Wednesday, January 23, 2008

Gold and Bernie

Well, I knew with a firm committment to keeping stops in the market that a day like this would come. With the fed on alert Gold was trading extremely erratically. Maybe not trading Gold in this environment is better, but I chose to put the faith in my system. Today 3 stops on the 5 minute chart totaling more than 16 points of losses. But if you consider that it was a 30 point trade from bottom to top, where we seem to be closing. If the goal of this journal is to test my method and develop sound trading principles which will keep me in the game longer, then taking a 16 point loss is actually a small victory in my evolution as a trader.

Friday, January 18, 2008

XAU and the swing pattern

Two trades today so far stretching beyond the kalman level and then trading back inside. All in all, a choppy session so far but expect Gold to try for new highs into NY open.

Thursday, January 17, 2008

Forex ECN's

Well, it may be time to switch brokers once again. It seems the MBT ECN program(which also goes by the name EFX) has established a completely open market for smaller traders. I may have to give it a shot as the demo is an amazingly eye opening experience. I can step in front of the bid, place a market order and not get scalped by my broker, I can even set OCO orders as close to the market as I wish. The only concern would be liquidity, but since I am not one of the big guns, it hardly seems an issue for me.

Spread the word and liquidity will be even better. As a retail trader, we need this business model to survive for our OWN survival.

Triple Convergence

I like when indicators can sync. I don't have much of a backtesting record to verify on 5 minute kalman channels, but I have for both keltners and 1 hr kalman levels. And on this chart all 3 are converging. My expectation is that a nice bounce should materialize from here. Will update in the a.m.

Update: as expected we got a very nice bounce, however I wasn't the only one expecting it. Price failed to touch the 1 hr Kalman level. In the strictest sense of my system, this wasn't a trade. 
But it's nice to see my market map is providing the correct outcome.

Wednesday, January 16, 2008

Early Nikkei Trade

The index always seems to open at an extreme gap. Usually good for a fade. As long as the system signals, I can buy with confidence.

Friday, January 11, 2008

Conservative Exits

With Friday here and recalling the horrible track record I have of fading huge trends on the last day of the week, I chose to exit my spot gold short at the most conservative level logically possible.

I applied the .786 fib retracement from the intraday swing my signal came from and placed my buy to cover order there.

A pretty good week, except for the nikkei trades which missed target 2 out of 5 trades and ended up in losses . Spot gold gave so many profitable trades I regret not following the metal market sooner.

Thursday, January 10, 2008

XAU in retreat

Spot took a dive into the US open today breaking the early range I traded. Now the mode is short.

System has been firing very consistently now. 1hr kalmans scaled on to a 5 minute heiken ashi and keltner bands setup.

The next step is to raise my money management to determine maximum stop loss and profit target levels. For example last week the ideal exit was about 5 points in profit and the ideal stop loss was about 3 points. I will keep a log and attempt to trade these figures sometime in the near future. For now I still just follow the keltners for the primary exit and the peak of the reversal bars used for entry.

Monday, January 7, 2008

Sweet Gold

Seems spot gold has found the kalman levels and is playing along rather well.  The spread on spot is about  half a point during active sessions. With Gold the commodity du jour, I expect this volatility to continue. Today the kalman levels have set up 7 times today, 5 trades for profit. Amazing.

Currently trading Nikkei in the am, Gold when it moves and UsdJpy when the trades set up.