.9000, I decided to place my stop losses just below that at 0.8999.  I set my take profits at just below each of the two 20 MAs (0.9130 & 0.9180 depicted at 6 on the 30 minute chart), at the most recent swing high (0.9400) and at where I would watch for a reversal to complete a head and shoulders pattern (0.9300, depicted at 1 on the daily chart).

At 4, I watched with disappointment as price dropped immediately at the start of the Asian session and began consolidating right on the daily 50 SMA looking like it was ready to shoot downward.  I went to bed thinking this trade was going to be a loser.

At 5, while I was asleep, price did shoot down to 0.9000, 1 PIP away from stopping out my trades for a big loss, but intead, the EURGBP skyrocketed in my favor.  This was where the true double bottom was formed.

At 6, I woke up to find that two  of my trades had already been closed out for a profit.  Nice way to start the morning and end the week.

I can’t wait to see if the other two trades close at their take profits.  Makes me wish I had put on one more order to see if I could let it ride.

]]> http://www.justsomeguytrading.com/blog/2009/10/23/my-trade-of-the-week-ending-20091023/feed/ 0 http://www.justsomeguytrading.com/blog/2009/10/22/my-trading-day-2009-10-22/ http://www.justsomeguytrading.com/blog/2009/10/22/my-trading-day-2009-10-22/#comments Fri, 23 Oct 2009 04:06:07 +0000 someguy http://www.justsomeguytrading.com/blog/?p=259 In the end, my IBFX account balance somehow worked itself out but no one from IBFX got back to me about what happened.  So much for customer service.  But since I was complaining about FIFO, they contacted me to participate in a survey of how they will implement FIFO going forward.  They presented me with six different options that ranged from doing nothing to presenting the illusion of a non-FIFO platform with FIFO accounting on the back end.  I applaud their effort for trying to restore the platform functionality of the good old days, but the NFA’s constraints on FIFO and Hedging are two really big loses in functionality that are hard to make up.  I told them I would be okay with them trying to make the platform behave like it used to (which is what they have done with MT4 at this time), but they would need to do a better job with the accounting aspects so that it was clear which trades made in the platform were actually being affected and offset by FIFO in the back end.

Other than that, I’ve been writing up chart patterns that I trade and in what context.  I hope to get those out soon.

I reported the problem to customer service on Monday and they said they would be able to tell me how the balances got out of sync within 48 hours. After not hearing back from them within 48 hours, I escalated to someone I am acquainted with at IBFX who is in a position to help. At least I got assurance from her she would get back to me on Thursday (10/15).

Poorly thought out implementation of FIFO compliance, if you ask me. If I can’t trust the numbers, I can’t trust the broker.

I’m hoping this all works out for the best. I’ve been with the broker since I started trading live over 4 years ago and have felt them to be honest, but I’ve run into quite a few major technical problems within the last two years (recurring problems with their data feed, a problem where my closed trades from the previous week suddenly became active again at the open of the following week). But this accounting issue is by far the worst, and I need to see results or I’ll have to walk away from them.

So I opened a template (.tpl) file and was surprised to find it’s data stored in a simple to read mark-up language. Now I could have just stopped there and deleted the objects manually with a text editor, but wanting to give my Perl skills a work out, I decided to code a little TPL editor.

The result is tpl_edit.pl. I tested it on Windows XP using Active State Perl (http://www.activestate.com/downloads/) and seemed to be working okay. Launching the script without arguments or with the ‘-h’ option illustrate how to use the script. I have printed it here for your preview.

> tpl_edit.pl -h

tpl_edit.pl 0.40
By Danny Granville (http://www.justsomeguytrading.com)

-D Delete objects and indicators from within a TPL File [INDICATOR DELETIONS NOT YET IMPLEMENTED]
-L List objects and indicators within a TPL File [INDICATOR LISTINGS NOT YET IMPLEMENTED]
-T Transfer objects and indicators between TPL Files [INDICATOR TRANSFERS NOT YET IMPLEMENTED]
-h Help [THIS MESSAGE]
-t Type (of object) [OPTIONAL -- SEE 'Object Types' BELOW]

– Delete objects of type OBJECT_TYPE from the SOURCE TPL file into the DESTINATION TPL file
– [NOTE: If you only specify the SOURCE file and not the DESTINATION, the SOURCE file will be modified]
tpl_edit.pl -D [-t OBJECT_TYPE [OBJECT_TYPE2 ...]] -s SOURCE [-d TARGET]

– List objects and indicators in the TPL File
tpl_edit.pl -L -s SOURCE

– Transfer objects from SOURCE TPL file to DESTINATION TPL file
– [NOTE: Currently only supports moving objects from the main window, not indicator windows]
tpl_edit.pl -T [-t OBJECT_TYPE [OBJECT_TYPE2 ...]] -s SOURCE -d DESTINATION

– Object Types
0 Vertical line
1 Horizontal line
2 Trend line
3 Trend by angle
4 Regression
5 Channel
6 Standard deviation channel
7 Gann line
8 Gann fan
9 Gann grid
10 Fibonacci retracement
11 Fibonacci time zones
12 Fibonacci fan
13 Fibonacci arcs
14 Fibonacci expansions
15 Fibonacci channel
16 Rectangle
17 Triangle
18 Ellipse
19 Andrews pitchfork
20 Cycles
21 Text
22 Arrows
23 Text label

Recently, I’ve taken a keen interest in the work of another developer/trader, Robert Hill. Earlier this year, I saw Robert speak at a 4XLA group meeting where he passed out a list of trades called “LSMA 200 Method” which showed a net 6152 PIP gain using an oscillator by Ron Thompson that Robert had made improvements upon. I was working on my own system at the time, and since Robert was still trading the system manually, I decided to follow up with it later. Well, when I got wind Robert was going to present again (he presented last Sunday (10/10)), I decided to revisit his system by writing an EA for it and backtesting it. I got some pretty good numbers during the same period, but I couldn’t get the entries and exits to match up with his reported results.

When Robert spoke at the meeting last weekend, I asked him about the system and results. He admitted that after the presentation, his system eventually got chopped up to the point that the account was blown. But what was really interesting was that he said my difference in results were likely caused by the version of the indicator I was using (I was using LSMA200vote_Ron_v02Fast while he was using LSMA200vote_Ron_v03FastArrows). He said that earlier versions of the indicator made errors in the calculation.

After the meeting, I headed home and took a look at the two indicators side by side. It was obvious the oscillator values were different, so I ran the same EA using the “fixed” indicator. It experienced the chop Robert observed the middle of this year and blew up just as Robert reported. But not the buggy indicator. In fact, I ran my EA over GBPUSD over the last two years and it eventually ended last week up ~100% after peaking with profits of about 400% twice in the first half of the last two years. I’ll have to spend some more time looking at the system to see why the buggy indicator works and whether I can leverage it at least the first half of each year against the GBPUSD.

C:\Program Files\Interbank FX\mt4\demo\development

2. Download and run the broker’s MT4 installer. I won’t go into detail here since I assume you know where to get the software and know to double click on the software to run it.  After the installer starts, I mostly click Next until I get prompted for the Installation folder.

3. Specify the installation folder for this particular copy of MT4. The installer will likely show a default installation directory like C:\Program Files\Interbank FX Trader 4 (or something with your own broker’s name).  I highlight the text in the field and then replace it with the complete path to the installation directory above.  You could also click the Browse button, but since the folders don’t yet exist, you’ll need to add a subfolder, double click on it, add the next subfolder, and repeat until you have the complete path.  After following either method, click Next to go to the next prompt.

Installation Folder Prompt

4. Modify the Program Group. Rename the program group to be the bottom most folder in your installation path (in this example, development). Continue with the installation process until you get to final page where you are asked if you want to launch the application.

Program Group Prompt

5. Uncheck the Launch software check box. My example says Launch Interbank FX Trader, but whatever it says, uncheck the box and click Finish.  We’ll launch later.

Launch Application Prompt

6. Rename or delete the shortcut added to your desktop. At this point you should have a shortcut on your desktop and a set of shortcuts in your Windows Start menu to launch this newly installed MT4.  If you would like to launch MT4 from the shortcut on your desktop, you can rename that shortcut to something that will distinguish it from other shortcuts that will appear after future installations.  In this case, renaming it to something like Interbank FX MT4 — DEMO — Development might do the trick.  Personally, I just delete the shortcuts on my desktop as I prefer to launch applications from the Start menu.

7. Customize your Windows Start menu. Basically, we are going to create the same folder hierarchy in our start menu as we did for our installation.  To do this, right-click the Windows Start button and select Open All Users. An Explorer window should pop up.  If the window only has one pane, press the Folders button at the top to see the file system hierarchy.  Go into the Programs folder.  In this folder, you should see the folder created by this installer that contains shortcuts to this new MT4 installation (in this case, Interbank FX Trader 4).  Rename this folder to be the name of the bottom most folder you specified to install this software (in this example, development).  After renaming it, create your folder hierarchy just as you specified for the installation directory, but you can omit creating the bottom most folder.  Once the folder hierarchy is created, move the folder containing the shortcuts (here, development) down to where it belongs in the hierarchy.

Final Program Hierarchy

8. Launch your new instance of MT4. Left-click the Windows Start button and navigate through your applications until you find the short cuts to your new instance of MT4.  Choose the program’s icon (in my case, Interbank FX Trader) and make sure the app comes up.  As this is a new instance, it should prompt you to add an account to log into.

Launching Application from the Start Button

Congratulations, you have a new instance of MT4 on your computer.

The Expo

I was surprised by how small the expo felt.  There are hundreds of brokerages out there, but less than a dozen had boothes at the show, amongst them GFT, FXDD, and InterbankFX (IBFX).  I didn’t see any red light/green light type of trading platforms (or did I just avert my eyes?), but there were a few education companies willing to teach you how to read the market, such as FX Bootcamp and SolomonFX.  There were a few publishers, such as Futures Magazine, Stocks & Commodities, Active Trader, and Traders Press.

I was actually interested in visiting the Dukascopy booth, but they pulled out before the show even began.  Bummer.  I was hoping they would have been stationed right next to the National Futures Association (NFA) booth so our nation’s regulators could hear just how many traders were fleeing to overseas brokers to escape their draconian regulations.

The InterbankFX booth had a 10-minute scalping competiion.  It definitely was a draw and I managed to get a seat to compete.  I was leading until the very last minute-and-a-half when the trade went against me.  Doh!  But unlike the real world of trading, I was a winner because I was given a little USB flash drive for my time—the actual winner was given an iPod.  It was pretty fun, but they could have put those trading stations to better use by having a trading pro sit with us, simulate a few market conditions and show us how they would trade it (with us pulling the triggers at our workstations).  If IBFX had done that, I imagine they would have had a lot of people opening accounts with them.

That being said, I thought the GFT booth was where it was really happening.  I’m not big on swag, but they gave away little booklets of trading tips (isn’t that why most people are there?).  And who kept appearing at the GFT booth to explain trading strategies and tips?  Why author Kathy Lien of course (who is director of currency research at GFT).  As far as deals go, rather than give away 10% or 8% bonuses for depositing your money with them as were the deals from IBFX and FXDD respectively, GFT was giving away a more modest $200 account deposit bonus and a seat at an exclusive presentation by Kathy Lien and Boris Schlossberg.  I’m not a fan of Kathy or Boris, but the thought of a little education was a little more tempting than cash.

Skipping the options and stock market vendors, I walked past all the boothes during one of the hour-long breaks.  But I hadn’t gone to the expo to check out marketing materials, I came for the presentations after all.

The Presentations

There were actually a few presentations that made the trip out to the desert worth it.  But having gone to a few duds, I have developed three rules to filter what I will attend at future expos:

1. If it is presented by an education company, forget going to their presentations—they are pure sales pitches.  What could they sell you after they tell you the specifics for free?  The one exception to this is a live trading presentation (where you can actually see them putting their money where their mouthes are).

2. If the presentation description mentions anything about Elliot Waves walk away.  If they spring it on you after you have taken your seat, run for the exit.  I’m not discounting the framework, but it can’t be covered in a 1-2 hour presentation with any meat—there are too many people at the show who just aren’t familiar with it and the presentation becomes an education in the theory instead of the trading mechanics.

3. If they neither tell you something you didn’t know nor tell you what you came to see in 10 minutes (or at least promise to show you what you came to see), walk out.  Some time slots are packed with good speakers—why waste an opportunity to see the really good ones?

Below are my reviews of the sessions I attended.  Some of them actually contained trading strategies that could be somewhat easily scripted and thus back tested.  I’ll review some of these strategies in-depth at a later time.

Advanced Order Types Tailored for the Active Currency Trader (Sunday, August 2, 12PM)

Presented by Steve Quirk & Don Kaufman, Instructors at Thinkorswim

The presentation featured no slides, a platform most people hadn’t seen and pretty little information about the stated topic of order types.  They pretty much were just showing off the thinkorswim trading platform which allows traders to set their entry and stop losses visually on the chart they are making their trading decisions from.  They were also touting a future feature of the platform where you could construct alerts and trading robots by dragging-and-dropping trading indicators and logic on a palette.  Cool features, but ones I didn’t need a whole hour to see nor expected to see at all.

Rating: Ugh! I passed up a tour of a chocolate factory for this?

InterbankFX Q&A Session (Sunday, August 2 6:00PM)

An invite went out to IBFX customers (me included) to meet with staff for an informal discussion of IBFX.  Personally, IBFX has been a headache for me as a trader (look for my review of them at a later date), so I had a list of points I wanted to bring up with them.  Marilyn McDonald, VP of Customer Experience, did most of the answering of questions.  She came off as a straight shooter and appeared to answer our questions honestly.  On the topic of how they were going to handle the new NFA FIFO regulations, they said they had developed their own back-end solution that would allow you to decide in which order you wanted to close trades as long as each trade had a different lot size.  There solution was different than the one MetaQuotes (the company that develops the MetaTrader Platform) had developed and hence trade execution with other brokers running MT4 may be different than that of IBFX. It also meant they were going from the normal MetaTrader statement e-mailed to you to an e-mail announcement with a link to your daily trading report (cludgy if you ask me—I love seeing my trades in chart form directly in the e-mail).  On the topic of the new NFA hedging regulations, they said it was on their to do list.  As for the annoyingly frequent problems with their data feed, one of the staff knew about the problem, but Marilyn did not.  The staff member explained the problem and Marilyn said she would give me her contact info later so I could contact her because customer support was blowing me off.  After the meeting, Marilyn didn’t seem to remember she promised me her contact info, but she did hand me a t-shirt for coming.

Rating: Ok (no marketing B.S., but I was disappointed Marilyn didn’t give me her contact info—I asked about a third of the questions during the session, so I can’t imagine she forgot me)

Live Forex Trading with Wayne McDonell, Chief Currency Coach, FX Bootcamp (Monday, August 3, 6:15AM)

I had driven out to see Wayne McDonell earlier this year in Cal State Fullerton where he gave us a two hour talk on fundamentals, quickly listed the technical indicators he used, and by golly, he ran out of time to show us how he put them in play.  He more or less said then that fundamentals are more interesting to him than the technical mechanics of trading.  But when I saw that McDonell was going to do a live trading demonstration, I woke up extra early to get to his presentation to see him set up his charts and pull the trigger.  This time around, he set up his charts and then basically talked about fundamentals for two hours.  We watched as the USDJPY spiked, retraced and spiked again, but the guy didn’t take the trade at all.  Pretty disappointing.  Now I don’t expect the perfect trade to appear during a two-hour demo, but I expect a guy logged into a $5 million trading account trying to demonstrate his trading method to at least throw on a micro mini lot on a genuine set-up.  Heck, I would have been happy if he told us he was using a demo account so he could feel free to take a more aggressive trade.

The chart set-up looked like it could work, although it was a heck of a lot of indicators to look at for trading in a single time frame (for the demonstration, he was trading on a 5 minute chart) .  He used 5, 21, 55 and 200 period exponential moving averages (EMAs), an 8 period simple moving average (SMA), Bollinger Bands at 2 standard deviations, a MACD set at 21, 55, & 8 and stoichastics set at 8, 3 & 5.  He also threw on some Fibonacci retracement lines during a set-up to determine support and resistance.  I could go on into more details about what he looked for in each of the indicators, but after watching him unable to place a trade, why would I write any more about it?

As an aside, it should be noted that InterbankFX was the sponsor of this live trading session.  As a promotion, FX Bootcamp was offering one month of their service for free for telling your existing broker (which included FXSolutions, FXCM, GFT, Forex.com and InterbankFX) to list FX Bootcamp as your introducing broker (new accounts got two months free).  Well, when I contacted InterbankFX (my broker) to have them list FX Bootcamp as my introducing broker (Introducing Advisor (IA) in InterbankFX-speak), they said they had no deal with FX Bootcamp.  When I contacted Wayne via an e-mail address his staff gave me at the show, I got no response.  I’m not sure who is to blame here, but they sure didn’t make me happy.

Rating: Meh, but at least the demo and subsequent deceiving promotion offer made up my mind not to subscribe to FX Bootcamp and hurry along my efforts to find a better broker.

High Probability Breakout Trading in the Forex Market (Monday, August 3, 10AM)

Presented by James Chen, Chief Technical Strategist, FX Solutions, LLC

Author of

• Essentials of Foreign Exchange Trading (Essentials Series)

This was actually the first good presentation I saw at the Expo.  James spoke well, showed us different consolidation and breakout patterns using a variety of common tools, such as horizontal support and resistance lines, trendlines and channels, moving averages, Bollinger bands, and Point & Figure chart patterns.  I don’t currently trade with either Bollinger bands or PF charts, but his set-ups using those tools looked so simple I’ve put it on my list of future trading methods to evaluate.

In case you are wondering, James says that FX Solutions offers Point and Figure charting tools.

Rating: Good.  It would have been better if he actually walked us through a few trade set-ups step by step. Or actually told us which methods he prefers.

How to Earn a Full-Time Income Trading Forex (Monday, August 3, 1:15PM)

Presented by Robert Sharpe, Founder and CEO, SolomonFX

Robert Sharpe gave us his rags-to-riches story.  Then he broke down the trading system his school teaches into measuring risk appetite, measuring currency strength, and timing the market.  He claimed to be teaching us how to measure risk appetite (but he didn’t, because it’s their proprietary algorithm) and then said we would have to watch another presentation, “How the Other 5% of Traders are Winning at Forex”, for coverage of the other two aspects of their system.  I’d rather be amongst the 95% of the other traders attending better seminars.

Rating: Ugh! I regret missing out on the “Fast and Furious Trading” presentation by Kathy Lien and Boris Schlossberg which ran at the same time.

FX360.com Tips and Trading Strategies (Monday, August 3, 2:30PM)

Presented by Kathy Lien, Director of Currency Research, GFT

Author of

• Day Trading and Swing Trading the Currency Market: Technical and Fundamental Strategies to Profit from Market Moves (Wiley Trading)
• Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game
• Day Trading the Currency Market: Technical and Fundamental Strategies To Profit from Market Swings (Wiley Trading)

Kathy presented 10 tips.  By my count, 7 of them involved intermarket analysis (such as AUD strenghtening when US ISM reports are positive), which for me are only useful for impressing my friends with my knowledge of world economics at parties.  But I found her first couple of tips most interesting—volatility for US and European currencies tended to increase from August to December and then sort of taper off while JPY pairs peak in March.  Maybe I’ll not trade April through July next year…hmmm…  And her other interesting observation was that pairs exhibited a monthly bias to whether they went up or down (basically, they had seasonal patterns).  Not exactly earth shattering news—I’ve seen these similar observations published before, but it was nice to be reminded of them.

If this were all that were presented, I would have wished I had stayed by the pool.  But alas, Lien described a Bollinger Band Retracement strategy using two sets of bands 1 and 2 standard deviations apart. I have no idea how this strategy pertained to the 10 tips, but at least it was something I could fool around with at home.  And one that I absolutely have to test out just because it is so simple was an extension fade: look for a major pair to record 7 or more of consecutively bearish or bullish candles, then enter a trade in the opposite direction after the US Session close with a 30 PIP stop loss and with targets of 60 and 120 PIPs.  I am always skeptical of trading strategies that use fixed PIP stop losses and take profits, but I wouldn’t mind checking something like this out.

Rating: Good.  A couple of trading strategies kept this from being a presentation to skip.

Trading Strategies of a Professional FX Trader (Tuesday, August 4, 10AM)

Presented by Todd Gordon, Senior Technical Strategist, FOREX.com

I actually don’t know if Gordon ever made it to any actual trading strategies.  I left half way through the presentation when he started to hand out prizes to audience members who could distinguish Elliot waves labeled i, ii, iii from those labeled I, II, III.  This presentation on Elliot Waves was not bad, just not good use of time for someone with any trading experience looking to start testing trading ideas right after the show.

Rating: To be fair, I can’t rate it because I didn’t sit through the whole presentation.  But I wish either the presentation title or the speaker profile in the resource guide gave me a clue I was walking into an Elliot Wave class.

Forex Technical Indicators and Trading Set-Ups (Tuesday, August 4, 1:15PM)

Presented by Jeffrey Baskin, Director of Client Education, FXDD

Jeffrey Baskin knew what we wanted.  After a few slides on chart patterns like double tops, he asked us if we wanted to skip them and look at real charts and setups.  The vast majority of people wanted that, so he pretty much dived into charts.  This was the only presentation I attended that mentioned Ichimoku clouds, which was refreshing.  He also mentioned the Vegas Tunnel strategy using the 144 & 169 EMAs (several other presenters mentioned that same strategy—was it just because we were in Las Vegas?).

Jeffrey said he traded Daily, 4-hour and 1-hour charts containing the 100 & 200 period SMAs, the 144 & 169 EMAs and the Ichimoku Cloud (with no indicator signals).  The SMAs were both trend indicators and support/resistance lines.  He didn’t actually size up a trade and describe entry and exit prices, but the way he described the charts he was doing entries off bounces or breaks of support and resistance.  Candle closure beyond moving averages or into or out of the Ichimoku cloud constituted a break of support or resistance.

Rating: Good. (Would have been excellent if he went into detail of how he calculated entry and exits of a few trades).

How to Trade News with Technical Indicators (Tuesday, August 4, 2:30PM)

Presented by Boris Schlossberg, GFT

Author of

• Technical Analysis of the Currency Market: Classic Techniques for Profiting from Market Swings and Trader Sentiment (Wiley Trading)
• Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game

This presentation was completely not what I expected and introduced the most bizarre concept I saw at the show.  In a nutshell, the technical indicator he proposed trading with was actually a report (available to GFT customers) which forecasted price action for the next US trading session (only the US Session).  This report would be ready before the US Session began and would depict price action at an hourly interval on a chart.  So, if the report showed price action would break down early in the US Session and then quickly rally in the opposite direction, you were supposed to take that possible scenario into account when trying to decide whether or not to follow your indicators.  Boris admitted the forecasts were sometimes wrong, but wasn’t able to describe to what extent.  He also suggested not trading the report directly, but instead using it to supplement your indicators.

I thought to myself, my technical analysis and indicators project a highly probable future for me…why would I want someone else’s chart analysis showing an uncertain future to guide me.  I also thought it was kind of funny that he presented it, because he focuses his analysis on the European market.  No one asked if he (or anyone) actually traded with it.

Rating: Huh?  Was this an August Fool’s prank?

Forex Trading for Maximum Profit (Tuesday, August 4, 4:30PM)

Presented by Raghee Horner

Author of

• ForeX Trading for Maximum Profit: The Best Kept Secret Off Wall Street
• Thirty Days of FOREX Trading: Trades, Tactics, and Techniques (Wiley Trading)
• Forex on Five Hours a Week: How to Make Money Trading on Your Own Time (Wiley Trading)

By the middle of Tuesday, I was dead tired and the conference rooms at Caesar’s Palace were icy tombs.  I had tried to read Rahee Horner’s books before, but her trading philosophies and habits were so different from my own that I sort of lost interest after reading a few pages.  So I was pretty tempted to jump ship and head out of town instead of waiting for her to present, but the fact that Raghee Horner is an actual trader for a living made me stick it out and stay for the final presentation at the Expo.

I am so glad.  It was the best presentation at the Expo and I can honestly say that some of her ideas have made their way into my trading and have improved my results.  Her trading set-ups and strategies can be found in her books, but the one I have been playing around with this last week involve using Autochartist to identify triangles, wait for the price to breakout and then take the trade in the breakout direction only if the MACD (12,26,9) points in the direction of the break out and the commodity channel index (CCI) (20 period) breaks out above 100 or below -100 (in the same direction as the price action).  Simple strategy. Kind of hard to back test given the use of chart patterns, but from what I’ve seen, seems pretty effective.

Prior to her talk, I was biased toward not using timeframes below 1 hour for my set-ups—I thought they were too noisy.  After her presentation, I re-examined my trading strategies at the 30 minute chart for several set-ups in the last few days, and timing my entries in that time frame resulted in good results with better risk characteristics than some of my hourly set-ups.

Thanks, Raghee!

Rating: Excellent.  I will try and read and review her books at some point in the future.

Before I even consider placing a trade, I assess what the market condition is like in various time frames.  I look at the charts to determine whether the market is trending or consolidating in the monthly, weekly, daily and smaller time frames.  I need this market assessment to decide what techniques will be applicable in the present market conditions and decide a good price to get in at and a good price (or prices) to get out at.

The following is my routine.  Each weekend, I take a step back and look at the daily and weekly charts to assess how the market behaved during the previous week and what it may do during the next trading week.  Each day, sometime after the New York close at 5pm EDT, I’ll assess what happened the previous day in the smaller time frames (4-hour, hour, 30 minute) and what is likely to come.  It’s at the daily assessment where I decide whether or not I will trade a particular pair and if so, what it will take for me to take the trade in either direction.  I usually take a look at the markets at the start of each session, but I usually make a mental assessment at those times rather than spend the time documenting them.

To assess the market, I use moving averages and trendlines.  There are other tools for performing market analysis, such as Fibonacci retracment lines, pivot points and Elliot waves, but for me, moving averages and trendlines do a pretty good job of depicting significant levels of support and resistance.

As a word of caution, my charts might look different from yours for a variety of reasons.  Prices differ by broker (Forex doesn’t have a central exchange and thus a set of agreed upon prices) so expect the indicators to tell slightly different stories from your own charts.  Also, Forex is a 24-hour market and some brokers have radically different concepts of what constitutes the close of the daily (or even weekly candle).  Needless to say, it’s important that you test how well these market analyses work on your own charts before making any trading decisions.

Being a Forex trader can be tough, though.  It’s all too easy to neglect doing a thorough analysis of the markets before entering trades (resulting in missed opportunities or trades that backfire).  It’s even easier to let the broker’s statements be the only clue as to why you got in or out of a trade.  And finally, it’s easy to stick with a mediocre trading strategy instead of putting in the effort of making it better or trying other strategies that may deliver the kinds of results you might be looking for.

Which is why I gave birth to this website.  Having my ideas and trades out on the Internet for public scrutiny is the push I need to make sure I go the full mile when it comes to thinking through trading strategies and objectively gauging my own trading success.  Plus, I really enjoy sharing what I think will benefit others.

I hope you find some information here that can benefit you.