Meta-Trader - Rocking in the Euro Zone

Welcome back Meta-Traders.

EUR/USD rocked the house this week and cleared the October 2010 peak breaking out to a new 2-year high. That's a big deal because every system traded on this blog has at least one EUR/USD pair and 2 of them are nothing but EU. EU is very trendy and if you look at the chart, there's very little sideways movement, it either goes up or it goes down.

Combine that price action with trend continuation logic underlying most of the systems followed here and it makes for the good results as we saw this week.

As for equities, we got out to a marginal new high in the major indexes, but on low volume. Equities continue to be the place to be with near-zero interest rates from the US Fed. As for equities trading, I started new positions in Yoga-pants retailer Lulu-Lemon (LULU) and on-line reservation play Open Table (OPEN) on breakouts above the 90 dollar level. I added to semiconductor play NXPI which made a new all-time high then sold off. We ended the week in poor form on a threat of a looming shutdown in the US government due to lack of agreement on the 2011 (that's right, this year's) budget.

On the forex side, it was a week to remember with gains nearly every live account, some of which were spectacular. Let's do the numbers.

The monster winner of the week was Atipaq Full Portfolio that gained nearly 6% for the week and is now up just over 29% year to date. Even more impressive is the fact that this system went out another 8% (752 pips) in unrealized gains!

Next up was Atinalla Full Portfolio that gained about a half percent on the week and went out with about $20 in open profits.

The old steady Megadroid Live picked up 1% on the week.

My own EA FX-Regression had a decent week and picked up about 1.3% for the week. Check out April 5 where FX-Regression pulled in 80 pips in not much time including a USF/CHF that picked off 20 pips in about 5 minutes!

Next was Atinalla FE which came back into profit, coming back from a -2.5% deficit last week and now showing up 0.65% on the year.

Next was Atinalla No 3 Live was the only loser dropping about 2% on the week and still in retreat after being up nearly 12% earlier in the year. This account continues to be caught up in the sloppy action of GBP/USD which doesn't seem to be participating the broad dollar sell off. This account went out with an open, unrealized profit and is still long EUR/USD.

My last live account is Atinalla No 4 SM Live picked up about 1.3% on the week and went out with about 170 pips in open profits, more EUR/USD longs.

Demo account COATL EUR Centered Portfolio gave back about 5% on the week, but still remains up a solid 26% on the year.

As for development items, I need to start paying attention to the results of the 70+ live accounts on Asirikuy and building a model for what is currently working and what is not. If I come up with right model, and spend a few minutes each weekend updating the model, I may be able plant myself in some real winning systems.

Once I have the model, i'll come up with an easy, visual tracking method that I can post weekly on the blog that allows the winning systems on Asirikuy to come easily into view without revealing too much. This type of activity is much less ambitious than I expected from myself, but given the limited amount of time I can spend on Forex, this shows the best chance of success.

As Yogi Berra said "You can tell a lot by just looking".

Check back Sunday for an update and have a great weekend.

Meta-Trader - Fx-Regression Live vs Backtest Results

Welcome back Meta-Traders.

Here are the results of a back to live test consistency check on my own Expert Advisor called FX-Regression. Since the system back-tests fairly well, the goal is to determine if these back tests are somehow flawed and will not be reflected in actual trading.

For the period of January 12, 2011 (when I started trading live) through March 31, 2011, here are the results:

- Results of trades was plus $41.71 or about +4.7

- Total Net due to Interest roll was minus $3.19

- Net P&L was plus $38.52 or about +3.5%

The period does not include the trade opened on 3/31 and 4/1 which resulted in a loss and put the account back into the negative. Attempts to reconcile the actual and live trades ran into these challenges:

- Back tests run on Forex.com showed a high number of chart mismatch errors, so the results had to be discarded

- Back tests were derived from Alpari US instead

- We had a clock change due to daylight savings. For live trading, I changed the start time for the trade to keep the start time consistent with US Eastern time, caused a shift in start time on the server that was not properly reflected in the back test.

Overall, the back tests showed the account down $60 or minus 6% for the test period. A detailed comparison of the trades for each symbol showed the following:

- EUR/USD took 40 live trades an about 30 of them were consistent the back test

- USD/CHF took 29 live trades and only 12 were consistent with the back test

- USD/CAD took 24 live trades and only 9 were constent with the back test

For cases where the live trading and back test didn't check out, we saw nearly every possible situation:

- Profits in live trading that showed as losses in the back test

- Profits in live trading that were missing altogether from the back test

- Losses in live trading showing as profits in the back test

- Losses in live trading that were missing altogether from the back test

Conclusions are difficult to come by with such a jumble of data. The fact that I got the closest results with EUR/USD show the spread-senstive nature of this trading system. Back tests used a fixed spread of 2 pips for EUR/USD, 3.5 for USD/CHF and 5.0 for USD/CAD set with the Asirikuy back test setting program. Differences between these values would cause the exact symptoms were are seeing:

- Back testing missing trades that executed in live trading

- Live trading taking profits that turn into losses in back-testing

But it doesn't necessarily account for cases where the back-testing was profitalble but live trading was not. These may be accounted for by differences between the simulated feed used for back testing, and the real-time feed used for trading

Overall conclusion is that back tests with this system bear at best a sketchy resemblance with live test results. Larger SP and TL values would reduce the size of the error cases not by eliminating the underlying problems - but by reducing the number of times they occur. Actual trading results - at least for the test period - were better that back test results. Whether this conclusion pans out for the rest of the year remains to be seen.

Have a great week all.

Meta-Trader - Out like a Lion

Welcome back Meta-Traders.

The first quarter 2011 came to a close this week. On the weather front, the spring lamb still hasn't arrived and the winter lion still remains well in charge. With pool season a mere 6 weeks away, spring and summer better get a get a move on!

Global equity markets continued their gravity defying climb. With a healthy dose of end-of-month and end-of-quarter window dressing, many stocks recovered nicely from their March 16th lows and ralled back nicely. As is stands now, the S&P 500 is just about 1% off the highs set back on Feb 18th.

The fly in the ointment of the global economic recovery continues to be risking energy prices. Crude oil prices got out to a 30-month high and was up nearly 2.5% for the week and up 27% from a year ago. I'm holding a small amount of ETF USO as an energy price hedge but overall i'm underinvested in energy.

My week in currencies was less than spectacular. I reversed my short in USD/JPY and went long on Sunday evening. I took a small profit on the long rather than letting it run which was clearly a mistake since I could have picked up abou 250 pips had I just stuck with it. Also, I manually closed out some losing trades in Sunday gap trader DCT. So overall, I was not in good trading form with this account and as a result Megadroid Live lost about on half of 1% on the week.

As for the robots, the week's winner was Atipaq Full Portfolio which picked up about 2.5% on the week. Even better, it went out with about 318 pips in open profits on a trio of NZD/USD long trades!

Every other live acount was down so let's get through them quickly.

Atinalla No1 Live lost about 1% for the week but went out long EUR/USD with an open profit of about 75 pips.

FX-Regression sliced through its recent profits losing about 4% for the week and went out down -1.77% year to date. Now that the quarter is over, I need to do a live / back-test consistency check. Perhaps I can get that out tomorrow.

Atinalla FE was idle for the week.

Atinalla No3 lost about 1.8% on the week, but went into the weekend with 74 pips in open profits.

Atinalla No4 lost about 0.8% for the week and seems doomed to continue to lose money.

Demo account COATL EUR Centered Portfolio but went out with about -451 pips in open losses.

Finally a quick note to my friend JT since his blog no longer accepts comments. The Zulu platform encourages unsound trading tactics and all the newbie users are drawn to these signal providers like bees to honey. Eventually, the provider goes off the cliff and takes down all the newbie users and takes away their money. I should know since I was once one of them.

That's it for now. Enjoy your weekend and get some rest.

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.

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 ..

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!

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!