Questrade

I just opened an account at Questrade. The experience was painless and prompt. I noticed one thing very quickly about their platform, that I usually research before hand.... not this time!! Where are the stops? I can't set a bracket order!!

Apparently the TSX doesn't allow stops unless they are stop limit orders. Questrade has something called VTSO, not exactly sure how it works yet. I do know that without stops, trading is riskier. IB offers stops on the TSX, probably simulated in their system. I'll have to do more research. Feel free to offer what you know if you're reading this.

Bracket Trader

Bracket Trader (BT) communicate directly with TWS. You can trade right from BT, or have an external app send signals to BT.

I've installed Bracket Trader and tried it with my IB simulated account. So far, so good. I like this set-up because I only have to generate signals and sent them to a text file. BT looks at the text file for orders and executes. BT has some nice features, trailing stops, multiple targets, etc. It's worth looking at. The main reason I like it is I don't have to code the scale out or order management part of the trade.

I'm setting Amibroker up to send LMT orders. If they don't trigger within a few bars then I cancel the order.

Has anyone else played with this application? I would like to hear about your experience. Once I get this working I'll post some AFL code to interface to BT, and I hope you will participate.

USDCAD - Trade update

I closed my open short position on USDCAD the other day. I guess I didn't think that price would go as far as the completely obvious support level, shown below in red. The area between the two blue lines is void of any support/resistance.

I netted 461 pips on the trade.

Looking at the chart, you can see more totally obvious S/R levels. How about 1.3000? Two times it bounced off that level. See how the price looks sharp, quick up, quick down the first time it hits 1.3000? This tells us it's an important level. I missed both opportunities.

So whats next for this pair? If it blows past the red support line it should continue to the next red line. On the other hand, if it bounces off this red line it could move up to the top blue line.

I'll be ready.

USDCAD - Look out below!

I've entered a short position in USDCAD. Why? Why not. The pair is at a major support level, a daily support level. I entered a few days ago, so I'm in profit and waiting to see what happens, and the best part is that I'm giving the market lots of room to move around, waiting for the decline.

Here are my previous thoughts on this pair, and where it would go

USDCAD Post 1

USDCAD Post 2

Notice on March 9, 2009 how the pair did penetrate the 1.3000 level and faked out breakout traders. Didn't I mention using a tight stop in an earlier post? I hope you didn't get caught on that one.

As I stated in an earlier post, I think the run up was due to the need for USD. Hedge funds had big clients who wanted out of the market, they could see the domino's falling after October of last year. To cash these guys out, the holding needed to be liquidated to some extent, including holding on non-USA markets. When they liquidate those holdings, the currency must be changed back to USD, so that drives up the price. There are clearly more forces at work than this, but I like the simple approach, all I need is in the price. And as I also stated before, understanding why something is happening is the downfall of many traders. You will know why many months later.

Credit Crisis and PUT option
If you do some creative searching on Google, you will find that there were those that shorted the market using PUT options before the credit crisis was public. Click on the link above to get started. So here is what I'm saying, you might have noticed this happening, and allot of traders did. How many acted? Notice the forum article, the writer is trying to figure out why? Who gives a rats ass why. Keep that in the back of your mind, like a dart in your back pocket, take it out when you need it. If you saw the market take a shit kicking like it did on November 8, 2008, you might have thought to wait a few days for a bounce, and pick up some PUTs. Or, you might have not because you wanted to know WHY? and didn't make a killing like the traders who sunk billions into PUTs. So, why ask why?

Looking at the charts below, notice on September 8, 2008 the USDCAD started to rally. Is this the impact of liquidating large amount of holdings? The pair tops out on October 28, 2008. So what do you think about that? At the time you would be asking yourself, why is it running like that? Stop asking, and make the trade. Even the hammerheads on CNN, BNN, and all the rest don't know what is going on. If they did, it would news.

Back to the USDCAD. It doesn't matter why it went up so fast. All I know is that the chart is telling me to short it. Be careful, manage risk, keep your capitol for another day if you are wrong. But if it cracks this support line, where is the next support? Keep looking down.

The other possibility of course is that it bounces a little and stays in this channel for the next 80 years. I'm playing the decline.

Here are the charts. Notice the daily support level at 1.1463 TO 1.1350.

Above = Daily chart

Below = Hourly chart

Tipster Trendlines v2.1

This page is out of date, click "Tipster Trendlines" at the top of the page.





Trade directly from your Amibroker charts. This AFL code allows you to draw three lines on the Amibroker chart and place an error free trade. You must have Amibroker 5 or better, IBController (from Amibroker website), Trader WorkStation (TWS) and an Interactive Brokers (IB) account. I have not posted the code at this time, but for a small $20 donation I will send it to you.


Tipster Trendlines v2.1 from Another Brian on Vimeo.

Trading Rules

I got these "rules" off another site, same old stuff.... throw up a few rules, make them general, hopefully the reader will buy the course they are selling.

Here it is:

Forex trading is really just about buying support and selling resistance. It's easier said than done, but here are some easy rules to follow:

Buy low sell high [ya, OK.]

Do not assume support and resistance even if there is precedence; let candlesticks indicate market sentiment at anticipated levels and act accordingly. When in doubt, let the market test and retest price levels. [and then what do I do?... I watch smaller time frames, sometimes a tick chart....but that if I'm trading off the H1 or H4.]

Apply a moving average as a simple visual way of indicating trend then buy support or sell resistance in favour of the trend [and what time frame are we talking about here? And what moving average period? How about just using higher highs and lower lows? Works for me.]

Retail speculators often get the big picture right but get killed by volatility at the lower time frames; increases chances of success by following the big picture more and this is really about 15 minutes or higher. [I agree with this, just ask Ryan O'Keefe!]


To sum it up, play with the trend, follow the big picture and apply wider stops that are more tolerant. That will really save you from a lot of nasty whipsaws but you will get it right when price reverts to the mean. In terms of strategy, nothing beats a simple one so you can get it right even if you wake up on the wrong side of bed. [I agree with this to, but it's general and doesn't really help a new trader]


Anyone have any comments on these so called "rules" that are more guidelines than anything....

Tipster Trendlines - version 2.1

This page is out of date, click "Tipster Trendlines" at the top of the page.





The "free" version is no longer available. Go to the Tipster Trendlines 2.1 post for additional information.I've modified the code for my Amibroker interface to Interactive Brokers (IB) Trader Workstation (TWS). All the functionality is now on one pane.


The user puts three horizontal lines on the chart called "BS", "TA", and "ST". Bracket orders can be placed and the code will check to ensure the bracket is correctly setup. You can also disable this bracket order feature and place only a "BS" (Buy Short) with or without a stop or target.


The Risk display is only an approximation for forex, and I have not tested it for futures.


The menu's are all drop down now. Here are some sample screen shots. I'll make a video when IB is online, their server are shut down until Sunday evening.

Better Video

I just signed up with Vimeo and uploaded version 1 of the Tipster Trendlines video. I think this site is better for this video since you can watch full screen and the quality is better.


Tipster Trendlines v1 - Amibroker and IB from Another Brian on Vimeo.

Finviz

If you trade stocks there is a website worth looking at. The only thing wrong with it is that it doesn't include Candian stocks. Take a look at this video tutorial of the site. I'll be using it to find sectors and groups that are leading the charge for the next bull. Conglomerates have had a great run over the past few weeks on this strong surge of buying. Lets see if the pull back is lighter compared to the other sectors and groups. Once I find the sector or group I'll look in the same place on the Canadian market. This is for the RRSP (retirement fund in Canada), a long term approach. I'm in one bank stock and one enrgey stock right now with a bunch of cash, sitting and waiting.

On to the video, if it asks for a password -> finviz

Another short tutorial about BigCharts.

Other blogs worthy of mention

I find it takes so much time to read and digest information available on the net to find the sites that are actually worth while to visit on a regular basis. Here are some sites that I visit that offer more than just hype.

MACD High Probability Trades - I noticed that MACD High Probability Trades has taken to forex. He has switched his trading from stocks to forex, stating that forex is the new thing. I look forward to reading his blog posts related to forex.

DailyFX - FXCM's news, analysis and signals web site. Pretty good but I prefer the forexfactory calendar for news releases. It's on the sidebar of the blog.

ForexProject - Not sure what happened to Rich. Last word he got a new job. I think he should spend less time making websites and more time trading. His web sites are great though!

Alphatrends - Eben though this is related to forex, I watch his daily videos and I've read his book. Price action is all you need. Watch a (single) tick chart when price is near support/resistance and you'll see what I mean.

TradeTheMarkets - The free videos are helpfull. Although I have never paid these guys anything, there site is worth a mention. I signed up for the free videos. Here is a nice one - the them is - when daytraing, only take trades in the direction of the trend (60 min trend in this case).

Ryan has been helpful - If you cant daytrade forex, then swing trade it. Read this guys blogs to figure it out. He has two blogs, his own and one on fxstreet

USDCAD Poll

Previously I have posted my thoughts on USDCAD forex pair.

First USDCAD Post
Second USDCAD Post

Shown below is the recent chart. Using all your skills, vote on which level you think will be breached first, the 1.3000 zone or the 1.1800 zone.

Vote on the poll - it's located at the top right side of the blog. Also, feel free to say your piece on the pair, commenting on this post.

Breakthrough

It's been a while since I posted. Here's what I've been doing, and not doing....

I haven't been working a whole lot on the updated version of Tipster Trendlines but it is close. I sent the code to a reader (David) who is testing it. David had some good ideas to improve the flexibility of the code. For example, the ability to submit a bracket order, or just a buy/sell order, or a buy/sell with a stop. Also, the menu's have changed with everything on a single pane.

Since the beginning of the year I thought I'd concentrate more on actually trading than coding trading systems reading/writing blog posts, and actually gain more experience trading every day.

Also over the past few months my frustration with IB's data feed has grown so I decided to try another broker for forex trading while still not closing the IB account. My issue here is that you cant get tick data. If I use another feed to Amibroker and IB to trade forex the two may not jive enough to scalp and/or place my stops. So I think we are kind of stuck with IB's crappy data feed.

I've opened a new account with MFGlobalFX to trade forex. I think they are an affiliate of FXCM since I can log onto the dailyFX website for news and signals (more on that later).

Their simple little platform is really all I need, I found to my surprise. I plot a few MA's and display a daily, H4, H1, M1, and tick chart to trade. Once I figured out what I wanted to see and what indy's I wanted to on my screen, trading was more simplistic. I only use price, MA's, slow Stochastic, and a table of ATR values. The platform is FXTradingStation by CandleWorks, does anyone else use this? The indicators are written in a language called LUA. I'm not about to dive into another language to port some indicators. So back it is to Amibroker. How do I get this new brokers data into Amibroker? ... more on that later....

Using this little platform made me think a little after I has some successful trades. Amibroker allows us to over complicate things. This simplistic approach helped me get my head around the trading plan that I needed to simplify. My plan was more than 10 pages and I really wanted a 2 pager, something I would memorise without even knowing it, something short. Also during that time I listened to a TraderInterview. This particular trader made up a simple "table", I call it a matrix, of his set-ups. He would detail the set-up for the applicable time frame and how to initiate a trade and possible profit targets. It is well known that a trader needs a few set-ups to draw from in order to flatten the equity curve, and this is a good visual tool to do that. This trader also scored the set-ups for each trade, promoting good set-ups and "firing" the under performers. Promoting just refers to increasing position size for the set-up. So this was my road map to simply my trade plan and my charts.

Back to the new forex account.... After I opened the account, I tried trading on the demo to figure out the platform. Easy stuff. Trade right from the charts. Then I went back to IB's TraderWorkstation and tried demo trading from the chart trader. Again, this was easy but the charts are not as nice but I can see through that by adjusting the colours. The worst part of IB chart trader is the lack of a tick chart. I have found scalping and setting trailing stops as my position moves to be so much easier with a tick chart.

Today I fired up the DDE link to FSXM with Amibroker and the data is now streaming. So at least I can set up some alerts to email me when price is getting close. If you are using FSXM and the FXTradingStation application let me know what you think of it. I was also wondering about sharing templates for that app, haven't found anywhere that does this.

This is the breakthrough. I ready to dump back tests and auto pilot systems for now. I've got risk management under control and I know my limits. A have some set-ups that I'm comfortable using. I have two issues left to solve and one is data availability / easy charting package, the other is to get comfortable with larger stops. The second will come , I think, with a larger account size, its all about percentage on the irsk side. The frst issue, charts, should be completed by Sunday night once the streaming quotes start to come in. I'll probably use Ami to look at tick data and some home grown indy's and use FXTradingStation for all other time frames and to place the trades. Tracking trades on FXTradingStation is also easy. I'd post chart shots bu the app wont open on the weekends when the servers are offline.

I'd be interested in knowing if anyone else uses a combination of Ami and FXTradingStation or Ami and FXCM to trade forex. What has your experience been?

Who is TMK?

Quite a bit of testosterone stirred up over at The Market Kid (TMK) blog. If your not familiar with this blog, it's written by someone, nobody really knows who, that claims to be a kid. Some speculate that he or she is a high school student. "Kid" probably refers to a kid of the market, a child, a constant learner, anybody follow me here with this?

What's he do?
TMK posts penny stock picks, basically following the Timothy Sykes program. Look for shitty stocks that move up quickly on no news or bullcrap from the forums and look to short when they fizzle out. Sure, pennies can be a bit risky, and that's why you should have your money management system in place and following it. Pennies can be fun to play and profitable but you need to set up your rules and play the game to the rules or your going to get hammered like a hockey player with his head down crossing the blue line. ... game over, lights out.

Educational?
Is there anything to learn from this "TMK" blog? Sure there is. Look up some of TMK's past picks and judge for yourself. Even better, use the past picks and make some rules up, then simulate the trades. ya ya, no shares available, whatever... the point here is you can use the blog to grease your wheels.... do your own work... but it sure is easier having someone narrow down the thousands of stocks to sift through.

Is he a fraud?
You might care, I don't. We all trade differently, we all judge people differently. If someone were to take the posts, which are apparently the result of scans and preliminary manual chart scans by eye, and put their own trading strategy to work on them, and found some they could actually trade, and make a profit from the posts, who gives a rats ass who the hell TMK is? Not sure about you, but I'm in this for the money, and to learn about myself and how i react to in different market conditions (think trade journal)

What the point?
I want to make money trading, not friends, not enemies, not contacts, just cash. Who is MKT? Who gives a crap, but whoever writes the post isn't a teenage high school nerd. This person has some market insight and has either taken a course or two, spent hours reading through all the bull on the Internet, or is old enough to have been in the game for a while. TMK has probably watched the Sykes videos a few times, and read his books. There are legitimate blogs on the net by people that makes money day in and day out, and I ask you, do you trade their picks ? and make money from them? do you lose money also?

You are the master of your account. You are the master of your mouse. You are the master of your mouth. Do whatever you want. Blow up your account. Read blogs repeadadliy that you dont like. Blast your mouth off like anyone else values your opinion, to make sure everyone knows that YOU are RIGHT!! We all crave to be right, and isn't that why most people do terrible in the market?


I'm too busy trying to take some coin out of the market to give a rats ass about MKT's personal life or the comments some of his reader leave. When I sift through the comments, I simply look for MKT and read that part.... but sometimes the filth gets interesting, and we all like to read that crap sometimes, don't we?

Remember this
When the bell rings, your not my friend, I'm trying to take your money.

Currency Interest Rates

Now that I'm using the daily and weekly charts, with an entry planned off the 4 hour chart, I need to think about the interest rates of the various currencies.

Many brokers will credit or debit your account on overnight forex positions.
Interest is calculated using the difference between the two currency interest rates. For example if you trade Euro Dollar, the ECB (European Central Bank) and FED (Federal Reserve) are the banks you would need to look too for the current rates.. If the ECB's rate is 2.25% and FED's rate is 4.25% the difference is -2%. A long (buy) position on Euro Dollar will generate a 2% debit interest on your account, a short position will generate a credit interest of 2%.

To show you the impact of this, here are a few examples and a link to use this currency interest rate tool. This is also know as the carry trade.

You need to know what will have an impact on your trade, and what the impact will be in order to make an informed decision. Using the chart below yo can see that the interest is minimal for most small trades, but of coarse this depends on the pairs, the rates, and the length of time you are holding the trade open.

I'm using this tool to narrow down the pairs I will be trading, and noting in my trade plan the desired trade to be on the right side of the interest rate. This will help me make my decision to trade the pair without having to goto the tool every time. Part of the weekly ritual is to update that table, for the pairs I have chosen to trade.

1 week for $30,000

1 weeks for $100,000

4 weeks for $30,000

Forex Trade Journal

A Trade Journal is part of my trading plan. A comment was recently posted about journals so I thought I would share part of my journal. I plan to share the excel version once there are a few more trades in it. I started a new journal not long ago when I decided to do forex on the daily chart, explained a bit more below.

In books, on blogs, in the seminars, the experts tell you to keep a trade journal. Notice it doesn't read "trade log". The journal includes all items you would find in a "log" and more. You can read about journal all over the net. I have begun to trade forex daily and 4 hours charts with a simulation account using various set-ups. The only thing better than my little journal would be to actually print out the chart when entering the order and writing your thoughts on the chart as the trade progresses. I don't have a very good printer so I don't do that.

My journal started with a few column's and I have added and adjusted these as I went along. I wanted to not only record the trade details but also the reason I entered (what was the set up), the adjustments along the way as I checked the chart each evening, and once the trade closed I recorded my thoughts and comments on what I did wrong or things to watch out for in the future.

Here are the current columns I use.

Pair
L/S
Order Type
Entry
Reason for entry
Status
Exit
Pips of profit
Date of Entry
Date of exit
Days in trade
Mod 1
Mod 2
Mod 3
Mod 4
P/L
Review of Trade and comment on result

Make the journal your own. I review mine after each week, both the current week and the prior weeks. This makes it stick in your memory.