Items Tagged With h-system

After almost 2 weeks of trading my plainly named system, the "H-system", I've received mixed results.   Results looked great after week #1 but since then, I've suffered 3 straight losses on Monday, Tuesday, and today.  So far, this system has 5 wins and 5 losses but I'm still up 109 pips or $1090.  

I said earlier that I may need to reevaluate my stop loss strategy which I am now doing.  The last 2 losing trades could of easily have been wins instead of losses.  To address this issue, I've decided to tweak my system a bit.  I've widened my stop loss and have moved it to the next level of support and resistance.  Whereas before, I was setting my stops at the 2nd level of support/resistance, I am now moving it to the 3rd level of support/resistance.  This will on average increase my stop loss by 6-10 pips per lot and therefore increase my risk.  I will only be using the 3rd level of support/resistance for the early morning European session where these spikes are happening.  If the US session opens and I'm managing an open position, I will move the stop loss back to the 2nd level of support/resistance.  If a trade is initiated during the US session, I will continue using the 2nd level of support/resistance.   

So I've increased my exposure a bit and I'll just have to wait and see how it turns out. 

February is beating me down hard and I'm looking forward to March.  I lost on two h-system trades today and one yesterday.  The British pound has been very indecisive over the last two weeks but I'm staying on my toes because I'm expecting a big fat breakout sometime soon.

I have to admit that I'm putting off the updating of my trade history because I know that my trading efforts from September 2006 until last month will be essentially wiped.   To put it another way, my profits over the last five months probably won't survive the beating I'm taking this month.  Was this all for nothing?  I'd have to say definitely not.  I've obviously still got a long ways to go and this month can be a great learning experience. 

Stay tuned later for a post where I'm going to give you reasons why I've always been concerned with the h-system money management rules.   

I actually had the best Lien Schlossberg trade last night when I shorted the CAD/JPY.  I profited 77 pips on a 1 lot trade.  Unfortunately, we were also short the USD/JPY but they recommended an exit with a 10 pip profit last night.  Since then, the USD/JPY plunged a unusual 200 pips.

I still enjoy the challenge the Forex markets have given me so I'll accept my losses and move on.  I'm not this challenged at my full-time job so I welcome it with open arms.

Over the last 4 weeks or so, I've been attempting to stick to the H-system which usually trades during the European session.  Though I've managed to automate a good portion of this system, it stills requires some filtering at point of entry.  I've been losing a lot of sleep during this time sometimes waking up in the middle of the night to either manage the positions or to determine whether the filters nullify the trade signal.  Well, I've managed to burn the candle to the point where I just cannot get up in the middle of the night anymore.  If I was actually trading forex for a living though, there is no question that I would work my life around the European session.  The moves during this session are sometimes driven by economic announcements but I've found the slippage associated with entering or exiting a position much smaller or non-existent compared to the US session announcements.  So basically, the lack of sleep has forced me to re-group and to think of a better way to trade this system and still get the much needed sleep that I require.  

In the meantime, I'm attempting to get back into less systematic methods of trading not only because I think discretionary trading may be a necessary complement to systematic trading but also because I find that it can potentially lead to the creation of a more automated system.  I'm already violating my #1 point from last week in my Trading Performance Update and Ramblings post.

I missed an H-system trade early this morning (I was sleeping) which would have been profitable by over 100 pips but I at least managed to pull off a 60 pip profit on 2 USD/JPY positions this morning and a 20 pip profit on 1 GBP/USD position yesterday to get me back in the black for November.  I'm currently up 34 pips for November and if I can remain profitable for this month, this will be the third straight month of profitability.  

I've found that I've been very good over the last couple of months keeping impulse and just blatant stupidity out of my trading.  My goals are pretty straight forward and I know that one dumb move can wipe out everything I've accomplished.  I'd like to compare this to quitting smoking.  I've quit smoking on and off over the years and would have been successful if it were not for isolated incidents.  These isolated incidents like when I go out drinking at the bars involve going outside for just one smoke.  This one smoke has managed to prolong my habit.  One smoke turns into another and then seeps into subsequent days when I'm not out with friends but when I'm at work or home or stressed or whatever reason I can find to continue.  One bad decision can lead to many more and however minor a violation it seems to your goal, it actually turns out to be the whole reason why you're failing.  Some of you have probably never smoked and therefore cannot relate to this analogy.  For that, you are lucky.

I apologize for the limited posts and also for posts that aren't as beneficial to you.  I've mainly been talking about me, me, me.  I'm in a bind for time this week so I'm just giving short updates until I can get back into the swing of things.

I've quickly recovered from my losses and I'm actually now up 22 pips for the month of January.  This was all thanks to an h-system trade last night that got me 90 quick pips and another 30 pip discretionary GBP/USD trade.

I have to also give some recognition to Lien Schlossberg, who have assisted in capturing 63 pips this week.  They also hit on a trade this morning for over 40 pips but I couldn't take it because I couldn't trade the US session.  They are unfortunately -47 pips for the month.  I will have to add to their trade performance page the fact that the performance I show is taking into account slippage, delayed alerts from their servers, and the inability to take certain trades either due to slippage or because I just wasn't in front of a computer.  Today was the first trade I could not take though so I consider these results realistic.  http://www.forexproject.com/Kathy_Lien_Boris_Schlossberg_Trades/

I have to be happy with what has transpired this week going from -191 pips on Sunday night to +22 pips today.  I said yesterday that the true test was to see if I could pull myself out of the funk before falling further into negativity.  It seems like I've been able to do this.  If I can continue with smart and unemotional trades, recovering from my losses this month will be my greatest accomplishment so far as a forex trader.   

The Lien Schlossberg signal service I've been using in addition to my own trading signals kept me very busy last week.  As I've said before, they don't send out signals that allow you to place a limit order.  All of their signals require a market order and if you aren't sitting in front of your computer with your platform open, you may miss the entry.  I was still able to enter a trade for every one of their signals with minimal slippage.  They didn't have a great week though, losing 91 pips.  

I lost only 12 pips using my own signals.  I had a decent trade on Friday that captured 78 pips.  It was a good trade because I did not violate my rules like I had in the past.  After I entered into a 3 lot GBP/USD position, my positions fluctuated from profit to loss.  I was not once tempted to exit before my targets were hit.  I may be able to attribute this to the confidence I have in my system.  Over the past 5 months, my h-system has been profitable by 900 pips.  http://www.forexproject.com/H_Trading_System/

Halfway through the month of January, I'm up 127 pips.  I'm still shooting for 5 straight months of profitability.

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  

The big GBP/USD move that I was talking about yesterday did happen this morning but I'm a little disappointed with what happened in my Oanda account.  I had 2 orders in last night to go long on the GBP/USD. (h-system)  The 2 lot order was canceled by Oanda.  The 1 lot order was executed and then immediately closed at a loss.  According to Oanda it was a TAKE PROFIT.  A loss of 16 pips doesn't seem like a TAKE PROFIT to me.   If my orders were executed and take profits executed as I instructed, it would have been a 120 pip profit.  The fact is, there was a large spike in the GBP/USD due to the surprise rate hike by the Bank of England.  I'm not sure how Oanda treats these types of things due to this fact but I'm waiting to hear back from them.

BOE Shocks With Rate Hike to 5.25%

I lost an H-system trade earlier today during the European session but nevertheless remained up 195 pips for the week.  I'm done for the week. 

This weekend, I will continue my dedication to the markets and do some backtesting of the Divergence and pivot point system.  I've also been busy adding new pivot point calculations to http://www.allpivotpoints.com .  Last night I added Camarilla, Fibonacci, and DeMark pivot point calculations for all securities.  So there is now a total of 4 different pivot point calculations for each security.  I'll continue to work in adding midpoints and 3-day rolling pivot points which I'm looking at using to create a breakout system.  I'll give more details when I can figure out the formula.

Hope you had a good trading week.  If you did, great, keep at it.  If you didn't, like some of you I've talked to, just keep going and don't get discouraged.  This isn't easy.  If it was, everybody would be doing it.  Just remember that if you lose, you learn and if you're going to lose money, this is a good way to do it.  Just be sure to evaluate why you lost and don't just block it out and never think about it again.  Then good losses turn into bad losses.