I've always found it difficult to to remove subjectivity when monitoring many different pairs, charts, and uniformly apply a process to decide when to enter and exit trades. When you're staring at charts across many pairs it's easy to convince yourself to stay in a losing trade or not take profit when momentum has died out. It also makes it difficult and time consuming to monitor whether your signal is still valid. I trade many asset classes so having this bird's eye view allows me to quickly monitor my signals and trade. My Dashboard Based system takes that subjectivity out.
I trade/rebalance/enter/exit trades 1x a day. The process uses daily prices (I don't trade on intra-day moves). It uses trend following, momentum, and volatility relative value signals across multiple time periods and across 19 pairs. I don't even look at charts because my dashboard summarizes all the information I need in 1 spot allowing me to quickly identify a new signal and whether I should edit an existing trade by a change on the dashboard.
FX Dashboard Website Link
Note: the dashboard is to big to display on Mobile. Need to view on PC.
Thought I'd share my website which is mostly focused on options trading but now has my FX Dashboard which I use to enter/exit trades without much thought these days. It updates daily based on API feeds which pull in FX prices and are calculated using my signal formulas.
It's all summarized on the website but basically here is my process that I follow.
Identify FX Trades using Multiple Time Period Trend Following Signals and Volatility Relative Value.
How to use the dashboard on my website:
Long Signals: All Columns Green (Price/Fast thru Vol/Avg)
Short Signals: All Columns Red (Price/Fast thru Signal Avg. RoC) except for Vol/Avg must be Green
I trade daily based on daily close pricing. Note: I'm not in always in every trade that produces a signal - sometimes I don't care for the pair, doesn't fit my macro view, or capital is already committed elsewhere.
Explanation:
Price/Fast: Current Price % above/(below) Fast EMA
Price/Med: Current Price % above/(below) Medium EMA
Price/Show: Current Price % above/(below) Slow EMA
Fast/Med: Fast EMA % above/(below) Medium EMA
Med/Slow: Medium EMA % above/(below) Slow EMA
EMA-Fast Rate of Change: Daily % Change in the rate of Fast EMA
EMA-Medium Rate of Change: Daily % Change in the rate of Medium EMA
EMA-Slow Rate of Change: Daily % Change in the rate of Slow EMA
Signal Avg Rate of Change: Weighted Avg of the Daily % Change in Fast, Medium, and Slow EMA (weighted 60%/40%/0%)
Vol/Avg: Standard Deviation of FX Pair % above/(below) the Medium Term Standard Deviation Moving Average
- Avoid buying or selling FX pair when Standard Deviation (Volatility) is > 25% higher than rolling 40 day average Standard Deviation.
Trade Side: Long or Short, shows which trades I'm currently in. Note: I am not always in every trade that produces a buy or sell signal for various reasons (capital committed elsewhere, doesn't fit my macro view, too volatile, not volatile enough, etc).Bet Size: Each pair is calculated a Bet Size to size the signals.
- The % amount is determined by calculating the standard deviation of each pair being traded and then standardizing it by calculating a mean variance.
- This results in higher volatility pairs receiving a lower % bet (less capital) and lower volatility pairs receiving a higher % bet (more capital). This results in equalization of volatility across the pairs.
- I'm able to apply this to calculate the daily standard deviation of the FX portfolio on an unlevered basis.
- I use this to determine how much leverage/margin I want to use. I.e. 10x leverage * 1% std (daily) = 10% account move for a 1 standard deviation move.
Fast EMA: 10d
Medium EMA: 25d
Long EMA: 50d
Standard Deviation calculated using 25d EMA of Daily Return and Variance
In fact all my calculations are done via excel calcs off of Daily Pricing Closes fed in by API feed.