VWAP

Definition


"Volume Weighted Average Price. A measure of the price at which the majority of a given day's trading in a given security took place. Calculated by taking the weighted average of the prices of each trade. The method is used by institutional traders, who often break a given trade into multiple transactions."

Another definition

The VWAP for a stock is calculated by adding the dollars traded for every transaction in that stock ("price" x "number of shares traded") and dividing the total shares traded. A VWAP is computed from the Open of the market to the market Close, AND is calculated by Volume weighting all transactions during this time period.

VWAP, or Volume Weighted Average Price is a tool used by some traders, I first learned of it from Brian Shannon who trades stocks. This won't work for forex since there is no volume.

There are a few different ways of displaying this in Amibroker. It can be a simple line like a moving average, this is the most common way pro's use it. Amibroker has a function to display it behind price, look in the help for these two functions with examples;

• PlotVAPOverlayA
• PlotVAPOverlay

Here are a few ways tp lot it and some code to try out.

eTokes Blog post on VWAP
I suggest reading his post, as well as Brian's post on VWAP, links below. eToke used a vertical "study" line drawn on the chart. This might give you an error on your chart if there is no line drawn. Here is his code with a little fix for this problem (adding "Nz");

Plot VWAP starting at a horizontal study line (Study ID set to ST)

//VWAP since last change in sentiment
TurningPoint = IIf(Nz(Study(“ST”,GetChartID())==0,1,0));
BarsSinceLastTurn = 1 + BarsSince(TurningPoint==1);
StartBar = ValueWhen(TurningPoint==1, BarIndex());
RunVolume = Sum(V,BarsSinceLastTurn);
IIf (BarIndex() >= StartBar, MTVWAP = Sum (C * V, BarsSinceLastTurn ) / RunVolume,0);
Plot (MTVWAP,”MTVWAP”,colorPink, styleLine);

Other ways to plot VWAP

Plot VWAP starting at selector line

This is another way, it will display the VWAP starting from where your selector line is placed. I use it for short term trading to see where all the volume is, makes finding support / resistance a bit easier when working with breakout.

_SECTION_BEGIN("Selector Line VAP");
segments = IIf(SelectedValue(BarIndex()) == BarIndex(), 1, 0);
PlotVAPOverlayA( segments , 300, 50, ParamColor("Color", colorDarkGrey ), 6 );
_SECTION_END();

Plotted like a moving average

_SECTION_BEGIN("VWAP");
Bars_so_far_today = 1 + BarsSince( Day() != Ref(Day(), -1));
StartBar = ValueWhen(TimeNum() == 093000, BarIndex());
TodayVolume = Sum(V,Bars_so_far_today);
IIf (BarIndex() >= StartBar, VWAP = Sum (C * V, Bars_so_far_today ) / TodayVolume,0);
Plot (VWAP,"VWAP",colorOrange, styleThick);
_SECTION_END();

Other links on VWAP
VWAP link 1
VWAP link 2

Chat Room

Most nights I'm trading EURUSD or HSI (mini Hang Seng). Tonight I'm in the chat room mentioned in an earlier post. Join me if you like. Tonight I'm looking at HSI. IB symbol for Amibroker is MHIV9-HKFE-FUT-HKD

CHATROOM

I was contemplating using twitter as a chat medium but I haven't explored it much or used it. Stocktwits is also a possibility but again I don't know much about it. Any comments on it's use compared to a chat room would be beneficial. Also, are any readers interested in chatting in the evening?

EURUSD

The last post on EURUSD talked about some basics and a short update as price was playing with the trend line. I am currently long and I plan on holding for the ride.


WEEKLY CHART From the weekly chart we can clearly see that price has entered an "air" zone, there is no meaningful resistance on the way up to the top of the yellow box.

Daily Chart - Long History The last time price had to overcome resistance it popped through the orange trend line on the third attempt (yellow circle). Price followed the upward red trend line and is still following it. More on this line later on.... We just broke the blue trend line, and as it happens, on the third attempt just like the prior break. No we are into the yellow free air space.

Daily Chart - Closeup Price just broke through the blue horizontal trend line, on the third attempt, same as the last horizontal trend line break. The pullback after the breakout above the orange horizontal trend line came to the upwards trend line and the 50% retracement. Note that it did not come back to the orange trend line, indicating a strong upward trend following the red line. Keep this in mind when looking to enter on the recent break.








Intraday The yellow area is the S/R "zone" from the weekly chart. It looks like we are clear for now. A good area to place a but LMT order would be at 1.4790 to 1.4844 for a low risk opportunity.







What's next?


Breaking the upward red trend line - This would only mean that the rate of increase or rise in price has slowed. Once it breaks through, look for it to come back to it and test it, then fall. No telling when this line will break.


Pullback - look for a pull back to the upward red trend line or the blue horizontal trend line. The best choice might be whichever one of those area also lines up with a fib level and a round number. I might even load up more on a pull back.


Be patient and wait for the pullback. If you need some help with pull backs watch this Pullback Video.


Do you have a position right now? Are you planning on geting in on this move?

HSI - Mini Hang Seng, and the big brother MHI

I live near Toronto, eastern time zone, I work during the day (not in the finance or trading field). I have free time after dinner and do some short term trading. Forex doesn't do much from 7pm to midnight unless you want to play ranges and scalp. Scalping doesn't work for me. I was looking to trade something that moves a little less choppy, has some liquidity, shows the volume, and can be traded technically. From my research which includes reading forums and blogs I have found the Asian markets are a good place for that. I'm taking trades at night on the mini Hang Seng futures (HSI).

Other contracts I have looked at include the following;

SPI - S&P/ASX 200 Index (Australia) APZ9-SNFE-FUT-AUD

mini Hang Seng Stock Index (MHI) MHIV9-HKFE-FUT-HKD

MSCI Taiwan Index @ SGX TWV09-SGX-FUT-USD

Be sure to adjust the symbol for the correct contract expiry before trading.

Of the above, I have chosen to concentrate on MHI. Here is the chart so far tonight, 1 minute time frame over several days. As you can see it trends nicely and has the odd gap fill. Trading shuts down for lunch time in Asia and when the come back there can be huge swings in the opening price, so trade small. I typically trade 1 or 2 contracts, depending on the set up. Right now the P/L is up and down, I'm learning the instrument and as long as I stay afloat and break even over the week I'm generally happy for now.

Intraday - HSI


Daily Chart - HSI


UPDATE:

Mr. Addict blogs about his experience with trading this instrument, both discretionary and Auto trading. Very interesting read and to me, his blog shows that he checks his results, indicating a high level of interest in success. This is something I lack (the checking results part) but I'm working on keeping the trade journal up to date. I'm going to use another approach and use AFL to import my IB TWS generated trade log and plot the trades. Then my notes will make sense. Keeping a spreadsheet doesn't appeal to me, it to slow, I prefer scratching notes.

Mr. Addict contributed a very valuable comment for those that trade MHI or HSI and use IB as their broker. Here is his comment, I've inserted the approximate USD equivalent values beside the HKD value so you can easily relate.

Addict said...

Why don't you try the full size contract, i.e., HSI instead of MHI? The bundled commish on MHI is 34 HKD (4.38 USD) per round trip and it's worth 10 HKD (1.29 USD) per tick. So price has to move four ticks in your favor to break even.

With HSI, the commish is 60 HKD (7.74 USD) per round trip, but each tick is worth 50 HKD (6.45 USD). So price only has to move two ticks in your favor to at least break even.

Better yet, go unbundled and you pay only 20.30 HKD (2.61 USD) per round trip for trading HSI, and 13.16 HKD (1.69 USD) for MHI. With unbundled, you need only one tick movement in your favor to break even with HSI, and three ticks with MHI.

EURUSD

UPDATE
Looks like a false breakout to me. It could also be a shakeout but I dont think a shakeout is that easy in forex and given this is a well watched trandl ine, there are too many participants at this level to do that.




Original Post
I was looking at the EURUSD chart today, deciding how to play pair as it nears long term S/R. My son came into the room and asked me what I was doing. I explained the bar chart and told him that we could make lots of money if our prediction was right. I asked what he thought the chart would do, first taking no more than one minute to show him how prices bounces off previous S/R levels, showing him the trend lines and S/R lines I drew. His 30 second view into the future is attached below and I have to tell you, its as valid as any other.

I'm playing this as a breakout for one reason only, this level has acted as resistance four times already and there is upward pressure from a very long trend line. There are three outcomes I see in the next week or so;

1: Breakout and huge move to the upside because of the long term nature of the two trend lines.
2: Breakout and a failure within a few days, price will move back below the 1.4821 area in a classic 2B move and then tank over multiple weeks if not longer.
3: Price will bounce off this area and head lower, below the uptrend line, then we are moving sideways. until a low is broken.

BTW - I have used Tipster Trendlines to place my trades. Check out this AFL for Amibroker for placing error free trades. "Error free" refers to the task of placing the trade, it does NOT refer to a trading system. the AFL also offers a risk management tool.

In short - this is a great place to watch price and place a trade. In other words, don't waste your time trading in between S/R lines on your chosen time frame.

Not sure about the long term, I'm focusing on the weeks ahead. Just for kicks, I'm posting what a 9 year old boy thinks of this market.

Forex Volume

If you have traded forex for more than a day you will now that there is no volume data since there is no central exchange. There are ways to guess at volume, which by the way will help you even though its an approximation. Since trading isn't an exact science, any data for volume is better than no data. When volume is read on a chart, say for stocks, we look for increasing or decreasing levels, or a spike on a breakout, and not a particular number.... only comparisons.

Forex data can be derived from tick data. I use this right now, the number of price changes from the IB data stream is counted and added until the bar closes, the afl uses the ibc.getrealtimedata function.

You could also use forex futures volume data, Amibroker will let you do this easily, but the market hours aren't the same from what I understand. I've never looked into this, so don't consider this as fact.

I ran across a site where forex futures data is taken from the CME website reports that are posted and available via ftp. The website is call evolution. I read some post at forex factory and it seems the site has been up for a couple of years. There doesn't seem to be a huge following, (which is good if you ask me).

I'll be taking a closer look at the max volume levels for the past week and keep an eye on them. Use this with your support and resistance and we will probably find more clues to where the next bounce will happen.

Take a look and leave a comment here on the site, as well as your thoughts on forex volume.

Code Snippet - EOD Data

On the weekends many traders are looking over charts, some only do it on the weekends. They might place orders based on the charts they view. No matter what type of order you use, if you are using daily data, you may have noticed that sometimes you don't get all the current data for every symbol. Murphy's law says that the stock you interested in will be the one that is missing one days worth of quotes. A couple of times I have almost placed an order based on old data, but noticed something wasn't right when I logged into the trading software and noticed the last price was different. I wrote this piece of code to show up in the title when the last daily bar isn't the same as today's day. The code also considers Saturday and Sunday.


DownloadDate = LastValue(DateNum());
TodayDate = Now(3);
if(Now(9)== 7) DownloadDate = DownloadDate + 1;
if(Now(9)== 0) DownloadDate = DownloadDate + 2;
if(LastValue(DownloadDate) != TodayDate)
BarDateError = " *WARNING: Data NOT Current*";
else
BarDateError ="";

My title bar uses this code, which is where the value BarDateError is displayed.


Title = EncodeColor(colorLightBlue) + Name() + " " + FullName() +
EncodeColor(colorLightBlue) + " - " + Date() +
EncodeColor(colorBlue) + " O=" + O +
EncodeColor(colorLime) + " H=" + H +
EncodeColor(colorRed) +" L=" + L +
EncodeColor(colorBlue) + " C=" + C +
EncodeColor(colorYellow) + " ATR: " + Prec(ATR(6),4) + EncodeColor(colorWhite) +
" " + BarDateError;


Hope this helps you reduce errors, trading is hard enough without having to deal with oversights.

Chat Room

I get email from time to time and have found it frustrating and difficult to solve a problem or have a healthy discussion via email. I've added a link to a chat room where we can have a discussion. If you want to chat about whatever, put a comment up on one of the posts and suggest a time. I'd like to chat about using Bracket Trader, or the advantages of using MetaTrader over Amibroker with IB (I know there are issues with that set up)

Look at the side bar on the right there is a title "Forex Hit List". I've added a link to a chat room.

Tipster Trendlines 2.12

Tipster Trendlines UPDATE HERE

Go to the Tipster Trendlines 2.1 post for additional information on how to obtain this AFL code. Don't make any more manual entry mistakes!

In addition, you may want to check the "Tipster Trendlines" TAGS on the the right of the blog to see all post about this code (or click this link).

Another update to the AFL, Tipster Trendlines, for trading right from the Amibroker chart. Here are the two additions;

Description (code follows below)

1. This addition will add "seconds remaining in bar" to the title of the chart. Good for intraday trading.

2. This addition will tell you if the last daily bar has the same date as today. Have you ever downloaded your EOD data and placed orders based on old data, assuming that you have the latest quotes? This won't prevent that but it will show a warning in the title of the chart so you have a chance!AFL CODE
Put this code at the top of the AFL, right after SetChartOptions(0,chartShowArrowschartShowDateschartWrapTitle); function secondsLeftOnBar_func()
{
Time = Now( 4 );
Seconds = int( Time % 100 );
Minutes = int( Time / 100 % 100 );
Hours = int( Time / 10000 % 100 );
SecondNum = int( Hours * 60 * 60 + Minutes * 60 + Seconds );
TimeFrame = Interval();
Newperiod = SecondNum % TimeFrame == 0;
SecsLeft = SecondNum - int( SecondNum / TimeFrame ) * TimeFrame;
SecsToGo = TimeFrame - SecsLeft;
return SecsToGo;
}

Replace the Ttle section at the bottom with this code
//Check if daily data is from today
DownloadDate = LastValue(DateNum());
TodayDate = Now(3);
if(LastValue(DownloadDate) != TodayDate)
BarDateError = " *WARNING: Data NOT Current*";
else
BarDateError ="";

Title = EncodeColor(colorLightBlue) + Name() + " " + FullName() +
EncodeColor(colorLightBlue) + " - " + Date() +
EncodeColor(colorBlue) + " O=" + O +
EncodeColor(colorLime) + " H=" + H +
EncodeColor(colorRed) +" L=" + L +
EncodeColor(colorBlue) + " C=" + C +
EncodeColor(colorYellow) + " ATR: " + Prec(ATR(6),4) +
EncodeColor(colorDarkYellow) + " Seconds Remaining: " + secondsLeftOnBar_func() +
EncodeColor(colorWhite) + BarDateError;
_SECTION_END();
Enjoy!

Tipster Trendlines 2.11

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


Go to the Tipster Trendlines 2.1 post for additional information on how to obtain this AFL code. Don't make any more manual entry mistakes!

Several readers have donated and received the Tipster Trendlines 2.1 (TT) AFL. A few things have come up, and I want to share the questions and code fixes.

CODE FIX
This fixes an issue where TWS rejects the submitted prices when TT is set for "Futures" trading.
Search for the red text below using the find box and replace with the code below. The NEW code is in blue. If you can't figure this out, let me know by comment or email.

if(Length == "0")
{
BS = int( BS ); // this truncates whatever is after the decimal
TA = int( TA );
ST = int( ST );
IBTarget = NumToStr( TA, 1.0, 0);
IBOrder = NumToStr( BS, 1.0, 0);
IBStop = NumToStr( ST, 1.0, 0);
}
VISTA

Microsoft VISTA continues to be a problem for Amibroker. The Interpretation window should be closed according to Ami support. The issue has not been resolved at this time, stay tuned in the Yahoo Amibroker groups. The reports I am receiving indicate the the TT screen "flashes" when Auto Trading is turned on.

Here is some code added by Rick. This code flashes the screen at the start and end of the trading day. Adjust the time as required:

Plot(TimeNum() == 092959, "",colorPaleGreen,styleHistogramstyleDashedstyleOwnScalestyleNoLabel);
Plot(TimeNum() == 155959, "",colorRed,styleHistogramstyleDashedstyleOwnScalestyleNoLabel);
(In Preferences - Intraday, "Time stamp of compressed intraday bars shows - "END time of interval")

Questions and answers

Q1. can make change to stop loss and target profit or not so that I can move my stop loss/target after the trade is entered.

A1. No. Once the order is placed and not filled, cancel and re-do in Amibroker. Once the order is placed and filled, move stops and targets in TWS.

Q2. Also if I used stop + limited price to enter trade, the trade may or may not be able to be filled. Can we see the trade has been filled in the status of Amibroker panel or not without going to IB pages?

A2. No. This is possible but I have not coded it. I had that feature in an earlier version.

Other Issues
Lastly, I would appreciate any feedback on this code posted as comments so other potential users can see the value. If current users have any suggestions, of issues with the AFL please let me know and we will remedy.

Auto Trading UPDATE

I have been using Bracket Trader lately. Great little program. I also just changed computers and noticed it doesn't run very well. I had to turn off my real time virus scanner. I'll have to figure out what files are running and add them to exceptions for the scanner.

The AFL I'm working on actually combines several systems that can be turn on and off with the params window. The time of day to allow trades can also be adjusted.

I send an email alert to me handheld so I'll be able to log on and check that the stops and targets have been placed, then just let it go. It's running on the TWS simulated account right now, making play $$.

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.

Are you ready to quite?

There is a forex trader named Ryan O'Keefe. You may have visited his blog. He has a post up about traders who have started out with great intentions and have almost blown up their account. If this is you, your might be asking yourself is "Are you ready to quit?".

Even if you're not ready to quite, this is worth a read. The theme is simple but not stated. When your having a rough go at it, make your trading plan simple, dumb it down. Trade only one pair, use only one system, trade a demo for a bit, talk to someone about your trading if there is anyone available.

The biggest problem you'll have with this is patience and waiting. If your trading only one pair and one system, you may go quite some time, days or weeks before you get a signal. This is part of the training. Wait for the right time. If you miss it, wait for the next one.

I use a trading journal, it is a royal pain in the ass.... but I fill it out as soon as I enter an order, when the order triggers (now I'm in the market), as the trade progresses (still in the market, recording my thoughts as well as target and stop adjustments and why I made them), and when the trade exits. Once I'm out I look at the chart, using hindsight since it is 20/20, to see if I read the situation correctly, and managed risk effectively. I have noticed that the losses that hurt the most were the ones that I had placed the stops at a point to far away for my comfort zone.

Where to place the stop and target? This pretty much defines if I get decide to enter or not. I identify the target and initial stop first, if the risk/reward ratio is less than 2 I don't consider it. If it is greater than 2, I now look at the position size. Here is the problem I had with this.... IB has a minimum order size that I'm not comfortable with for some trades, the stop placement would be too much of a $$ loss. So I opened an account at MBtrading, they allow smaller lot sizes. I haven't placed any trades on their system yet. One I start it up I'll post some trades and ideas.

So the whole point to the post is to "get back to basics" and follow the rules you made up in your trade plan. That is why I am reading my trade plan tonight, and every other night, until it is burnt into my brain.

Good trading!

USDCAD

Remember this post of the USDCAD?

Price dropped to resistance that can be clearly seen on the weekly chart. I've shown 3 support / resistance levels with the white lines. After the third push to 1.3000 price fizzled down to the middle white support line and bounced.... twice. We are now in a channel. There are several ways to play this. Here are a few ways to play it at the 1.3000 level.

1. Buy once price goes over 1.3000, stop just under that level to your taste, and depending on how much of a bet your placed.

2. Buy as price approaches 1.3000 looking for it to quickly snap through 1.3000 for a quick profit, riding the momo and using a trailing stop. This method would work for you if you think it will be hard to get in once it snaps through the level.

3. Wait for the break, then the pullback. I won't be doing this since I don't see the USD and CDN being more lopsided than it is right now. But the market doesn't care what I think.

4. Don't play the upside. I'll be waiting for the upside break, but I don't think it will happen. I expect the bottom to be the favoured direction.

To get past 1.3000, there will probably need to be some sort of catalyst. Having said that, watch for the bottom white line to be broken for a downside move.

I should note that this is based on daily and 4 hour charts. I will not go deeper than a 4 hour chart now trading forex. I have scaled down my position size and will trade based on daily and 4 hour time frames. To scale down my position sizes I've had to open up another forex account at a different broker since Interactive Brokers minimum size is too large for me to use with wider stops.

Chatroom

blog.tipster.ca - Fullscreen

Free eBook for everyone! - How to find free books online

Yet another effective way of minimizing capitol depreciation by NOT paying for books.

If you have been reading this blog for a while you might remember the post about how to find books on line for free. How to find free ebooks is the topic once again. The post was on Tools for trading education. Read it after this post for a complete understanding.

Recently I wanted to read a book and did a quick search for the title. (This post will not use specific book names in the text as there are often searches done to find websites that show others where to find this material. I will give you the tools, you find it yourself!!)

To find almost anything you want, use the Google advanced search. Check out the screen shot below that shows how I searched for the book. Here is the Google advanced search.

... and the results, see the "visited" link?

Here is the link to the advanced search page results from Google, a link for an ebook, go to the second page down near the bottom. You will quickly find a link to the pdf.

Here is yet another trick if you have made it this far. Right click on the google link and select "copy shortcut". Paste that into the address bar of your browser and then remove the last part of the link that is the file name. Then hit enter. This will, in most cases, show you the contents of the directory. In this case, you are presented with a long list of books you might be interested in reading. All you need know is a cold beer and a large monitor. Enjoy!

Tipster Trendlines - v2.1 being finalized

I've just sent the latest code (v2.1) to three others who offered to help get it all working. For the most part it works fine, just needs some calculations for the risk panel. I've tried to make it determine risk based on user selection of stocks, futures, or forex.

There are a few other brand new features too.

With the extra help, this shouldn't take to long.

How to Trade from Work

Don't want IT to know what your doing online? Trading, cruising porn, chatting, whatever you want to do, do it like you were sitting in front of your home computer. All IT can see is that you are accessing a remote computer, they won't know what your doing. It's your own proxy server!!

Use Windows Remote Desktop. This video takes you through a high level of setting this up. Sorry for the crappy quality.

Here is a resource for Remote Desktop Q&A.

An excerpt from the above:

Q. What port does Remote Desktop use? Does everything go over port 3389?

A. Port 3389 is the only port you need to open. Windows will attempt to stream sound through User Datagram Protocol (UDP) first. If no port is available for UDP, sound will stream through a virtual channel in Remote Desktop Protocol, which uses port 3389.

Q. How do I connect Windows Desktop Client to a remote port other than 3389?

A. In the Computer field in the Remote Desktop Client connection dialog, specify the port in either of the following ways:
• Computer name, colon, port number
Example: TSComputer: 22229 • IP address, colon, port number
Example: 192.168.1.1: 22229

USDCAD

Interesting chart pattern on the USDCAD. Triple top with an ascending wedge. A triple top gives it a bearish feel but the pattern is not valid until it breaks lower support. The ascending wedge gives it a bullish overtone. Since we don't have volume to add to the clues, we can only use price action. Notice the buyers were not waiting to buy shown by the lower lows. Also the lower lows get closer together, so they are also not waiting as long to jump in. On the other hand, look how fast price jumped off the top resistance line, telling us all kinds of sellers came in, plus its a big super fat round number (1.3000).

Buy on a break over 1.3 with tight stops, it either goes like a f'n canon, or fakes out and reverses back into the channel.


On a break out, you could also put in a short stop order below the 1.3000 line to catch the fake out on its way back to the bottom of the channel.

This is the type of pattern I would use breakkouts on, not channel trading. The converting to USD might be over, then again it might not. Use price action to guide you. Don't enter at the middle of the channel, enter at the top or bottom, this allows you to use tight stops, control risk, and have an edge.

Trading from work

There is a poll on the right side of the blog, "Do you trade from work?"

Do you? Take the poll.

If we take these results, we can see that 54% of the responders want or actually do access there trading account from work. Here is what I'm getting at; Does anyone want to see a video of how you can do this without the IT department knowing what your doing? There is nothing illegal here. You just have to know how technology works to be able to avoid the "tracking logs". Make no mistake, you will be a part of the log, but it wont show up that you are using TWS or WebTrader, or continually accessing your brokers web page.

You may be think, he is using a proxy server. No, that's not it, but close. So, do I have your attention? Take the poll first, then leave a comment.

Currently, this is what the poll looks like:

Good Reading and Video

In my opinion, support and resistance with momentum are the way to trade. It involves the alignment of the trend on multiple time frames. You may have heard this before and it is difficult to put it to use. But it is like anything else, you need to practice. Practice makes you remember the rules. We have all heard that we should find something we are comfortable with and stick to it with discipline. If this is your style, all you need to do is pick the smallest time frame from which you want to trade. Use three time frames. I like to use the weekly, daily, and hourly to pick where I will enter.

The following video by Brian Shannon will help you understand this concept. If you want more reading, buy his book. He doesn't over complicate things, he makes it gumby pokey easy to understand. In case you don't know this because you've been living under a rock for 2 years, Shannon was the head of training at MarketWise for some time. They are a very good trading training firm in the US. Previously I have mention Sam Seidens work who also works for them. Shannon is a full time trader now. Buy his book. It is good for any type of trading, even forex. (If you use this link, I actually get paid a dollar or two).

In addition to this, if your interested in forex, read this PDF. It explains things pretty well at a high level. The "rules" and description of discipline and money management are honest, not a bullshit bunch of crap that is usually written.

Forex eBook

One more thing before the video. Read this post to understand more about support and resistance. It explains the Gap & VWAP. The VWAP is the volume weighted average price.

The video below is timeless. I watched it three times to memorize the info. If you can memorize it, you will do better. Think of your job, and how you just "know" what to do day in and day out. You know it becuase you have done it so many times. Use a demo account, that will help memorize the info and required action. Again, watch the video a few times.

Tipster Trendlines - Update

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





A quick update on the code; I haven't had much time to work on the code, not to motivated with the market jumping all over the place. I'm spending most of my "market" time evaluating my RRSP holdings. I'm also testing a strategy on the simulated account for longer term forex trades, s swing trade time frame from a day to a few weeks.


I hope to have the code ready in a week or two. Is anyone willing to test and give me feedback?

To qualify you need to know how to program in Amibroker, I'm looking for some help to test and tweak the code. Any takers? Drop me a line at my email, in the top right under "What this Blog is all about"

USDCAD Trade

A video of a set up I am playing tonight. It looks like the USD buying might be over, or paused for now. If the markets break out, the USD probably wont move any higher. In any event, this trade is basically a small scalp that demonstrates my Tipster Trendline code for amibroker.

By the way, go see Brant's videos at http://www.trade-guild.net/ if you want another view of the market.