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Bullish & Bearish Engulfing Bars (Part III)

This is the third article in the series on trading the Bullish and Bearish Engulfing candle stick patterns. Following on from Part I and Part II, we will look at trading the short signals for AUDUSD, EURUSD, GBPUSD, USDJPY, and USDCAD. Let’s recap the results for the long side: We used hourly rolling bars to […]

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Bullish & Bearish Engulfing Bars (Part II)

This is the second article in the series of trading the Bullish and Bearish Engulfing candle stick patterns. Following on from Part I, we will actually perform some backtests using the results we found in Part I. In Part I, we split up the analysis for long and short trades separately. Here we will keep […]

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Bullish & Bearish Engulfing Bars (Part I)

Many people ask if there are any particular technical setups that I like to look at and what the best way to trade them is. My all-time favorite heavily involves Support and Resistance levels, and using these as breakout levels. The art lies in finding them and then managing trades appropriately. In this article we’ll […]

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I’ve been asked lots of questions as to how to determine the next moves in GBPUSD. There have been many arguments for a bottoming out at the current levels, as well as for a continuation given the strength of the downward move experienced post Brexit. In this article I’ll try to get a handle on possible outcomes, by looking at some fundamental indicators and see where they point to for sterling over the next couple of months. The longer term perspective will be more difficult to gau…
GBP, Brexit, and Fundamentals
EURUSD tick data for the period 6th January 2016 to 8th January 2016. Zip file contains CSV files for each day. The format of the CSV files are: Local Time, Server Time, Server Time Milliseconds, Bid, Ask. The time resolution is in seconds.  This means that there can be multiple quotes per second. Local Time is GMT+0 Server Time is GMT+1  
Tick Data EURUSD , 20160106 - 20160108, Broker1
In this post I want to cover one of the factors that enters into the creation of the benchmark index outlined in my Trading Approach. This factor is called Value, and provides an underlying fundamental reason for trading various currencies. To explain value let’s assume that the water company Evian sells an identical bottle of water both in the UK and in the US. These two bottles are identical. Same water, same glass bottle, same label, same everything. In essence a tourist from the US coul…
Trading Currencies using Purchasing Power Parity (PPP)
An upcoming recession in the US is on everybody’s mind (at least that’s what Google Trends shows):
Trend of "US Recession" Search on Google
Trend of “US Recession” Search on Google
And with that bad news for the rest of us. To put that chart into context the last official recession according to the NBER was between December 2007 and June 2009. And the average duration between recessions since World War II has been five years, with the longest period being 10 years: between 1991 and 2001. So is it going to happen soon? Proba…
A US Recession or Not - Outlook and Friday's NFPs
Would you like to build consistently profitable trading systems from scratch? This article series does exactly that.  Here are the steps which we’ll work through:
  • Define the underlying principles of a successful trading approach
  • Determine the assets which obey these principles
  • Determine rule sets for trading these assets
  • Work out a straightforward portfolio construction method
That’s the theory. In this article-series we’ll go a step further and look at how to implemen…
Building Consistently Profitable Trading Systems – Principles of a Successful Trading Approach, Part 1
This is the third article in the series on trading the Bullish and Bearish Engulfing candle stick patterns. Following on from Part I and Part II, we will look at trading the short signals for AUDUSD, EURUSD, GBPUSD, USDJPY, and USDCAD. Let’s recap the results for the long side:
  • We used hourly rolling bars to identify the appropriate four-hourly patterns
  • Trading in the direction of the breakout was profitable
  • There was a sweet-spot for holding the trade for roughly 12 hours
  • After usi…
Bullish & Bearish Engulfing Bars (Part III)
High Frequency trading has become both the poster-boy and the scapegoat over the last couple of years in trading circles. It’s been seen as a sure-fire way of making money, as well as a sneaky way the flash-boys tax all the other participants in the market. In this article I want to cover some of the basics of High-Frequency Trading, as well as how it applies to trading from your “Living Room.” An example of such trading from your own private realm is the following P&L chart showing profits i…
High-Frequency Trading from your Living Room
“Greed is good”, but one shouldn’t always assume that the counterparty won’t notice. Last Wednesday, 27th January 2016, was FOMC day, news event day, and the markets went ape. Following on from the previous articles the idea was to continue to exploit the observed quote outages and extract value. Turns out that (presumably as expected), brokers aren’t that slow on their feet. I was moved from B-book status (i.e. rookie / loser status) to A-book status. Let’s just say that exces…
FOMC Day: How the Golden Goose got cooked – Getting my A-book status
I’ve written several articles on what happens during news announcements, and associated quick trading strategies.  But from a regular trader’s perspective, surely there must be another way to approach these things. In this article I’ll given an overview as to how to trade these news announcements in a slightly more leisurely way, and see if there is anything to be had out of trading against market hysteria.  The instrument of choice will be the EURUSD, though you can pick any other inst…
Trading News Announcements Systematically: EURUSD and Non-Farm Payrolls