Warr-duc: AUS/YEN

[Warr87]

Some ideas that have been rattling around in my head.

Could be good to include a MA from the daily/weekly timeframe to help confirm longterm trend. I tried to include those MA's on my chart on a smaller timeframe but it wouldn't let me. I wonder if a custom indicator would allow me.

In the past I have found that the MACD, for example, is simple and effective and works well with something else. So, (for some outloud ideas), would the MACD on daily work with the addition of it on the weekly on as well. Or, MACD on daily with the weekly MA to confirm direction of trend.

Those are all very basic but I think they may work. Or maybe not. But will look into it.

 

[Warr87]

This looks promising.



Blueline is the daily 10 period EMA, the chart itself is the 1H AUDJPY. The other line is a 40 period MA for the chart (so a 40 period 1H MA).

 

[ducati916]

So based on this, it would be time to sell the AUD and buy EUR.



Based on the weekly, which I find gives cleaner signals.



Re. trend-lines: horizontals are stronger than slanted. Trade the slanted between horizontals. The steeper the slanted when it meets a horizontal, the more probable the horizontal holds.

jog on
duc

 

[Warr87]

I did some coding last night to test the daily timeframe MA. had some errors. will continue to work on it.

 

[ducati916]

Time to exit long AUD and go long EUR?

Very hard to see the tiny 'red' blip. So hard in fact, it is an argument that the trend is set to continue and the current blip is just a blip. I'll move down to a shorter timeframe.



So I would argue: prepare to flippe:

We know longer term we are at a major resistance point. We also know that the macro picture is far from clear, even less so than usual. There is no definitive signal, but, there is enough to prepare mentally to reverse positions.

jog on
duc

 

[Warr87]

I got my EA starting to function how I want it using a higher timeframe as a direction filter, and position sizing. Now I'm just going through testing a few ideas. Some showed promise in 2020 but backtesting a little further back showed average results.

 

[ducati916]

Currently:

AUD broke resistance. Of course a macro-argument for that is that AUD is a resources based currency. With commodities heating up, it makes sense that the AUD shows strength.



jog on
duc

 

[Warr87]

I had the chance to test a few ideas but nothing significant. A few things were profitable but the low win rate was something I knew I couldn't trade through.

Next step is returning to an indicator that I like, and one which I think @ducati916 likes too: supertrend indicator.

 

[ducati916]

So I have been watching this.

I added the EMA. The point with a currency is to catch the big trend and if possible the smaller corrections within that trend. Currencies tend to be mean reverting, so long/short works well for them.

This 'looks' like a shorter term correction in a longer term trend. A break of the trend line (not pictured) back towards the EMA. So currently I would be short FXA long FXE, at least until price and EMA converge.

The experiment continues.




jog on
duc

 

[Warr87]

i haven't given up trying a few ideas but a few things on the back burner as I deal with other things.

my use of an EMA looked promising in the past but quantifying it doesn't seem to easy.

 

[ducati916]

So I have been thinking on the FX problem/issue.

From @peter2 this:

What interested me (apart from the quote below) was the time frame. Being 4hrs.



So what I'm looking at currently: I'm not really into day trading if I can possibly help it.

So below is a 3yr chart.



But more interesting the 20yr chart.



So what is the idea?

We have different traders trading very different time frames. This would allow the pooling of talent to trade a currency through very different time frames as a collective.

How might this work?

So any number of brokerages allow demo accounts. The 'Collective' all have login details to a demo account, where a position, under prior agreement, is traded in real time. Now, if anyone wanted to trade their own position with cash, they of course would be free to do so.

The results, trades, reasoning, etc. could be updated in a thread dedicated to that trade, which in this instance would be a currency trade.

Now of course there would need to be some rules put in place, for example:

(a) A total position would be entered; and
(b) Percentages of that total could be traded through different time frames: eg. 5% through the 4hr time frame, 10% through a daily time frame, 20% through a weekly, but you get the idea.
(c) Some form of common analysis, agreed possibly once per week on an ongoing basis.

Anyway, you get the gist.

PM me if you have any interest.

jog on
duc

 

[peter2]

An interesting idea. What's the purpose for assembling a few traders who trade their strategies (across different time frames) on a currency pair? As it's on a public forum I can only think that it's an educational journey.

What would be demonstrated by this journey?

(i) The weekly trader will do very little work. The daily trader will do more, while the 4hr trader works the hardest. The profits from each time frame will be determined by the system edges during the period traded. I won't assume which one makes the most as the position size and amounts risked by each system will influence this.

(ii) The reward/max DD of the portfolio will be better than one or more of the individual systems.

(iii) A trading group can do better than an individual? [ Maybe, maybe not. ]

I've always declined invitations to trade with others as what I do suits me and my lifestyle. If I was working with others and missed a huge move in a market because it happened on one of my tennis evenings. How can I explain to others in the group that my tennis evenings are more important to me than a trade for the group?

IMO trading groups break down quickly as they're not fully supportive. Group leaders rarely accept members with differing opinions.

 

[ducati916]

1. An interesting idea. What's the purpose for assembling a few traders who trade their strategies (across different time frames) on a currency pair? As it's on a public forum I can only think that it's an educational journey.

2. What would be demonstrated by this journey?

3. (i) The weekly trader will do very little work. The daily trader will do more, while the 4hr trader works the hardest. The profits from each time frame will be determined by the system edges during the period traded. I won't assume which one makes the most as the position size and amounts risked by each system will influence this.

(ii) The reward/max DD of the portfolio will be better than one or more of the individual systems.

(iii) A trading group can do better than an individual? [ Maybe, maybe not. ]

4. I've always declined invitations to trade with others as what I do suits me and my lifestyle. If I was working with others and missed a huge move in a market because it happened on one of my tennis evenings. How can I explain to others in the group that my tennis evenings are more important to me than a trade for the group?

5. IMO trading groups break down quickly as they're not fully supportive. Group leaders rarely accept members with differing opinions.

1. Yes the primary purpose would be educational, both for the participants and any that followed the thread.

2. That a variety of strategies/tactics re. entries/exits/hedges/risk management can exist within a single overarching trade. Currencies lend themselves particularly well to the multi-time frame type of trade (that is my opinion more than proven fact).

3(i). Time frames can be anything that suits the participants. Someone may want to scalp 1 day a week, while generally considering a weekly position. No person is locked into any particular time frame. What we couldn't have however is trader A placing a short term trade and trader B taking it off to do something else. But we are all adults and have respect for other's opinions.

3(ii). Possibly. That is something that will either be demonstrated or not as the case maybe.

3(iii). Again, proof or not, will be in the pudding. I have a number of thoughts on this. In theory, yes. In practice, it might prove not to be the case.

4. That is part and parcel of the contract. The group cannot be reliant on a single party to make trades etc. One trader cannot be expected to monitor the market 27/6. This, I would expect to be a strength rather than a liability. For example: I am NZ based, which is a slightly different time zone to you. If we are talking a short term trade, say a 4 hr trade: it could be a tactic that I open it, you close it. The time zone, aiding efficiency. There are multiple ways (many currently unthought of) in which this could work. All that would really be expected is that each trader provide, say once a week/day (frequency to be agreed), some input in the form of their own analysis, which could form the basis of a trade, taking profit, hedging, etc.

5. Which is entirely possible. Equally possible is that it works better than expected. In this case, there is no 'leader', this is a group of experienced traders with disparate styles who are participating through choice. By choosing to participate, it would be inferred that egos be checked at the door. To be honest, I don't think it would be an issue. Successful trading is about an open mind with strong convictions lightly held.

The number would have to be relatively small to facilitate coherence, but large enough to generate differing viewpoints and approaches. I'm thinking a minimum of 4 and a maximum of 6 might be the number. Any approach is fine, mechanical, discretionary, macro/micro all could be valid.



jog on
duc