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DIY ForexSkills
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A Community of Traders. Determined to Succeed. Sharing their Success.
A Community of Traders. Determined to Succeed. Sharing their Success.

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Election mayhem

No doubt some EAs did well during yesterday's US elections and others not.
Whatever the results, it is useful to examine the charts after such events to see how the markets moved and how our EAs coped with such conditions. The insights from that can inform the coding of our future strategies.
In the image below we can see the action for 5 pairs on the H4 timeframe. Pretty remarkable retracements over a relatively short timeframe.
If our EA did well, how would it have coped if there had been no rapid retracements? Or what if the moves had occurred on a longer or a shorter timeframe? Would that have made a difference and/or can we code the EA to operate well under all three conditions?
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The story so far...
In my Post of 25 July I started an experiment for a strategy on the Daily for people who can only spend 10 minutes or so on their trades each day.
The main lesson for me so far is that you must have patience - which I don't have much of and why I normally do automated trading with my FX Autotrader Elite. See here for my real account.
http://www.myfxbook.com/members/sydap2003/sydap-pro/1675402
So far on this manual strategy, I have closed two positions too early and placed an unnecessary hedge on another.
The portfolio has gone from +$22 to $180 and currently at around -$70 with the swings largely due to the Japanese stimulus package and rumours.
But I will persevere and since I am going on an extended holiday I won't be able to interfere too much in the trades which should be a good thing. Not too many Posts either for a while. :)
And I will also have to ask my broker to make this demo account indefinite so that we can accumulate a year's worth of data.
The CHFJPY looks set for a Sell on Monday. I have added RSI14 to give an additional view for Buy or Sell.
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Using Higher Timeframe Confirmation
Following on from yesterday's Post, we have had some reversals, we have had some more entry signals, and we have gone from +$22 last night to $80 at one stage today largely due to Yen rumours.
I was tempted to close one Sell trade at a small loss but have decided to stay in based on what I see on the Weekly - a strong candle reversal pattern. Confirming that the Sell trade we took on the Daily was probably justified.
As shown in the image below.
I have also added a second set of EMAs (24+/ 2) and RSI 14 to my template, which I think might be useful longer term as secondary consideration. But I want to keep this strategy simple so still undecided as to whether I will use them.
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Quick Update
I am testing the strategy I outlined in my previous Post, on Demo just taking microlots.
The entries made so far are on the whole, holding up OK. Of course this is very, very early stage for trades that should go for several weeks.
But encouraging. Certainly a lot easier than the M1 strategy. This Daily strategy just requires a few minutes shortly after the markets open each day. Or if that is not possible, whenever during the day but use the signals from Close of previous day.
Sometimes this will actually get you a better entry.
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When you don't have the time
In my previous Post I wrote about a 1M strategy that we could play with when bored - best during the quiet Asian session.
Today is the other extreme - a strategy for a Daily timeframe for those who don't have the time to sit and play at their computer all day. Just an idea at this stage after reading some articles. But looks promising.
The strategy is shown below.
The six EMAs, 4,6,8,10,12 are used to show when market is ranging (EMAs all tangled) and when it is trending (EMAs apart).
We don't trade when EMAs are tangled - price is ranging.
The EMA8 is the thick red line which we use as the Buy or Sell indicator. And we look for a major thrust, large candle to signal the momentum change. Confirmation is with the OsMA 12,16,9 above/below zero line.
On the image below, the white vertical lines are the entries,. The red vertical lines are the exits, based on the OsMA weakening.
Re-entries would seem possible. And exits could be delayed depending on spread of the EMAs at the time that the OsMA is weakening.
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When you are bored
While waiting for Strategy tester to spew out some more optimisation results with the Autotrader, I decided to play around a bit on the 1 minute chart with divergences between price and RSI.
Actually worked quite well taking just 5 to 10 pips TP and SL and manually moving SL to BE from time to time.
Four such setups are shown on the image below. (I forgot to label to first Buy).
A bit of fun during idle times.
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Market dynamics
Over the weekend I created a great counter-trend strategy (on EU H4) using FX Autotrader Elite. Great for 2.5 years, tripling the account at only 2% risk per trade, and then it tumbled; but started picking up again in 2015. See first graph.
Meaning that market dynamics changed markedly in 2013 as evidenced in part by the ATR dropping by about half.
Re-optimising using ATR-based settings and adding an additional two filters for the full 6 year period, we do manage to turn around the bad losses for 2013 and 2014, but at the expense of lowering profits drastically during the "good" periods. See second graph.
With the ATR now trending back to how it was in 2010 and 2011, and the equity curve moving up again, I'll keep the "good" year settings running on demo, ready to switch onto live/real account when the forward demo test has confirmed my back test results for 2016.
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Automating Divergence trades
Trading on divergence between price and say RSI is a popular forex trading strategy. But waiting at your computer to see when the setup forms is a very tedious business.
With the addition of a new feature on the FX Autotrader Elite, we can now automate such a strategy.
A six year back test of the first such strategy on the EU M15 is shown below. Apart from a flat period in 2012, the strategy is nicely profitable at around 25% pa trading at 2% risk per trade
http://www.fxautotraderelite.com/
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Now that AxiTrader has restored its margin requirements my live test account is off and running again.

GU is currently ranging quite tightly so two false starts so far, but only tiny losses.

Let's see what happens as the London session gets under way.

http://www.myfxbook.com/members/sydap2003/sydap-pro/1675402
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OUR SPECIAL ANNIVERSARY OFFER ENDS THIS THURSDAY!

If you think the FX Autotrader Elite can help your trading now is the time to check it out. Its the first time we've ever offered 30% off. We're excited about the latest version and all we've added to help traders, plus of course our top performing strategies.
http://www.fxautotraderelite.com/
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