Trading the "Dirty Dozen"

EURUSD
EURAUD
GBPJPY
AUDUSD
NZDUSD
EURJPY
GBPUSD
AUDJPY
USDJPY
NZDJPY
USDCAD
EURGBP

The dirty dozen as I am calling it. Now some may argue that there is some overlap and I could trade different crosses to not pay spread twice etc, but who cares. These are the 12 pairs that seem to align very well with a trading style I have been experimenting with over the last few months. A longer time frame than I am used to at 15 min but still short enough to keep the stops small and the risk very small. This is completely contrarian to my normal style which is 1 min or less timeframe and larger lot sizes mostly because the stops were so small the risk even at larger sized lots was still small. Hopefully this will allow me to put on some trades and leave the screen and get a life outside of trading.

Lot sizes are calculated based on an initial 100 pip stop although it will be very rare to ever hit that level of stop. Risk is at 1.5% but only if it hits that 100 pip stop. Most of the time the stops will be around 20 pips give or take due to market conditions. That means that in reality most of the time my trades will only risk 0.3%! This allows me to put on trades for multiple pairs without risking more than about 3% total. Based on what I have seen up to this point it is unlikely that all of the pairs will set up for a trade at the exact same time. This should really keep the risk very very low.

One thing I won't discuss here is my trading style. This is a journal and not a trading system thread. I will say that this trading style does not involve any custom indicators.

There is a trade explorer and I will attach it here in a few minutes. It is one that I was using for my other trading style called "sheep or lion". I would strongly recommend you DO NOT use my TE for trading in your account. The time delay between trades and the TE updating can be as long as 10 minutes. If a trade goes the wrong way I could be out of a trade before you even see that I was in the trade. Also, I have only been researching this method for about 2-3 months so it isn't proven in the long term.

Hopefully, trading this way trades will be measured in hours and days and not minutes and seconds.

That's it for now, time to go see DeadPool!

Hey Magnum, how's it going? Been meaning to ask you for a while about your trading robots mentioned in other threads. I too use IB and TWS for live trading, plus NinjaTrader for historical analysis and backtesting if I have to code anything. I've tried writing robots in Ninja in the past (called "strategies") but they weren't very consistent and I gave up on them. But I hope to write better ones when I get more time, so any advice would be appreciated! Anyway, here are a few basic questions:

1. Did you write the robots yourself?
2. Which language are they in?
3. Do you run them continuously?
4. How big an issue is connection problems with the TWS API, and how do you get round it?
5. Without giving anything away, would you say that the strategy and code used by the robots is relatively simple or relatively complicated?
(I've programmed both kinds in the past and to be honest the simple ones seem to work better than the "expert" ones over time!)

Sorry for hijacking your journal with this. If you prefer PM then that's fine. Thanks

No problem.

1. Yes. I wrote them myself. Since I had a programming background and I was somewhat paranoid about someone else programming it and "stealing" my work so to speak.
2. Written in C++, using Microsoft Visual Studio
3. Yes they run continuously. Trades can last anywhere from a few minutes to several days when it catches a good trend. It has far more patience than I do as a trader although I am trying to learn.
4. The trading style that it uses doesn't really have any issues with connectivity. Losing connection for even a few hours hasn't been an issue. The thing to remember about IB is that there are two times each day they reboot or close out the days activities. Once at 5 pm eastern and again at midnight eastern. These will last around 15 minutes each. My software checks the connection about every 5 minutes and reconnects automatically if needed. The risk level is so small that even if it went heavy against me and the robot couldn't connect it wouldn't be an issue. The software will send me a text if it cannot connect after 30 minutes. I have only received 2 of those texts in the last 4-5 years. I have two internet connections here along with generators and UPS's to keep everything running.
5. Way simpler than most would expect. Like you I tried the more complex trading styles but found that many "filtered" out really good trades in an effort to block a few small bad ones.

I played around with NinjaTrader and an add on called BloodHound a few months back. I liked BloodHound because I could rapidly prototype trading ideas and instantaneously see the results on the screen. No real programming required. I liked it but not enough to buy it. It has a 30 day free trial.

Thank you very much. Your answers are very interesting! I've heard it usually takes about 200 attempts to yield just one consistently profitable trading robot, so hats off to you for all the hard work.

Plenty more questions but I'll hang fire for now. Cheers and good luck

Three trades open at this point. Nothing else in position.

AUDUSD long with stop now at BE
AUDJPY long with stop now at BE
USDCAD short waiting on a little more movement before moving stop.

Once I move the stop to BE I will let things run for a bit before moving the stop again. USDCAD is a very small risk at this point.

Good way to start off the week.

All three trades at BE now. Just letting them run until I see some sign of reversal.

Waiting for others to set up but nothing anywhere near where it needs to be.

I am still used to making decisions just about every minute. It is going to take some time to get used to waiting for 15 minutes. Each trade showed early signs of reversal so I jumped out.

The AUDUSD is showing signs of pausing at what could become the high while AUDJPY keeps battling with one of the MA so I am ok with getting out when I did. Wish it would have continued to run but such is the life of FOREX.

USDCAD would have been stopped out at BE if I let it run. It had a very strong reversal candle so again I am happy with where I got out.

Just need some others to set up now.

Shorted EURUSD and EURJPY earlier. EURUSD is doing well. Had stop on EURJPY in too tight. Missed a re-entry point on it as well. Oh well, lesson learned. Still way up for the day.

Missed several key trades today but overall I am happy with the new system. One thing trading live does for you is it shows you how to actually trade the system. It's one thing to look back and say that you would have taken a trade or not but to actually do it live is when you begin to build faith in how the system operates.

One thing I wanted with this system is a way to join a trend even after it has begun. That is where I missed some of the key entries earlier. I was still figuring out this part. The EURUSD trade was an entry even after the trend had started and it actually played out as one of the best of the day so far. There were at least 3 more trades that I could have taken near the London open but at that time I was still looking for a good way to join the trend since Frankfurt seemed to be the one to start the price movement today.

I didn't take any trades during the asian session last night although I should have. There were a number of good set ups that could have run through the night and still be running now.

Now that I have the last missing element of trading this way, there are no excuses left as to when to trade. So, off I go to look for more opportunities.