Still Tinkering

Well, it would seem my original system is better if I can watch the market during the day and I don't have that option now.

I looked around for brokers that offered web based trading as that has a better chance of getting through my employer's firewall. I found a bunch of complaints that web based tools were error prone. So, I don't think I'm going to go that route.

That puts me back where I started. Where I'm watching the day charts so that the intraday stuff doesn't pull me off track.

Question is what will give good signals on the day charts?

I'm testing something right now along the lines of keeping things simple. I'm using two Linear Regression Indicators (LRI). One as a signal line (5 days by close) and the other as the primary (25 days by close). I've tried using the lines by close and by median and I can't decide which is better.

Anyways, as I'm testing things, a buy signal is thrown when my "signal" line crosses my primary from below and a short is thrown when it crosses from above. This is modified a bit by the primary LRI as I've set it up to show different colors when it is trending up or down. So, if a short signal is thrown but the primary LRI indicates that the price is still going up, don't enter a short.

I've noticed that positions should be entered soon after a signal because the price move may be over after a few bars.

I'm also playing with my trailing stops. Presently set to a 2 ATR lookback, 2.25 ATR multiplier, and a 7 period lookback. I'm aiming for something that gives good profit on stop out (as I've yet to figure out what prices I should set limits for) and also acts as a bit of an indicator (as it tends to arch away from the price at entry points).

As I'm using the day charts, it takes a while to test out systems. Still trying to see if this one works.

Interesting side note: when I was looking for info on web based trading I found a few Swiss forex brokers. Seems there is no cap gains tax when you trade with them. Think I'll keep that in mind when I build a workable system.

Tinkering

Changed the parms on the Ichimoku

• Tenkan - 3
  
• Kijun - 7
  
• Senkou Span B - 21

Sitting back and watching for now.

EUR/USD

I've entered a EUR/USD long at 1.3316 with a stop of 1.3292.

I'm thinking that I'd rather wait and see how the market acts instead of just setting an entry stop.

Should it look like it's going up I'll add at least one entry stop. I need to look at this pair a little more before I start adding limits as well. Seems there can be some long hall trends.

--------

Wed update 8am:

Just when I think I'm starting to get a handle on all of this, I realize that I don't.

=\

EUR/USD long 1.3316 stopped out. Loss of $24

Note on EUR/USD: Don't open a long over a red (short) cloud or a short under a long (blue) cloud.

USD/JPY

My long 118.oo USD/JPY entry stop was triggered, so I have three positions open with USD/JPY.

As of this morning:

• Cloud is somewhat thin and indicating things are going up (blue)
• The 4-6am bar that triggered my entry stop also is when the CMO hit the 50 line from above
• TCF lines have been skipping against each other all night
• TSI looks as if it is trying to go horizontal and its gap is thinning
• Tenkan/Kijun have formed a upwards channel. At this point time, the only way for these lines to cross is if the price drives down around 117.00.
  

Based on the outcome of these trades I need to determine if I want a full ATR indicating when I should add to my position or maybe a half ATR.

Also, I noticed that trailing stops (volatility based for past seven periods) are tighter on the hour charts. But, those trailing stops don't pop me out early. I need to check on the other pairs if this is true. So, for right now, I'll set my trailing stops to the hour chart and all other signals will continue on the two hour chart.

So, I moved the stops on all three USD/JPY trades to 117.41.

---------------

Update 6:30pm 3/20 -- Aftermath:

Well, I'm both irritated and intrigued.

Irritated as everything stopped out on a large downswing. The 117.54 lost $11.08, the 117.79 lost $32.38, and the 118 lost $50.27

Intrigued because I think I see a pattern. On the first entry stop (117.79) the ATR was 18 and the second entry stop's (118) ATR was 24. This led me to think the following:

1. If I set entry stops at 1/2 ATR and 1 ATR after entering, I'll get in sooner.
2. If I set a limit on the two entry stops and the initial position to two full ATRs above the first position's price, I can take profit at times I can't watch the market (at work and asleep)

That leads to the questions of:

• When should I set my entry stops? Should I wait a bit to see what's happening?
• Is that the best way to set limits? I could offset way too soon, but, I wouldn't be at a loss on big reversals.

Very interesting stuff.

I have no idea if setting this 2 ATR limit would've helped out only today or if it is a reoccurring pattern. Or if it only holds true to USD/JPY.

Much to think on.

Forex

EUR/USD 7:30pm:
CMO has hit zero and TCF lines have crossed indicating a long. TSI and the Tenkan/Kijun lines still indicate the short continues. The price is in the cloud which is very tall.

8pm update: Tenkan/Kijun lines have crossed and indicate a long as well. Chikou Span indicates that this is a weak signal. Will check in at 10pm.

USD/JPY 7:30pm:
The CMO hit the -50 from above at 10am this morning (the bar after I entered). In the past I chalked this up to entry turbulance, but the past trade has me wondering. CMO has hit the zero line and the TCF lines have crossed. TSI and Tenkan/Kijun lines indicate that the long continues. Clouds are small to moderate in height. Not sure what to think here.

8pm update: from around 7:40pm to just before 8pm I saw the price go from around 117.31 to around 117.66 before settling at 117.62. Crazy. If the price hits around 117.79, I'll look to add to my position.

8:55pm update: And lo did my entry stop get triggered. Entered a second USD/JPY at 117.79 (4pips over the day's high and 1 ATR over the open price of the 8-10pm bar) with a stop of 116.67.
10pm update: Set an entry stop for USD/JPY118.08 in case it climes like mad.
12am update: Can't leave well enough alone. Based on price movement and thus a change in ATR size, I've modified my entry stop to 118.00 and moved all stops to 116.92. Hopefully no odd price movements overnight.

AUD/USD 7:30pm:
Continues upwards.

8pm update: Strange. All indicators are showing a strong uptrend, but the CMO is moving down towards the 50 line. Is an exit coming up? Or is that just noise?
10pm update: CMO has hit the zero line and the TSI lines indicate a short. But the Tenkan/Kijun and TCF say the long continues.

EUR/JPY 7:30pm:
Acting like USD/JPY. Very thin clouds.

8pm update: Same

NZD/USD 7:30pm:
Continues upwards with thinning clouds.

8pm update: CMO has hit the 50 line from above. Valid offset signal?
10pm update: Matches the AUD/USD 10pm update except that the TCF is also indicating a short entry.

USD/CHF 7:30pm:
Price popped above cloud for three bars before going back in. CMO came down to hit 50 at 4pm today and the price may be forming a short. If it does, I'll ignore this pair as well.

8pm update: CMO and TCF indicate short but TSI and Tenkan/Kijun do not.
10pm update: Price is going up again.

Day After

EUR/USD has just entered clouds from above
USD/JPY continues upwards and looks like a good long
AUD/USD short signals are gone
EuR/JPY is showing long signals, but weaker than USD/JPY
NZD/USD is acting like a weaker version of AUD/USD
GBP/USD now has given a long signal. I'll ignore this one as well.
USD/CHF looks like a long. If I were trading it I'd enter long at 1.2120

Entered long USD/JPY 117.54 with a stop of 116.19

I've yet to have seen anything to explain the very large price moves on USD/JPY and EUR/JPY. Hopefully, something useful will show up today.

------

From poking around - when the Nikkei 225 goes up, the yen goes down.

hmm

Market opens

EUR/USD:
Has formed a short (CMO crossed zero line, TSI lines have no gap, TCF has crossed, and Tenkan/Kijun lines have small gap and moving upwards together) but is well above the cloud still. Mixed messages on this one Chikou Span indicates a weak signal and price is well above the clouds.

USD/JPY:
Woah! Price just shot down to 116.29 (as of this writing 6:10pm) from close on Friday of 116.77. Price action is wholly under the cloud. The Chikou Span is indicating a strong short. I'm adding to my position.

AUD/USD:
Cloud is not as tall after market open. This pair is looking like it wants to signal a short too, but zero line has not been hit (very close), TCF hasn't crossed (close as well), TSI has no gap, but Tenkan/Kijun is nowhere near crossing.

EUR/JPY:
Hmm, price is dropping fast. All action on the 4-6pm bar is in the cloud which is very tall. Chikou Span is strengthening the short signal. Both TSI and TCF lines are starting to gap. I'm a little hesitant to enter due to the tall cloud and recent price action. However, the chart looks very much like 2/25. A very good short run started that day.... but the cloud thinned significantly. If this was a real money account, I'd probably pass. But, as this is a practice account, I'm going to see if I'm being silly in the face of a good run or not.

NZD/USD :
Looks like it is trying to form a short.

GBP/USD (not trading, just watching):
The downtrend strengthens. If I were trading this I would enter a short at 1.9393 with a stop of 1.9463.

USD/CHF (not trading, just watching):
My original system indicates a long (CMO hit zero and TCF has crossed). However, the TSI is still indicating a short, but with a small gap. Tenkan/Kijun has not crossed. Mixed signals all around. Price is well under the cloud and Chikou Span is indicating a stronger long signal. If I were trading this, I'd wait and see.

-------

Entered short EUR/JPY 154.88 with a stop of 155.89 (total risk of around $85).
Entered short USD/JPY 116.28 with a stop of 117.54 (total risk of around $110).

-------

Update 3/18 10pm

Well, that was irritating.

*Huge* jump in the price back up on both EUR/JPY and USD/JPY.

A few things come to mind:
1) Never enter into similar pairs at the same time (i.e EUR/JPY & USD/JPY).
2) Never enter on a EUR/JPY signal when the cloud is so tall
3) I need to pay attention to the Chikou Span on USD/JPY
4) Adding to a position needs 2-3 more days in the right direction and the right side of the cloud.

My USD/JPY's have not stopped out yet. The only reason is because I didn't move the stops down at the last period. At this point, I think the CMO's hitting of the -50 line at 8am 3/16 was a real offset signal. I closed out both USD/JPY positions.

EUR/JPY reversed and hit its stop for a loss of $86.31.
USD/JPY closed out by hand. Loss $6.82
USD/JPY closed out by hand. Loss $83.60

grrr

Old system is indicating USD/JPY has gone long. The 8-10pm period broke through the top of the cloud. But, the Tenkan/Kijun are running together and the Chikou Span is saying the signal is weak.

I'll be digging around in the FT and FXStreet tomorrow morning to find out WTF was going on this evening.

Further thoughts

I was thinking a bit more on trades my system doesn't work well with and that I should probably list out what I'm going to give the most attention.

But first I want to talk about the Ichimoku Kinko Huo (Hyo) signal I started using late last week.

A good overview can be found here.

It consists of 5 lines: Senkou Span lines A & B, Tenkan Line, Kijun Line, and the Chikou Span.

The gap between Senkou Span lines A & B form a "cloud". These clouds have several nifty traits.

• Price action above the clouds indicates an uptrend and the reverse is true of downtrends
• The Senkou Span lines form two support levels if the price is moving above them and resistance levels if the price is below
• Long signals occurring above them are supposed to be stronger and the reverse is true of short signals

The Tenkan Line and Kijun Line act like moving average lines. A long signal is given when the Tenkan crosses the Kijun from underneath the Kijun (short signal is when the Tenkan crosses the Kijun from above).

The Chikou Span highlights the current period's price compared to the price a set number of periods in the past. It indicates the strength of a signal. A long signal is strengthened if the Chikou Span is above price activity of the set past period (short is strengthened on the opposite)


With regards to using it with my current system: I may have found a way to signal adding to an open position as distance away from the cloud may be a sign. At present it looks like if the Tenkan/Kijun crossover happens before my original signals, my entry signals are strengthened. If the Tenkan/Kijun crossover happens more than a couple periods after my original signals, my signals are weakened. It would seem that entry signals that occur when the price is in the clouds is rather untrustworthy (sometimes it works sometimes it doesn't). Lastly, the Chikou Span really does a good job on showing the strength of an entry signal. If short signal is thrown and the Chikou Span is equal too or greater than the last 4+ period's price action, think twice about entering.

On the CMS charts, I've set the indicator properties to:

• Tenkan - 3
• Kijun - 12
• Senkou Span B - 24

---------------------------------------------

On to a quick look through of the items with <6pip spreads on CMS:

EUR/USD - Works well.
My CMO has indicated that some trades should be exited even though the trend was ongoing. It appears that should the CMO indicate an exit, but the price action is not in the clouds, I can keep the position open. The offset signal appears to be strengthened if the price is in the clouds.

USD/JPY - Undecided yet on use of Ichimoku with my original system which looks good on the two day charts.

AUD/USD - Looks good except except entering when the price doesn't move for several days in a row.
Entry signals with tall clouds should be ignored until the clouds shrink and the CMO hits the zero line again (waiting until the trend reverses would be safer). Beware short entry signals over blue clouds on the CMS charts (likewise be careful of long signals under red clouds). If both the TSI and Tenkan/Kijun lines have little to no gap and are repeatedly crossing, wait until the price action moves farther away from the clouds (in the direction you're looking for) than it had been moving. No need to wait for the CMO to hit the zero line again in this case. Beware of entry signals if the price has gone horizontal for more than 5 days. Offset signals are likely to come while the trend is still ongoing. Not positive of this, but, exit if two offset signals show in 2-4 periods.

EUR/JPY - Looks OK.
Tall clouds make for some questionable/rocky entry signals. The Tenkan/Kijun crossovers after entry can be ignored if there was a major price move in the past 3-4 periods and TSI indicates an ongoing trend in the correct direction. When the TSI and Tenkan/Kijun gaps are very thin to non-existent, check the price action compared to the clouds. If the clouds are indicating that the trend is ongoing, calm down. Offset signals are likely to come while the trend is still ongoing. Not positive of this, but, exit if two offset signals show up in 3-4 periods.

NZD/USD - Looks OK
Generally ignore my old system for entry signals and use the Ichimoku. Do not enter longs below clouds or shorts above them. Be careful when price has been moving horizontal for a while. CMO works most of the time. I saw a couple cases where it exited early, but for the most part the CMO worked fine on exits.

GBP/USD - Not sure about this pair. I'll watch and not trade this pair.
My system works sometimes and then fails. The Ichimoku on its own does the same. Looking at a few months of price action, it looks like the price tends to run in a tight channel and then quickly bumps up or down for a very short period (with the occasional very exciting day or three).

USD/CHF - Not all that sure of this one. I'll watch and not trade this pair.
Tall clouds make for some questionable/rocky entry signals. The Tenkan/Kijun crossovers seem to have less significance. Offset signals are unreliable. Not positive of this, but, exit if two offset signals show up in 2-6 periods.

EUR/CHF - I'll continue to ignore this pair.
My original system works around half the time. The Ichimoku system has better entry signals. The offset signals of both systems rarely work and relying on entry signals in the reverse direction pretty much nulls any profit.

USD/CAD - Very unreliable signals. I will ignore this pair.

EUR/GBP - Very unreliable signals. I will ignore this pair.

--------------------------------------

So, where do we stand?

EUR/USD:
It is currently on an uptrend that started on 3/12. The CMO has hit the 50 line from above twice now (3/16 at 2am and 10pm). Price had pulled very far from the clouds Friday morning and started easing towards them in the late afternoon. The TSI lines had no gap at 6pm 3/6. Considering how very far the price action is from the clouds, I think I could enter a long but I'll just watch due to the age of the trend.

USD/JPY:
My short from 10pm 3/15 at 117.18 (stop 117.54) continues. Price exited the bottom of the cloud 8am on Friday, but then hopped back in. Update (3/18): just noticed that the Chikou Span was signaling that the short I entered on was weak ...hmmm. The CMO had come up to hit -50 8am 3/16, but I had ignored it due to how young the position was.

AUD/USD:
It is currently on a strong uptrend that started on 3/14. Clouds are getting taller on the chart.

EUR/JPY:
Short signal came at 8am 3/16 and the price touched the top of the cloud at 6pm. Cloud was tall at 8am and has grown significantly. CMO is bouncing around zero and the Chikou Span indicated the signal was very weak. I want to see what the price does when the market opens at 5pm tomorrow before doing anything.

NZD/USD :
It is currently on an uptrend that that was signaled on 3/14 while under the cloud. Later that day the price went over the cloud and the trend continues.

GBP/USD (not trading, just watching):
Short signal came up late Friday above the cloud. Chikou Span strengthens the short signal. The cloud is moderate sized.

USD/CHF (not trading, just watching):
Short formed 10am 3/15 on a bar that spanned the cloud. The downtrend looks to be weakening.

Tinkering

Offset my long USD/JPY 117.72 at 117.11 for a loss of $51.85. That is the last time I use the day charts. They are too slow to show direction.

Entered a short USD/JPY at 117.18 with a stop of 118 based on the two hour chart.

I'm going to go with the two hour charts for the time being.

EUR/GBP started to form a long at 10am this morning (after I left for work...grrr) and around 7pm started to shoot up. It continues to do so and after being burned for entering late I'm not sure if I want to enter long right now. Perhaps if there is a large pull back at 10pm or tomorrow morning I'll check all the signals again.

USD/CHF is a sell side mirror image of EUR/GBP.

All the rest with <6pips are on continuing trends.

Observations

I found some interesting things when looking at different time periods on USD/JPY.

My signals, as described on my 3/3/7 post, work pretty well on the shorter periods with the exception of my trailing stops. However, when I bumped up my ATR multiplier to four, it looks like it still works.

Items of note:

* The two hour period charts look to anticipate the market better without running into the problem of hitting major reversals while I'm at work or asleep
* The four hour chart is slower to show where the market is going than the two hour, but is way better than the day chart
* The hour chart looks to exit positions before the trend is through
* The half hour chart gives a few funny signals
* The fifteen minute chart makes me wish I had all day to watch and trade forex. Very nice signals throughout the day.

So, I think I'm going to go off of the two hour charts from now on with a focus on the 3pip (EUR/USD and USD/JPY with CMS) , 4pip (EUR/JPY and GBP/USD with CMS), and some of the 5pips. Note, CMS adjusts the pip rates +/- 1 every few minutes based on some formula.

I'm also thinking I may try my hand with the 15 minute charts this weekend.

Update:

Entered a short EUR/GBP 0.6819 with a stop of 0.6892 (risk of $102.82 on a full reversal) on the two hour chart. This is a 5pip spread.

I'm entering a bit late as my signals indicate that the enter short signal went off at noon. 0.6836 close on the noon bar.

Later Update:

Yes, I did enter late... too late. EUR/GBP stopped out at a loss of $76.65

Started to use the Ichimoku Kinko Huo signal this evening. When I plugged it in, I saw that the long had formed shortly after I entered my sell.

Ehh

Ugly

Another problem with entering too soon.

My 118.39 USD/JPY hit its stop of 116.34. Loss of $173.22.

My 117.72 USD/JPY is still in play with its stop of 114.40.

Not sure what USD/JPY is doing. The TSI has no gap, but the CMO continues up and the TCF's gap is closing.

I think I'll start looking at the 1, 2, and 4 hour charts. I stayed away from them before because I can not look at the market while at work (blasted firewalls).

Sloppy

When I entered USD/JPY I was just eyeballing the chart.

Seems that the CMO did not hit the zero line the other day.

It was at -5.

So today, when the zero line was hit, the price closed out at 117.70.

In an irritable fit, I took another long position at 117.72 (which should have been my first position) with a stop of 114.40 (risk of $282 on full reversal).

Actually, that is another sign I forgot to mention. The trailing stops I use (TS) tend to have a sharp dip opposite to the trend on the specific period that the entry signal is given.

The last 24 hour period had a rather large hump in the TS (see my 114.40 stop). Presently my TS is showing 116.34, but that will probably change in the next 24 hours.

---------------------------------

Let's see how my other predictions fared....

EUR/USD: Weak downtrend.
USD/JPY: All indicators say enter long
GBP/USD: No long signal yet
USD/CHF: Weak uptrend
EUR/JPY: TCF has crossed over. So, CMO and TCF are in agreement on a long signal. TSI is a hair or two away from crossing
GBP/JPY: CMO and TSI are in agreement on a long signal. TCF's gap is closing
EUR/GBP: Still don't know what to think. TSI is very weak and both the TCF and CMO are meandering around
USD/CAD: Same. The CMO has hit the zero line but neither TSI nor TCF have indicated a short
AUD/USD: All indicators say enter long
EUR/CAD: Very weak TSI. Looks like its "downtrend" continues
EUR/AUD: Short continues.
GBP/CHF: CMO has hit the zero line and so a long signal is given, but TSI looks very weak and untrustworthy.
CHF/JPY: Weird. CMO is still under zero (-0.339 at the time of this writing) and TSI has not crossed. No entry signal
AUD/CAD: Continues to futz and I will now ignore it.
AUD/JPY: Continues its long
NZD/USD: All indicators say enter long
CAD/JPY: Continues its long
NZD/JPY: Continues its long

Market start 3/11

A number of entry signals came up after the markets opened. Granted, I wasn't able to check in until an hour and a half after the markets opened.

In the end, I went with a long USD/JPY as CMS offers a 3 pip spread on it.

Entered USD/JPY long 118.39, with my stop set at 116.34 (risk of $173.22 on full reversal).

Summary of the rest of the forex by way of my system (skipping EUR/CHF):

EUR/USD: Looks like a weak downtrend for now.
USD/JPY: CMO, TSI, and TCF all indicated a long entry sometime after market open.
GBP/USD: CMO continues up from -50 and the TSI has gone horizontal (indicating shorts should be offset). I think the long signal will come sometime tomorrow. Maybe in the evening.
USD/CHF: Uptrend continues from 3/7. Mixed signals on how strong.
EUR/JPY: CMO hit the -50 line and the TSI went horizontal on 3/7. The CMO hit the zero line sometime after market open today but neither the TSI or TCF has yet confirmed the long signal. Unless the price does something real strange, I think a long signal should come through by the morning.
GBP/JPY: Was acting like EUR/JPY through today. The main difference is that the TSI is giving a long signal and the CMO hasn't yet hit the zero line. I think the long signal will come by morning.
EUR/GBP: Not sure what to think on this one. TSI is very weak with no gap between it and its signal line. The TCF's gap is narrowing as well. However, the CMO has slowed its decent to the zero line.
USD/CAD: The CMO has hit the zero line but neither TSI nor TCF has indicated a short. The short will probably show itself sometime tomorrow .
AUD/USD: Hmm, I think the long will come sooner than mid week.
EUR/CAD: Continues its downtrend
EUR/AUD: All signals point to enter short.
GBP/CHF: TSI and TCF indicate long entry. But, CMO hasn't hit the zero line yet (but is very close).
CHF/JPY: Only TCF is indicating a long at this time. I think a long signal will come through by morning.
AUD/CAD: Is still futzing. I'm starting to think this should be on my "stay away from" list.
AUD/JPY: All indicators say enter long
NZD/USD: CMO has hit the zero line, but neither TSI or TCF confirms the long yet. Long signal will probably come by morning
CAD/JPY: All indicators say enter long
NZD/JPY: All indicators say enter long

EUR/CHF

EUR/CHF is a bit funny with my system.

Short signals aren't trustworthy and long exit signals can be weak.

No.

Looking more closely at how my system works with EUR/CHF, shorts are indicated in the wrong spots and while some long signals do work, around half do not.

I won't trade EUR/CHF with my system

What's the next trade?

Hmmm...

Off of the day charts:

EUR/USD indicated a short should be entered on 3/5. While the price looks to be moving in a channel, the TSI is indicating that it's short and the TCF started to indicate a stronger downtrend on 3/8. A missed boat?

USD/JPY gave an exit short signal on 3/7. The TSI and CMO are a hair away from showing a long signal. However, I've seen the price jump away in the other direction. This may give a long signal on Monday.

GBP/USD is on a short run. The CMO hit -50 today (3/9) but the TSI is not quite horizontal. Not at all sure if that is a valid exit short sign.

USD/CHF I think I missed the boat on this one. A short exit showed up on 3/5 and all indicators showed long on 3/8

EUR/CHF I may enter long on this one. A short exit showed up on 3/7, CMO hit the zero line on 3/8, and both TSI and TCF indicated a long early 3/9. I think EUR/CHF's action might trail USD/CHF's a bit.

EUR/GBP this is one of the charts that made me think I should have stayed with USD/CAD. It is still on an uptrend from 2/6. It's CMO has hit the 50 line twice since then (2/20 and 3/7) with the TSI going horizontal on 2/20and 3/8. Of note: on 2/20 the TSI line was above 25. Does this mean that the CMO hitting 50 (on a long) and horizontal TSI that is above 25 indicates that the position should *not* be exited? Regardless, I'm not sure if EUR/GBP is continuing its uptrend or not. I'll reassess once the CMO hits the zero line.

USD/CAD Maybe short in a day or two.

AUD/USD indicated that shorts should be exited on 3/8. Long signal looks like it may come mid week.

EUR/CAD indicated that longs should be exited on 3/5. A short signal came up on 3/8 (close of 1.5492). This one is a bit of a dilemma, recently the price action has not been significant. Considering that the price is now down to 1.5369, the down trend might be anywhere between a third to halfway over. That and the CMO journey above 50 was a short one. I don't think entering a short now would be all that good. I'll call this one a "missed boat".

EUR/AUD indicated that longs should be exited on 3/7. Maybe short in a day or two.

CHF/JPY indicated that shorts should be exited on 3/7. No clear indication of when a long signal will be coming up.

AUD/CAD is futzing around with no clear indication of direction.

EUR/JPY, GBP/JPY, GBP/CHF, AUD/JPY, NZD/USD, CAD/JPY, NZD/USD indicated that shorts should be exited on 3/7. Maybe long in a day or two.

Testing my FOREX system

As mentioned before, I've just recently put together this simplified system.

I entered into a long USD/CAD on 2/28 before I finialized version 0.1 of my system. My current system indicated that I should have entered long on 2/26 (1.1606 close).

Ehh

So, I entered long USD/CAD at 1.1681 with a trailing stop of 1.1546 (potential loss of $135 on a full reversal). Moved the stop to 1.1539 on 3/2, 1.1562 on 3/5, 1.1617 on 3/6, and 1.1621 on 3/8.

Note: on the forex day charts a new "day" starts at 5pm. For example, at 5pm on 3/5 the 3/6 period starts.

The CMO indicates I should think about offsetting my position now (1.1781 as of this writing) as it has come back down to touch 50. But, the TSI (decent gap and still moving upward) and TCF (still at a very large gap but starting to move inward) indicate the trend is still stong.

Waiting for 5pm to see how things lie.

Update:

After 5pm and have moved my stop to 1.1643

CMO, TSI, and TCF are pretty much the same from this morning.

Update 3/9, morning:

Here is a good test of my system. Or, rather, a chance to fine tune.

TSI has gone horizontal. So, two indicators to exit my position.

However, in the past, CAD/USD's TSI has gone horizontal but maintained a decent gap. Along with the TCF's very large (though shrinking) gap, this long trend may just be consolidating. Something that strengthens this line of thought is that the TSI's signal line is still pointing up.

To hedge my bet I've moved my stop up to my entry price of 1.1681.

That may or may not be foolish. Because, if the trend is continuing and there is a drawdown, I'll be knocked out. Also, if the price is reversing, I've lost the profit my signal just told me to take.

Question: Is it better to take profits when there are signs of a reversal? Or, seek to try to ride the whole trend?

In the first case, some profit will be lost on leaving the trend early. In the second, there may be no profit and even a loss when early signs of a trend's reversal are ignored.

Update 3/9, weekend market close:

Ahh, a TSI signal line that continues up is not a sign that the long is continuing. The TSI has turned down while its signal line continues up. Considering the CMO is nearing the zero line I'd say a short signal will be showing itself on Monday or Tuesday.

So, moral of this story: If I'm holding a long and the CMO hits the 50 line from above and the TSI goes horizontal, offset the position.

It looks like the horizontal TSI holds true on shorts as well.

Anyhow, I've offset my position at market halt (1.1722) giving a $34.96 profit.

Weird

No more DOMS, which is a good thing.

However, I'm still breathing real hard so haven't upped either the squats or push ups.

One thing I changed was the rests on the squats. I thought it would be hard to add more squats with how I set up my rests. So, I changed the rests to match the pushups where I do all reps and rest after.

So, now I'm doing: 4 squats at the top of the minute and 5 push ups at the thirty second mark.

I had anticipated that this would be harder.... it was not.

Weird.

I've also seen little fat loss with the guggulsterone. I've read it could take a month to see anything, but I'm at three weeks with little to show.

Normally I avoid the named suppliments as they are pricy with little return. But, in poking around I found something called Hot Roxx Extreme. After some more hunting around for a good price I found $29 a bottle with shipping. I picked up two bottles and will see what's what. If I get little to nothing, I'll just stick with the CLA.

In order to ramp up a bit and get ready for the Hot Roxx I upped my dose of the guggulsterone to two in the morning, 2 at noon, and one at 5. I've been doing that for a week and still nothing to show. So, I'd say guggul by itself isn't all that great.

Playing with the FOREX

I'm currently trying a few things with CMS Forex's practice account.

A few years ago I developed a trading system as a C++ exercise which I then ported to Python.

The problem with that system was that it tied money up for months at a time (3-9) and while it was in the black, the return was minimal considering how long the money was tied up.

Well, let me rephrase that... with the amount of capital risk that I was willing to tolerate, the return was minimal.

It's been my experience that even with careful paper trading, there are still confounding variables. So, I see paper trading and "practice accounts" as only indicators that a system *might* work. Because of that, I keep my risk very small until my system proves itself out in the live environment.

It is also prudent to work with dealers that offer practice accounts that act just like real accounts. It is better to lose fake money when learning the software than real.

CMS's software is very easy to learn, but it is easy to make incorrect assumptions. For example, I tried moving a few stops by dragging and dropping thinking the software would set the price to where I dropped it. It did not and it lost me over 50%.

So, again, play with the practice account for a while to make sure you understand the software.

CMS offers many indicators as well as trading systems that will automatically attach to the chart.

Personally, I like to try to keep things simple as the more complex systems get the more they tend to be specialized to certain market activity. As this time around I'm not willing to invest the time in creating a huge trading system from scratch, I'm looking to find a few indicators that will give entry and exit signals with an emphasis on keeping losers small. Yes, I like big winners, but what's the point of big winners if the losers eat all the profit? Better several small winners (to offset the losers) and a handful of big winners.

At present I'm using the following indicators with my CMS practice account:

• Trailing Stops - Volatility (TS) with a 2 ATR lookback, 3 ATR multiplier, and a 8 period lookback
• True Strength Index (TSI) based on close, 20 smoothing periods, 13 double smoothing periods, and 7 signal line periods
• Trend Continuation Factor (TCF) based on close and 7 periods
• Chande's Momentum Oscillator (CMO) based on close and 7 periods

My findings at present using the full day charts:

• Be very wary of entry signals when the CMO is not coming down from 50 for shorts or coming up from -50 for longs. From what I've seen, when it is bouncing around in between 50 and -50, it is a sign of a continuing trend that may or may not be ending soon
• Generally, a good strong entry signal follows this course (example of a long signal):

1. The CMO comes up from -50 (possible short exit signal)
2. The TSI turns horizontal (followed by #1, this is a stronger short exit signal). Should this be accompanied by a narrowing of the gap between the TSI and its signal line, this is a very strong indicator that a long signal is coming (and that you should exit a short now)
3. Once #1 and #2 have happened, if at least two of the following happen, enter long (and exit your short if you haven't already): a) TMI crosses its signal line, b) TCF plus line crosses its minus line, and c) CMO is >= zero
   

A short signal is similar to the long except #1 would be coming down from 50 and #3 would be reverced.

• On entry, the trailing stop is set to the TS of the previous period (i.e. on EUR/USD, if I entered long today 3/3, I'd set the stop to the long TS of 3/2, 1.3046)
• Going forward on a position, trailing stops are moved to the TS of the previous period. But never to a position of greater loss (or less gain).
  
• If, after entering, you find the TS indicating (for at least two periods) that your stops should be placed at a greater loss (or less gain) than where they are currently placed, look to offset that position (**not true in every case... but is a very negative sign)
  
• Keep in mind that the CMO should not be the sole determining factor on exiting a position. If it crosses the 50/-50 line look at what the TSI and TCF are doing. If they aren't signaling a reversal, ignore the CMO.
• Large gaps in the TCF plus and minus lines and especially in the TSI and its signal line are good indicators of a strong trend
• While the CMO and TCF might indicate an entry signal or change in direction before the TSI, the TSI is more reliable as to which way the trend it going. So, if both the CMO and TCF indicate a long entry but the TSI keeps showing a short (signal line above the TSI) for 2-3 periods after entering a long position, get out.
  

I'm presently confirming how well the above holds up. Trades look to have a lifespan of anywhere from a week to 3-4 months on very strong trends.

Should I confirm the above, I will enter the market with $200-$500 to confirm if what I found in the practice account holds true. If so, I'll beef up the account.

Another thing I'll be looking into is adding to my position on long running trends.