I'm starting to get more than a little cautious about the stellar increase in the AUDJPY over the last several days.
While it's true that markets can continue to move higher or lower for long periods of time it's important not to get too caught up in recent events. In fact, though we all react to these things at different rates, you can consider it a warning whenever there is something to get caught up in.
Insidiously, it is often those things that happen over a very long period of time that we forget to take notice of. For example, the smart phone has been growing in leaps and bounds and will probably do so for years, but at some point it is likely to turn into the next PC. If you haven't noticed PC's are now relatively cheap commodity products which leaves PC makers turning to the service sector in an attempt to fuel continued growth.
In any case, this is a point at which I have to resist ramping up the aggression factor in my trading robot... and the notion that it might be a good idea to take a bigger bite out of upward movement needs to serve as a warning to me.
16 Mart 2011 Çarşamba
Recent Forex Results
I've had some success analyzing the AUDJPY over the last few days. In particular, whether by luck or otherwise I managed to spot some channels, one of them an apparent bull flag, a wedge leading to 82.00 and then predicting a breakthrough beyond that level.
It's very rewarding to make an observation and then have results conform to your expectations.
Anyway, I'm still letting my robot do my trading for me. It's earning north of 1% per day and I continue to make minor tweaks in an attempt to push the appreciation rate closer to 2% if I can.
Recent tweaks involve looking at various stochastic values in order to adjust position entry scale to some degree. Obviously, as the robot only opens long positions, the idea is to open less positions during periods of strength and more positions during periods of weakness.
It's never as simple as it sounds.
For more radical tweaks or outright departures from the main trading robot I'll strike out with a small amount of capital in a new account. I have one of these experimental robots running right now. It's very heavily tweaked.
I've got another radical, but simple, idea in the wings. It will have to wait until next weekend so that I'll have time to implement it.
It's very rewarding to make an observation and then have results conform to your expectations.
Anyway, I'm still letting my robot do my trading for me. It's earning north of 1% per day and I continue to make minor tweaks in an attempt to push the appreciation rate closer to 2% if I can.
Recent tweaks involve looking at various stochastic values in order to adjust position entry scale to some degree. Obviously, as the robot only opens long positions, the idea is to open less positions during periods of strength and more positions during periods of weakness.
It's never as simple as it sounds.
For more radical tweaks or outright departures from the main trading robot I'll strike out with a small amount of capital in a new account. I have one of these experimental robots running right now. It's very heavily tweaked.
I've got another radical, but simple, idea in the wings. It will have to wait until next weekend so that I'll have time to implement it.
Possible AUDJPY Reversal Point
I obviously have no guarantees but, according to my own proprietary reversal indicator, this is a potential reversal point.
Again, do your own homework, but this is the "signal" I'll be posting to my alerts blog...
UPDATE: It's about 9:49pm and the AUDJPY 1hr chart is showing a potential twin tail.
UPDATE: It's 10:03pm and here's the 1hr chart right now...
And here's the chart from my last post showing the 3hr trend channel.
I don't know if we are going to stay in trend, but I wouldn't expect a straight drop through a support line that has been in effect for so long.
Again, do your own homework, but this is the "signal" I'll be posting to my alerts blog...
UPDATE: It's about 9:49pm and the AUDJPY 1hr chart is showing a potential twin tail.
UPDATE: It's 10:03pm and here's the 1hr chart right now...
And here's the chart from my last post showing the 3hr trend channel.
I don't know if we are going to stay in trend, but I wouldn't expect a straight drop through a support line that has been in effect for so long.
AUDJPY: October Trend
The AUDJPY has been on an upward trajectory for a while now.
There is no telling, at least not in advance, whether we'll see more massive upward movement due to hawkish statements from the RBA or not.
However, here is a 3hr chart showing recent movements:
Obviously, clear support and resistance helps identify some lower risk entry points.
There is no telling, at least not in advance, whether we'll see more massive upward movement due to hawkish statements from the RBA or not.
However, here is a 3hr chart showing recent movements:
Obviously, clear support and resistance helps identify some lower risk entry points.
New Robot Rules Fermenting
It's late Friday night, the markets are closed, and all through the house not a creature is stirring. Well, nobody but the scheming trader hatching up another robotic system.
As someone who designs software systems for a living I can assure you that, in terms of making improvements, nothing is more helpful than watching a system in action. The key point here is the concept of "seeing" the results. While this arena is a bit of a different animal I've always been proud to claim that if I could see the problem I could fix it. You see, no matter how complex the problem there is usually something along the lines of a paradigm shift which greatly changes the nature of available solutions.
So, at the end of the week, when I'm not at work, I can review charts, apply various indicators, and see how various changes might affect trading and earnings. During the week I can see or hear positions open and close and watch the daily results tally up. Simple but powerful stuff.
Anyway, the thing that is keeping me awake at night, in a good way, is a relatively easy way to increase the profit per trade. I believe so anyway. Hopefully we'll find out next week... as I'll be developing this new ARTFAB robot pronto.
I do already have a robot trading at an average return of 1.2% per day over the last five weeks (BREAD - basic robot earning all day) but I've set an aggressive stretch goal of averaging 2.5% per day. BREAD just isn't going to get there. Assuming that other people have done much better than my paltry goal really gets the creativity flowing -- as you simply know it's possible if others have done it. There must be a way to get there while strictly controlling risk levels.
I'm sure there are many ways. I intend to find one of them.
As someone who designs software systems for a living I can assure you that, in terms of making improvements, nothing is more helpful than watching a system in action. The key point here is the concept of "seeing" the results. While this arena is a bit of a different animal I've always been proud to claim that if I could see the problem I could fix it. You see, no matter how complex the problem there is usually something along the lines of a paradigm shift which greatly changes the nature of available solutions.
So, at the end of the week, when I'm not at work, I can review charts, apply various indicators, and see how various changes might affect trading and earnings. During the week I can see or hear positions open and close and watch the daily results tally up. Simple but powerful stuff.
Anyway, the thing that is keeping me awake at night, in a good way, is a relatively easy way to increase the profit per trade. I believe so anyway. Hopefully we'll find out next week... as I'll be developing this new ARTFAB robot pronto.
I do already have a robot trading at an average return of 1.2% per day over the last five weeks (BREAD - basic robot earning all day) but I've set an aggressive stretch goal of averaging 2.5% per day. BREAD just isn't going to get there. Assuming that other people have done much better than my paltry goal really gets the creativity flowing -- as you simply know it's possible if others have done it. There must be a way to get there while strictly controlling risk levels.
I'm sure there are many ways. I intend to find one of them.
Challenging Times
While I realize the world went through a bit of an unwind, before and after the Dubai incident, I've been busy with work and family issues instead.
Things have just been incredibly busy!
In any case, what with the volatility and unwinding that has been going on it's probably a good time to be inactive. I did manage to blow up my small discretionary account (my robots are far better traders than I am) but that's insignificant.
However, the big news, from my own point of view, is that I have some tweaks for my up-and-coming robot. Basically, I need it to detect a downward slide quickly and then decide not to waste it's risk capital on redundant positions.
Maybe I'll have some time to do some blogging and tweaking this week?
Things have just been incredibly busy!
In any case, what with the volatility and unwinding that has been going on it's probably a good time to be inactive. I did manage to blow up my small discretionary account (my robots are far better traders than I am) but that's insignificant.
However, the big news, from my own point of view, is that I have some tweaks for my up-and-coming robot. Basically, I need it to detect a downward slide quickly and then decide not to waste it's risk capital on redundant positions.
Maybe I'll have some time to do some blogging and tweaking this week?
AUDJPY: Market Call
The AUDJPY has done a whole lot of nothing for the last few days.
Can you blame it? It must be tired after the recent climb.
More seriously, with the
RBA considering whether to raise rates another 25 or perhaps even 50 basis points, I don't expect any type of calamitous drop.
I think we might see a drop down to 83.00 again but if it does stop in that region I'd consider the range between there and 84.30 to be a consolidation zone. Again, given the interest rate decision in the near term future I'd eventually expect more upward movement as long as there is not an RBA based negative surprise.
Your mileage may vary.
UPDATE: Wednesday after 10:00am, we have an apparent AUDJPY breakout... currently at 84.50 and testing the underside of our previous support channel. I'm hoping that we reject 84.50 a few times before crossing -- as that will help my trading robot better take advantage of the movement.
See what I'm talking about? You can go back through a few previous posts to get a wider view of recent events.
Can you blame it? It must be tired after the recent climb.
More seriously, with the
RBA considering whether to raise rates another 25 or perhaps even 50 basis points, I don't expect any type of calamitous drop.
I think we might see a drop down to 83.00 again but if it does stop in that region I'd consider the range between there and 84.30 to be a consolidation zone. Again, given the interest rate decision in the near term future I'd eventually expect more upward movement as long as there is not an RBA based negative surprise.
Your mileage may vary.
UPDATE: Wednesday after 10:00am, we have an apparent AUDJPY breakout... currently at 84.50 and testing the underside of our previous support channel. I'm hoping that we reject 84.50 a few times before crossing -- as that will help my trading robot better take advantage of the movement.
See what I'm talking about? You can go back through a few previous posts to get a wider view of recent events.
Da Signals
It takes a lot of fortitude to use them but I think the signals blog is proving itself useful.
For example, right now we seem to have established a bottom in the recent AUDJPY downward movement.
So, especially under such a condition, we get good results if we see a signal and then look for confirming behavior. Basically, the signals are great lead-ins to a period of analysis.
No, they aren't all useful. As you would expect there will often be signals that are simply useless. The key point is that you don't have to be watching the markets all day long to take advantage of signals. You can simply fire up the charts and issue a yes or no decision several bars after they arrive.
For example, right now we seem to have established a bottom in the recent AUDJPY downward movement.
So, especially under such a condition, we get good results if we see a signal and then look for confirming behavior. Basically, the signals are great lead-ins to a period of analysis.
No, they aren't all useful. As you would expect there will often be signals that are simply useless. The key point is that you don't have to be watching the markets all day long to take advantage of signals. You can simply fire up the charts and issue a yes or no decision several bars after they arrive.
AUDJPY: Ominously Flat
I'm looking at a short term chart, but the lack of volatility suggests that something is in the air.
Even with the recent good news from China things have been relatively lethargic.
The daily chart is also showing the potential to have a few down days.
This seems like a good time to manage risk.
UPDATE: This evening, while I was on the road, I see that we had a nice spike upwards, hitting my take-profit points and leaving me flat. Nice.
Even with the recent good news from China things have been relatively lethargic.
The daily chart is also showing the potential to have a few down days.
This seems like a good time to manage risk.
UPDATE: This evening, while I was on the road, I see that we had a nice spike upwards, hitting my take-profit points and leaving me flat. Nice.
AUDJPY: Support Becomes Resistance
My last post showed a profitable overnight setup based on a week long support line on the 1hr chart.
Here, I've got an example of a support becoming resistance once it has been violated.
Take a look at the following 15min chart:
See the violation around 9:00pm last night? As an aside, this was a good point to try a well protected short. Overnight we tested a longer term support line (see my previous two posts) which held.
Finally, notice that recently this previous support line held as resistance just before 6:00am. I do expect it to be violated as the longer term support held -- but obviously we'll have to wait and see.
Here, I've got an example of a support becoming resistance once it has been violated.
Take a look at the following 15min chart:
See the violation around 9:00pm last night? As an aside, this was a good point to try a well protected short. Overnight we tested a longer term support line (see my previous two posts) which held.
Finally, notice that recently this previous support line held as resistance just before 6:00am. I do expect it to be violated as the longer term support held -- but obviously we'll have to wait and see.
Trading Week Recap
I've been leery of letting BREAD (my primary trading robot) trade too much. I suspect prior tweaks have it taking too much risk. As such I kept it on a short leash and it only earned 0.9% for the week. Perhaps I'll have time to make some adjustments over the weekend.
On the discretionary front I was back down to a more reasonable 13% this week. Last week's 34% was probably some type of market movement vs trading style confluence. These thing happen.
In other news I have a new Bollinger Band based robot in the works. An early version of it was trading this week -- earning almost %1 as well. More trials and adjustments to look forward to!
UPDATE: No time to do anything Forex related this weekend.
On the discretionary front I was back down to a more reasonable 13% this week. Last week's 34% was probably some type of market movement vs trading style confluence. These thing happen.
In other news I have a new Bollinger Band based robot in the works. An early version of it was trading this week -- earning almost %1 as well. More trials and adjustments to look forward to!
UPDATE: No time to do anything Forex related this weekend.
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