tag:blogger.com,1999:blog-79948532147922886892024-03-13T23:13:01.542+07:00Mean TradeTrading with the Supertrend since 2007Unknownnoreply@blogger.comBlogger252125tag:blogger.com,1999:blog-7994853214792288689.post-13797213257817948462022-04-04T19:37:00.010+07:002022-05-31T22:16:53.187+07:00Low leverage crypto opportunities<p>There are actually some cases in which trading on leverage can be quite profitable and no, it's not because you get bigger rewards, the answer is in funding. In particular, negative funding.</p><div data-reddit-rtjson="{"entityMap":{"0":{"type":"LINK","mutability":"MUTABLE","data":{"href":"https://coinrotator.medium.com/trading-weekly-altcoin-breakouts-with-low-leverage-b8ece28d43ea","rel":"noopener nofollow ugc","target":"_blank","url":"https://coinrotator.medium.com/trading-weekly-altcoin-breakouts-with-low-leverage-b8ece28d43ea"}},"1":{"type":"LINK","mutability":"MUTABLE","data":{"href":"https://miro.medium.com/max/1400/1*7pva4Bwsn_nfvPwhTFimtA.jpeg","rel":"noopener nofollow ugc","target":"_blank","url":"https://miro.medium.com/max/1400/1*7pva4Bwsn_nfvPwhTFimtA.jpeg"}},"2":{"type":"LINK","mutability":"MUTABLE","data":{"href":"https://coinrotator.medium.com/trading-weekly-altcoin-breakouts-with-low-leverage-b8ece28d43ea","rel":"noopener nofollow ugc","target":"_blank","url":"https://coinrotator.medium.com/trading-weekly-altcoin-breakouts-with-low-leverage-b8ece28d43ea"}}},"blocks":[{"key":"14jm9","text":"There are actually some cases in which trading on leverage can be quite profitable and no, it's not because you get bigger rewards, the answer is in funding. In particular, negative funding.","type":"unstyled","depth":0,"inlineStyleRanges":[],"entityRanges":[],"data":{}},{"key":"9pqp2","text":"Why do coins rise with negative funding?","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":40,"style":"BOLD"}],"entityRanges":[],"data":{}},{"key":"2mrcl","text":"Usually, there is an on-chain incentive to stake the coin, and people holding the spot version are trying to protect their downside.","type":"unstyled","depth":0,"inlineStyleRanges":[],"entityRanges":[],"data":{}},{"key":"2n7tl","text":"This is a good strategy too but it can be expensive and even harder to time than buying and holding for a swing trade.","type":"unstyled","depth":0,"inlineStyleRanges":[],"entityRanges":[],"data":{}},{"key":"1sbnm","text":"Instead, look for long opportunities rather than try to hedge the market, which is in itself a slippery art best left for professionals.","type":"unstyled","depth":0,"inlineStyleRanges":[],"entityRanges":[],"data":{}},{"key":"5b37u","text":"Some recent successful examples of low leverage longs.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":54,"style":"BOLD"}],"entityRanges":[],"data":{}},{"key":"9s2ud","text":"LUNA from early March has been on a tear in price. Rising from 60 to today’s 115. In spite of the insane fud around the ponzinomics of how UST is collateralized, the market has been driving the price higher. All while holding LUNA on low leverage you would have been collecting sweet sweet funding in the process.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":4,"style":"UNDERLINE"}],"entityRanges":[{"offset":0,"length":4,"key":0}],"data":{}},{"key":"7532b","text":"LOOKS is another ponzified altcoin with an interesting history. Created as a gas rebate airdrop for opeansea.io users, LOOKS has a staking program that has yielded returns in the thousands. Great, another leverage altcoin that requires hedging and is trending higher.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":5,"style":"UNDERLINE"}],"entityRanges":[{"offset":0,"length":5,"key":1}],"data":{}},{"key":"6p1b5","text":"What about the liquidation risk?","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":0,"length":32,"style":"BOLD"}],"entityRanges":[],"data":{}},{"key":"720cu","text":"This is where the optimal position size is important for your portfolio. You need to ensure you are not using more than 1x leverage on your brokerage account and second, the contract is perpetual. Don’t use futures that expire, this will screw up the strategy in a hurry as you won’t get paid and the contract could expire at a loss.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":186,"length":9,"style":"ITALIC"},{"offset":186,"length":9,"style":"BOLD"}],"entityRanges":[],"data":{}},{"key":"6us7c","text":"I wrote a bit more detail on the topic in a medium post yesterday while waiting for a flight if you are interested. I just thought it was helpful to show that not all leverage trading is bad and toxic to crypto, there are in fact rather simple and straightforward ways to benefit greatly without taking much risk.","type":"unstyled","depth":0,"inlineStyleRanges":[{"offset":44,"length":11,"style":"UNDERLINE"}],"entityRanges":[{"offset":44,"length":11,"key":2}],"data":{}},{"key":"689u0","text":"But yeah, most people will blow up on leverage because they are greedy and unwilling to be patient for the right opportunities. For the few that are willing to respect leverage this might be a good strategy to add to the arsenal.","type":"unstyled","depth":0,"inlineStyleRanges":[],"entityRanges":[],"data":{}}]}"><div data-block="true" data-editor="9fa763" data-offset-key="8ea1p-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="8ea1p-0-0"><span data-offset-key="8ea1p-0-0" style="font-weight: bold;">Why do coins rise with negative funding?</span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="fbc71-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="fbc71-0-0"><span data-offset-key="fbc71-0-0">Usually, there is an on-chain incentive to stake the coin, and people holding the spot version are trying to protect their downside.</span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="cs7d7-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="cs7d7-0-0"><span data-offset-key="cs7d7-0-0">This is a good strategy too but it can be expensive and even harder to time than buying and holding for a swing trade.</span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="3aj8m-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="3aj8m-0-0"><span data-offset-key="3aj8m-0-0">Instead, look for long opportunities rather than try to hedge the market, which is in itself a slippery art best left for professionals.</span></div><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="3aj8m-0-0"><span data-offset-key="3aj8m-0-0"><br /></span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="47h4l-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="47h4l-0-0"><span data-offset-key="47h4l-0-0" style="font-weight: bold;">Some recent successful examples of low leverage longs.</span></div><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="47h4l-0-0"><span data-offset-key="47h4l-0-0" style="font-weight: bold;"><br /></span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="5mqfg-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="5mqfg-0-0"><span data-offset-key="5mqfg-0-0" style="text-decoration-line: none;">LUNA</span><span data-offset-key="5mqfg-1-0"> from early March has been on a tear in price. Rising from 60 to today’s 115. In spite of the insane fud around the ponzinomics of how UST is collateralized, the market has been driving the price higher. All while holding LUNA on low leverage you would have been collecting sweet sweet funding in the process.</span></div><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="5mqfg-0-0"><span data-offset-key="5mqfg-1-0"><br /></span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="12pis-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="12pis-0-0"><span data-offset-key="12pis-0-0" style="text-decoration-line: none;">LOOKS</span><span data-offset-key="12pis-1-0"> is another ponzified altcoin with an interesting history. Created as a gas rebate airdrop for opeansea.io users, LOOKS has a staking program that has yielded returns in the thousands. Great, another leverage altcoin that requires hedging and is trending higher.</span></div><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="12pis-0-0"><span data-offset-key="12pis-1-0"><br /></span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="dl85d-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="dl85d-0-0"><span data-offset-key="dl85d-0-0" style="font-weight: bold;">What about the liquidation risk?</span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="dit9-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="dit9-0-0"><span data-offset-key="dit9-0-0">This is where the optimal position size is important for your portfolio. You need to ensure you are not using more than 1x leverage on your brokerage account and second, the contract is </span><span data-offset-key="dit9-0-1" style="font-style: italic; font-weight: bold;">perpetual</span><span data-offset-key="dit9-0-2">. Don’t use futures that expire, this will screw up the strategy in a hurry as you won’t get paid and the contract could expire at a loss.</span></div><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="dit9-0-0"><span data-offset-key="dit9-0-2"><br /></span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="63ih5-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="63ih5-0-0"><span data-offset-key="63ih5-0-0">I wrote a bit more detail on the topic in a </span><a class="_1FRfMxEAy__7c8vezYv9qP" href="https://coinrotator.medium.com/trading-weekly-altcoin-breakouts-with-low-leverage-b8ece28d43ea"><span data-offset-key="63ih5-1-0" style="text-decoration-line: none;">medium post</span></a><span data-offset-key="63ih5-2-0"> yesterday while waiting for a flight if you are interested. I just thought it was helpful to show that not all leverage trading is bad and toxic to crypto, there are in fact rather simple and straightforward ways to benefit greatly without taking much risk.</span></div></div><div data-block="true" data-editor="9fa763" data-offset-key="fcren-0-0"><div class="public-DraftStyleDefault-block public-DraftStyleDefault-ltr" data-offset-key="fcren-0-0"><span data-offset-key="fcren-0-0">But yeah, most people will blow up on leverage because they are greedy and unwilling to be patient for the right opportunities. For the few that are willing to respect leverage this might be a good strategy to add to the arsenal.</span></div></div></div>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-7994853214792288689.post-90666806836076328402022-03-15T23:02:00.009+07:002022-05-31T22:17:23.649+07:00I finally developed a crypto screener for meantrades<p>About 10 years too late for the really easy money in crypto but I'm finally here.</p><p><br /></p><p>At long last a <i>toolkit for trading the crypto markets</i> which applies my unique approach directly inspired by the meantrades system</p><h3 style="text-align: center;"> https://coinrotator.app</h3><p style="text-align: center;"><b>A crypto market screener for bullish and bearish scenarios.</b></p><p><br /></p><p>Employing the SuperTrend as the primary trend, CoinRotator scans the top 1000 coins against BTC, ETH, and USDT and finds trends on the daily time frame which are aligned across all 3 markets.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEgHUogkF6CedArp10X9Vh7vJHL5N0SDwWKpWp5IaeeohEFRY1ITzHytdHHAZ6K7tlEf2eoKq9D8cjbFwb8offYyR2Pxu77QDZrOl6HXzO1xKnWN_Oldj0JmSXISqVN7GG8Pko5VxYFiK6s2Vt_FJrF9F-vk9O681qpHO5ghmuNIXGbTaWHbCiFy6fJtFA=s2880" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="864" data-original-width="2880" height="192" src="https://blogger.googleusercontent.com/img/a/AVvXsEgHUogkF6CedArp10X9Vh7vJHL5N0SDwWKpWp5IaeeohEFRY1ITzHytdHHAZ6K7tlEf2eoKq9D8cjbFwb8offYyR2Pxu77QDZrOl6HXzO1xKnWN_Oldj0JmSXISqVN7GG8Pko5VxYFiK6s2Vt_FJrF9F-vk9O681qpHO5ghmuNIXGbTaWHbCiFy6fJtFA=w640-h192" width="640" /></a></div><br /><p><br /></p><p>This screening method is further enhanced by applying a filter using the Weekly SuperTrend to determine which markets are aligned on the higher time frame and then only taking those trades. The trend is indeed in alignment if both the Weekly and Daily signals are printing in the same direction.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiErsDiIUX9n6kELNf806PwJj5K2AQRB3blbb6NHH6J1YUrelV4m6fLQFQMWpM8VKZCUT-R5c2uToal3oK8EbCbKhf4KnolTU85GLXpG5jg9mwpy9zHDp705FCawZJ9gbx9e_i9BKhU_61KZexG8eS58EW9h_SvAbXh9Te-64Y9S_hyqQLm6urRpq_8JQ=s1040" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="236" data-original-width="1040" height="146" src="https://blogger.googleusercontent.com/img/a/AVvXsEiErsDiIUX9n6kELNf806PwJj5K2AQRB3blbb6NHH6J1YUrelV4m6fLQFQMWpM8VKZCUT-R5c2uToal3oK8EbCbKhf4KnolTU85GLXpG5jg9mwpy9zHDp705FCawZJ9gbx9e_i9BKhU_61KZexG8eS58EW9h_SvAbXh9Te-64Y9S_hyqQLm6urRpq_8JQ=w640-h146" width="640" /></a></div><br /><p><br /></p><p><br /></p><p>Recent trades that have performed well include:</p><p><br /></p><p>BETA 22%</p><p>OSMO 35%</p><p>RUNE 50%</p><p><br /></p><p>One current trade that I have entered which is not in alignment with the weekly SuperTrend is JASMY. This coin has a very high rate of volatility when it moves to the upside so it is worth taking a chance on a counter-trend BUY.</p><p><br /></p><p>I even built a bot to alert CryptoTwitter when signals change.</p><p>You can follow it here </p><blockquote class="twitter-tweet"><p dir="ltr" lang="en">Osmosis (OSMO) changed from HODL to Sell today! Find out more at <a href="https://t.co/63M2ng91JB">https://t.co/63M2ng91JB</a> <a href="https://twitter.com/hashtag/CoinRotator?src=hash&ref_src=twsrc%5Etfw">#CoinRotator</a> <a href="https://twitter.com/search?q=%24OSMO&src=ctag&ref_src=twsrc%5Etfw">$OSMO</a> <a href="https://twitter.com/osmosiszone?ref_src=twsrc%5Etfw">@osmosiszone</a></p>— CoinRotatorBot (@CoinRotatorBot) <a href="https://twitter.com/CoinRotatorBot/status/1503465748794159109?ref_src=twsrc%5Etfw">March 14, 2022</a></blockquote> <script async="" charset="utf-8" src="https://platform.twitter.com/widgets.js"></script><p><br /></p><p><br /></p><p>Join my <a href="https://discord.gg/uZZzCdsveN">discord</a> to talk about specific trades. Always happy to talk strategy and specifics of the crypto screener.</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-45542273906622848982014-10-15T23:18:00.000+07:002014-10-18T00:43:00.132+07:00Why is Volatility good for some systems and dangerous for others?I'm often find myself reading popular blogs and forums which talk about volatility as a <a href="http://www.dailyfx.com/forex/technical/article/special_report/2013/01/24/forex_education_do_hours_i_trade_matter.html">dangerous development in markets</a>, and Forex in particular. Granted, no matter the system, when markets accelerate in their transactions there is always the <a href="http://youtu.be/E1xqSZy9_4I">possibility of errors</a>, no matter how robust or automated the process. In the case of my own trading method, times of decreased volatility are a strong indicator of <a href="http://meantrade.blogspot.tw/2012/09/keeping-switch-on.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+MeanTrade+(Mean+Trade)&utm_content=FeedBurner">drawdowns</a>.<br />
<br />
So I asked myself, what is it about Meantrades that makes volatility a necessary and<i> good</i> thing? The answer surprised me a little, and makes me doubt what I discovered as it seems I am on to something that most retail traders are unaware of. And how can that be? I'm just a regular guy who happens to be a forex trader.<br />
<b><span style="font-size: large;"><br /></span></b>
<b><span style="font-size: large;">Volatility is a measure of uncertainty.</span></b><br />
<br />
Meantrades signals are determined when a reversal is seen short term on a longer trend. For example, if the daily trend is long, Meantrades will only see a buy signal if there is a swift selloff and rapid reversal. The amount of time necessary for this reversal is usually around 12-48 hours, anything longer and the daily trend is at risk of reversing and this prevents signals on smaller time frames to fail to appear. I should mention then, that the past few years I have traded nothing smaller than an hourly chart (and the range bar equivalent).<br />
<span style="font-size: large;"><b><br /></b></span>
<span style="font-size: large;"><b>But, what exactly is being measured in Forex volatility? </b></span><br />
<br />
The term is often used interchangeably with <a href="https://www.mataf.net/en/tools/02-01-volatility">acceleration and range</a>. But, what is truly important from my perspective, is that it refers to<i> uncertain</i> direction in the market with an expanding price range (this requires an objective assessment which traders demarcate with <a href="http://finance.yahoo.com/echarts?s=%5EEVZ+Interactive">options trading</a>, most commonly used for commercial hedging rather than outright speculation). All other meanings are interesting but not very relevant for my needs as a directional trader.<br />
<br />
I think it is worth delving into popular standard definitions as most people simply have an emotional or experiential reaction to the news of "volatility" in the markets. I too was vulnerable to this for years as I was glued to CNBC and then Bloomberg on the tv in the background. I've since gone dark and rarely, if ever, turn on the news when i am trading. I have even extended this to popular forums and chat rooms where trade signals are issued. I find that no matter how useful the information, it will eventually conflict with my own signals. Inevitably the signals I choose to ignore because of external information will be the screaming winners.<br />
<br />
Investopedia <a href="http://www.investopedia.com/terms/v/volatility.asp">defines volatility</a> as either:<br />
<br />
<span style="font-family: gandhiserif-regular-webfont, Helvetica, Arial, Verdana, sans-serif;"><span style="-webkit-text-stroke-width: 0.15000000596046448px; color: #444444; font-size: 17px; line-height: 25.5px;"><i style="background-color: black;">1)A statistical measure of the dispersion of returns for a given security or market index.</i></span></span><br />
<span style="background-color: black;"><span style="color: #444444;"><span style="font-family: gandhiserif-regular-webfont, Helvetica, Arial, Verdana, sans-serif;"><span style="-webkit-text-stroke-width: 0.15000000596046448px; font-size: 17px; line-height: 25.5px;"><i><br /></i></span></span>
<span style="font-family: gandhiserif-regular-webfont, Helvetica, Arial, Verdana, sans-serif;"><span style="-webkit-text-stroke-width: 0.15000000596046448px; font-size: 17px; line-height: 25.5px;"><i>Or:</i></span></span></span></span><br />
<span style="background-color: black;"><span style="color: #444444;"><span style="font-family: gandhiserif-regular-webfont, Helvetica, Arial, Verdana, sans-serif;"><span style="-webkit-text-stroke-width: 0.15000000596046448px; font-size: 17px; line-height: 25.5px;"><i><br /></i></span></span>
<span style="font-family: gandhiserif-regular-webfont, Helvetica, Arial, Verdana, sans-serif;"><span style="-webkit-text-stroke-width: 0.15000000596046448px; font-size: 17px; line-height: 25.5px;"><i>2)A variable in option pricing formulas showing the extent to which the return of the underlying asset will fluctuate between now and the option's expiration. </i></span></span></span></span><br />
<span style="-webkit-text-stroke-width: 0.15000000596046448px; background-color: white; color: #111111; font-family: gandhiserif-regular-webfont, Helvetica, Arial, Verdana, sans-serif; font-size: 17px; line-height: 25.5px;"><i><br /></i></span>
The point is the press almost never refers to either of these definitions when they report on volatile markets. All the are reporting on is that a closely watched index has dropped a larger percentage than in previous sessions. In itself this is of course, important and newsworthy, but for traders it creates false assumptions.<br />
<br />
<b><span style="font-size: large;">Why do bloggers often talk about the dangers of volatility in trading?</span></b><br />
<br />
Simple. Most trading systems are static in their application. They do not seek a dynamic pattern to determine entries and exits. Although meantrades uses no "feel"or artificial intelligence. It seeks a <a href="http://meantrade.blogspot.com/2011/12/nesting.html">"nesting" pattern</a> which only works well when volatility is present in the forex market. Perhaps this is the main differentiation between Meantrades and systems such as <a href="http://www.dailyfx.com/forex/technical/article/special_report/2011/12/15/Here_is_How_to_Trade_Forex_Majors_like_the_Euro_During_Active_Hours.html">these</a>. There have been popular systems over the years which attempt to tackle this but often their complexity extends far beyond the capacities of retail traders. Which frankly is a nice thought exercise but without vast economic resources, they are just not satisfactory solutions for the average trader. The buzzword associated with these "revolutionary" systems is: adaptive. Two of the more interesting are well presented in video format:<br />
<br />
<a href="http://youtu.be/k_pLf5v7E-c">Summers Bars</a> are very similar to constant range bars. However they perform one extra adaptive function which really caught my eye. They take into account the average volume in previous bars and begin to print as volatility increases. This smooths out indicators as well as gives you a unique technical perspective which standard charts cannot offer. The results are not necessarily an improvement but, like meantrades, it puts you in and takes you out of the market in less crowded junctures.<br />
<br />
<a href="http://www.investopedia.com/articles/trading/08/adaptive-moving-averages.asp">Adaptive Moving Averages</a> were popularized by <a href="http://youtu.be/lp_1j2HzjQE">Perry Kaufman</a>. According to Investopedia this approach would:<br />
<blockquote class="tr_bq">
<span style="color: #111111; font-family: gandhiserif-regular-webfont, Helvetica, Arial, Verdana, sans-serif;"><span style="-webkit-text-stroke-width: 0.15000000596046448px; font-size: 17px; line-height: 25.5px;">allow winners to run. As a trend comes to an end and prices consolidate, the moving average would move closer to the current market action and, in theory, allow the trader to keep most of the gains captured during the trend.</span></span></blockquote>
<br />
However just as static approaches to markets have proven, this very interesting attempt was nothing more in the end than intellectual stimulus for whipsawed traders everywhere. As the article mentions in conclusion from a great <a href="http://libgen.org/book/index.php?md5=73AF9B1161D86948D3EDE201C91BB68C">book</a> on backtested technical indicators:<br />
<br />
<blockquote class="tr_bq">
<span style="color: #111111; font-family: gandhiserif-regular-webfont, Helvetica, Arial, Verdana, sans-serif;"><span style="-webkit-text-stroke-width: 0.15000000596046448px; font-size: 17px; line-height: 25.5px;"> "Although the adaptive moving average is an interesting newer idea with considerable intellectual appeal, our preliminary tests fail to show any real practical advantage to this more complex trend smoothing method."</span></span></blockquote>
<br />
<br />
<span style="font-size: large;"><b>Volatility, the most dynamic of indicators.</b></span><br />
<br />
Trading static systems in a dynamic market will yield excellent results some of the time, and dreadful results the rest of the time. Using a crass simplification, <a href="http://www.investopedia.com/terms/m/meanreversion.asp">mean reversion trading</a> will yield tiny gains 70 percent of the time while <a href="http://www.investopedia.com/articles/technical/04/032404.asp?rp=i">breakout systems</a> will get chopped to death during the same market conditions. While breakout systems will reap huge rewards during the other 30 percent of the time while mean reversion systems will lose all their gains in the same market environment. I have seen some try to create a barometer to transfer between each method with fairly effective results, and for this I think they alone get how retail trading is done. For the rest, there is just heartache without much education other than to learn how to admit defeat in the face of an unflinching forex market.<br />
<br />
The trick for most traders is to learn to embrace volatility, not as a dangerous side effect but as a surfer would; acknowledge the force of nature which provides you with the waves to surf. It's best o remember that nobody ever got rich in a still marketplace.<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-13108154805979631502014-10-09T11:57:00.001+07:002017-08-05T20:30:53.708+07:00Drawbacks of my trend systemsAlthough no system is perfect, I think it is a healthy exercise to consider what are some weaknesses inherent in my approach to trend trading.<br />
<br />
Signals sometimes reveal that a trend has ended a little too early. Or in yesterday's trade, <a href="http://meantrade.blogspot.tw/2014/10/todays-signals-10914.html">a little too late</a>.<br />
<br />
<div style="text-align: center;">
<span style="font-size: large;">The problem of the Hard Right Edge</span></div>
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<a href="https://4.bp.blogspot.com/-bWmH0WoJzUw/WPuuDg09ThI/AAAAAAAASXY/CUNSVb2DIfwAYtciXywu1ekksvP2o6PCQCLcB/s1600/20170206_193748.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="world trade center mall chaos on display" border="0" height="320" src="https://4.bp.blogspot.com/-bWmH0WoJzUw/WPuuDg09ThI/AAAAAAAASXY/CUNSVb2DIfwAYtciXywu1ekksvP2o6PCQCLcB/s320/20170206_193748.jpg" title="world trade center mall sytematic build" width="180" /></a></div>
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<br />
<ul>
<li>A signal to go long is actually a signal to go short in a much more important price trend. The problem is you never know when or where than much more powerful price trend will begin. This is what you might refer to as the illusion of control. No matter how many technical indicators you place on your chart or how thorough your backtest reveals an edge, making each and every trade is an act of random faith that price will behave in the accustomed fashion. As we observed yesterday, things can go wrong all at the same time and there is little one can do to protect the downside than to keep risk to a minimum via position sizing.</li>
</ul>
<br />
<br />
<br />
<ul>
<li>Profitable signals are usually pared by periods of <i>random drawdowns</i> which have no discernible beginning or end. These signals can be seen in non-traditional trading markets such as <a href="http://miami-real-estate-trends.blogspot.com/2017/08/is-miami-addicted-to-famous-architects.html">pre-construction real estate buying trends</a>, a colleague of mine has cataloged popular Miami condos that yield seeking traders are gravitating towards in Miami these days. Before reading on, check them out here: <a class="" href="http://miami-real-estate-trends.blogspot.com/">http://miami-real-estate-trends.blogspot.com </a>. Last week saw one of the best single day returns while this week saw all signals sucked into the false dollar bull run.</li>
</ul>
<br />
<br />
<ul>
<li>Profitable signals appear at <i>random intervals</i> and can continue for an indeterminate period.</li>
</ul>
<div>
A few golden rule lists I have found both counter-intuitive and true:</div>
<div>
<br /></div>
<div>
Gartman's 20 Rules of Trading</div>
<div>
<br /></div>
<div>
Tim Morge, Master Your Trading Master Yourself</div>
<div>
<br /></div>
<div>
8 Rules that Simplify Futures Trading</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-65072356916288016842014-10-09T11:32:00.001+07:002014-10-13T19:27:09.967+07:00Today's Signals 10/9/14<br />
Current positions:<br />
Short EUR/JPY 137.46 or higher<br />
Short GBP/JPY 174.37<br />
Buy USD/CHF .9508 or lower<br />
Short GBP/USD 1.6161 or higher<br />
Buy USD/JPY 107.99 or lower<br />
Buy USD/CAD 1.1116 or lower<br />
<br />
Closed Positions:<br />
Buy EUR/AUD 1.4344 +42<br />
Short EUR/USD 1.2613 -72<br />
Short XAU/USD 1204.34 -86<br />
Long USD/CHF .9614 -63<br />
Long USD/CAD 1.1167 stopped breakeven<br />
Short AUD/USD .8792 stopped breakeven<br />
Short GBP/USD 1.6059 stopped breakeven<br />
<br />
<br />
*Stops are based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-69244105688933064552014-10-08T09:34:00.000+07:002014-10-09T11:26:00.855+07:00Today's Signals 10/8/14Current Positions:<br />
<br />
Buy EUR/AUD 1.4344 or lower<br />
Short EUR/USD 1.2613 or higher<br />
Short XAU/USD 1204.34 or higher<br />
Long USD/CHF .9614 or lower<br />
Long USD/CAD 1.1167 or lower<br />
Short AUD/USD .8792 or higher<br />
Short GBP/USD 1.6059 or higher<br />
<br />
Closed Positions:<br />
<br />
Short GBP/USD 1.6039 -69<br />
Short AUD/USD .8738 -55<br />
<br />
*Stops are based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.<br />
<div>
<br /></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-36146948713457797292014-10-07T11:05:00.000+07:002014-10-07T21:57:19.853+07:00Daily Signals 10/7/14<span style="font-family: inherit;">Current Positions:</span><br />
<span style="font-family: inherit;"><br /></span>
<span style="font-family: inherit;">Short EUR/USD 1.2613 or higher</span><br />
<span style="font-family: inherit;">Short GBP/USD 1.6039 or higher</span><br />
<span style="font-family: inherit;">Short AUD/USD .8738 or higher</span><br />
<span style="font-family: inherit;">Short XAU/USD 1204.34 or higher</span><br />
<span style="font-family: inherit;">Long USD/CHF .9614 or lower</span><br />
<span style="font-family: inherit;"><br /></span>
<span style="font-family: inherit;">Closed Positions:</span><br />
<span style="font-family: inherit;"><br /></span>
<span style="font-family: inherit;">Buy EUR/AUD 1.4400 stopped breakeven</span><br />
<span style="font-family: inherit;"><br /></span>
<span style="font-family: inherit; line-height: 18.479999542236328px;">*Stops are based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-41352751276402356022014-10-06T13:09:00.000+07:002014-10-06T21:07:51.444+07:00Today's Signals 10/6/14Current Positions:<br />
Buy EUR/AUD 1.4400 or lower<br />
<br />
Closed Positions:<br />
Buy USD/CAD 1.1107 +131<br />
Short AUD/USD .8772 +78<br />
Buy EUR/AUD 1.4418 stopped breakeven<br />
Short EUR/USD +111<br />
Short XAU/USD 1215.08 +218<br />
<br />
<span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">*Stops are based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-11061329084211079192014-10-03T11:52:00.006+07:002014-10-06T14:22:29.261+07:00Today's Signals 10/3/14Current Signals:<br />
<br />
Buy USD/CAD 1.1107 +105 stop to breakeven<br />
Short XAU/USD 1215.08 +155 stop to breakeven<br />
Short AUD/USD .8772 +75 stop to breakeven<br />
Buy EUR/AUD 1.4418 +8<br />
Short EUR/USD 1.2642 +84 stop to breakeven<br />
<br />
Closed Trades:<br />
<br />
Short EUR/USD 1.2629 -45<br />
<br />
<span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">*Stops are based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-41003163478494024972014-10-02T14:08:00.003+07:002014-10-03T02:04:57.254+07:00Today's Signals 10/2/14New Positions:<br />
<br />
Short EUR/USD 1.2629 or higher<br />
Buy USD/CAD 1.1107 or lower<br />
Short XAU/USD 1215.08 or higher<br />
Short AUD/USD .8772 or higher<br />
Buy EUR/AUD 1.4418 or lower<br />
<br />
<span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">*Stops are based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-57120731939357448782014-10-01T12:47:00.003+07:002014-10-01T12:47:42.655+07:00Today's Signals 10/1/14Closed Positions:
Short EUR/JPY 138.82 +25
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-46315613466933334802014-09-30T16:17:00.001+07:002014-09-30T16:17:15.788+07:00Today's Signals 9/30/14Current Positions:<br />
<br />
Short EUR/JPY 138.82 +53 stop to breakeven<br />
<br />
Closed Positions:<br />
Buy GBP/USD 1.6247 stopped breakevenUnknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-28406190793370435002014-09-30T02:28:00.001+07:002014-09-30T16:15:12.551+07:00New Signals 9/29/14New Positions:<br />
<br />
Buy GBP/USD 1.6247 or lower<br />
Short EUR/JPY 138.82 or higher<br />
<br />
Closed Positions:<br />
<br />
<span style="background-color: #333333; color: #cccccc; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">Buy GBP/JPY 177.79 stopped breakeven</span><br />
<span style="background-color: #333333; color: #cccccc; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">Buy EUR/JPY 138.94 stopped breakeven</span><br />
<span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">Short XAU/USD 1221.67 +28</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-31459706472679883162014-09-26T14:20:00.002+07:002014-09-26T21:03:06.283+07:00Trade Signals 9/26/14New Positions:<br />
Buy GBP/JPY 177.79 or lower<br />
Buy EUR/JPY 138.94 or lower<br />
Short XAU/USD 1221.67 or higher<br />
<br />
Closed Positions:<br />
Buy EUR/AUD 1.4418 +94<br />
Buy GBP/USD 1.6327 -31<br />
<br />
<br />
<br />
*Stops are based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-5473921058646538152014-09-25T15:28:00.000+07:002014-09-25T21:12:53.857+07:00New Signals 9/25/14Current Positions:<br />
Buy GBP/USD 1.6327 +12<br />
Buy EUR/AUD 1.4418 +28<br />
<br />
Closed Positions:<br />
<br />
Short EUR/USD 1.2856 +129<br />
Short XAU/USD 1227.72 +110<br />
Long EUR/JPY 139.39 -70<br />
<br />
*Stops are based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-88415572741763377172014-09-24T22:17:00.001+07:002014-09-25T15:18:28.023+07:00Today's Signals 9/24/14Current Positions based on hourly charts:<br />
<br />
Short EUR/USD 1.2856 stop to break even +96<br />
Short XAU/USD 1227.72 stop to break even +53<br />
<br />
Closed Positions:<br />
Short AUD/CAD .9797 stopped break even<br />
<br />
<br />
*Stops are always based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-87047065673224728682014-09-23T13:39:00.002+07:002014-09-24T22:12:24.535+07:00Today's Signals 9/23/14<span style="">Current Positions:</span><br />
<span style=""><br /></span>
<span style="">Short Eur/USD 1.2856 or higher</span><br />
<span style="">Short AUD/CAD .9797 or higher</span><br />
<span style=" ">Short XAU/USD 1227.72 or higher</span><br />
<span style=""><br />
Exited the following trades in the past 24 hours:</span><br />
<span style=""><br /></span>
<span style=" font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18.4799995422363px;">Long USD/CAD 1.0967 +56</span><br />
<span style=" font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18.4799995422363px;">Long EUR/AUD 1.4363+89</span><br />
<span style=" font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18.4799995422363px;">Long GBP/USD 1.6331 +27</span><br />
<span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18.479999542236328px;">Long EUR/JPY 140.08 -40</span><br />
<span style=" font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18.4799995422363px;"><br /></span>
<span style=""><br /></span><br />
<br />
<br />
<span style=""><br />*Stops are always based on the previous swing high or low prior to the signal and require an hourly close above or below this swing high or low; they are not based on a strict price.</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-6322609456177202012014-09-22T18:36:00.000+07:002014-09-24T22:14:50.245+07:00Today's Signals 9/22/14<span style=" font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.4799995422363px;">Nice morning action as the loss from Friday has been over taken with a really nice pop in <a href="http://www.dailyfx.com/eur-aud">EUR/AUD</a></span><br />
<span style=""><span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.4799995422363px;"><br /></span>
<span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.4799995422363px;">Exit USD/CHF .9350 +35</span></span><br />
<span style=" font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.4799995422363px;">Long USD/CAD 1.0967 +30, stop to break even</span><br />
<span style=" font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.4799995422363px;">Long EUR/AUD 1.4363+113 stop to break even</span><br />
<span style=""><span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.4799995422363px;"><br /></span>
<span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: x-small;"><span style="line-height: 18.4799995422363px;">New positions</span></span></span><br />
<span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: x-small;"><span style=" line-height: 18.4799995422363px;">Long GBP/USD 1.6331 or lower</span></span><br />
<span style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: x-small;"><span style="line-height: 18.4799995422363px;">Long EUR/JPY 140.08 or lower</span></span><br />
<span style=""><br /></span>
<span style="">*Stops are always based on the previous swing high or low prior to the signal.</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-13554321611614356902014-09-19T14:14:00.001+07:002014-09-20T11:25:55.560+07:00Today's Signals 9/19/14Three markets signaled today:<br />
<br />
Buy USD/CHF .9350 or lower<br />
Buy USD/CAD 1.0965 or lower, 1.0967 or lower<br />
Buy EUR/AUD 1.4363 or lower<br />
<br />
Results:<br />
Buy USD/CAD -65<br />
<br />
Second signal on USD/CAD<br />
<br />
Open Positions:<br />
Long USD/CHF .9350 +46<br />
Long USD/CAD 1.0967+8<br />
Long EUR/AUD 1.4363+1<br />
<br />
Stops are based on an hourly close BELOW the swing low at the time of the the signal.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-73321046441547575282014-09-19T00:54:00.000+07:002014-09-19T01:15:24.266+07:00September has returned with welcome volatilityAfter what has been a shockingly sludgy market, September has seen <a href="http://www.myfxbook.com/forex-market/volatility">volatility <u>expansion</u></a> to the Forex markets with a bang.<br />
<br />
Here are the pip totals so far with 2 weeks of trading said and done.<br />
<br />
EUR/USD no trades<br />
GBP/USD +212<br />
AUD/USD +114<br />
EUR/JPY +171<br />
GBP/JPY +198<br />
USD/CAD +32<br />
XAU/USD +231<br />
OIL +272<br />
<br />
<i>Most gains were primarily set up on Tuesday the 16th, which was a FED speaking day. It's encouraging to see that the FED announcements are once again causing markets to move.</i><br />
<br />
*Please note, all trades are taken off the meantrades hourly system applying a daily supertrend filter to determine which trades to exclude and which trades to take.<br />
<br />
**No position sizing modifications were made for these pip totals. If one were to consider position sizing modification, the first trade after the daily supertrend filter would be a full sized position while each additional trade taken in the same direction as the established daily supertrend would be a half size position. This is necessary in a low volatility environment where waiting for the supertrend cross to exit would create extremely small gains as the price behavior in such an environment, contrary to expectations, does not trend well at all. It is in the truest sense of the word, a mean reverting environment.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-1142021510377396152013-01-23T10:03:00.000+07:002013-03-08T13:53:16.100+07:00Forex System Development ConsultingI now offer consulting for those who are finally at the systems development phase of their trading journey. Most are looking for a good system which is just the entry phase of becoming a trader.<br />
<br />
The next phase requires that you adapt what you have learned until that point into a personalized version of how you see the markets trading.<br />
<br />
It took me a good 5 years into my trading development before I began to realize this massive difference.<br />
<br />
All the great books on trading will tell you the same thing. One of the Market Wizards is famous for saying that he could give his exact profitable system to 10 people and some of them would still lose money.<br />
<br />
With this in mind, I offer my 12 plus years experience in Forex and Futures trading to those who are ready to take the next step.<br />
<br />
If your system is viable, I can even code it for you in EA format.<br />
<br />
I will watch you trade and give important technical and psychological feedback every step of the way. I enjoy the path which trading allows one to discover about themselves and I would like very much to help you as well.<br />
<br />
You can always contact me on skype at mezameo for more details.<br />
<br />
Happy tradingUnknownnoreply@blogger.com0Vietnam10.951978221389624 106.699218759.9537032213896239 105.40832525 11.950253221389623 107.99011225tag:blogger.com,1999:blog-7994853214792288689.post-53024136678940688702012-10-10T18:09:00.002+07:002012-10-10T21:42:16.726+07:00Anemic VolatilityHere we are into the homestretch of the trading year and volatility is frighteningly anemic. Meantrades just doesn't perform well on an intraday basis without those sharp swings between support and resistance. Taken about a 20% hit the past 2 weeks and am considering waiting it out a few days, even weeks, until the volatility returns. I feel fortunate I can see a link between the system results and a precise metric. However it still does not change the fact that market conditions are not ideal for a system which buys volatility.<br />
<br />
Until I see a decent uptick in the 3 month ATMF volumes, I am going to trade the <a href="http://meantrade.blogspot.com/2012/05/weekly-meantrades.html">weekly version of meantrades</a> where at least I know the markets can trend long enough to see some gains.<br />
<br />
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<a href="http://2.bp.blogspot.com/-nAr3eHhkjGQ/UHVWx-DErPI/AAAAAAAADVg/aLqCsDKopwM/s1600/JPMorgan+G7+Volatility+Index+(VXY)+Analysis+-+JPMVXYG7+-+Bloomberg.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="315" src="http://2.bp.blogspot.com/-nAr3eHhkjGQ/UHVWx-DErPI/AAAAAAAADVg/aLqCsDKopwM/s400/JPMorgan+G7+Volatility+Index+(VXY)+Analysis+-+JPMVXYG7+-+Bloomberg.png" width="400" /></a></div>
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<br />Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-7994853214792288689.post-71705745488953611272012-09-06T12:32:00.001+07:002012-09-06T12:32:47.569+07:00Keeping the switch onLooking back at the previous post so many months ago I am pleasantly surprised at how much my attitude towards automation has changed. Since the end of June I have been on an automated version of my system and the results have been nothing if not impressive. Some takeaways over the past few months in my transition from mechanical manual trading to automation include:<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-6ZgTUwFIT80/UEg1ZrSXvfI/AAAAAAAADAc/I1ZDdeoPQcA/s1600/meantrades+System+-+Myfxbookytd.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="165" src="http://2.bp.blogspot.com/-6ZgTUwFIT80/UEg1ZrSXvfI/AAAAAAAADAc/I1ZDdeoPQcA/s320/meantrades+System+-+Myfxbookytd.png" width="320" /></a></div>
<br />
<br />
<ul>
<li><b>Accepting drawdowns with a more passive attitude. </b>The roll-out of the EA conincided with a technically poor Forex market. There was no volatility or serious volume coming into the market this summer--which is to be expected with many large traders off for the summer months. However I kept the controls on and sat passively while the system took it's lumps. It was perhaps the first time ever in my trading career where I allowed my account equity to drop without any attempt at hedging or removing stops. Ironically I feel I have grown as a trader by becoming <i>less</i> involved in my actual trades.</li>
</ul>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-NpfrZkICctk/UEg0g5OohqI/AAAAAAAADAU/qt3Hoxhuz4Q/s1600/meantrades+-+Myfxbookmonthly+results.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="173" src="http://1.bp.blogspot.com/-NpfrZkICctk/UEg0g5OohqI/AAAAAAAADAU/qt3Hoxhuz4Q/s320/meantrades+-+Myfxbookmonthly+results.png" width="320" /></a></div>
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<br /></div>
<ul>
<li><b>Having a healthy expectancy</b>. By knowing how meantrades has performed in the past, keeping the switch on during drawdowns enables me to avoid missing the huge upswings in account equity. At the moment my expectancy is only around 1.3 for every dollar risked. Most long term systems tend to float around 1.5 to 2 for really huge returns. There are a few considerations on the lower expectancy such as trailing supertrend exits too closely during flattening volatility in the Asian session. Widening the supertrend stop as well as taking Friday afternoons off are two of the ideas I am toying with currently. Generally speaking though, 1.3 is enough for things to get very interesting in the long term. Currently meantrades is running at about 60% accuracy on the 3 markets I am trading everyday (those are EUR/USD, GBP/USD and the cfd for oil). I am thinking like a trend trader on this matter and would probably like to tighten the stops more, reduce the drawdown and get larger returns less frequently. All in due course. For now it's about keeping the switch on and maintaining a healthy expectancy.</li>
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<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-83738875359794904192012-05-23T10:29:00.000+07:002012-05-23T10:31:16.569+07:00Weekly MeantradesThe past few weeks have been nothing short of frustrating. Automation with constant range bars on Metatrader 4 seems futile. With a single disconnect from the brokers server, the constant range bars are immediately scrambled and thus any reversal patterns are suspect. Somehow this had me thinking about how I can get this very decent system called meantrades running without a hitch. I came up with a version which uses 240 minute and 60 minute bars.<br />
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The only major difference (there is one minor variation however) between this system and the constant range bars version is that it is restricted to only 1 profitable trade a week. "Profitable trade" as in it will enter up to 2 unprofitable trades in the same direction per week. This is similar to the intraday meantrades which only takes two consecutive unprofitable intra-day trades in the same direction.<br />
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The results thus far are quite respectable. Considering the time invested versus return on capital, the weekly version of meantrades is a better deal for smoothing out the all important equity curve.<br />
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I realize these numbers probably seem absurdly high and I am just as skeptical as anyone else would be. But it's been backtested for several years and all trades are based on a closed bar basis so it is pretty hard to fudge the results.<br />
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Currently the XAU/USD weekly version of meantrades is running at 75% for the year with a total of 698 pips employing a trailing stop. With a fixed 100 pip target it's coming in at 871 pips. Let's say we are in June already, since we cannot take another trade until next week, that is a very tough return to beat of 145 pips per month trading no more than 1 winning trade per week.<br />
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The results for the EUR/USD market are also quite respectable. Coming in at 69% for the year trading only once a week the supertrend exit works out to 963 pips thus far while a fixed exit of 63 pips has yielded a return of 335 pips. Winning percentage is based on a total of 26 trades so far this year.<br />
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I initially set out on this discovery using the AUD/USD. My thinking was that somehow if I ever got around to getting meantrades automated I should probably try it out first on some less volatile pairs. I have never traded AUD/USD seriously as it seems rather dull market. In fact it's almost as profitable as any other market I looked at. The results came in as follows: 70% winners out of 27 trades taken. Most impressive are the drawdowns to achieve profitability. The market just seems to trend better than others when applying the lens of meantrades. Average losing trade was 67 pips while the average winning trade was 55 pips. This is the only serious issue for me trading less frequently. The average winner is normally larger than the average loser in a robust system. However when you are applying a trailing stop methodology for exits, the out sized returns of just a handful (or even a single yearly trade) can outpace the averages quite easily. As the Black Swan movement has attested to, the market does not reward those who seek the average return on equity as a benchmark, it obliterates them every few years with massive crashes and bubbles. I'm not a fund manager and I'm not seeking an average return so I will keep doing what I'm doing until something comes along which makes more sense.<br />
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For now, meantrades with trailing stops seems like the best way for me to trade these volatile and incredibly profitable markets for the foreseeable future.<br />
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Some of the inner workings for setting up the weekly meantrades method:<br />
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<li>The ratio levels need to be set off of the first 4 hour bar of the week or the second bar. This is slightly subjective in that I prefer to use the smaller of these two bars, unless it is just too small a range. In that case I will use the first 4 hour bar regardless of how large it is.</li>
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<li>Stops are usually an hourly close beyond the swing high of the trade entry. However in some cases this bar closes inside the Keltner bands (even though it is outside the highest high or lowest low for the trade setup). It is best not to take the loss until price has also violated the Keltner bands. There have been many cases where price makes a minor new high or low inside the Keltner bands only to reverse immediately. </li>
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Here is the only trade currently open with Weekly meantrades. An EUR/USD short currently sitting at +110pips. Stops are already at break even since price has already touched the opposite Keltner band from where the trade originated (as per the original rules of meantrades).</div>
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<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-7994853214792288689.post-12034187381492059272012-04-04T23:36:00.001+07:002012-04-04T23:36:44.439+07:00Trending or Ranging? Stops or Cost averaging? Zero loss trading? Wake the fuck up.There are a few basic unanswerable questions in intraday trading. Is the market trending or ranging? Do I use hard stops or average in? Has the market volume dried up for the day? Only the left side of the chart can give any clues. I've tried at various times to achieve some semblance of a complete system. One which avoided the draw-downs necessary in institutional standard systems popular in the trading community but I have never succeeded in achieving any level of certainty about my trading.<br />
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Last week I modified one of my basic exit criteria from using swing high extreme price levels to relying on a very good but nonetheless, delayed indicator called "supertrend." This resulted in disaster for my account. Instead of having a fixed stop loss range in place (because fills can be dubious in the forex world), I was giving myself back to the fate of the markets. Huge fuck up. Markets don't "respect" indicators. They are just tools to help confirm what you are already positioning for. Once you let indicators decide your sole entry and exit you are fucked and feeble. That's not trading, that's more like tossing a chinese star in the air with your bare hands below it. A bad idea set in motion. Sometimes I wish I had a very close trading ally. Perhaps this is why most great traders don't actually pull the trigger, they have clerks who do the "dirty work" for them.<br />
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March was a decent month. I only traded 2 weeks but came out with a 20% return on equity. Very pleased. But then I went and messed with a sound risk metric, employing "supertrend" as a stop loss rather than simply a trailing stop. This caused me to give it all back to the market. Back to humble pie for me grandma.<br />
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In addition to battle tested methods of meantrade, I have always been focused on finding a way to trade ORB (opening range) breakouts on the same chart as reversals. I finally discovered that using a trailing indicator such as the cci, stochastics or rsi on a larger time frame as a directional indicator of the current market (yes, still a lagging metric but trends tend to persist in forex for at least a few hours which is all I need to take profits on a weekly basis) creates very robust breakout trading opportunities on my constant range charts. I have been using 10 pip ranges for both my EUR/USD and GBP/USD charts as of late as I find the market is as whippy as ever and the 20 crb's were giving back far too many pips.<br />
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I am now taking the pre-London range as my two trade levels (long and short). I only trade in the direction of the 4 hour indicator (in this case the 4hr reading of the CCI should be above the 0 level). The results are not bad. With this method it enables two trade opportunities per market per day. If the market breaks out I can enter at first break and if it pulls back to a trade level I am watching, I can enter for a nice reversion trade. Now I have both sides of a good market on my radar and on the same chart. This is somewhat encouraging for me as I was often sitting staring at the screen waiting for a meantrades setup to occur while the market just takes off without any retrenchments. Not a particularly useful way to trade the forex market these days.<br />
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So I will take this massive hiccup in stride. I will stay the course, I won't take this as an indication that I have failed once again. But a very sound reminder that I have a decent system, which works but requires that I take my medicine. And everyone knows a traders medicine is their stop loss.</div>
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<br /></div>Unknownnoreply@blogger.com0