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Fun With Forex
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Fun With Forex

by The MoleSeptember 8, 2014

Equities are doing their thing and I’ve been entertaining myself otherwise. This morning I proposed two speculative entries, one of which may actually turn into something interesting. Let’s take a look:

2014-09-08_EURCAD

The symbols were EUR/USD and EUR/CAD – the former dropped lower (much to my joy – see the DX) and the latter is climbing higher. Now this may just be a one day affair but given the formations on the daily and weekly (2nd and 3rd panel) we could be on to something. Which is why I’m converting this into a daily campaign now.

2014-09-08_USDZAR_setup

USD/ZAR – I had my eye on this sucker hoping it would push back into that 10.8 zone – wish granted! I’m now short with a stop above 10.84. No long play if I’m stopped out – that 25-week BB is too close for comfort.

Only one setup for the subs tonight BUT it’s a super juicy one – not to be missed! Please step into my lair:

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About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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  • per

    Crazy tape. I’m being slapped around so need to exit to get my bearings right. I suffer from bullish bias right now and am looking to find a more neutral stance.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    I spit on the Spoos. never trust a large hourly candle.
    must be a volume hole or something at that level.

    http://s30.postimg.org/54xot1zch/es_fence.png

    -GG

  • BobbyLow

    My experience has been that nothing can damage my account more than a bias and that goes for both bullish bias and or bearish bias. Furthermore, bias can lead to worse things such as a deadly trading disease that I call “Whipped Dog Syndrome”. I still have a few scars from this disease and it has taken me a few years to recover from it. 🙂

  • Scott Phillips

    Wise words. It took me a long time to recover from the mental scarring I did to myself in the early days

  • Scott Phillips

    I just woke up, and my account is back on track, up 40K overnight. Took partial profits on NZDUSD at 2R (according to rules I tested over the weekend which show a 2R partial profit take improves SQN). Rest of positions as shown.

  • Scott Phillips

    It is a trading range. Trade accordingly. If you trade instruments or have an account that can’t be that nimble, then stand aside. The bullish case still has the edge here, the longer the range goes on the less influence the preceeding trend has

  • per

    Thanks – really appreciate the guidance.

  • per

    Thanks – sounds like I need to reset.

  • https://evilspeculator.com molecool

    You know – I have been saying that for a week now. Just saying… But if it takes for Scott to endorse so folks listen – well, whatever it takes – LOL 🙂

  • Scott Phillips

    In a trading range you should ONLY buy the lows, and sell the highs and scalp (take quick profits dont hold for a trend).

    How do you know if it’s a trading range? If you sort of think it might be a trend, but you aren’t sure, then it’s a trading range.

    A rule of thumb I use is that after 20 bars the influence of the preceeding trend is lessened and it becomes a coin flip. Up until that point the odds of continuation are around 60%, with the caveat that around 80% of individual breakouts (in long and short direction) will fail.

    Trading failed breakouts in trading ranges is one of the strongest and most consistent edges in trading.

  • Scott Phillips

    We sing off the same sheet, but I’m an asshole about it 😉 How’s the NN coming?

  • BobbyLow

    I didn’t like /CL’s hammer at the close of Open Outcry today and closed out my short via SCO at MOC for +2.4R. I also closed out my short of /ZN via PST at MOC for + .73R. No reason for closing /ZN (PST) except that my rule based stop is a long way away and the “Bull Dollar run is getting long in the tooth.” Earlier today, I also closed out my Short USD/CAD for -.66R loss so net closes for today was +2.47 R.

    Still open – Short NZD/USD and Long GBP/AUD

  • BobbyLow

    That’s a beautiful thing mate. Nothing like waking to the smell of a good cup of coffee and +40K. 🙂

  • Scott Phillips

    Well the day before was down 48K so it has to be viewed in context. When I backtested my system I couldnt take into account intraday correlated positions and as a result this was an outside the curve event.

    It motivated me to do some testing on partial profit takes and it improved the SQN markedly banking some profit at 2R. This should decrease open risk on winning positions and remove some of that effect.

  • Scott Phillips

    The coffee is actually the best thing! I can’t do *anything* without it

  • Scott Phillips

    Good decision on CL, we discussed it might turn into a trading range. Agree with you about bull dollar run, and the big GBPUSD gap has to be exhaustion this late in a trend. The end of that stage of the run is close now. So I think your GBPAUD, though counter trend is a good trade.

    I’m short NZDUSD with you (taken partial profits at 2R). New setups for today, Short ZC Z4 (extra position), ZM Z4 and ZN Z4.

    2.4R in a day is incredible mate, your system continues to outperform mine 🙂

  • BobbyLow

    I hear ya on coffee. Me too. Coffee is my last addiction along with the markets of course. No booze, no pot, no speed, no cigs, no nothing. But I can not and will not do without my coffee. 🙂

  • https://evilspeculator.com molecool

    I’m way beyond ANNs at this point – the quants have moved to more effective systems. Knee deep in code and it’s the most exciting stuff I’ve I’ve probably ever worked on.

  • https://evilspeculator.com molecool

    Simply abandon the need for ‘being right’. Once you wrap your mind around that it’s a completely new ballgame.

  • Scott Phillips

    My sponsor often points out all the ways in which I am still an addict 😉

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    QUANTS!?!?

  • BobbyLow

    As far as the markets go there’s probably a fine line between passion/dedication and being addicted to price action. The only thing I do know is that this is the only business that I can do 12 hours a day and love every bit of it. I really can’t call something that I love to do work.

    And my last addiction to coffee is the only one of my addictions that my wife is happy about. 🙂

  • https://evilspeculator.com molecool

    Yeah, I started on a new journey about six weeks ago after Scott and I hit a wall with Heisenberg and related development. So I delved into the world of machine learning and quite frankly I will never look at the market the same way again. Most of the stuff you see out there on the financial news/media/blogging front is Kindergarten stuff – designed to entertain retail and hapless fundies.

    Have learned a shit load and I couldn’t even begin to explain the stuff I’m working on right now… In a nutshell we are talking about market pattern discovery and genetic labeling of every single market wiggle on variant timescales. For me at least it’s a whole new ball game. Very cutting edge stuff and my math skills aren’t even close to being up to actually making full sense out of the underlying algos. I do understand how they work and I am able to beat the code into submission and have it do my bidding. In other words I’m kind of sliding along by the seat of my pants.

    If nothing else I now can answer questions that I never thought to ask – the data I’m getting is far beyond what I’ve ever seen out there. Give me a set of candles and I can tell you whether or not the same or a somewhat similar move has happened anytime in the past x years. Extreme pattern matching so to say. Probably being done in the murky depths of some prop desk quant brainiacs – for me it’s completely new turf.

    Hopefully something fruitful will come out of it.

  • Scott Phillips

    OUTSTANDING!

  • captainboom

    I only have one vice… lying about all the others. 🙂

  • https://evilspeculator.com molecool

    Okay, here’s an example – one of hundreds of patterns on the ES 240. Also enclosed the pattern profile which shows the similarity plot.

  • Scott Phillips

    Extremely cool 🙂

  • https://evilspeculator.com molecool

    Problem with ANNs is that they are prone to over fitting and that the algos often gets stuck in local minima (on the error profile – as opposed to optimizing for global).

  • https://evilspeculator.com molecool

    Tip of the iceberg as they say – I really can’t disclose much more right now.

  • Scott Phillips

    Go get that money! I backtested 3 sets of out of sample data and my real world results with taking half the position profit at 2R – in every instance roughly the same expectancy (small increase) but dramatic increase in SQN.

    I think there is a reasonable chance this ruleset works for 4hr or 6hr, looking forward to collating 3 months worth of data for you. So far real world results are about 80% of backtest.

  • Scott Phillips

    One question. What does the “bull dollar run” have to do with ZN?

  • Darkthirty

    There are no answers…as soon as you state a fact, you’re done making progress, for you must stop and defend your statement of fact

  • BobbyLow

    Probably nothing. At this point although still not totally convinced one way or the other, I can not find any evidence of a correlation other than the two attached charts that does show an inverse relationship from August 18th where /DX closed at 81.63 and has gone straight up while /ZN on August 18th closed at 126’09 and has had a steep decline since then. So this may be just a coincidence but it did catch my attention.

    http://screencast.com/t/dVDRwEwLlc37

    http://screencast.com/t/fC6T4dFrq3

  • Scott Phillips

    NEW POST!!