One RDT trade

As mentioned inΒ  my weekly wrap up, I shorted AUDJPY. RDT (read: Really Dumb Trend) system did well today. Nothing much to say, just profit target was achieved. Trade closed with +194 pips. What a week.

Here is the chart to inspire/show off/whatever…

audjpy_rdt_trade

I am done for the week. Time to catch Australian Open. I am all in for Roger Federer. πŸ˜†

Weekly wrap up

This is the week of USD. And this is the week of President Obama. IHF (read: I-Hate-Forex) system ran wild with Long USDCHF, Long USDCAD, Short EURUSD, Short AUDUSD, Short NZDUSD (after long NZDUSD stopped). All winners. All positions are closed. Some signals were deliberately ignore on Thursday session, as yours truly, the brilliant Trader Gav felt dollar was over extended, and refused to take on any risk to Long USD. πŸ˜†

Pretty quiet week for RDT (read: Really Dumb Trend) system. I have two signals at the end of Thursday U.S session. Short AUDJPY, short EURJPY. Something fishy going on with Yen. Yen is notoriously naughty to my systems. So, only AUDJPY position is taken with small size. So, right now, I am short AUDJPY.

Outside trading, my day job is coming to the end soon (bad timing huh). So I am actively looking for next project. In case you are interested to know, I am a very experienced Billing systems consultant (IT) for Telco or cable companies. Let’s see which country I am flying to later. It is not a surprise to see companies are struggling with budgeting problems, I expect a little more difficult to seal any deal. While confirming my next project, I am focusing on my automated trading system development project.

Life still goes on, trading still goes on well. Let’s see what market is to offer us next.

Hope you had a good week.

Thoughts from trading strategy development

One of my regular trading related work is constantly researching and creating trading strategies for my trading tool box. It is an interesting job. The programming, testing, and debugging areΒ  painful and sometimes, mind wrecking :-). But, it is still considered as mechanical effort, since we have the strategy, rules, the work is just translating it into codes.

The most interesting and tricky part that I have found is the process of developing the strategy.
There are always similar questions like,
“Why did the strategy did not catch this sell off?”
“Is the criteria too strict and missing out opportunities?”
“What should I do to avoid this loss due to choppy condition?”

So on….

Seriously, there is no absolute answer for these questions. The end result of trying to answer them will be nothing but curve fitting.

If there is one thing we must learn before developing a trading strategy is to accept the non-perfectness of it. Face it, no strategy or system is perfect. One should never try to “fine tune” or expect his system/strategy to fit all market conditions. You will have losses. You will have draw down. You might not agree with me, but that’s true. I hope this statement is hard enough to make you quit trading or at least quit developing your own system. πŸ˜†

The key point is to first understand the nature of your strategy. Be it a trend following, a range bound top/bottom picking or contrarian strategies, whatever. Understand it, accept the fact that losses will be there. There will be situation that your strategy does not work. And , also, the strategy should be developed in line with your own personality, ok, I am not going into it, but you got the point.

A simple rule I am using when developing a strategy or a system is to have positive expectancy with acceptable accuracy (winning rate). OK, I hear some people shouting about accuracy is not important as long as we have good positive expectancy. Well, it depends. Weak hearted small traders, are you really able to take the 70% failure of your system though you know it is having a positive expectancy in long run? You might be killed mentally. For more about this topic, read about my old post here .

Alright, that’s all . Just another piece of my random rant. I am going back to fix my program bug now….

And , yeah, once you’ve done, start live trading with extremely small position. You will be surprised. πŸ™‚

Weekly wrap up

I would say it was a little bit tricky this week. The RDT system went Long and short on EURJPY, Long NZDUSD, both were doing pretty good, except the Long EURJPY, which was a crap with -1R loss. GBPUSD was a discretionary trade. It didn’t meet the RDT system criteria, so the system gave it a miss. The rest of the week, I did some discretionary trades, which were not impressive at all.

Having a semi automated entry system helps. It saves me a lot of chart screening time. And it tortured me as well. πŸ˜† It takes really great patience to sit down and wait for the signal. I started some discretionary trade this week, when I was waiting for RDT signal. That was not a right choice. I should have spent the time reading instead of trying to show my brilliance (foolishness in fact) in the market.

So far so good for automation project. I am working on coding steps size trailing stops. I am doing it manually now to trail stops. I can feel the aging effect inside me. I am getting slower now when figuring out some program logic. Probably, I need more practice to gain my sharpness.Β  I am still waiting for my new PC to arrive. I purchased one on ebay to host my ATS program. Running the program on my laptop day and night is not a wise choice.

It’s all good. My system is still on, let’s see if I’ll have any trade on Friday.

Two RDT play: EURJPY, USDCAD

Here we go. My Really Dumb Trend system fires buy signal for EURJPY. It looks a little stupid… πŸ˜†

Anyway, let’ see how it work out, and who is the really stupid one.

eurjpy_1hr_rdt

(Click to view the full chart)

And here is Sell signal for USDCAD

usdcad_1hr_rdt