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How to Trade the Start of the Year: Guide to Stress-Free Positioning

Most people are familiar with the term ORB (open range breakout). It was popularized by Toby Crabel’s book “Day Trading with Short Term Price Patterns and Opening Range Breakout”, as well as the The Logical Trader: Applying a Method to the Madness (Wiley Trading) by Mark Fisher. ORB uses the price range set at the […]

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Market Reaction to NFPs on 8th January 2016

Following on in the series of Market Dynamics the NFPs presented a great opportunity to take a closer look at what happens during important news events. I’ve learned my lesson by now: don’t trade during news events. And this is especially true of stop orders in these situations. Price will just hop straight through. When […]

Testimonials

EURUSD tick data for the period 10th January 2016 to 15th 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.
Tick Data EURUSD , 20160110 – 20160115, Broker1
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)
Taking Control of Your Trading Numbers is Taking Control of Your Profits
Taking Control of Your Trading Numbers – that means actually being able to replicate the results that others produce.  It’s the only way to be sure that you know what’s going on. Well, many people got back after last week’s article asking about the details of the calculations as well as about some of the more technical jargon:
  • What do I mean by asset?
  • What’s an asset bias?
  • What does it mean to risk-adjust returns?
  • How can I go about calculating the charts in the article?
  • How …
Taking Control of Your Trading Numbers
PBOC fixings have become a fixture (at least for the last couple of days). With the big sell-off in the CSI China is trying to inject liquidity into the market and doing so in different ways. For the FX market it’s been a weakening of the reference rate. Here are the rates over the last couple of days (versus the USD): RMB Of course the market cottoned on to the PBOC’s desperation, and the rout continued. The effect on the Asian time-zone currencies was worth noting. We already covere…
Getting obsessed with news events: the AUDUSD and USDJPY during the 8th Jan PBOC fixing
It’s only been the fourth trading day of 2016, but there is no shortage of surprises, volatility, and all round mayhem. Today the AUDUSD had two announcements which can be considered relevant. The first was at 00:30GMT, the Building Approvals number, and shortly after 01:15GMT the PBOC rate fixing for the CNY. The first announcement was followed by a slow 10 pip grind to the downside, followed by a retracement to 0.7084. The PBOC announcement was issued at 01:16GMT, on the back of which …
More on Market Dynamics: AUDUSD and the PBOC
Following on from the previous post on ADP and slippage I’m writing up this brief note to share the pain, and hopefully get the point across: leave the News Alone Please. One of my systems that trades the EURUSD currency pairs actively, operates using stop-orders to enter the market and associated protective stops to limit the losses.  You might have guessed it’s a momentum based strategy.  The issue here is that when the market gaps, or is too thin, the orders won’t get executed.  And this …
Why Slippage Is Important -- Unemployment Impact on My Sanity
Taking control of your trading numbers is very important.  Here is an example of how straight forward it can be to run backtests in Excel. If you want to follow along in the article series, follow the link: Taking Control of Your Trading Numbers
SPY 12 Month Momentum Filtered Backtest in Excel
It’s useful to be able to add a trailing stop to your trades.  Given I never got my head around the MT4 functionality I wrote this small EA, which does the job.  Place it on top of the currency chart and give in the number of pips by which it should trail your trades. You need to put it on currency charts for which you have trades.  So if you have USDJPY trades put the EA on an USDJPY chart. This EA will not trail stops for trades that have a non-zero magic number.  So if you have trad…
MT4 Trailing Stop Expert Advisor
Kelly applied to the SPY ETF
This XLS shows the calculations which were performed in the Kelly Criteria article. The data included are the SPY ETF historical prices as well as the backtest results from the London Breakout Strategy applied to the EURUSD. Here you can see how to calculate the optimal leverage on your favourite asset class or your favourite trading strategy.  Please read the article to see what the caveats are and what riding out a full Kelly might possibly lead to.
Kelly Criteria Spreadsheet