No Signals Today

I just wanted to give a quick recap of the week…  I did not have any GBP/USD trading signals today.  From the experience I've had with my system, it certainly seems like the GBP/USD is at a critical juncture where a decision will be made very soon on whether the short-term trend downward will continue or whether the pair will reverse or correct. 

Overall, it was a losing week for the system with a total of 4 trades, 2 winners and 2 losers.  I lost a total of 63 pips this week.  I changed my exit strategy this week to a static stop loss of 30 pips.  This was changed after my 108 pip loss (3 lots at 36 pips each) on Wednesday.   In addition, I think I've optimized it more and hopefully the results will reflect this going forward.

1. Changed the stop loss to 30 pips.  I will no longer use a 34 EMA as a stop loss.  I noticed that if the price went against me by over 30 pips, usually it would continue to go against me.
2. From backtesting results, it would be safe for me to move my stops on all 3 positions to breakeven after I'm up 20 pips.  This will certainly cut down on some losses from what I've seen.  This is a new addition.

I've been poking around the FX Trader Plus capabilities that FXEngines offers and have asked many questions of them over the last day.  I've come to the conclusion that this system can be fully automated.  Each evening, I would still manually put my orders in at certain levels but after that, I'd let the automation take over.  I will make sure to demo test the automation next week before allowing it to take over.

http://www.fxengines.com/register/signUp.jsp?referralUser=rparedes  

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Am I a Flip-Flopper?

I had just about written off FXEngines as a viable option for news trading but not as a trading platform.  Here is a question I sent to them yesterday:

I'm wondering if the following can be automated?

Here is an example:

1. Schedule order at 1:30 am at a specific price with a 30 pips stop and a 30 pip limit
2. Order executes at or after 1:30 am with a 30 pip stop, 30 pip limit.
   
3. If the position goes in my favor and is up at least 20 pips at anytime, move the stop to breakeven
4. On a long position, once profit reaches 30 pip profit, trail the stop using last candle low and the reverse for a short position

This is possible with FXEngines FX Trader Plus package which costs $1.00 per lot traded.  You get premium exits like the one described in my question, exit creation, US news trading engines for not only the EUR/USD but the GBP/USD, USD/JPY, and USD/CHF, European news event engines, Japanese news event engines, and Australian news event engines.  I don't see myself taking advantage of the news engines but if I can totally automate my trades via this platform, I will.  

Let's think about the cost of the FX Trader Plus package.  $1 per lot traded.  If I make 20 trades a month at 3 lots each, that's 60 total lots for a price of $60.00.   How much does it cost for the Oanda API where you also have to do the programming, $600.00 a month.  Quite a difference for losing a little bit of flexibility.  The drawdown here is that you are limited to only FXCM as a broker but this may change in the future. 

I've signed up for the FX Trader Plus and as always will let everyone know how it goes.

If you're interested, follow this link and use me as a referral: http://www.fxengines.com/register/signUp.jsp?referralUser=rparedes

Popularity: 1%

Trade with a Flexible Lot Size

I'm now with my third different broker in the one year since I started trading.  My first was FXCM, which I still use, my second was Gain Capital or http://www.forex.com, and the third which I most recently opened an account with, Oanda.   If I had to describe each in one incomplete sentence, it would go like this:

FXCM - Comfortable platform with industry standard spreads.

GAIN - Offers a decent free API to standard account holders with at least $10,000.

Oanda - Lower than usual spreads during non-news events that allows any size lot trades.

It's pretty much impossible to describe in one sentence but I thought I'd give it a try.  What I'm finding is that there really isn't a hugely noticeable difference between them.  I've heard traders say that FXCM artificially spikes prices or that Oanda's spreads during economic releases turn news trades into news untradables but each have their issues and there is no perfect broker platform.  If I had to make a semi-perfect broker platform, it might be a combination of the three.

• Spreads from OANDA
• Currency pair selection from OANDA
• API from GAIN
• Order types from GAIN which provide limit, stop loss, OCO, If/Then single, If/Then OCO, and trailing
• News from GAIN and FXCM
• Money transfer options from GAIN and FXCM
• Interest on balance from OANDA

This is just a list by quickly brainstorming but it might be beneficial if I created a feature matrix unless someone knows if someone already did on the web.

Originally, the whole point of this post was to mention FXSol's Flexi Contract options that I stumbled upon today.  I thought Oanda was the only broker that offered variable sized lots but this is not the case.  FXSol offers lot sizes of 1K, 5K, 10K (Mini), 50K, or 100K.  Nice….

At this moment, my wish list of features that are not provided by any broker are both related to order scheduling:

1. Ability to schedule an order at a specific time.  This is provided by FXEngines and can obviously be done via an API
2. Ability to receive alerts if and when this order is triggered also provided by FXEngines  

Like I said, FXEngines can do both but what FXEngines really provides to you is a front-end to their API that communicates with FXCM.  This front-end is web-based and slow.  They really need to update their technology and offer a front-end to brokers other than FXCM.

Popularity: 3%

More Information on FXEngines

I've talked to a lot of you about FXEngines and there has been much optimism as well as much skepticism.  I was first exposed to all of this at the FXCM expo where I personally got to listen to Scott explain their goal.  There were a lot of ears turned up during his talk.  There were also a couple of people who just flat walked out which I took as close-minded on their part.  In this world of Foreign Exchange trading, there are so many scams out there and it isn't easy to disseminate what is real from what is not so I can understand but I'm opting to remain open-minded for now.

I sent an email off to Scott (the CEO) about my concerns with the
inability to capture last week's large move and I think there is
something I have to understand about all of this.  FXEngines strategic
direction recently changed to trading the news so this platform is in
its infancy.  Just the fact that after 5 weeks, I remain profitable is
also a good sign.  I am still hopeful in automated trading because FXEngines are constantly changing as we all must in this environment.  Like I said, this is all relatively new to them so we can either stand by it and continue automated trading or not. 

Here was Scott's response to the inability to capture the move last week and also a response after I said that somtimes, his post trade review was "sugar-coated."

I don't take offense, so don't worry about that.

The
bottom line is I am not sugar coating, although I will put the best
spin on things I can. Yesterday's traded DID take profit, and that's
why they exited early. The exit signals are there for everyone to see,
and they protect profit. If that's not the way you want to trade you
can create your own orders, or soon we'll have more wide open engines.
But it's a fact - those engines protected profit because that's how the
engines are designed. It's also a fact that most bad trades are flat
trades. We have not had a SINGLE trade reported by me that was a good
spike, but that I reported as flat. Thursday's trade was flat at the
open. It SLOWLY became a 20 pip spike, then retraced. Our system is not
designed to pick up slow moves, only spikes.

So in all of the
cases of the reviews I feel pretty justified, but don't take this to be
defensive. I take your point completely, but I offer a rebuttal and I
think it will stick. I have no problem calling a bad trade a bad trade,
and I will do my best to keep it straight going forward. I value
honesty more than most people, so I appreciate your feedback and feel
free to let me know if you disagree.

Scott

I think it is important to see that this platform is designed to pick up spikes, NOT slow moves.  I think it is also important to see that they are constantly making efforts to improve.

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