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.

The 11th Commandment “always use quality data”

OK.  So maybe that’s not exactly true.  But if Moses had been a trader he would have snuck that one in there.  Rather than write about data …. we’ve created a video blog for this one. 

It’s only three minutes long but should give you a good idea of why investing in data is a smart idea.  Do you want quality trades?  Better make sure your numbers are accurate ……

PS.  In the narration I say its Nasdaq data, it isn’t.  It is in fact S&P.  I also make a horrific error in my pronunciation at the end.  I would re-record it but TBH … it’s too late at 1130pm.

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.

Interest rates up. Markets go berserk. We know where they are going.

Many years ago I spent a lot of time at Disneyworld Florida.  I went every two weeks when I lived there.  It was quite awesome.  Between there and Busch Gardens I got a real taste for roller coasters.  I was really glad of that today as the markets delivered a seriously wild ride.

Interest rate warnings were issued in the USA.  In this case, we’ll show the eMini chart.  Before the announcement, the eMinis were gently rising.  Then the announcement came and we saw a 13 point rise in 15 minutes.followed by 3o minutes of not a lot (marked in purple).  We were stuck in the swarms and trying to break out of them. 

When we couldn’t make the break, then what we see 80% of the time happened. 

We left them violently. 

45 minute after the announcement we were out of the swarms and we had impulse targets predicting a drop to between 2719 and 2714 (highlighted in orange).  That’s a full 14 points. 

We were there in 15 minutes and then we were predicting an impulse of 2698 – 2689 (marked in blue).  That was another 21-31 points away. 

Now, as our regular traders will know the lower target there would have taken us deep into the third swarm.  Unlikely. 

So … taking profits at the conservative level of 2698 made sense.  And by jingo we made it!!!! 

35 points on the S&P.  With a single contract that’s $1750.  Or put in another way, you just paid for 1/3rd of the entire Master Traders Course and Software.  IN ONE TRADE.  Oh, and don’t worry.  We get these trades all the time.  It’s not a one off.