Attempt to work normal hours

Living in Vietnam is a great advantage to those in the us when it comes to forex trading as my afternoon is the most active session to trade--Europes morning is my afternoon. But when it comes to trading the US session its a test of endurance. With the new daylight savings shift I am not done until 4 am. I am a zombie most nights for the second US session and I am often missing my trades and fading strong trends.

I've taken a long hard look at Europe and German markets look the most volatile, perhaps even more so than US markets. I will be trading the Bund and the Dax futures for a while now. The drawdowns on my signals for the Dax are a little expensive but the returns are more than the comprable volatility conditions in the US. The Bund is comprable to the 10 year in the US and will be where I take most of my trades as its range is much smaller and trades alot slower. If I'm wrong I will lose less and if I'm right I will still take home a nice profit.  Here are the trades from Friday.

HOPS and LOPS

Funny name for an incredibly simple concept. The high and low of the previous day are considered value areas to fade, the day before yesterdays highs and lows are the "s" in hops and lops.

Take a look here for a more thorough explanation.

Point of Control

The past few weeks have been an incredibly creative, and perhaps rewarding, for my trading vision. I demoed a great deal of real world software and stumbled upon the very envogue market profile short term trading methods employed by a vast majority of on-line futures traders. I shopped around and found that no one was offering this way of seeing for less than 50 usd per month. So I went back to the coding caverns of MT4 and found an approximation(a very myopic but functional one!) of the method and settled on a free compromise. Thank god for Russian coding forums!

The indicator, unlike the real deal, only gives indication of the most basic of Market Profile indications daily, but its enough to enhance the accuracy of my mean reversion system. The results have been outstanding the past few days. I will post some trades today and show you what I have been seeing.

"market profile" for MT4

The market holds its breath

Before FOMC decision the mkt is in an extremely tight range. I missed todays earlier GBP/JPY trades so I caught a late trade on EURUSD short however the mkt seems stuck. Not ranging to the downside at all so far in the US session. Low volatility could bring this trade into a loss. Or if volatility should pick up, after FOMC EURUSD should find time for a pullback for exit.

relentless trending

The only truly risky part of trading mean reversion is when trends begin relentlessly moving in one direction without so much as a pullback. This morning was quite clearly one of these days. There really is no remedy for staying out of the way of these trends. In my experience, trading smaller time frames tend to give you the briefest of chances to grab an exit, today was no different. Using the 55 tick chart on Ensign there were 3 sell signals on the way up, when price finally touched back down on the lower keltner, the loss was only a collective 10 points and a buy signal soon formed a few bars later.

I didn't buy enough on the bounce, only one unit, this seems to be a remaining bias of the previous trade for the mkt to drop further than the charts gave me. This is a liability in trading a system I have to improve my faith in my system.

stick with it

Today I want to keep my eyes away from the futures markets, they were simply ugly yesterday, turning just a sweet signal was setting up. Today I will focus only on GBPJPY. There have been 2 trades thus far on GBPJPY, both on the short side. However the keltners are trending upwards.

I have taken a free trial over at ensign and have used the template which originally inspired me to port the system over to mt4. You can take a look and see the difference between a tick based chart and a time based one, its much smoother. I am seriously debating whether or not to sign up for ensign and trade off of these charts instead. The only problem I have at this point is how to get a better method of judging support and resistance, I have grown accustomed to the murrey math levels now and would like to continue to use them but its a bit cumbersome to have to look back on the mt4 charts every 5 minutes when there is a big move.

http://charts.dacharts.com/2007-10-26/LD804139-03.png

Smooth trade

I want to document the tough trades and the smooth trades, but this week has been simply brilliant! Starting to get more confidence in my system adapting to every market condition. My biggest concern has been getting on the wrong side on trend days when price doesn't retrace enough to exit at the keltners, but this is what the aboslute strength has been extremely effective at eliminating.