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Silent Service Method

  • #11,221
  • Nov 5, 2010 10:43pm Nov 5, 2010 10:43pm
Quoting Low
All stops at BE. Hoping we just need to test and see if R became S... how lame.
Undoubtedly the prudent thing to do. Even if it is lame.
  • #11,222
  • Nov 6, 2010 12:09pm Nov 6, 2010 12:09pm
Audio piece up for the week.
  • #11,223
  • Edited 8:39pm Nov 7, 2010 11:10am | Edited 8:39pm
Dear Chris (and anyone willing to participate, of course),

First of all, thanks a lot for your wonderful thread. I am learning a lot and am still at the very beginning of the learning process, I am afraid. Still, I am greatly enjoying it.

That said, I would like to have your opinion about automatic trading systems. In particular I use Dukascopy as broker and I became interested into JForex recently: it seems a nice platform and easy enough to learn (for experimenting even quite complex strategies).

Nonetheless, from what I have learned from this instructive discussion and your many advices, I would tend to be against a brute-force optimization approach and I will start coding (at least for fun) some basic strategies trying to catch the psychological roller coasters behind the price action.

I was considering the following pros and cons of an EA vs a manual method; please let me know if you concur with me.

Pro:
- enforced discipline: an EA does not have feelings.
- repetitiveness: you should be able to replicate results and judge the method as is, without extra involvments
- 24/7: it is always trading (I have an old laptop which would serve the purpose greatly)
- quick analyzer: capable to go through a great amount of data and analyze all currencies pair at once
-possibility to check whether there is truly an edge, using a back-tester (Dukascopy uses real ticks, which makes the simulation more reliable)

Cons:
-repetitiveness: if you are a disciplined/pro trader (not my case, at least for now), I am sure you can be able to see through charts, put that extra intuition which is just not possible to code (although a fair complex code may include numerous exceptions and sub-sub-cases);

-not pedagogical: you can improve your coding skills, but it is unlikely you will improve your discipline; someone else is 'controlled' for you. I think it is worth improving discipline, not only for trading.

I am really looking forward to reading your opinion. Thank you so much, again.

Have a great Sunday.
  • #11,224
  • Nov 7, 2010 11:34pm Nov 7, 2010 11:34pm
I have to admit, I have never really given a lot of thought to actually using an EA, but I would have no problem in theory with it.

The one thing that people tend to forget about trading is simply this: It's an means to an end. You are doing it to make money, nothing more, nothing less. Too many people forget that.

So in short - if it makes money for you, and frees up your time.......Why not?

I am sure someone out there will give you a better answer than mine though!

Chris
  • #11,225
  • Nov 8, 2010 3:12am Nov 8, 2010 3:12am
Quoting clockwork71
I have to admit, I have never really given a lot of thought to actually using an EA, but I would have no problem in theory with it.

The one thing that people tend to forget about trading is simply this: It's an means to an end. You are doing it to make money, nothing more, nothing less. Too many people forget that.

So in short - if it makes money for you, and frees up your time.......Why not?

I am sure someone out there will give you a better answer than mine though!

Chris
I find they are ok but being a static life form they eventually start to become obsolete without regular updates to cater to current market dynamics. i.e consolidating vs trending market etc


My 2c.
  • #11,226
  • Nov 8, 2010 6:37am Nov 8, 2010 6:37am
Chris,

Thanks for your prompt reply.

Still do not know whether it will end up being profitable to me, but I think it is fun to experiment. I will give it a try.

Quote
The one thing that people tend to forget about trading is simply this: It's an means to an end.

Definitely agree and I hope I will remember it in practice. I tend to forget it, too: probably unknowingly, sometime; but, once you have emotional reactions: it is crystal clear that you forgot that (since you are not even pursuing your goal, anymore).


4xAddict,

Thanks for pointing that out. Yes, I definitely agree; in fact, I think still you have to spend some time in updating your software. There are many algorithms out there, trying to catch the mood of the market (e.g.: whether it is trending or not). Still, I think one should tune the parameters and even rethinking the whole strategy, from time to time.

Have a great week.
  • #11,227
  • Nov 8, 2010 6:42am Nov 8, 2010 6:42am
Quoting actarus
Chris,

Thanks for your prompt reply.

Still do not know whether it will end up being profitable to me, but I think it is fun to experiment. I will give it a try.



4xAddict,

Thanks for pointing that out. Yes, I definitely agree; in fact, I think still you have to spend some time in updating your software. There are many algorithms out there, trying to catch the mood of the market (e.g.: whether it is trending or not). Still, I think one should tune the parameters and even rethinking the whole strategy, from time to time.

Have a great...
That optimization setting in the strategy tester is handy for that. Helps to establish current market outlook by allowing tests to be run with Stops and TPs across a range to find the most profitable method.

Not a bad idea to run back tests at the end of each week for the 2 weeks just gone to optimize your settings for the coming week. You would be amazed how tuning EAs like that helps.

Some guys even do it nightly
  • #11,228
  • Nov 8, 2010 8:52am Nov 8, 2010 8:52am
Looks good so far......
Attached Image (click to enlarge)
Click to Enlarge Name: eurgbp.png Size: 34 KB
  • #11,229
  • Nov 8, 2010 10:24am Nov 8, 2010 10:24am
Quoting Ben920FX
I already shorted EURGBP.. Goodluck to my trade...
Quoting Ben920FX
Monthly Pin Bar is enough for me to hang on this...

Long term SHORT also for me IMHO.

Quoting clockwork71
Looks good so far......
Couldn't agree more
My edge ===> Patience
  • #11,230
  • Nov 8, 2010 3:21pm Nov 8, 2010 3:21pm
Quoting Ben920FX
Couldn't agree more

RIGHT. And the fact that it it now a monthly trade, I like it even more.

Chris
  • #11,231
  • Nov 9, 2010 8:12am Nov 9, 2010 8:12am
This is the chart I am watching with the most interest today.....
Attached Image (click to enlarge)
Click to Enlarge Name: cable.png Size: 25 KB
  • #11,232
  • Nov 9, 2010 11:42am Nov 9, 2010 11:42am
Quoting clockwork71
This is the chart I am watching with the most interest today.....

Yep......(chart from last week):

http://i54.tinypic.com/2gv4rdi.png
  • #11,233
  • Nov 9, 2010 2:38pm Nov 9, 2010 2:38pm
I feel like I should win some kind of prize for being absolutely 100-per-f**king-cent wrong.

Stopped out of both.
  • #11,234
  • Nov 9, 2010 3:58pm Nov 9, 2010 3:58pm
Quoting Low
I feel like I should win some kind of prize for being absolutely 100-per-f**king-cent wrong.

Stopped out of both.
You sir, get the gift of education......
  • #11,235
  • Nov 9, 2010 4:00pm Nov 9, 2010 4:00pm
Quoting Low
I feel like I should win some kind of prize for being absolutely 100-per-f**king-cent wrong.

Stopped out of both.
One other thing I should say about this - there were valid set ups in the cable and Euro......you just can't always be absolutely correct all the time. The truth is, they were reasonable trades - the market just got a little skittish from what I saw in the afternoon. (Was at the gym, saw it falling on one of the televisions.)
  • #11,236
  • Nov 9, 2010 4:06pm Nov 9, 2010 4:06pm
Check out the silver and gold charts:
Attached Image(s) (click to enlarge)
Click to Enlarge Name: silver.png Size: 43 KB
Click to Enlarge Name: gold.png Size: 45 KB
  • #11,237
  • Nov 10, 2010 2:34am Nov 10, 2010 2:34am
Quoting clockwork71
You sir, get the gift of education......
Another way of looking at it is that your trade was 100% right - you just got the timing wrong and the stops were too tight LOL.
  • #11,238
  • Edited 2:51am Nov 10, 2010 2:39am | Edited 2:51am
Quoting clockwork71
Check out the silver and gold charts:

I read something about gold yesterday which completely changed my perspective...

To summarise.... It was saying that with gold(and silver) at these levels mining it becomes much more viable and the mines can go for the previously unprofitable veins which will increase production. For instance Silver Wheaton buy their silver off the Zinc mines for $4 an ounce - it used to be just waste material - not anymore LOL.

So expect the market to be flooded with gold and silver soon..(the article didn't say that bit - just my interpretation).
  • #11,239
  • Edited 3:10am Nov 10, 2010 3:00am | Edited 3:10am
Quoting stewrigh
I read something about gold yesterday which completely changed my perspective...

To summarise.... It was saying that with gold(and silver) at these levels mining it becomes much more viable and the mines can go for the previously unprofitable veins which will increase production. For instance Silver Wheaton buy their silver off the Zinc mines for $4 an ounce - it used to be just waste material - not anymore LOL.

So expect the market to be flooded with gold and silver soon..(the article didn't say that bit - just my interpretation).
Longer term Stew that is probably likely however there are substantial delays associated with setting up new capacity, nothing like potash but we are still talking years. Also, of the silver available above ground the lion's share of it used in industrial applications is destroyed unlike gold. There is a strong case for significant upside in the both of them but especially silver going forward.

The major cause of the spikes in silver lately has been the CFTC cases against JPM and HSBC for market manipulation. JPM is holdings trillions of dollars of paper silver short positions and HSBC is not far behind. They have no where near enough physical silver to fulfill the sales they have made if those that bought their shorts want to redeem for bullion.

They are currently coming under massive short squeeze pressure with huge buying interest out of Asia so we could also be seeing JPM/HSBC and the other large US banks involved making a last ditch effort to drive it down in the near term to give them a cheaper level to exit their positions.

Yesterday this also happened which caused a short term pinch to long traders - "CME confirmed silver margins raised from $5000 to $6500 (30%) effective 11/10 settl - no other metals effected".

Effectively a margin call on the spec longs in the market causing an unwinding of stretched positions. This is possibly the last way that the US banks can be protected from what is massive exposure so we may see this occurring again going fwd is buy interest remains at these highs. I've attached the release from the CME yesterday and you can see the size of the increases and imagine easily the impact this had on a number of long speculators all of a sudden getting margin calls for so much extra capital.

I am no PM expert however there is a lot of information available at the moment showing how short they are and it's not healthy.

Just my opinion, I am no Gold/Silver bug however I think that a material selloff offers a good level for longer term accumulation.

4x.
Attached File(s)
File Type: pdf Chadv10-461.pdf   16 KB | 300 downloads
  • #11,240
  • Edited 4:22am Nov 10, 2010 3:08am | Edited 4:22am
Yeah I'm just trying to rationalise why I missed the trade of the century..LOL.
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