Friday, March 25, 2011

Meta-Trader - In like a Lion

Welcome back Meta-Traders.

Spring knocked on our door last weekend with some warm temperatures and sunny conditions. Warm enough to considering bringing the patio furniture out of the basement and onto the deck. But alas, we got whacked with another winter snow storm and another blast of cold bring recalling the adage "March comes in like a lion and out like a lamb." But here we are on March 25th and the Lion is still on charge. Oh well ..

For equities it was "Risk on" with equities rallying sharply from last week and retracing about half of the drop from the recent recovery high set a mere 5 weeks ago. I re-entered a 1/2 postion in Netflix, added to government IT contractor CACI and started a new position in Pharmacy Benefit IT provider SXCI. Also, a multi-year holding HMSY (also in the health care cost containment area) broke out to new all-time highs this past week.

On the Forex side, it was pretty quiet verus last week's fireworks. Let's take it from the top.

Atinalla #1 picked up about 2.5% for the week and is up a solid 26.83% on the year.

Atipaq Full Portfolio gave back just over 1% from last week's stellar action. It went out long NZD/USD with about 87 pips in open profits.

Megadroid Live pickup up about 3.5% on the week. Regarding last week's post, I put on a small short in USD/JPY just under 81. The pair went sideways all week and zig-zagged in and out of profit. I went out with a 39 pip open loss. My stop is at 82.10 and i'm sticking with it for now.

FX-Regression went on a tear and rallyed hard from last week but ended up giving some back at the end of the week.

Atinalla FE Live picked up about 2% from last week, but remains down -2.5% on the year.

Atinalla #3 Live had a brief recovery, but ended close to recent drawdown. This account topped out earlier in the year up +12 for the year, but as of now is up just +3.3% for the year.

Atinalla #4 SM Live continues to languish and lost just over 1% for the year.

Finally Coatl EUR Centered Portfolio had another spectacular week and is now up over 31% for the year (after running it only 3 weeks) with another 530 pips in open profits. This is the one to watch.

Overall, i'm pleased with how things are going. On average, my live forex accounts are up +9.39% for the year versus about +4.5% in the SP-500. In reality, its much better in Forex since 2 of my best performing accounts have twice as much funds as most of my losers. In any case, i'm keeping a conservative perspective, since we never know what's coming next.

Cheers and have a fine weekend. Take a rest, you've earned it.

Friday, March 18, 2011

Meta-Trader - A Nuclear March

Welcome back Meta-Traders.

It was an extraordinary week by any nearly any definition. The vast human tragedy that has unfolded in Japan is almost incomprehensible. The earthquake itself was described as a "1000-year event" and the tsunami overwhelmed the local defenses and laid waste to miles of coastline killing thousands and causing billions in property damage.

The disaster exceeded the design specifications for the 4-reactor Fukushima Daiichi nuclear power plant and knocked out both local and off-site power. This lead to a dangerous overheating of the reactors and a series of explosions which left the plant spewing out radioactive material. Is this scenario - natural disaster causes nuclear accident - a 25 Sigma Event?

Equity markets hated this of course which sent stock markets plunging around the globe. Quaddfi was now merely a distraction from the massive loss of life and property in Japan. Not to mention the loss of economic output in Japan which is the world's 3rd largest economy. As if all that weren't enough, the prospect of an out-of-control nuclear reactor is enough to put anybody on edge. All this nasty business made for some good forex trading, so let's do the numbers.

The week started on the right foot when Sunday gap trader DCT pulled in about 60-pips in the first 2.5 hours of the Sunday open.

On Tuesday, USD/CAD went parabolic and raced up about 200 pips stopping just short of par. Recall I noted last week that I wanted to sell parabolic up-moves in USD/CAD. Unfortunately, I missed this move and within a few short hours, it USD/CAD was back down to the 0.98 area. So I missed the chance on that move, but here's where it gets interesting.

On Wednesday afternoon at about 5PM EST, I was just minding my own business when USD/JPY completely fell out of bed and plunged through long-term support levels at about 0.80 to a new all-time low for this pair (high for the Yen) at 0.76. I checked for news and couldn't find any and found it interesting that this type of large move would occur outside of both US and Japanese core market hours.

Call it Yen repatriation, call it unwind of the carry trade, call it hedge fund repositioning. In any case, I saw opportunity and I went long USD/JPY on the bounce back to support and picked up 82 pips in about an hours time. You can see that trade, the DCT trade and a pair of sucessful Megadroid trades reflected in my Megadroid Live account which had a pretty decent week.

On Friday the G7 countries announced a coordinated effort at central bank intervention to keep a lid on the rising Yen. This alone was an extraordinary event and we haven't seen a move like this in over 10 years. Personally, I don't think it will work and I think the USD/JPY will revisit last week's low in the coming week. I didn't back this opinion with a position though.

The systems over at Asirikuy systems had some amazing results and we will see below.

The winner in terms of live accounts was Atipaq Full Portfolio Live which pulled in an astounding 18.95% for the week which was over 1100 pips! I've reflected further on how Atipaq trades and have these key observations:

- Take profit is roughly 3 times the box size, and stop loss is the bottom (or top for short trades) of the box size, so take profits are much larger than losses

- The system can get into multiple long or short trades (one per day) on the same pair in the same direction. It holds them until as long as it takes for them to hit the TP or SL.

- In my case, the system was short 3 trades NZD/USD and 3 trades of AUD/USD trades which all ran to their take profits.

As if that weren't enough, it the system went into the weekend with over 100 pips in open profits. Thank you Daniel Fernandez!

Next up was Atinalla #1 Live which picked up just under 1% for the week but went into the weekend with about 58 pips in open profits.

Next up was Atinalla #3 Live which was down about 0.8% for the week and went out with about 47 pips in open losses.

My own EA FX-Regression Live gyrated around the zero point.

Next up is Atinalla FE Live went to a new equity low early in the week down about -6.5% but came back somewhat later in the week and went into the weekend with an open profit in a long EUR/USD position.

Finally Atinalla #4 SM Live was down fractionally for the week but went out long with about 50 pips in open profits.

One last word demo account COATL EUR Centered Portfolio had a spectacular week picking up 11.59% for the week. Even more impressive is that it went out with an astounding 2700 pips in open profits! That's an incredible performance and pretty unbelievable for a forex robot. Keep up the great work Daniel Fernandez!

That's all for now and let's keep the brave people of Japan in our thoughts ..

Friday, March 11, 2011

Meta-Trader - When it rains ..

Welcome back Meta-Traders.

Winter took a final swipe at the Northeast US this past week. Torrential rains combined with saturated grounds and melting snow lead to flooding in many low-lying areas. This photo was taken this past Monday in Elmsford, NY not far from your author's home.

Events in Japan were much worse where a major earthquake and resulting tsunami left many dead and millions in property damage. These events highlight the sheer destructive power of water which is ironic given the fact that water is vital to our existence.

Investment lessons? Never buy real estate in a flood plain or other low-lying area regardless of how much of a bargain it seems. High ground is the way to go.

On the Forex side, the quake in Japan led to a quick 1.5% selloff in the USD/JPY which broke a recent uptrend in place in since early February. On the daily chart, USD/JPY has been in an up-trend since September of 2010. There's no doubt that Japan will recover since they are perhaps the most productive, well-organized and technologically advanced country on the planet. So this sell-off in USD/JPY represents a buying opportunity in the pair. Out of disaster often comes opportunity and it's no different this time.

On the equities side, I got whip-sawed and shaken out of last week's 1/2 position in Netflix (NFLX). On the plus side, I took profits in AVGO and QCOM and I have some good realized profits for the year. I'm content with a high cash position at this time. Let's take a look at the forex robot accounts.

Atinalla #1 had a decent week and picked up about 1.5% on the week with a one losing trade and a winner about twice its size. The system went into the weekend with a long trade in EUR/USD showing a decent profit.

Atinalla #3 had a setback shedding about 3% for the week. This system has been in retreat since hitting a new equity high back on 2/24/2011.

Megadroid Live had a decent week and picked up about 1.2% on the week.

My own EA FX-Regression had a good week and picked up about 3.5% on the week and came back into profit for the year. Atinalla FE was idle for the week.

Atipaq Full Portfolio got out to a new equity high early in the week, but gave most back by the end of the week. The system went out with about 0.6% in open losses.

Atinalla #4 SM finally had a winning week and is still struggling to get back above even.

Newcomer Coatl EUR Centered Portfolio gave back some of last week's profits but went out with a whole bunch of 0.01 size position all over the EUR board. I'm not sure if this portfolio is trading properly but we'll find out.

Finally, if you are trading my own EA FX-Regression, please set the Startup Hour back one hour to compensate for Daylight Savings time adjustments which take affect in the USA this weekend.
Have a great week all!

Friday, March 4, 2011

Meta-Trader - Pain at the Pump

Welcome back Meta-Traders.

We started to see the downside of politicial instability in the Middle East here in the USA. Gasoline prices had the highest-ever one week spike gaining between 5% and 8% in a few short days. This fed fears that the fragile global enconomic recovery would sputter.

Most disconcerting was a sagging US Dollar which usually catches a bid when risk comes off. USD lost just over 1% on the week as measured by the US Dollar Index (DXY) and about 1.6% versus the EUR. These developments leant some credence to the perma-bears which have been preaching food riots, hyper-inflation, and general social breakdown for quite some time.

Equities continued last week's slide and caused me to wash out the big three tech positions (Apple, Amazon and Netflix) early in the week. I stayed out of these 3 and missed out on a sizable rally on Thursday but made out okay on the rest of my positions. I re-entered one half of Netflix on Friday and added to a monster rally in health-care cost-containment play HMSY which broke out on Friday in parabolic fashion. I'll be watching AAPL closely for a breakout of the $365 area to reload on the long side.

On the Forex Robots front, it was drawdown pretty much across the board.

Leader Atinalla #1 Live pealed off about 7% for the week on a choppy USD market full of head-fakes and false breakouts.

Next up was Atinalla #3 Live which gave back about 3% on the week, but went out with a decent open profit in a long GBP/USD trade.

My own EA Fx-Regression lost about 3% for the week and remains down about -3.6% for the year. I entered a short position in USD/CAD on a price spike early it the week which I closed out later in the week for a 10-pip profit plus a few cents rollover interest.

I've been watching the USD/CAD and its clear its been a major downtrend for some time. I closed the position since this account is pretty much for FX-Regression, and i'm going to use the Megadroid Live account for further fundamental trading.

An interesting thing occured to me regarding the Carry Trade. Currency should be as simple as just positioning yourself of the right side of the swap and collecting the daily interest. But its not, of course and why? Because those on the collecting side of the swap are punished by adverse price moves, intended to shake the big money out of the hands of the carry traders, and into the hands of the brokers.

What does this mean from a trading perspective? It means pick a direction and wait for a price spike adverse the primary trend, and put on a very small position in favor of trend resumption. I'll be looking for opportunities in USD/CAD this coming week.

Atinalla FE Live missed out out on some trades in my live account due to "Trading Disabled - Server Issue." Need to look at the Asirikuy forum for that.

Atipaq Full Portfolio had a very interesting week. At one point it was down -5%, then later in the week up +5%, and finally settled up +1.09% in open trades. With breakout system Atipaq running on 6 pairs, there's a lot going on in this account. For a refresher, check out my review of Atipaq here.

Atinalla #4 SM Live had a lackluster week and lost about 1%.

New comer Coatl EUR Centered Portfolio had a good week picking up about 4% in closed trades. It went out with a little over 1% in open losses, so we'll see what happens. This system deserves an entire blog post to figure out everything that's going on. The way things, are going, I may not get to it until summer vacation.

On a final note, CNBC launched a new currency-only half hour weekly show called Money in Motion. Check your local listings. I'll be adding this to my mix of daily recording for later playback.

My current lineup is:

- Nightly business report - PBS
- News Hour - PBS
- Mad Money - CNBC
- Fast Money - CNBC
- Options Action - CNBC

Take care all and have a great week!