My First Forex Experience (NNFX)

Trading Discussion Trade Journals
102

I’ll be honest, so far I’m not finding any of this emotional.

I think it’s 3 real reasons.

  1. I’ve lost money trading discretionary before (Crypto).
    I was up, then didn’t take profit… then liquidated.
    Then added more, and lost it… Then added more…
    Then I said… NO MORE! One really emotional night!

  2. I’m focusing on the process, not the trades.
    I don’t look at it as money, I look at it as results.
    They aren’t fun tokens yet, the numbers are telling me if I’m moving the right direction.

  3. I’m spending more time on the back testing and coding than I am on the trades.
    I literally jump on for 15 minutes, update my log with any closed (TP/TSL) trades,
    close any trades needing closed then open any new ones needing opened.
    It’s almost as if taking the actual trades is the least important part!

I do however wonder if things will change much when I inevitably go into a period of significant drawdown.

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103

Yikes! That sounds rough. It looks like you turned it into a stepping stone, not a quitting opportunity. Thanks for sharing!

Do you have a plan for that? Hold? Close?

104

The only plan there is to keep going.

I’m backtesting and improving all the time, but I do know that it needs to be an evolving process and markets change, trends change.

I’d like to say that using dynamic risk management, trading a range of pairs and suspending trading any pair that is in a period of DD in my strategy tester will keep me from seeing large levels of DD in the overall account, but the law of averages says I will hit a run of losses at some point.

It might not feel good, but I need to trust the process. And if the process is wrong, i need to fix it.

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105

@Mondeoman

See attached Strategy and Alert Study for Cryptos.

I’ve added the Binance Fees as default, as not including it effects the figures unrealistically.
Binance fee is 0.1%, dropping to 0.05% for using BNB as a means of paying your fees.

I had a play about with a few settings and got some decent results with a few combos.

Cheers

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106

Little update today, just more on the Coding of my Tradingview strategy.

I’ve added in some rules for backtesting surrounding Stoplosses.

So the options are now,

Fixed Stoplosses, Trailing Stops, and Fixed/Trailing.

Fixed/Trailing is where the trade starts with Fixed stoplosses. Once the first part of the trade hits Take Profit level, the second part of the trade gets changed to a Trailing Stoploss.
This second part can be changed to a different ATR value to the original set.

Also I’ve added the option in Fixed Stops mode, to move the SL to Break Even on the second part of the trade when TP is hit on the first half of the trade.

Lots of options there to backtest and potentially implement in my actual trading as time goes on!

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107

Hi Chris,
I really appreciate you sending these links. At this stage, this looks like a foreign language to me. I did sign up today to the 30 day free trial on the Pro, and it only took a few hours to be presented with the 40% off offer. Then I looked at the Pro+ and thought … wweeeeellllllllllll - that is 50% off and includes some stuff for day trading. So I took the bait hook line and sinker and decided to lease the Pro+. I was expecting that the fee would be taken from my card on 11May21, but I got confirmation that it was taken today. Of course, I use a MCO card, so by the time next month rolls around, my 2% cashback in CRO tokens may pay for the fee if CRO does a 50X in a month :roll_eyes: Now I will get my skates on and accelerate my training. I got thru the first 3 training vids today on Youtube provided by Trade With Resolve. I am assigning 10 hrs per week for the next 4 weeks to familiarize myself with the app.

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108

So little update today.

Finished my coding for my tester completely, really happy with the outcome.

I’ve added the currency strength filter aswell so i can see if that will be something that helps.

So now that I’ve completed the tester, I was able to fully backtest my current strategy.

Before to test it against a single currency, for a year it would take at least 1 hour.

Tonight it took me less than 1 hour to test against 44 pairs.

I tested 2012 to 14, 14 to 16, 16 to 18, 18 to 20 in 3 year chunks with the years overlap… Then 2020 to present, so 15 months.

The first 3 years I would have been 15% up, unfortunately this turns to 129% down next 3, 63% down next 3, then up to 75% for 2018 to 2020.

Jan 2020 to now is 45% up.

This shows that my Algo, from the limited eyeballing, then paper testing has optimized it, but optimized it to recent data. It however means there’s noting to say from that has an edge at all.

I’m very happy to have actual facts in my hand now, and am planning to spend the next few weeks using this benchmark as one to beat before starting May with a new or evolved version.

Onto tonight’s trades though, I closed out my USDCHF trade in profit tonight, as there is high level USD news tomorrow.

My 2x GBP trades are in loss at the moment, but no indication given to close at this point.

I took one new trade, using both my indicators, and a backtest of the last 6 months (takes literally 1 minute to do) shows that the pair in question would be in 0.3% DD over the period.

My new Risk rules meant I took the trade on half risk. Had it been over 3% DD over the 6 months I’d have not taken the trade at all.

So things are improving all the time, marching forward and quite satisfied as I believe I’m closing out the first chapter, the one I’ll call the “Unknown Unknows” phase, and I believe I’ve entered the “Known Unknowns” phase.

I feel I’m now armed with enough knowledge and information to now know where the gaps are, and have enough of a plan and direction to start filling them.

Cheers as always for reading guys.

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109

That is fascinatingly productive. Have you tried yet to analyze what the major trend was in the profit years and the loss years (bull, bear, choppy, cannot determine)? It could be that your EA works in bull and bear but not in choppy, or a myriad of other conclusions. Remember - data acquisition, data processing, data analysis. You are detailing the first two but still need to analyze the outputs to see if there are any patterns worthy of further testing to support or refute. You seem to be able to program at a very fast pace, or that just may be me being over 30 years since writing any line of code (save for Excel macros). Keep it up.

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110

Keep an eye out for deals around the holidays. Especially Christmas. I think the good one starts in December every year.

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111

So back to the 3 headings thing…

Personal Aspect

So that’s me a week into night shifts and settled in. Finally able to sleep etc.

So Really just ticking along, works ok, my Crypto investments are doing really well.

The house I looked at buying this time off is going under offer, the agents messaged me today asking my level of interest incase I wanted to make an offer.
I really thought about it, but have decided I’m going to keep my money invested for the time being.

Mechanical Manual Trading

So not got many trades on at the moment, compared to some weeks anyway. That’s partly due to my indicators not throwing up many entries, but also due to my new risk management rules. I’ve turned down 3 trades, and taken 2 half risk ones.
Will be interesting to see if it works any better.

I’ve ironed out the last bugs in my strategy code now (found a bug in the SL calculations last night) so have got myself geared up, sheets made and am ready to spend the next 2 1/2 weeks optimizing and testing a rev 2 algo to deploy at the end of the month.

Also though, I was sat pondering what data sets I can access from Tradingviews Strategy. And what I can do with them. I did some digging and there are ways to pull this.

I did a little tinkering and put together a bit of code with 3 moving averages on the equity curve of the pair being tested, and was able to increase and decrease position size depending on the equity.

Initially I found when entering a drawdown, it was difficult to get back out of it, as the low position size meant it was hard to get over the MA’s again. However, I then added a look back at recent win/loss ratio for positions. and using a win/loss ratio value to increase position size off the back of a win streak can help pop over the MA if the market is turning in favour of my algo again.

I’m going to keep this one ticking along testing slowly and seeing if there’s a good method to do it.

This would in reality give a method to backtest how much extra I can keep using the risk management, help develop a better risk strategy but on a granular level, I can use a printed “Enter trade with 1.5% position size” or similar on my chart at the time of actually going to make the trades.

EA Auto Trading

The MT5 EA has finished a 156 hour data collection on my home computer, I got a notification on the MT5 app. So I’ll use Team Viewer to login and start a data capture of the next 3 years with the same criteria tomorrow. I can do this a further 2 times before I get onshore, and should then have data of which combination of my chosen indicators works best over the last 9 years.
I can then do similar duration tests with other settings enabled, or different things such as risk management switched on etc.

So… DATA, DATA, DATA…

Time to get rid of some more of the unknowns. These are Known Unknowns now!!!

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112

Hi Chris,
Welcome from a land lubber.
This may or may not be useful to you in your broader planning. A long time ago, (perhaps 30 years ago), my wife and I sat down together mapping out our new lives and decided that we were going to put in place some hard and fast rules about what we did with our funds and why. Probably for the reason that over decades, things had worked out better than planned, we have never questioned those decisions. I reveal two of them - that are associated with the two major expenditures most ordinary people will have in life in the Western world.

Personal Private Residence (PPR, or home, for short).
The equity in our home shall never exceed more than one quarter of our wealth. It is important to put this into context. I was an expatriate oil company manager overseas during which my employer paid my overseas accommodation and other costs so that we were able to save a very high percentage of gross earnings. Upon repatriation to the UK, with a large sum in a UK bank, it was very easy for us to obtain a 75% mortgage, and took that opportunity since paying interest on the mortgage (even at 7% per year at the time) was less costly than renting. Our entire deposit was funded by five years of after-tax income from our INVESTMENT properties, which at the time commanded 15% gross return on value. Oh, those were the days!!
The issue now, winding forward 22 years, is that the equity in our home now exceeds that “maximum of 25%”. Importantly, it was the decision we took at the outset that allowed us the flexibility. I view our PPR as both a liability and an asset. A liability because it is unlikely we will move out and cash out, so would not in practice realize gains, and meantime, we have to pay insurance, repairs and decorating costs on top of our mortgage that we would not be paying if we rented. An asset because its street value has increased about four times over in 22 years, and hence our equity value has increased four times that because we took a 75% mortgage (equity increased 16 times). It is interesting to note, despite the ups and downs of the UK residential property market that a quadrupling of price in 20 years is the same as a doubling in 10 years and represents about 7% per year (my own estimate of our own UK inflation rate over the past 20 years with the costs we decided to have in our lives). So you could argue that all we have done with property value is tread water but with net equity has equated to around 7% per year compounded OVER inflation. Like most baby boomers, we feel wealthy - but we are not as wealthy as we feel due to stealth tax (inflation).

CARS
It is tempting, when you have choice, to go a bit overboard when deciding what kind of car to drive, and it is difficult to gauge value for money. So we took the decision that the net value of our cars would never exceed 5% of our wealth. Though on two occasions we have, like many, bought one new and one nearly new car from manufacturer dealers as personal lease purchases (my mother would call these buying on the never-never), I have mainly resisted this sort of purchase and decided to self-fund the initial purchase, and if required take out a 3 or 4 year loan for the specific purpose of amortising the cars since they are liabilities, not assets. What has really helped in this respect is being self-employed and being able to claim mileage back from our small company at £0.45 a mile, and driving typically 15K to 20K miles per year to customer locations to perform my consultancy work. An effective negative cost before tax, but that is a different story. What it basically means is that we set a limit on the amount of car depreciation acceptable to us as a necessary part of cost in our lives. So we have been able to drive reasonably luxury cars for 20 years and not feel guilty that this has been an excess of any sort. It continues to amaze me how many people drive around in a car worth half as much as their house (maybe a slight exaggeration, but you get the picture).

I hope this may be of some use to you. It worked for us. We did not pluck the numbers from thin air. At the time we took that decision, Joe Bloggs Average was paying up to 25% of his net income to rent his home, or a similar amount for mortgage. Recently I have read that young folks in North America are having to pay up to 40% of their net income in rent costs, and this is not sustainable. One quarter to one third should be a warning sign that such costs without a future reduction plan may be a recipe to remain in the poor house for some time to come.

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113

Thanks for that, I’ll have to take a dig into the numbers but you are absolutely bang on.

I found myself in quite alot of debt, most of through my ex wife’s financial mismanagement, partly from me not having control over the finances and just thinking if I kept earning more we’d be fine.

When we split it came to light there were even more debts that I never knew about, things in her name, and joint names etc.

I made the decision to take on ALL her debt and our own, and bought out her equity in our home leaving myself pennyless and with interest payments that ate all my wages as an offshore Automation Engineer!!!

Last year was a wakeup call, nearly made redundant. So I shed my nearly new VW camper, sold the house and got myself completely debt free. I’ve bought a little VW Gti (2 years old, cash) and have the money there for a house deposit leaving me with a small investment pot too.

I’m not ready to pull there trigger there yet. and to be honest most of my deposit money is tied up till at least September/October in a portfolio of Crypto Currencies and shares.

I’ve got a new Dave Ramsey inspired approach to spending and saving, but not for investing. I don’t think his investing advice is aimed at anyone other than those who are awful with money.

I’m running a tight cash only ship, still treating myself but also saving about nearly 1/2 my salary per month.

I’d like to be in the position though investing and having no debt and keeping my bills low, I could work in a supermarket or Screwfix (Home Depot) or maybe even if I get good at trading without changing my lifestyle much.

Yes I’d dream of owning an Aston Martin, maybe I’ll pick up a V8 Vantage (£35-40k) but it’ll be cash, and would be shed at a moments notice if I needed the capital.

Everyone seems to live by the mantra that the more they earn, the more they spend. For me it’s been 30 odd years of that, but time to change that before I hit the big 40!!!

So, Trading…

Mechanical Manual Trading

Couple of Stop Losses and Take profits hit today. Overall today the open PnL has pushed forward.

I’ve opened one new trade full risk, and got offered a trade which my new rules said was a nogo.

I’ve done some research and will be developing the theory further though. From what I’ve seen, putting a 200 period moving average on your profits for a particular asset should give you an indication whether your strategy is working or not working with it.

So my next step is to be running a 12 month backtest at each entry to see whether it’s a go or no go.
I’m planning to devise a method for backtesting it over the next few weeks.

I’ve implemented it into my strategy tester and published it on TV.

Uploading: MA monitor 1.JPG…

EA Auto Trading

Started the next 3 year backtest last night, this should take approx 6 days.

This is testing baselines, entry and exit indicators in combination with standard settings.

Once I’ve found a strategy that works profitably over all the time periods, I’ll take that combo, and backtest the best settings for it to maximise profit over the time periods.

The following trip I should be able to carry out test of Stoploss, take profit, currency strength filter and other settings applied to see if they increase profit.

Finally the last trip I’ll backtest risk management settings.

From here that is 3x 6 week cycles, so 18 weeks until I have the data I need.

I might be able to bite some chunks of time off that by carrying out smaller chunks of testing when I’m home, but I don’t want to tie up the computer as I use it when I am home for other things too.

Chris

114

Ok so nothing really exciting happening other that optimizing and backtesting my systems further.

Took a couple more trades tonight, and on the whole things are looking as good as I can hope.

I’d previously deployed my risk warnings to the strategy tester, which I refer to before each trade.
This has prevented entry to a few trades, but also gave me the green light to go on 3 trades today.

I have found “better system trader” podcast which I have been listening to the last few days, and this morning found a 2015 episode with Dr Howard Bandy.

He discussed exactly what I was trying to do, where an instrument doesn’t play well with your Algo for a perdiod, rather than change the algo, use a secondary method to reduce risk or sit it out.

This is exactly what I’ve employed with the MA’s over the Profit curve, let the strategy tester carry on trading the asset through a period of loss, while I don’t take the drawdown.

He refers to the issue as “synchronization”. Where your algo, be it a fast algo for choppy markets, or a long lazy algo to catch big trends, does not find fabourable entries in the current market for that asset.

You can’t build an algo to catch both types of trade, if you try, you likely end up with a master of none.

So more research is needed, whatever i deploy needs to be both simple and testable, BUT I believe I’m evolving further and improving daily.

widget

Chris

115

Wow!!! Good job!!! That’s amazing! Getting out of debt is massive! Good for you.

I, too, am on a Dave Ramsey kick. I froze my credit about a year or so ago, and I thought about unfreezing it and improving my credit.

Now, I wanna try to live the cash-only life. The only reason I would have a credit card would be to rent a car when I travel. Some places are credit card only.

Other than that, I have no reason.

Getting out of debt must have been painful, huh?

But you made it!

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116

I was in the position not alot of others are that I have the skills and i had the income (just) to finish my house off to a decent standard and recoup enough money to become debt free in the process.

I went rice and beans first as the more I was able to save, the less painful it would be selling up and no longer being a home owner.

The amount of interest with home improvement loans, credit cards, financed gas boiler, 2 vehicles on finance plus the debts my ex partner ran up behind my back literally were a third of my salary in the end when the chips landed.

We also had closed our online business when we separated, as it needed my skills and knowledge to operate, but also her to do the orders while I was away. Working together became too difficult, so that income disappeared overnight also.

When in a situation like that theres only one thing you can do, come back fighting.

Dave Ramsey gave me the rice and beans approach while I finished the house, made a budget to stop my debt growing mid term then cleared the lot.

My bills now are so small its mad, after bills, child maintance etc, I keep about 1/5 of the remainder for groceries, clothes, fuel, entertainment, hobbies etc. The rest I invest in shares and crypto while learning my FX trade.

Plan is to make the money elsewhere (Crypto bull cycle and shares which is something I’m ok at, especially given the market conditions). But FX I see as a slow and steady thing that I can eventually move my pot into when I become consistent, and then take profits back into other investments or start another business.

A cash only life is the dream for me from here. I have everything I need, and am learning the skills to fulfill my wants.

117

YEAH!! David Goggins says, “Stay hard!” Both of those guys use extreme medicine for an extreme sickness. Often we wanna put a band-aid on our major problems. But we know deep down that it ain’t gonna work. Then, when it gets worse, we act surprised! haha

You had a lot on your plate, to say the least. It really sucks. But it’s true: you gotta fight back. It can be your end or your new beginning.

It’s scary because we’re used to the stress of debt, and doing something that gets us out of debt is new territory. And we don’t know how much worse it could get if we try something new (such as living without credit cards).

We’re told all our lives to get good credit. If you hear that for 20+ years, why would you think it’s wrong? “Credit cards are bad?” Then, you think you gotta get rid of them to catch up on debt…and it completely goes against the ingrained messaged that you must have a credit card. Thus, causing you cognitive dissonance–walking your own path with no one to guide you.

It’s scary. Then, 6 months after cutting up your credit cards you realise you should have done it sooner.

118

Ne’er a truer word was spoken. BTW, I laughed when I read about your ex (sorry) but that is exactly what happened to me about 30 years ago, and I was in Aberdeen too. She cut up credit cards in front of me, then had new ones sent to her friend’s address in London. But when I expatriated to Syria, she had the mail forwarded to the office address, but the mail arrived before she did. Aaaaarrrrrgggggghhhhhhhhhh. It gets better with time, believe me.

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119

Last September, I took up the cryptocurrency CRO offer from Crypto.com - the ruby card, and have been accumulating a 2% cashback in CRO tokens since then. You top it up with cash before you use it as a Visa debit card. About one in ten transactions do not go through. I think it is neither a fully fledged debit card nor a credit card, to merchants. Anyway, compared with a conventional credit card, I have earned about 2,000 CRO tokens at about $0.25 each, and they are staying in our Crypto.com exchange account. My wife just applied for one too. 2% sounds like small change, but it soon adds up. And seeing the Visa and Mastercard bills coming in at nearly zero for a few months feels great too. Not everyone can make that change abruptly, but anyone can make it over a timeframe that suits their own budget, and many will find the “game” of trying to stick to a budget a new interest. Best of luck with getting off the drip feed drug of the credit cards.

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120

@Mondeoman I’m jealous that you can get involved with crypto. It sounds exciting, but I’m not comfortable enough with fx to take on another financial instrument. Do it for those of us who can’t!!

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121

So a couple of updates here; back to the 3 headings I think.

Personal Aspect

So today I woke to an email from HR.

I’m currently on a temporary position, as my rig has moved to Denmark and we are waiting for work permits.

It’s now come back from the Danes that we are only allowed a certain allocation of UK nationals, and the decision has been made I won’t be returning to my vessel.

BUT… as a consequence, they have made the decision to send me back to one I was on previously, but with a promotion.

So I’m going back to my old metal home where i was for 3 years, with mostly the same old friends!!!

On day shift!!!

With more money!!!

As I’m on day shift I open myself up to a great opportunity.
At the moment I find the time on night shift to do my trading at 9pm.
I will not always be able to do this when things are busy.

Being back on day shift I will be able to pretty much guarantee I will be able to relax at trading time, and it will give me the ability to run multiple accounts.

I’ve given myself a 10 week timeframe to get my algos in order, work out my DD and position sizing, then use my first two pay rises to pay for entry to the 5%ers Prop firm.

See below on how I plan to improve my DD and make my equity curve less volatile.

Mechanical Manual Trading

So, I touched on my new additional risk filter, ie using the strategy backtest to keep me out of trades on pairs that are not synchronous with my algo currently.

I took a compare of my slow algo I’m building, side by side with the fast algo I trade.
Low and behold, the pairs that one is profiting on, the other is lowing on and vice versa.
Directly inverse correlation.

The slow algo catches the big movements, the fast algo makes money from the in-between movements.
When the market favours one, it generally doesn’t favour the other.

There were the odd pair where both profit, and the odd pair where neither made much or lost much, say 1-2% a year up or down.

But the pairs where fast works, we’re talking 10 to 30% a year gains with a long prolonged win streak.
But the losers were also large, 10-20% in long streaks.

So using the risk management, stepping out of pairs not syncronised, I should be able to protect from DD, and focus on the syncronus pairs.

Also, deploying BOTH the fast and slow algo’s at the same time, I should be able to find trade opportunities on different pairs for both algos.

Basically use the backtester regularly, either simply before each trade, or maybe once or twice a week, separate which pairs are synchronous with| Fast, Slow and which are in that middle ground where they are bumping along winning one, losing the next etc.

So time will tell, but I believe this will help long term.

EA Auto Trading

Still ticking ahead with this. next 10 day optimize running.

I’ve started looking into building a dedicated machine so I can run round the clock optimizes even when at home.

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