Algo trading whilst I sleep and code. It’s here.

Today is a landmark day. It was the first day that I was completely happy to go to sleep at 10pm and let EnigmaSignal Autonomous Trade (TM) run the account for me. Of course, I had set the parameters. Low risk at $10 a pip. Moderate aggression on trade, conservative stops.

I woke up to two nice little trades but “only” 50 pips ahead. OK sanity check time.
Mmmmmm mmmmmm. That’s the life for me. Algo trading. And chilling.

EnigmaSignal Quant Trader (TM) releases soon after 4th July. We’ll keep you informed.

flatline. verb. fail to increase; remain static.

The headline is the dictionary definition of flatline.  In trading terms, it is about right.  That’s pretty much what most markets did today.  I watched none of them as I was busy coding a few enhancements to EnigmaSignal “Quant Trader” (EQT).  Yes, we have a name for the product.  That’s what we have built, a personal quant trader.  A Quant Butler if you like.  Personally, I’d like it called Joe 90 after a hero of my youth (see video below). Brits and Aussies will know why.  Americans probably not so.

The great thing was EQT kept working for us.  Right now we have two nicely profitable algos coded and we have another 4 ready to go.  All well tested and now running with real money.  Anyway….todays trade of the day comes from our HTF50 trade type.  Thats Higher Time Frame (scenario) 50. 

Long and detailed set of rules behind it, but it delivers. 

Usually 2-3 small losses a day and a nice winner.  With a risk/reward setting for us of 2:1 that means it delivers a consistent 50 ticks a day (25 forex pips).  That’s 6525 pips on an annual basis, which we like very much.  And that’s from one trade type.

I ended up as a late entry trade but still delivered 150 ticks or 75 pips.  A nice $570 profit with a maximum risk of $133.  Quite happy with that as a risk-reward.  Notice the stop chases up the trade.  Fully adaptive to market conditions (and also configurable for aggression levels).

The real key?  Would I have taken this trade?  I don’t think I would in all honesty.  I wouldn’t have taken the two losers either, but they totalled 11 pips so no big deal.  In fact, I wouldn’t have traded today and would have been $570 worse off for it. 

As from 10pm UK time, I will up our individual trade limit to $200k on forex and 4 futures contracts.  Two trades at a time but asking EQT to monitor 10 markets.  Something I know a human cannot do (and neither can a scanner!!). 

As ever, happy trading.  I will keep you informed of progress.

Meanwhile, enjoy Joe 90.

An algorithm must be seen to be believed

The above is a quote from Donald Knuth.  He’s an absolute genius computer scientist, mathematician, and professor emeritus at Stanford University.  Now I have seen our auto trader in operation for a couple of weeks, I understand what he means.  It hasn’t had a losing day in 10 days.  I’m wondering how come?  I was expecting at least one.  BUT I have spent hours tuning it to trade for each contract and the results are starting to look cool.

These are two nice trades here.  The only two today on GBPUSD.
The purple dots are entries on the first trade (it adds to a winning position) with a single exit on reaching the target.  That gave us 92 ticks profit.  The second trade was 2 half position entries (marked in orange) and that gave us a 4 tick loss.

This just ONE strategy.  We have five more under test.  And they can all be configured.  For risk, for risk/reward, for a move to breakeven etc etc etc.  It’s a VERY serious tool.

And just for giggles here is GBPAUD making us 141 ticks.  No more trades here either.  This is set to run in conservative mode also (the other modes are moderately aggressive and aggressive).   Keep watching.

We are now testing indices, stocks and of course (and I hasten to add we don’t trade them) cryptos.  So why do them?  Because some people want to.  Our job is trading what we want and enabling our members to trade whatever the heck they want.

We are very close to release date now.  We are testing with REAL money.  24 hours a day.  When we are confident to raise our own trading to $200k clips of forex and 5 S&P then we will release the product simultaneously on Ninja and Sierra.

We’re excited people.

Why Oscar Wilde would have made a great algo trader

To paraphrase Oscar Wilde, trend-following hedge fund computers know the price of everything, but the value of nothing. This means human investors who focus on value over the long term, rather than price trends, should always be able to profit.

I would agree with that.  But I’m not interested in the long term value of stocks or currencies or commodities.  I’m a trader.  I want to make my return then take my profits and move those money into other investments like property.  

I have traded manually for years at home.  You may ask why when I have worked for banks and hedge funds. Why?  Because the computer power needed to algo trade effectively 10 years ago was over $100k.  Now I am doing it on a water cooled PC that just cost me $4k.

And the results are spectacular.  Full auto trading.  100% machine based trading.

Today for example from Midnight to 4pm UK time the EnigmaSignal auto trader had made 90 pips on GBPAUD alone (see below).  By 9pm that was 150 pips.

How much screen time have I spent doing this?  Zero.  Read that again.  Zero screen time.

Sure I had to set up the parameters.  That took me a couple of hours.

Parameters like:  move stop to break even. minimum profit target, risk: reward ratio etc.

But now I have this strategy set …. the machine will execute the strategy ruthlessly and without emotion.  When I saw a couple of these trades I wondered how in the heck it had taken them.  I could see the setups were good, but I would never have taken them manually. 

And so as we move flat (another parameter for the end of the US markets) I am over 160 pips to the good or put it another way $3200.  Will all days be this good?  Maybe not.  But this was just one currency pair.  

For the first time ever I now feel we truly have the power to deliver a personal algo trading machine for every trader.  To allow you to achieve consistency in your trading to a level that most traders have never seen.  It’s a trip.  Existing users will be upgraded free of charge.  new users will be able to lease or purchase the product.  

For now, the testing continues.  Real money.  Real trades.  Nothing at all is hidden.  Those of you who know the address can screen share and watch it live.  Those that have done so already are ready to be upgraded today!! 

Be patient.  We’re almost there.  We have everything running on Sierra Charts.

Soon we hand the algos over to our Ninja Trader platform programmer.  

By end June we will be live on Sierra and Ninja.  They have the power to handle the complex math.  MT4 is just not up to the job.  Other platforms we will consider in due course.

And finally.  Remeber in all of this, the human is still in the loop.  The machine trades YOUR orders.  Its just trades faster, without emotion and it always follows the rules.  You still need to fit the system to your personality and risk profile.  That’s why all new EnigmaSignal members will still have the opportunity of 1:1 coaching and a complete boot camp course.

At EngimaSignal we dont just backtest the trades.  We backtest the traders.

And another long delay to the blog … but its been worth it

Deep apologies.  I have just been crazily busy on the main project for us right now – the Ninja Trader and Sierra Charts ports.  Plus a sneaky bit of trading along the way of course.

Let’s cover off the trading first. That’s easy.  Today was a good day – and its still not over yet as all these positions here are live.  A cheeky little $4000 (£3049) profit on a few positions.  Look below here though and you will see exactly why I am so happy with this trading.

So why am I so happy?  because those positions were all auto traded!!  Yes, AUTO traded. 

I was asleep when the GBP position was taken, which made it even nicer still.  And I was away from my desk when this little puppy was taken too. 

This is EXACTLY as the trade is drawn on screen at the moment (I may change it).  The risk is calculated, the target is.  NOTHING on this chart is manual. 

No trade is taken when we don’t have at least an 87% chance of making the trade work within 4 time periods.  So far in the last 24 hours, we have traded 26 times on an incredibly choppy GBP/USD.  twenty winners and six losers.  Average win is 20 pips.  Average loss 5 pips.  That makes me very happy.  It took trades that I would not have taken, that for sure.  Which is actually good.  Especially on a choppy day. 

Not long now for the release, and frankly I can’t wait.  I think we have something very special here and with only 500 memberships available it’s going to be fun to have a closed community of traders. 

We will be developing new trade types all the while and making it work for everyone.

In the meantime, thanks for you rpatience and apologies I’m not bloggin that often.

No blogging but profits and some serious developments

Its been crazy busy past few days so I have had no time for anything other than a few trades and mainly, developing the latest versions of EnigmaSignal.  The big news is I now have the Sierra Charts and NinjaTrader 7/8 versions in beta test.  And they look great.  Some nice changes to the graphics and I’m also developing an auto trader as well. 

That will recognise setups and load them up into an interface for you to simply hit trade/no trade.  I’ve also been testing it in fully automatic mode, with real money, on Sierra charts.  The results are good so far but need tuning.  Two of the trades are shown below.  The charts are still using Ensign in the diagrams because I have that setup for auto screenshots in Sierra. 

The entries are not perfect, and the exits are certainly not.  Plus it missed a major short on the GBP/AUD that it should have caught.  BUT that said … its made a profit every day for a week.  Ninja will follow Sierra.  

And there we have it.  Ready for release in 3-4 weeks on Sierra, sortly afterwards on Ninja.  Along with (shortly afterwards) a brand new website.  We’ve also amended the sentiment indicator so that it shows directly on the chart and colours itself according to the strength of the sentiment (third chat below). 

And finally …. we will be showing sentiment from another timeframe on the chart at the same time.  So you can see the 5 minute and 15-minute sentiments or 15 & 60 etc simultaneously.

 Sierra Charts with money management entries marked.
Sierra Charts with money management entries marked.

NQ makes it rain. GBP/AUD makes it pour.

“Mathematics is the language with which God has written the universe.”

― Galileo Galilei Mathematics is at the very centre of what we do.  And as usual, it delivered.  For people that spend the time to learn Enigma, the profits are truly life changing.

And so today we have two joyous trades and one superb piano accompaniment.  In truth, I am trading lightly at the moment as we prepare the Ninja Trader and Sierra chart versions of EnigmaSignal plus the auto-trader. 

Todays trades net us 26 points for $260 on the Nasdaq and £1100 or $1600 on GBP/AUD. And today’s musical inspiration is the wonderful Mariage D’amoure by Paul de Senneville.  Another piano piece, listening to this makes programming a dream and simply so enjoyable.  And all this whilst making money as well. 

Those of us that trade (whatever your motives) truly are blessed with good fortune.

When indexes chop, stop.

Being open, today has been a really choppy day on the indexes  I have completely struggled to find an entry that has left me in a trade for longer than 20 or so minutes.  I’ve taken a few S&P points here and there and lost a couple as well.  Basically a break even on the indexes.  A nice day on the Treasuries again for a swift $400 profit.

Days like this happen.   That’s life.  Still a profit but not a good one.  Our new auto-trader (in test for release shortly) would have broken even on the S&P as at the time of writing but made nice profits on GBP/AUD (long).  GBP/AUD is now largely a function of the biggest one-way bet on currencies at the moment – the decline and further decline of the Australian dollar. 

Check this chart out.  This is weekly.  And the price is now in a zone (marked in yellow) where we forecast the price would go as long as NINE weeks ago. 

So where from here?  Goldman Sachs has said it sees the AUD ending the year at 0.72 by year-end.  Well, to be honest, that’s not far off now, is it? We have a row of support at 0.75 on the weekly chart but will it hold?  If it doesn’t then the 0.72 could be this week or next.  That’s a massive decline since February. 

Look at the weekly chart below ….. it says it all.  I’m now shortly going to start assembling a nice long position.  I will start soon (note – SOON, not today).  And with luck the 0.75 level may hold and we can head back towards the 0.79 or higher level,

Why I listen to Chopins “Raindrop” Prelude, Op 28, No. 15

There are times when after you place a trade you just have to think about things.  The Raindrop prelude focusses on inner confliction and the contemplation of the solitary self.  I’ve included a link to this as well as my screen shots.  Do give it a listen.

As you will know if you read these regularly I have been short and long of GBP/AUD on and off for a couple of weeks.  Always hoping for a big short to come. 

Friday early morning we had yet another short signal and I duly took it.  Then I listened to Chopin.  It’s a piece that really suited my mood.   Would I finally see a trade that would deliver BIG?  I mean don’t get me wrong I’ve had over 500 points from the pair in the last couple of weeks but I wanted more and I wanted to stay in for as long as I can. 

As at close of play, I am 414 points ahead.  I’m now waiting for the markets to open in the Far East.  When they do I shall adjust my stop.  And let it all run overnight I hope. 

Meanwhile, on indexes, one of our newer traders managed to take a delightful $980 on the NQ and other made a whole heap elsewhere.  What a great day! (see below)

In other news, our Ninja and Sierra trade versions are coming on wonderfully.  The Sierra auto trader is also looking great and after that …. we shall work on the Ninja Auto Trader.  Thes products will let you day trade even if you work.  And …. we will likely make them available “in the cloud” so you can check on them from anywhere and not worry about power outages and things like that at home.  The power of Chopin.  It makes one think easier.

AUD/USD plus ça change, plus c’est la même chose

The French have a wonderful way with words.  How much nice the headline sounds than the translation – “the more it changes, the more it’s the same thing”.  That’s definitely the case right now for the Aussie Dollar.  Its being smashed almost everywhere, despite increased talk of global growth (normally a driver for the Aussie to go up). 

Daily it is battered and is sitting precariously now on the edge of the swarm, right on the micro swarm marked below.  The negative sentiment around this currency pair remains, and whilst I can see no reason to buy AUD right now, there as to be a chance that it will bounce a little from these levels shorty.  Not ready to trade but worth watching on a daily basis. 

The weekly chart is a different story altogether and offers little to be short-term optimistic about.  The Aussie dollar has been battered here for several weeks but is approaching a significant low.  Again careful monitoring of this would pay dividends if we see a turn shortly.

And finally, have a look at the Nasdaq chart.  Nasdaq gapped open last night and I had a trader on the line to me asking what he should do about his weekend hold of a short.  Apart from saying “don’t do that” I pointed out we had daily support at 60 (arrowed on chart) that had held the market twice but been tested and was likely to be tested again.  And so it was.  He got out for a scratch trade and could go to bed in the USA and actually sleep instead of worry about a few contracts short.  He’s going to become an excellent trader and I was pleased he didn’t panic.

And now …. back to the markets.  If this sort of weekly overview interests you then you will enjoy our soon to be launched daily video forecast and live video room.  It will be cool.