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.

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.

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.

New trader update – results continue to improve

It’s about 8 weeks since we last mentioned our new 19 year old trader.  Then he was brand new to trading and started off nervously but making small profits every day.  Where are we today?  Well.  Here is his trade screen.  A few tiny losses but a raft of profits. 

You’ll notice the trade summary is from his phone.  Why?  because he trades from the phone.  And he gets his chats from the broadcast unit that we have for all of our traders when they are on the move.  

He started with a $10k account and is averaging 4% per week returns.  That means he gets his money back on EnigmaSignal in just 12 weeks, trading very safely.  What a great way to trade and make a second income?  Way to go Samsung and EnigmaSignal.

 

 

Two Hearts

Two hearts, believing in just one mind
Beating together till the end of time

Those are lyrics from a Phil Collins song, for the movie “Buster”, which was, of course,  about The Great Train Robbery.  But it could just as easily have been written about the movements of the S&P and USD/JPY.  These two instruments are highly correlated – in fact, the USD/JPY is almost a proxy for the S&P.  

Have a look at the chart below.  On here you can see the chart shows the S&P500 with the USD/JPY overlayed in blue as a line chart showing the closing price of USD/JPY over the same time period. Notice how they move very closely together.  

Why is this useful information?  Two reasons.

First off, be very careful if you see a chance to trade both of these at the same time.  You could double your profits of course – but your losses will go the same way.  Be patient and trade the chart that looks the best.

Secondly.  If you have a smaller account and trading an eMini is a little rich for you at $50 a point, then trade a smaller amount of USD/JPY.  You’re going to be able to get in on the moves, but with a lower level of risk.  And there is nothing wrong with that.  Consider it a way to build up your account until you are ready to trade the eMini or just keep trading forex. 

Either way, EnigmaSignal will give you high-quality trades.  And plenty of them.

eMini and GBPUSD profits

Not a lot to say today.  The markets were a lot quieter.  I actually didn’t trade all day as I has so many meetings and a blinding headache.  CNBC was a great meeting though, and I look forward to being a regular commentator on their active trader show.  I think we can really add value to that.  I was sitting on a couple of positions from yesterday to see if they really made gains.  They did OK (see below) but didn’t pull up any trees.  So.  A short blog.  The new training course (completely free) launches soon.  That should be exciting.  Other than that … a very quiet day.