Crazy.Ivan

Introduction

We are pleased to offer an automated trading strategy which represents a modified subset of price patterns originally invented by Ivan Krastins. We have decided to call it CrazyIvan in misguided homage of its original creator.

 

What Is it?

CrazyIvan is a mechanical trading system for 8-hour Forex charts which trades on five of the most popular forex pairs (i.e. EUR/USD, GBP/USD, AUD/USD, AUD/JPY, USD/JPY) as well as the gold futures.

 

Results

Our live trade log is available here – this is a Google spreadsheet that will be automatically updated after each completed campaign.

 

How Does it Work?

It’s very simple. After you sign up for CrazyIvan you will start receiving emails (also SMS after beta testing) alerting you to take entries or to close them at particular price points. Each entry alert will come with an initial stop, which may be amended as the campaign progresses. Here’s an example:

CrazyIvan.EURUSD.480 Alert #47 at 1:00 PM EDT

CURRENT MKT POSITION: Flat

ACTIVE ENTRIES:

LONG SIGNALS: IP-L
IF BUY EURUSD STOP @1.28445.
THEN SELL EURUSD STOP @1.277.

RISK: 74.5 pips.
RISK RATIO: 1%.

EXPIRES:
New York: 10/16/2014 7:00:00 AM Eastern Daylight Time
London: 10/16/2014 12:00:00 PM GMT Daylight Time
Tokyo: 10/16/2014 8:00:00 PM Tokyo Standard Time

This alert tells you that an Inside Period long entry is currently active on the EUR/USD currency pair at 1:00pm EDT. The suggested entry is at 1.28445 and the ISL is at 1.277. The quoted risk and ratio in the alert is equally important as it shows your risk exposure in full pips (or ticks on the futures side). In this case your risk will be 74.5 pips. Before taking your trade you now can use our handy Forex Risk Calculator to accurately compute your position size. It’s a rather nifty little utility we hacked up that may become handy to your discretionary Forex trading as well.

2014-11-15_CI_risk_calc_1

So given the above buy alert, $100,000 in trading capital, and a risk ratio of 1%, you would be buying $134,228 worth of the EUR (i.e. the amount of money you know control), which is a bit over 1 full lot, 13 mini lots, or 134 micro lots. It is crucial that you stick with as precise a position size as possible thus reducing your risk to not more (and not much less) than the chosen risk ratio (in this case 1%, which is what we recommend). If your FX account permits it use fractional lots to approximate the suggested positions size as closely as possible.

The exit or stop alerts you will receive are short and to the point:

CrazyIvan.EURUSD.480 Alert #48 at 5:04 PM EDT

EXIT REMINDER: Sell at 1.288 and clear all stops.

CrazyIvan does not have defined targets at the onset of a campaign. You will be alerted when an exit condition has occurred or when your stop has been hit. Of course it is crucial that you set your stop in conjunction with your entry – we recommend that you place a conditional order via your trading platform (or via your broker), thus allowing you to walk away and forget about the trade.

For a much more comprehensive review of the CrazyIvan messaging system please point your browser to the order flow page.

 

Edge & Statistics

Extensive back and forward testing suggests that CrazyIvan eeks out a small edge (between .2 and .5 R expectancy per trade depending on market conditions) over many trades per year (300 trades per year with some filtered out). The 360-minute system, traded correctly will generate 50R in a normal year, slightly less in a bad year, and over 100R in an exceptional year. It takes an average of 6 trades a week. Scott has never seen a peak-valley drawdown higher than 15% though it is absolutely possible. As you already know – past performance is no guarantee of future results.

The win rate is not exceptionally high, in a good time 60%, though averaging 54%-57%. What makes it work is that the average win is larger than the average loss. So you CANNOT be trying to guess which setups are going to work.

 

Equity Curve Filter

In early 2014 we decided to implement an equity curve (EC) filter into CrazyIvan. The reason for doing so was the realization that CrazyIvan exhibited high dependency, meaning it was cycling through distinct clusters of winning and losing periods. Here is a recent reason example that demonstrates how our EC filter works:

2015-05-24_CrazyIvan-EC_filter

Granted this is a rather idealized occurrence and our EC filter may sometimes activate or deactivate a bit late, which is unavoidable. As there apparently is a high correlation between winning and losing streaks between the symbols CrazyIvan trades and winning campaigns can run for a day or more the EC filter keeps an open cache of open positions in addition to a list of completed historical campaigns. You can find more information about our EC filter here and here.

 

How To Make It Work

Ivan’s setups do well in any time with sufficient volatility, and do incredibly well when volatility is rising off a sustained period of low volatility. They flat out suck in choppy sloppy markets. You absolutely must understand the magic of compounding, and trade perfectly with perfect position sizing. Even though conventional wisdom is 2.5% of capital risked per trade for a system like CrazyIvan.480 in our opinion this is too high. We would recommend 1%, recalculated for every trade so in effect you are compounding during the year.

You must exit when the system tells you to. No hanging on to trades, no trying to time an exit for an extra few ticks, no pyramiding, no nothing but following the rules. We also strongly suggest that you set your orders, and an alarm on your watch/phone to come back in 8 hrs. We never screen watch trades, it is mentally fatiguing, it induces errors, and is counterproductive to good trading. Trading CrazyIvan means set and forget. Almost always you will only have to adjust your trades at the 8hr rollover on the 480 versions. All trade alerts will be numbered and contain the name of the instrument as well as the chart interval (see example trade alerts above) so that there never is any confusion.

 

Price

CrazyIvan is available for $149.-/month. Subscribers will receive email alerts (you can set yourself up for free SMS by following the instructions here). If you like what you see – don’t hesitate and sign up here.

 

Words To The Wise – Please Read BEFORE You Sign Up

Patience: Trading alongside a black box takes discipline and patience. You might subscribe and find starting off during a losing week or two. If you follow a trend trading system then you need to give it time. Sometimes you might get lucky and bank profits right away but consistency is the key and you should be prepared to give CrazyIvan at least two to three months. I’m not saying that because I want to squeeze more subscriptions out of you guys – this is a very basic concept when it comes to automated trading and there is plenty of documentation on that subject available online.

Consistency: There is another aspect to consistency worth remembering – let’s say you sign up and you run into a losing week or two. At the end of the month you skip for a month or two and then come back – there is a good chance that you just missed out on a great run as the best time to join a proven trading system is when it just had a drawdown. Case in point: If you for instance signed up during summer 2010 and threw in the towel during the early summer doldrums then you just missed out on a monster run starting in July all through mid January 2011.

Mechanical: That’s how you will have to be – even if it hurts. Don’t look at your charts – that’s what your discretionary trading is all about. Be aware that if you commit yourself to trading CrazyIvan there is only one way to do it and that’s the Evil Speculator way. There is no second guessing or waiting for a ‘better entry’. You execute the order when you get the signal. Over time you might see things that you believe will improve your odds – fine – if you can make it work that’s great but if you break the system and start losing money please don’t come and complain to me. If you are going to trade mechanically, it is IMPERATIVE that you take every single trade. All the time, no exceptions. As a cherry picking exercise this will flat out lose you money.

The Future: No one knows how high or low a market will go. No one knows when a market will move. You can’t undo the past and you can’t predict the future. Prices, not traders predict the future.

What You Know: Using ‘common sense’ is not a good way to judge or trade markets. If common sense would equal success in trading the markets we’d all be millionaires and the SPX would be trading around 400 right now.

Losses: Face it – they are the cost of doing business. No one (not even a well tested system) can be right all the time. No one can make money all the time. System traders expect and handle losses with objectivity and detachment. If you don’t have losses, you are not taking risks. If you don’t take risks you won’t profit – simple as that.

Capital: Don’t get greedy. For every $25k you have in capital we strongly suggest that you trade one ES futures contract max – for every $10,000 you have in capital trade one NQ contract max. Do not stray from this rule. This is also the reason why your broker’s margin requirements do not matter. What does matter is that you won’t feel too much of a pinch when you lose – and you will lose often. The key is sticking with the system and in order to assure that you need a comfortable ratio between your available capital and the risks you take.

Please do not sign up for CrazyIvan if you disagree with any of the tenets listed above – you won’t do us or yourself any favors.

 

A Few Pointers

Alright, before you jump the gun and sign up – here are a few pointers:

  1. I strongly recommend that all CrazyIvan subscribers refrain from using the following webmail providers: Yahoo/Hotmail/AOL/Verizon/ATT/MSN. If you do use one of those then hop over to GMail and sign up for a free email account. GMail has the best spam filtering on the planet right now and thus far there have been no issues with folks receiving our alerts.
  2. Please make sure you read the CrazyIvan page in its entirety – in particular I recommend you review the before-you-sign-up section. That should probably cut down on 90% of the emails I will receive :-P
  3. When you sign up you have an option to provide your SMS number. First up, make sure that you follow the input format as described in the form (i.e. no plus, no leading zeros, no spaces, your country code, etc.). Second – if you provide the SMS you will receive both email and SMS alerts. If you start seeing emails but no SMS arrives please let me know (admin at evilspeculator) and I’ll try to find a better route for your mobile provider.
  4. I have kept the subscription format on a month-to-month basis for now – there is no auto-pay. Once your subscription has expired you’ll have to extend your subscription from your membership page. Nevertheless – I want to make it clear that trading a blackbox system takes a 3 month commitment minimum, which hopefully should not come to a big surprise to you. This is not a system which will make you tens of thousands with one contract in a matter of days. Look at the profit graph of the past year and judge for yourself.
  5. You know the old mantra: Past performance is no indication of future success. I have tested the crap out of this thing and have great hope that it will continue to perform but as you know – black swan events happen and when it comes to trading there are no guarantees.
  6. There will be days when CrazyIvan does not get an entry trigger – please do not send me constant emails asking me why it’s not trading today. The system is the system and it’s possible to have a straight up or straight down day and there are not trades being taken. On average there is about one trade every two days.
  7. If you like what you see – you can sign up here.

Frequently Asked Questions (more to come):

Q: If there is slippage between your alert and the current spot price should I go with the exact stop as indicated or should I modify it?

A: I would set recommend setting it as directed. Of course there are times when the tape moves away from you very fast in which case you may decide to add the lost pips as part of your additional risk. Always err on the side of caution.

Q: On some occasions I am getting fills by my broker per the alert but it seems that CrazyIvan didn’t trigger. What should I do – stay in the trade or exit?

A: Basically in a nutshell – if you get filled and do not receive a trade confirmation alert we recommend that you exit immediately and remove your stop. Unfortunately this can not be avoided completely as there are slight differences from one Forex feed to another plus your mileage may vary even depending on your account size. Given who you clear through it’s unfortunately also possible that your broker is screwing you via spreads that you would never see via popular ECN brokers like Interactive Brokers for instance. So if this happens a lot (more than once or twice a week) then you may want to take a closer look at your broker’s spreads and if you find spreads as wide as parking lots take your business elsewhere.

Q: Will you be making an Excel or Google docs spreadsheet with the recent trade history available to subscribers?

A: Yes, the trade history is now live and available here. We update the charts at the top of the spreadsheet once a week but if you scroll down you will see the latest trades right after they finalize.

Q: Where can I access the data feed for CrazyIvan?

A: Just to make this clear – CrazyIvan is a black box trading system. There is nothing to watch – it’s not an indicator/oscillator like the Zero. All you will receive are email/SMS alerts indicating when CrazyIvan is executing a trade.

Q: Does CrazyIvan include the Zero data feed or is that separate?

A: Nice try! 😉 No, that’s a separate subscription – one has nothing to do with the other and CrazyIvan is not based on the Zero.

 

How To Create A Gmail Filter For CrazyIvan

I usually recommend Gmail as an email account as it’s most reliable and also the fastest. I also suggest that you create a special label (i.e. folder) in your Gmail settings. As a side benefit this will also prevent Gmail from labeling any CrazyIvan alerts as spam. Consider this your 10 step program to getting your CrazyIvan addiction under control:

1) Log into gmail (that’s the easy part)

2) Click on Settings:

 

3) Click on Labels:

 

4) Click on ‘create new label’ near the bottom of that page:

 

5) Call it ‘CrazyIvan’ (or whatever you want) and click on ‘create’:

Note: This is a simple example and I would recommend that you create one filter per currency pair and time interval, e.g. Crazy.Ivan.EURUSD.480. This will allow you to quickly sort through the alerts and also assure that you don’t miss any of them.

Note: If you want to receive free SMS alerts via IFTTT.com then you need to label the alerts ‘CrazyIvan’ (including the dot). If you want to call it anything else then you also need to update the label in the IFTTT recipe. I hope that is clear.

6) Click on Filters:

 

7) Click on ‘Create a new filter’ which you’ll find on the bottom of your filter list.

8) Add the words ‘CrazyIvan Alert’ in the subject’s ‘has the words’ field:

Note: If you are setting up separate filters (i.e. folders) per currency pair, e.g. CrazyIvan.AUDJPY.480, then use the following more explicit format instead: ‘CrazyIvan.AUDJPY.480 Alert’ (without the quotes).

9) Click on ‘create filter with this search’.

10) Select the right label (i.e. folder) to link it to:

For instance in this case I used CrazyIvan.AUDJPY.30 as my label as I want all those in one single folder [update: CrazyIvan is not available anymore – only CrazyIvan 480]. I’m also selecting ‘never send it to spam’ for obvious reasons.

10) You are done! In the future all your alerts will be placed in your CrazyIvan folder.

 

How To Receive Free SMS alerts via Gmail

1) If you have not done so already, create a Gmail filter label called ‘CrazyIvan’ – instructions here:

2) Point your browser to http://ifttt.com.

3) Click on ‘join’ in the top right corner:

4) Select a username, email address, and password:

5) That is it – now click on this link: https://ifttt.com/recipes/107429

5) Activate Gmail and SMS further below on that page. The process is easy and pretty procedural. Takes two minutes max.

6) Press ‘use recipe’.

6) That is it – you are done. From now on you will receive any Gmail messages labeled ‘CrazyIvan’ via SMS.

Tip: If you ever want to change your SMS number go to https://ifttt.com/sms and click on ‘edit channel’. Easy.

 

How To Receive Free Jabber Alerts Via Gmail

If you haven’t signed up for a Jabber account and are interested then please write me an email to admin@ with your current ES username and the password you want. I have tested several Jabber clients, so here is a list of my favorites:

Android

iOS

For Windows there are a ton, so check the whole list. On OS X the list is a bit shorter but I like Psi – works like a charm. Usually all you have to do is to enter username@evilspeculator.com as your login and the password you sent me in order to connect. A few clients require only the username and the server name separately but I’m sure you can figure it out – if you run into trouble please let us know.