Archive for April, 2010
Results for many of the strategies are available online, anytime. You can check them out yourself, or show friends the results of the strategy that you use on your live account.
Check out the links at the top of the blog.
All settings for these results are available under the Strategies section.
Remember a few weeks ago, we mentioned at the meeting that we were trading Smart Trader on every pair, in order to find the best pairs to work with? Well, last night we showed some results that are VERY encouraging. A few weeks ago, I started a trading trading station with a group of 4 currency pairs using Smart Trader. Once I set it up, I let it run without any supervision. After about 4 weeks trading the Smart Trader – 4 Pair account balance was up 68%! It has zero (yes, zero) losing trades!
…pause for effect…
Now for those of you who want to point out that there may be current open orders, you’re correct there probably are some open orders. For everyone else, go to the Statement Tab and look at the open orders at the bottom of the page. You’ll find (as of this posting) that some of the open orders have been hanging on for quite a while. This provides an excellent opportunity for all of us to review one of Philip’s classes regarding “closing orphans”. Following Philip’s training, any member running this on a live account would have checked the account daily or every other day to determine whether any trades were being “orphaned”. By employing Philip’s great pointers, this account would have a higher return. So, to recap, the account’s equity increase (as of this posting) is 48%.
— UPDATE —
This ST4Pair account was started with the theory that we wouldn’t close orphaned trades in order to see how it would react to changes in the market. The orphaned trades had a detrimental effect on the account, and it took almost 6 weeks for that effect to overwhelm the account’s growth. Now, you and I both know that there’s not a trader out there that will ignore a live account for 6 weeks! So, if you follow the strategy suggestions we have listed here on the blog (click on Strategies on the right), your ST4Pair account will behave differently.
As you can see by the pie chart here, trading with 4 pairs provided more stability in the strategy. You’ll notice the EURJPY and GBPJPY were more than twice as active (active in the particular way that Smart Trader prefers) than either the EURUSD or USDCHF. And of course, this activity may adjust as the market changes. So, a few weeks or months from now, other pairs may produce that same activity that Smart Trader prefers. But don’t worry, Windsor Park FX will continue to provide you with updated results on the individual pairs we trade on Smart Trader.
See you next time!
Hello everyone! I wish to all of you in the USA, a Happy Tax Day! Congratulations, now you won’t have to think about taxes until next year!
Okay, now that that is taken care of…
Today, we are going to cover the Average Daily Range (ADR) and the Average Monthly Range (AMR) relationship.
Why do you care about ADR and AMR?
Here’s a visual explanation:
GREEN: A currency pair with a big daily range and small monthly range provides lots of day to day retracement.
RED: Daily Range is low and the Monthly Range is large, so the currency pair is trending up or down.
BLUE: Both are high. Any currency pair in this quadrant has a lot of movement. To stay conservative with this much volatility in the pair, you’ll definitely want to trade smaller lots and fewer trades.
ORANGE: Have you ever heard the sound a bee makes when it’s stuck between a glass window and window screen? That’s the same sound this currency pair makes as it buzzes along. It’s hard to find profit when there’s so little movement.
Below are charts pulled from Gallant FX. They include the Average Daily Range (20 days back as of 04-15-10), and the Average Monthly Range (3 months back as of 04-15-10). All the numbers below are quoted in pips, not micropips:
Now, you see here the value, in pips, of each currency pair’s ADR and AMR as of 04-15-2010. You’ll also notice the ratio of AMR over ADR (average was 3.74). Each currency pair’s GREEN ratio corresponds to the GREEN quadrant in the diagram above. They have a Low AMR to High ADR ratio.
This ratio helps all Members, including myself, to narrow down and focus on which pairs will perform better when using different strategies.