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Showing posts with label no. Show all posts

Monday, May 9, 2016

Watukushay No 5 An Excellent System Ready for Release ~ forex trading gambling

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4:03 AM in , , , , , , , , , , , , , , , , , , ,

After a few months of testing and development I am glad to announce that the first release candidate for Watukushay No.5 is ready to be traded. Some days ago I talked about the first beta release and how I wanted to explore community based development before releasing the EA and after some limited success with this idea I have found enough profitable results for this system as to release the EA to all Asirikuy members. The release candidate of Watukushay No.5 will be ready for live trading featuring adequate error handling and functional decomposition with high-quality code that will allow us to have reliable and well-executed live trading results. During the next few paragraphs I want to share with you the importance of Watukushay No.5s achievements, a little bit about what I was able to achieve with this system and what it represents to the Asirikuy community.

As I mentioned on the previous post about this experts beta, Watukushay No.5 is a universal daily breakout system that is able to enter the market on a wide variety of circumstances adapting itself to the inherent characteristics of each different daily breakout it enters. Watukushay No.5 therefore belong to the same family as the turtle trading system and Kutichiy, aiming to profit from directional movements by entering the market after a given price value is broken towards the same side. However, Watukushay No.5 also includes a "fade mechanism" which also allows it to trade against breakouts and increases its flexibility to be profitable on currency pairs where fading certain movements is more profitable than trading the breakouts.

When I released the beta I had found the first EUR/USD profitable settings and I had some preliminary results for other currency pairs. Right now I am proud to say that I have reached profitable settings for this EA on the EUR/USD, USD/CHF, USD/JPY and GBP/USD. This is important since we only have a few systems that are able to trade the 4 majors and Watukushay No.5 will be able to introduce a lot of diversification power through its results on different currency pairs. Adding to this is the fact that the most profitable results (achieving a higher than 2:1 average compounded yearly profit to maximum draw down ratio) belong to the USD/CHF currency pair and NOT to the EUR/USD, giving us the power to diversify greatly against other trading systems like Teyacanani and Watukushay No.2 which achieve excellent results on this currency pair.
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Perhaps one of the most important things about this EA is its ability to constitute a viable portfolio on its own. The above image shows you the equity curve with yearly balance restarts (meaning that the internal balance of each instance is reset to the general account balance every 12 months) for Watukushay No.5 when trading the 4 majors at the same time. during the past 10 years. The portfolio of this EA achieves an average compounded yearly profit of 44% coupled with a maximum draw down level of 16% an excellent result only achievable up until now with a few other portfolios.

Despite the fact that all instances trade the same system it seems that maximum draw down periods do not tend to overlap since the different currency pairs are able to exploit their particular breakout inefficiency only under select market conditions that rotate amongst them. This in turn allows the different instances to hedge their draw down periods and achieve the above mentioned results which show this to be the case. Below you can also see the monthly profit chart for the portfolio obtained with 10 year backtests and a 1 year balance restarting technique. The system shows a high population of profitable months with a good number of highly profitable months that ensure the portfolios draw down remains under control. It is also worth mentioning that Watukushay No.5 was developed with all Watukushay Project principles in mind. The system was therefore developed with great care so that reliable simulations could be achieved.
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In summary, Watukushay No.5 is a great addition to Asirikuy featuring profitable results with similar draw down and profit targets on the 4 majors, a milestone achievement for Asirikuy portfolio system development. The system also showed excellent portfolio results, reason why its contributions to our long term profitability are bound to be important. Right now I have opened a poll within the Asirikuy community forum to choose a name for this EA and when the name is ready I will release the systems live trading version coupled with at least 2 account for live testing within Asirikuy.

If you would like to learn more about my journey in system development and how you too can develop your own likely long term profitable systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Sunday, May 8, 2016

Broker Conspiracy Theories Are they True ~ forex trading get rich quick

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4:43 AM in , , , , , , , , , , , , , , ,

If people new to forex trading have anything in common it is the overwhelming belief in the broker conspiracy theories. Ask ten people on their road to become successful traders about what they think regarding forex brokers and they will tell you that the main reason (or one of the main reasons) why they cannot profit as much as they want is because their brokers "play with them" in such a way that trading profitably becomes impossible (or much harder at least). The reasons why there is such a widespread belief in the broker conspiracy are many but the real question to ask is, is this conspiracy real ? Do brokers willingly play with their customers and mess with their execution and accounts in such a way that profitability is removed ? On todays post I will talk about these issues, giving you my opinion about the broker conspiracy theory and the consequence this has on your trading.

You have just bought your first extremely profitable scalping system, simulations show great results (although they are unreliable for this type of systems), your demo account shows great results and you are ready to jump into a live account with your first forex broker. You open up the account, fund it, get your VPS and start to trade your EA only to notice that your demo and live accounts almost never agree and your demo account is taking almost twice as many positions as your live trading account. Upon checking your live account you see a lot of spread widening, re-quotes and slippage that makes you think : the rumors were true, my broker is messing up my execution.

To tell you the truth, I do not believe in broker conspiracy theories because it is not in the main interest of a broker to harm their customers performance due to the fact that they make money from the spreads and this means that the longer it takes for a customer to lose their account, the more money they make. Generally what people perceive as their broker "messing with them" is nothing but the harsh reality of trading in the real market. Sometimes if the broker is a "market maker" this may become a little bit shady since the broker may make some decisions to protect itself from quick positioning or scalping, which they do not like due to the fact that they cannot properly hedge their exposure when such small and fast positions are opened. Such decisions may include spread widening, re-quotes, etc.

I have had my fair deal of experience with people in the broker industry (well known brokers at least) reason why I can tell you that most of the things you hear about are nothing but myths. Brokers are not "evil market makers" making money when you lose money, that to me seems like a childish way of putting things such as the brokers are "the bad guys" and you become the poor good guy/gal who could only make it if he or she wasnt screwed as much by the big guys. The first thing you need to do here is to take responsibility for your profits and your losses. Forex brokers are not responsible for your opening and closing of positions and therefore the fact that you attempt to use systems that simply dont work under real market conditions is not their fault.

However I always believe that you should always work with the worst possible case available such that your trading and decisions are as robust as possible. If there is a broker conspiracy and brokers will relentlessly prosecute and make certain systems (like scalpers) totally nonviable then you should focus on trading a system that is shielded from the power your broker has over your trading. Certainly it would not be very intelligent to trade a given system that you know depends greatly on execution variables your broker controls. If brokers do seek to make traders lose, then why in the world would you want to make it easier for them ?

In the end, if you profit or if you dont depends entirely on the decisions you make. If you trade systems that are very vulnerable to your brokers bidding then you will fall prey to the problems of real market execution and - if existent - to your brokers endless hunger for new traders flesh. As I said before the key here is to take responsibility for your trading and find systems that will allow you to trade with the smallest degree of dependency on live execution variables. Systems that trade in the medium or long term which do not have small take profit and stop loss targets will make you "immune" to any conspiracy since your broker will not be able to control your trading through the manipulation of execution variables.

However it is interesting here to note that I have never heard a profitable trader complain about execution related problems as a "broker conspiracy" since experienced traders know that this is a characteristic of the real market and that being successful despite their existence is one of the jobs YOU have as a profitable trader. It is irrelevant if these problems are or arent caused by your broker, if they are there and you want to be profitable then make your trading style such that these problems will have a small effect on your account balance. If you are suffering because of execution issues you should know that your trading style is what gives them the room to harm your wallet.

If you would like to know more about automated trading system development and how you too can design likely profitable trading systems please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Thursday, May 5, 2016

Five Common Mistakes in System Optimization ~ forex trading jobs in new york

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2:16 PM in , , , , , , , , , , , , , , ,

I believe that one of the most important aspects of system design and use is system optimization. This step in system design is vital since it allows us to adjust a given trading system so that it can more efficiently exploit the market inefficiency it is based on. When done correctly, the optimization of a trading system gives you a more profitable version of your logic with better profit and risk targets in long term performance and a very robust strategy which is not likely to fail even if market conditions change significantly. When done incorrectly, optimization leads to curve-fitted systems which are "fit" to test profitably in the past but fail to profit in the same way in the future. What is the difference between correct and incorrect optimization ? On todays post I will talk to you about this very important aspect of system design and what mistakes system designers and traders usually make that make their optimizations invalid and the resulting trading system useless.

In the end, there is a good way and a bad way to optimize a strategy and definitely all systems can be adequately optimized if certain precautions are taken into account so that the most important "curve-fitting pitfalls" are avoided. I will now describe the five most common and dangerous mistakes made when optimizing and I will attempt to give some solutions to these very usual and sadly lethal blows to long term profitability.

1. Optimization period length. I think that the most common mistake when doing optimization is -without a doubt- the length of the testing period used to optimize. Strictly speaking, optimizations are not bound to be meaningful fit they are done within periods of less than 5 years given that smaller periods of time are not statistically relevant according to long term changes in market volatility. So if you want to optimize your system and avoid curve fitting, use a period of at least five years. Using a smaller period will most likely "fit" your strategy to very specific market conditions and will make it unable to perform correctly as the market changes.

2. Reliability of the simulations. It is very important to note that in order for optimizations to be valid, simulations need to be valid. Optimizing a scalper or a similar strategy which cannot be simulated accurately does not make any sense since the trading results - and thus the optimization results - are not going to represent live testing to any accurate extent. Designing systems that explicitely control one minute bar opening and that use adequate profit and risk targets - large enough to avoid interpolation errors - is critical for adequate optimization.

3. Ignoring the results surroundings. One of the most important aspects of system optimization is to take into account the results "around" the most profitable result you found. For example, if the optimal value for an indicator period for your strategy is 20 when doing a 5 year optimization what happens when the indicator value is changes to 19 or 21, what about 18 or 22 ? It is very important to consider the surrounding since they give you an idea of the possible changes of profitability you will get if the market changes enough so that your "optimal" settings are no longer that good. If your system is very profitable with 20 and then loses 70% of its profitability with 19, then the strategy is not robust enough and it IS bound to fail in the future as market conditions may drift - even if only slightly - from your set results.

4. Fine grid optimizations. Another common problem with optimizations is the use of very fine grids when optimizting. In general, the coarser the optimization the less risk there is to curve fit a strategy since the fitting is done in a "lose way" and results that may over estimate profits and underestimate future draw downs are also avoided to a good extent. In general you should not optimize to any grid lower than 2% and better 5% so if you are doing an optimization of a strategys SL from 20 to 200 do not use steps smaller than 4 to accomplish this.
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5. Reoptimizing after Optimizing. When you optimize a parameter for given strategy, then optimize another one and then reoptimize the first one to the new profitable results you are most likely doing a sort of "fine grid" optimization in the sense that you are "fine tuning" the first variable to the seconds "best results". This is similar to doing a fully correlated optimization (although less computationally intensive) but it has similar dangers in the sense that increased correlation and probably further curve fitting is introduced. My advice here is to only optimize variables from a first set of parameters in order and avoid reoptimization of a variable after it has been optimized once.

As you see, these common mistakes in optimization are made by most people who want to improve their automated trading systems and all of them are bound to generate very good results using optimizations that are possibly going to be an over estimation of profit and underestimation of draw down in the long term. In a future post I will give you a diagram for optimizations explaining a little bit how I optimize my systems and what "general procedures" I follow so that my systems end up being robust, profitable and with a high like hood of maintaining their risk and draw down characteristics in the long term.

If you would like to learn more about my journey in automated trading and how you too can start to design and program your own likely long term profitable strategies please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Forex Trading NO LOSS Strategy ~ forex trading money

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9:17 AM in , , , , , , , , , ,

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Forex Trading NO Loss Strategy
With Proof 
People who have not experienced much in Forex trading. This strategy specifically for these gentlemen is a very useful thing.

After working for several months on this strategy we can say this with full confidence.
You can Earn a good profit Daily with this Strategy.

This strategy is very simple and easy to use.

Account Type: Any Micro Account.
Broker : Any Broker.

How to Use This Strategy: We Provide all information about this strategy
when you buy this No loss strategy.
Also you will be guide with the help of Skype. and we provide a training video.
If you want to ask any question.
Feel free to contact with us on instaforexreal@gmail.com
Skype: Geynstuff



Proof : This is only 5 Days Trades History.

All Trades Close Automatically. All Trades Targets Hit Automatically.
 This not a Robot this is a Real earning way.




Deposit : 500$
After 5 Days Belance  :1057.60
Total Profit : 526.13

Dont waste time and dont waste your money. Get this strategy and Earn Real Money.

Payment Process: Skrill, Perfect Money
Pay only one time: 200$
Lifetime opportunity, Golden Chance
Feel free to contact with us on instaforexreal@gmail.com
Skype: Geynstuff
Please note: if you are not satisfied after learn. we will not refund the payment.
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Wednesday, April 27, 2016

New Trading Robot that always profitable ~ forex trading margin

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10:00 AM in , , , , , , , , , , , , , ,

Tradewar Evenpro v1.2 Expert Advisor

SAFE AND SECURE EA STRATEGY

Fxtradewar Evenpro (v1.2) Expert Advisor , has been created by the **Fx Tradewar**.
FxtTradewar Evenpro is a new EA that I particularly like. Evenpro is a safe and secure Trading Robot.
Our EAs can get 60% to 100% profit what ever the amount invested and the most imporatant aspect of our EAs Drawdown which can not be more than 15% in worst case scanerio. For more information visit our site or contact us.
May be Monthly Profit  Reach 60% to 100% more than 200%.
Fxtradewar Evenpro EA work only ECN Accounts who have a Low Spread and low Commission.
The Ea strategy is based on Strong High & Low Level.The strategy is called “BreakEven Stop”.
Tradewar Evenpro trades the EURUSD on the M30 or H1 timeframe. The user can set the initial lot size (by default 0.5 lots) & (1.00 Lots). 
It also uses a safe compounding strategy that automatically use a very small Stoploss (15 Pips to 20 Pips).
One of the most interesting things is the trailing procedure that is implemented in the EA.
When The Order Executed EA follow the trailing stop (by default Point 1 or Point 3).
This EA Performances are really Good.
If you want to buy Please feel free to Contact given below the address.
Skype : Fxtradewar
Email at: fxtradewar@gmail.com Phone: +92-3456673414 Website: Www.fxtradewar.com/
  • EA Performance Result-1
Test result performance
Robot Gain Result report
Even pro report result gain profit
 

Saturday, April 23, 2016

No Loss Strategy without Stop Loss ~ forex trading models

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5:19 AM in , , , , , ,


Forex Trading No Loss Strategy Result
Make 2000$ in 10 DAYS

Many peoples do not believe on this strategy. But today i will show our trading strategy result in my live account .

In this account we deposit 3500$
after 4 Days Profit is 900$ profit

After next 2 days again  profit 565$
Total Withdraw Profit 
2000$

If You Need this strategy Please feel free to contact with us
Skype ID : Geynstuff
Email us: instaforexreal@gmail.com
Please note: if you are not satisfied after learn. we will not refund the payment.In addition, we manage accounts with 40% on all profit. without loss without risk free trades.
















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Friday, April 15, 2016

Intelligent Trading Answering Every What if ~ forex trading journal spreadsheet

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2:25 PM in , , , , , , , , , , , , , , ,

I believe that the worst characteristic a person can have as a trader is unfounded optimism. When I started trading I possesed this very undesirable character trait and it took me a long time to get rid of this pest that would keep profits away from my account. It is very easy for traders -especially new ones - to get lured into believing simulations or past live testing results and jump into systems with high risks believing that a certain scenario will not happen. I cannot tell you how big a mistake it is to ignore every possibility and to act on faith and hope. Time after time I have seen traders do this and get burned in the process with their hopes in one hand and their empty accounts on the other. On todays post I want to talk to you about the great importance of the "What ifs" of trading and why it is important for you to answer every possible "what if" question you can ask until you are satisfied with every answer.

One of the most vital things when you want to succeed at something in life is definitely preparation and trading is simply not the exception to this rule. Often people will venture into trading manual or automated trading systems with little preparation and without a good plan for every possible outcome that can arise. The truth is that most people who attempt to succeed at trading with expert advisors dont even have a clue of what they do if certain scenarios arise and in the worst cases they consider some scenarios "extremely unlikely" or "impossible to happen".

I remember clearly how a person told me a few years ago that it was "almost impossible" that his Martingale system would get 7 consecutive loses since such a market situation was simply extremely rare and such a case would never appear. I told him that everytime a trade is entered the possibility to lose exists but he continued to tell me that it wouldnt and that I was simply "not understanding" the nature of his system. The years passed and his system did trade profitably for a while and after a year or so of trading it took 8 consecutive loses and wiped his account clean. It was not the fact that the consecutive loses happened what killed my friends account, it was the obvious lack of preparation for such a scenario.

This happens all the time. People trade systems believing that a certain "what if" question does not deserve an answer because it is simply "extremely unlikely" when the truth is that the mere possibility of it happening should make a trader have a plan against it. If you are trading a system believing that A or B or C wont happen then you are setting up yourself for disaster. Every unanswered "what if" question is a void in your system, a void that will one day be filled, catching you completely unprepared for the consequences.

I always answer any possible question about a trading system - especially losing situations - so that I can avoid having a situation where I am simply caught with no answer. What if system A has 6 consecutive loses ? I will suffer an X draw down and the system will be Y% away from a worst-case scenario. What if a draw down level of X% is reached ? I will stop trading the system since it is below the worst-case scenario which is double the max draw down infered from reliable simulation results, etc. One of the things I have found helps me keep up with my systems and maintain my success as a trader is to ALWAYS have a plan. The most important part of doing this is to answer EVERY "What if" question you can think about. What if you have 5 onsecutive loses ? What if you have a 2 year draw down ? What if... What if ?

As you see, one of the most important parts of success in trading is nothing more than preparation. Knowing the answer to every possible question about your system and having a plan for every possible trading outcome is vital for you to achieve success. There cannot be a lethal "What if" question. If there is any of these questions that ends in "I would lose my account" then there is something inherently wrong with your trading strategy, as a safety every system must be able to give signals of "being too risky and not worth trading" before reaching a wipeout status. For example, a system with a worst-case scenario of 30% will be stopped at this equity level, preserving the other 70%, while a system that wipes the account at 5 consecutive loses simply has no such "time" to warn its user about a problem before it is already to late. Hope for the best. Prepare for the worst.

Are you answering all your "What if" questions ? Having an answer to all of them and having a plan for every draw down and profit outcome is vital for success, that is my humble advice. If you would like to learn more about automated trading and how you too can learn to design systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Forex Expert Advisors Forex Massacre an Unbiased Review ~ forex trading kerala

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5:16 AM in , , , , , , , , , , , , , , ,

Today we are going to take a look at a system that was developed allegedely by a seven figure forex trader. This trading system- named Forex Massacre- claims to be able to do several interesting things like making more than 20K every month or thousands of dollars per trade. Today I am going to go through this systems website analyzing the evidence provided by the author and judging if this evidence is enough to backup the authors claims. After carefully analyzing the whole website I will try to analyze the experts trading tactic giving you my opinion about the systems like hood of being long term profitable and whether or not this system is worth buying and testing.

I can say with total confidence that this forex masscre system seems to be a total insult to customer intelligence. The website talks a lot about the benefits of the system, huge monthly profits, no need for previous knowledge about forex trading, more than 90% winning rate up to date but the system never shows any proof of profitability. It is certainly like these marketers are not even trying anymore. Why in the world would someone buy a trading system based on a few pictures ? The fact is taht any of those screenshots of "trades" could have been draw by anyone with photoshop (even paint) and a metatrader 4 platform. These screenshots of trades do not tell as anything as even if they were actually real they are hand picked and do not say a thing about the long term profitability of this trading system.

What does the website of forex massacre actually tell us ? Absolutely nothing ! The website is a whole venture of hype coupled with a few - probably hand drawn - pictures of trades that may or may not be in line with the reality of the way in which this system trades the market. I think that it takes a lot of nerve and dishonesty to sell a system that does not have the slightest evidence of profitability. Where are the backtests ? Where are the live tests ? If this system is so profitable, then why doesnt the owner show us a 6 month live investor-verified account on a myfxbook link to proof its profitability ?

Sadly I think you guessed right. Probably the creator has never tested this system live and backtesting statements just show a losing system that does not even do well in simulations, otherwise they would have at least placed some backtesting statements on the site. In the end this trading system has absolutely no evidence of profitability (not even evidence of its trading method or tactic) and therefore it is NOT worth buying and testing. In fact, this system is even insulting as it makes you go through 3 pages of reading without showing you any valuable information. I only have two words for this system... Next please !

If you liked this review and you would like to know more about trading system reliability and how you too can determine if a system has potential for long term profitability please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Wednesday, April 13, 2016

Why There is No Universal System Differences Between Currency Pairs ~ forex trading glossary

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4:03 AM in , , , , , , , , , , , , , , , , , , ,

Can we build a system that trades successfully on all forex currency pairs ? This has often been a question of the automated trading system world that simply asks if there is a universal inefficiency, an inefficiency that is so common that it can be found an exploited on all different currency pairs. Up until now, the answer to this question has been a resounding and unequivocal NO. To the best of my knowledge no system has ever been developed to work on all currency pairs despite the claims of many system sellers who tell you that you can use their systems on all of them. But why has it been impossible to build such a system ? Why does trading all currency pairs seems like such a big challenge ? The answer lies within the very fabric of the market and the way in which the different currency pairs trade and react. Within the following paragraphs I will explain to you some of the basic aspects of these currency pair differences and why it makes the creation of any universal system extremely hard if not impossible.

You may have been told that inefficiencies in the market arise due to crowd behavior- which is a human characteristic- and that all currency pairs in forex show it to some degree. When you hear this it becomes easy to think that if a system "really works" then it is bound to work on absolutely all the instruments available in the currency market. After all, every instrument is bought and sold by humans and this would make them inherently inefficient.

Certainly if all instruments traded with the exact same number of people and with the exact same objectives we would be able to easily find a universal inefficiency but the matter of fact is that this is not the case. The first dramatic difference between instruments is the number of participants and the inherent liquidity of each currency pair. Some pairs like the EUR/USD are very liquid while others like the GBP/CHF dont have 1/10th of the liquidity of the former so their price action is dramatically different and the inefficiencies within it become dramatically different. The less people who trade a given pair, the more efficient it becomes since crowd behavior becomes less pronounced and individual decisions start to play important roles.

Then we have other differences that also make the movements of currency pairs different. For example if you are trading the USD/JPY and there is a negative trade balance against Japan then there will be a given fixed amount of money each month that will pull the USD against the JPY just merely because of business transactions that have nothing to do with speculation. The volume of these transactions is very significant and the time in which they are processed and their magnitude will have an impact on the way in which a pair moves.

Many other factors such as central bank intervention and even cultural differences play an important role in the way in which a pair moves when compared to another and all of these factors help to explain why the finding of universal inefficiencies is so hard. However when you look at higher time frames (daily and beyond) there seems to be some coherence and this is the reason why some systems that target month or year long trends manage to exploit the same inefficiency on several different currency pairs. However the success of these systems along the whole portfolio is never total and more often than not there are very strong differences between the profitability of different currency pairs and several pairs where the systems simply do not work.

So will we ever find a global and total inefficiency ? I would have to say that probably no, but if there is a chance it will take a lot more liquidity on all instruments and a lot more market participants to make this the case. Certainly in the future if the market volume on the illiquid currency pairs increases enough we might be able to have - even though not a truly universal system - at least systems that will have better success along different currency pairs.

If you would like to learn more about system development and how you too can build your own likely long term profitable systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Wednesday, April 6, 2016

Watukushay FE An Intra Instrument Experiment Part No 1 ~ forex trading journal excel

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2:46 PM in , , , , , , , , , , , , , , ,

One of the best things about the new metatrader 5 platform - as I mentioned on a previous post - is the extreme quickness in which backtesting and optimizations can be done. It is remarkable how I can now do a 200 run optimization in less than an hour while previously it took more than 5 or 6 hours and even 24-48 for certain trading systems. After porting Watukushay FE and enjoying this very fast simulations capability I decided that it was time to try a multi-instrument approach for this freely available trading system. Certainly I had donde some experiments before on the USD/CHF and the GBP/USD but I had never been able to try as many combinations and settings as I wanted to due to the inherent slowness of MQL4 based backtesting. On today and tomorrows post I want to show you some of the results of my studies on several currency pairs for Watukushay FE and how these results show us a very wide and unique perspective about the Watukushay FE trading system. For those of you who do not know anything about Watukushay FE it is a freely available trading system I coded available at http://watukushayfe.blogspot.com.

It is important to note here that I coded Watukushay FE based solely on my observations of the RSI and trend behavior on the EUR/USD and I had never thought about making this expert trade on other instruments when I first designed and implemented its logic. It is a fallacy that a "good system" should work on "all" currency pairs as it tackles a "vital aspect of market psychology" since different pairs have different trading makeups and volumes which make their particular price action very different. Pairs that people may regard as similar such as the EUR/USD and the USD/CHF are in fact tremendously different with many systems that work on the EUR/USD failing to work on the USD/CHF and vice versa. Some of the reasons why this happens include bank intervention, liquidity, volume, trade deficit difference, etc.

However it is always interesting to look at the performance of systems on other currency pairs since it brings a hint about the differences between instruments, showing us why a system may work on one and not on another. Understanding and knowing the true nature of these differences allows us to develop systems that are "adapted" to each different currency pairs trading nature. An analysis of these differences also allows us to change the design of a system- particularly its exit logic- to better exploit inefficiencies found in a particular instrument.

The first think I did with Watukushay FE was to run the "standard" settings derived from very coarse optimizations on the EUR/USD on the GBP/USD, USD/CHF, AUD/USD and USD/CAD (10 year backtests on Metatrader 5). The results are indeed good -as shown in the graphs below- in the sense that the system is profitable in the long term on all of these currency pairs, however it is important to say here that profitability is much lower than on the EUR/USD with most of these pairs reaching only a compounded yearly profit to maximum draw down ratio of 1:3 to 1:5. This shows us that the system tackles a market inefficiency that is present to a certain extent on all these currency pairs but unfavorable conditions are much more frequent than on the EUR/USD.
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It is evident when comparing the different equity curves that the smoothest of them is the EUR/USD which - of course - achieves the best results. We see that Watukushay FE has smooth periods of profit on most of these instruments but unprofitable periods are simply very destructive for the other pairs while they are only mild for the EUR/USD. Even tough the equity curves seem to show us that all instruments could be traded profitably the potential reward for instruments other than the EUR/USD is simply not enough to compensate for the risk taken. The deeper draw down periods also make Watukushay FE on other currency pairs far more difficult to trade also limiting risk escalation to a great extent.

However it is clear that some very interesting questions arise. Is it possible to do coarse optimizations on other pairs to find more EUR/USD-like results ? It is possible to implement small modification to the logic that improve the trading technique significantly ? Are there any other instruments worth trading for Watukushay FE besides the EUR/USD ? I will tray to address some of these questions on tomorrows post. If you would like to learn more about Watukushay FE and all the Watukushay Project experts please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Watukushay No 5 The Aussie and the Kiwi More Encouraging Results ~ forex trading guide for beginners pdf

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10:36 AM in , , , , , , , , , , , , , , , ,

During this weekend I released the first official version of Watukushay No.5 coupled with all its 10 year backtesting data showing profitable results on 6 different currency pairs in Asirikuy. From my last post about this EA you might remember that Watukushay No.5 had been tested on the EUR/USD, GBP/USD, USD/JPY and USD/CHF, however at that time I hadnt completed my analysis on two other currency pairs that also show us great results with this strategy despite their overall lack of liquidity, the AUD/USD and the NZD/USD. On todays post I want to share with you some of the results of the EA on these currency pairs and how the EA is able to use a completely different trading technique to profit from the different trading mechanics of these two instruments.

As you may already know, Watukushay No.5 attempts to exploit breakout inefficiencies on the different currency pairs. On the 4 majors this is done by exploiting periods of low volatility when the currency pairs form significant ranges, entering breakouts when important moves develop within the following trading sessions. However, these trading tactics do not work well on the AUD/USD and NZD/USD, not only because they tend not to form areas of compact trading but due to the fact that this areas do not lead to successful or unsuccessful breakouts with any statistical significance. In the end if you try the same tactics as with the majors you will obtain slightly profitable results which are definitely not worth using in live trading.

Upon my analysis of these two instruments it became clear that I needed to think the problem from another perspective if I was going to find any profitable results for this EA on these two pairs. This meant going back to a meticulous analysis of the currency pairs and the way in which the medium and long term trends develop within them. After spending a few days working on this I finally realized that the key was to rely on breakouts of more volatile sessions but aiming at much higher take profit and stop loss targets. The idea was that this large breakouts do allow us to predict long term trend direction with a good statistical edge in the long term.

Backtesting results were indeed very encouraging showing me that my analysis had been right. When you exploit this different and larger breakouts on the AUD/USD and the NZD/USD, you obtain some very profitable results which are achieved as the EA is able to follow long term trends through the periodical entering of this large session breakouts. The effect resembles the accumulation technique used by the turtle trading system, allowing us to follow a trend and greatly profit from its long term direction. Below you can see a picture of how this trading works on the NZD/USD, notice how the EA got a lot of profit from a developing trend.
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The 10 year backtesting results also give us great results for both of these currency pairs. We arrive at results which have average compounded yearly profit to maximum draw down targets better than Watukushay FE and the same as Teyacanani on the EUR/USD in the case of the NZD/USD. Surprisingly, the best trading results for this EA have been found on the NZD/USD, showing us the robustness of this strategy as a portfolio solution. The EA shows us its robustness and its ability to exploit two completely different market inefficiencies based on the same trading mechanics but aiming for entirely different things.
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Later today 3 live accounts with real money will be added to Asirikuy to start the testing of the system on the USD/CHF, NZD/USD and a full portfolio setup. Hopefully within the next year we will be able to gather some very useful information about its trading system, its tactics and its ability to tackle changing market conditions. The ability of this EA to adapt to each particular market situation and its very large set of adaptive parameters will probably lead it to succeed in this quest against market changes.

If you would like to learn more about automated trading and how you too can develop your own likely long term profitable systems please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Sunday, April 3, 2016

Liquidity in Forex Part No 1 What it Means and Why it is Important ~ forex trading game app

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3:54 PM in , , , , , , , , , , , , , , , , ,

The term "liquidity" is used a lot in trading and finances since it is a vital aspect of market behavior. However, people often use this term very liberally in forex trading often without understanding its exact meaning and the implications of high or low values of this particular property. On this article I want to explain to you what the term "liquidity" is, what it exactly means, its implications within a given instrument and why it is such an important characteristic of the market.

Imagine that we had 20 people standing on a circle with 19 of them holding empty glasses and one of them holding a glass full of water. Now we want to see how much time it will take for the person with the glass to pour it onto the next one and so on until the water reaches him/her again. What we find is that it takes a long time for the water to be exchanged along the full circle because only 2 players are able to participate (the one holding and the one receiving) while all the others have to stay on the sidelines, waiting for their glass of water. Now imagine that we give half of them a glass of water, the process is much faster since the number of active participants has now increased to include everyone, all the people are actually exchanging water all the time.
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Liquidity on the market is nothing else than the "water" in the above example, it is the amount of volume exchanged of a given instrument over a given amount of time. When there is high liquidity there is a lot of volume being exchanged and when there is low liquidity there is little volume being exchanged. When we have a lot of volume people can get in and out of the market easily (since there is always a buyer for every seller and vice versa) while when there is low liquidity the market gets "stuck" as people have to fight to get in or out of their positions. When there is low liquidity you also get harsher price movements since a person holding a position may be forced to drastically change the offering price to match what the other end - which is very scarce - wants. So while under high liquidity exchanges are easy and swift, under low liquidity prices move more erratically since the offered and accepted prices tend to have larger gaps between them. The consequences for the little trader are unpredictability and spread widening while for the large players the consequences are mainly not being able to get in or out of positions due to the lack of available exchange capacity.

Liquidity in the forex market is extremely difficult to read and study since the market has no central exchange but it is handled over a wide variety of banks worldwide in an over-the-counter manner. The volume of a given contract that has been exchanged during a certain period of time therefore becomes hard to read since it depends on the particular provider you are talking about. Even though the market is praised as being extremely liquid and huge, the fact is that this is only be true if you can access to all - or a lot - of liquidity providers (banks). If you limit yourself to just a few you will see that the liquidity you have access to is nowhere near the trillions of dollars people talk about.

When we are going to trade the foreign exchange market, knowing the liquidity levels of the instruments we want to trade is important since currency pairs with higher liquidity tend to be "easier to trade" since they show more inefficiencies characteristic of crowd behavior while instruments with low liquidity tend to show a more random walk much more characteristic of individual investor behavior. Therefore, instruments that are very liquid tend to be easier to exploit using mechanical trading systems while those that dont tend to be much harder to trade. However, as the time frames get bigger liquidity starts to become a less important factor and crowd-based inefficiencies still arise. This is the main reason why you should look for strategies based on larger time frames and longer period indicators when attempting to design systems for illiquid instruments.

On tomorrows post I will discuss the inner aspects of liquidity in the forex market a little bit more, I will discuss some of the currently available literature about the subject in economics and the liquidity characteristics of different currency pairs. If you however would like to learn more about automated trading and how you too can start designing and programming your own systems based on realistic and sound strategies please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Monday, March 28, 2016

Liquidity in Forex Part No 2 Analyzing the Liquidity of Different Pairs ~ forex trading good or bad

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5:10 AM in , , , , , , , , , , , , , , , , , ,

On yesterdays article - which was part No.1 of this post - we talked about the definition of liquidity and the implications of high and low liquidity levels on the forex market. Today we are going to give an in-depth look to liquidity in the forex market, particularly I will talk about recent literature in economics dealing with the evaluation of liquidity on several different currency pairs and what we can conclude and use from this analysis. After reading this article you will have an idea about which are the most liquid and illiquid currency pairs, something which should give you a good idea of what pairs you would want to focus on for the development of mechanical trading strategies.

First of all, it is important to understand that liquidity in forex in simply a pain to research. In order to investigate the liquidity levels of any given market instrument we need to have all transaction information including, type, volume and time. This means that we need access to the "books", the registry where all the transaction information of a given broker is kept. Since there is no central exchange in forex, we cannot get the real liquidity values but if we choose a broker that uses a large array of liquidity providers and we take a look at all their transaction we might be able to draw some general conclusions regarding overall pair liquidity values (at least relative to each other).

The Swiss National bank published a paper a few months ago dealing with the evaluation of liquidity on the FX market (you can access it here). Besides discussing previous literature findings regarding forex liquidity the authors investigated the liquidity levels of several different currency pairs using data from 2007 to 2008. The authors used a daily reversal measurement (explained within the paper) of liquidity in order to get a comparable to number to use between the different currency pairs.
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The studys first findings show us that the EUR/USD and USD/JPY were the most traded instruments during the testing periods while the AUD/USD and USD/CAD had the lowest trading volume. The authors also emphasize on the fact that even though the GBP/USD is an important pair it is very illiquid when compared to the EUR/USD, confirming the findings of previous studies and pointing to the reason why the development of GBP/USD based systems is far more difficult than for the EUR/USD since the lower liquidity makes inefficiencies harder to exploit in a mechanical fashion.

Another interesting conclusion is the high liquidity of the USD/CHF and EUR/CHF during this period which the authors attribute to the safe-heaven status of the frank and the economic crisis during 2007-2008. The study also shows us that liquidity is not constant but changes considerably over time with most currency pairs starting to lose liquidity around August 2007 (carry trade unwinding) rebounding slightly and then resuming the downtrend at the end of this year. This analysis shows that stressful periods in the market are characterized by important drops in liquidity having a very strong relationship with risk sentiment.

Perhaps the most important contribution of this article is the development of ways to measure liquidity and the finding of correlations of FX pairs liquidity with other financial instruments or markets where liquidity is more easily measured. This in turn would allow investors to watch for drops of liquidity, something that could be especially important to those investors looking to shield themselves from crisis periods (investors involved in carry trades for example).

Of course, for us the most important findings are the relative levels of liquidity of the different pairs and their relative relationship. From the above mentioned study we can see that definitely system development should be focused on the EUR/USD and USD/JPY while longer term strategies aimed at "harder" to trade instruments should be used on pairs like the GBP/USD and the USD/CAD.

If you would like to learn more about system development and how you too can develop systems for these currency pairs with sound trading strategies please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Saturday, March 26, 2016

Update No Loss Multipairs Trading Strategy Live Proof Result ~ forex trading made ez

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Wednesday, March 23, 2016

Weird Arbitrage Opportunities in Currency Trading The USD COP Case ~ forex trading germany

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2:42 AM in , , , , , , , , , , , , , , , , , , ,

Have you ever dreamed about making money with absolutely no risk of loss in the currency trading market ? Did you think that such opportunities did not exist ? Contrary to most peoples belief in the fact that there are absolutely no arbitrage opportunities in currency trading I have personally observed the contrary for perhaps the past ten years in a very weird occurrence that seems to be absolutely particular to the USD/COP currency pair. The COP - or Colombian peso - is the main currency unit of the Colombian government and some extremely weird arbitrage opportunities are presented within Colombia to make substantial profit from USD or EUR exchanges. On todays post I will share with you this very strange case and why it leads to a rare inefficiency which doesnt seem to be present anywhere else.

The USD/COP is what many would call a "strange" currency pair. The pairs spread is usually around 0.1-0.2% of the pairs value and daily fluctuations can go from 2 to 10% of the exchange rate. This sometimes crazy volatility makes trading this pair hard (for anything but long term trading) but it also makes local Colombian currency exchange houses maintain some exchange rates away from the real interbank FX rate when very large fluctuations occur to avoid having strong monetary loses.

What happens here is that a great arbitrage opportunity is created that is actually quite strange. For example in early 2009 the USD/COP went from 1800 to nearly 2600 in a matter of a few months and the local exchange houses kept their exchange rate near 2000-2100 due to the fact that raising the rate to 2600 would cause them loses due to their previous peso reserves against the USD. Since most currency houses lack proper diversification and protection measures they need to eliminate their own loses by keeping exchange rates artificially low (although the time period this lasts is limited).

The opportunity arises since you can go to a currency house, exchange COP for USD at an exchange rate of 2100 then you need to physically take your money to the US (yes, you need to travel) then deposit it into a US bank and withdraw it through a wire transfer to Colombia at the FX rate of 2600. If you think this would have been impossible due to some reason, the fact is that I know several friends and traders who actually did the trip and managed to get 20% profits in a matter of days. I even had a friend who did the trip three times and made a 60% return over his initial "investment". Of course, the arbitrage opportunity is limited by the fact that you can only take 10K USD in cash out of the country legally per trip but it does give you the chance to get some risk-free profit from currency exchanges.

The reasons why this bold inefficiency exists are many but probably both the above exposed lack of proper protection from strong currency moves and the general injection of money from the drug industry into currency exchange houses could make this arbitrage opportunity both a consequence of money laundering and inefficient handling. The fact that a very small percentage of the population has US or EU visas and bank accounts in the US and EU needed to finish the transaction could also explain why this is not exploited to the point where the market is made efficient.

Of course the fact that exploiting such an inefficiency could also be supporting the drug industry has made me refrain from ever taking part in this game but certainly there is an arbitrage opportunity that I know many have taken advantage of to get massive profits when these small windows of opportunity arise every 2-5 years. Definitely a weird occurrence that is worth noting and discussing. If you have any opinions please feel free to leave a comment below :o)

If you would like to learn more about my journey in automated trading and how you too can build your own automated trading systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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