Pipsqueaks #4: Just how many pairs in that basket?

 

In preparing this article I couldn’t help but be reminded of one of my favorite growing up anecdotes. My older sister Susan, about five years of age at the time, was having something of a dispute with the boy from next door. I don’t remember what he did to annoy her, but he was redressed severely in a way that only my sister could do – she told him to “get out of here you basket!” She unfortunately had misunderstood a nasty expletive uttered by my father only a day earlier. I’ll treat what my father actually said as a matter of suspense, as it has no other significance. So much for that segue, what I wanted to discuss was a continuation from last week’s article of useful Forex automation in regard to basket trading. But before I go there let me take a moment to provide an explanation regarding how I take Davinci trades in Forex as several questions have come my way on this topic.

 

So here’s how I take the Davinci trades in Forex (and I might add that I was pleasantly surprised by Curtis’s post the other day that his method of taking them was indeed similar to my own): when I receive a signal, I take a quick look at the chart, and if it looks good, I’ll quickly place a trade as called (long or short) and set a five pip TP. If I really like the chart, I may go for six or 10 pips, but usually five. For my own level of risk I usually take this as one standard lot. I take these trades during the London, New York, and late Asian sessions, skipping the early to mid Asian session and the first hour or so of the New York session. I do not trade this during news. I take the trades on all of the Nadex pairs except CHF/USD (just my preference). Just for fun I experimented this week with some trading during the Asian session on my demo account without the use of the EA I usually use for taking these, and both lost (at least in Forex, I didn’t look at the Nadex result). What was annoying here was that price actually touched my TP twice but the position didn’t close. Whether it be the effect of the spread at the time or slippage or whatever. Which is why I like to use an EA to manage trades on my live account.

 

For whatever reason, setting the TP in MT 4 does not guarantee the position closing when the spot price hits the target. That’s why I like to use an EA called VR Stealth Pro (freeware) to manage the trade as it gives me one-click entry and I can automatically have a five Pip TP programmed automatically that I can drag around till my heart’s content. These are soft exits, as the broker doesn’t see them and you don’t have to worry about any shenanigans. Spot price hits target, position closed. End of line. One catch -you have to leave MT 4 running for this to work. And whereas you may not necessarily get the exact price as programmed, at least the trade will close when expected.

 

Okay, not a big deal in a single trade, after all, I can always push the button on the terminal to close it manually if I’m sitting there watching my trade. But what if there’s more than one? casino forex auto trader pipsqueaks slick tradeWhat if I want to have for open positions? Or five? I could really use some help…and fortunately there is some automation out there that will help and it’s free to boot! VR Stealth Pro is my EA of choice for taking the Davinci trades. I keep some charts on standby with the EA loaded and Donchian channels at the ready so I’m never more than two clicks away from entering a position when I need to. But sometimes I might want to work with more currencies simultaneously, and so I need a tool from a bigger toolbox. Happily I found one such neat little program and, like VR Stealth Pro, it too is freeware and works pretty well. It does however have, from my point of view, the unloved name of “Casino”.

 

It’s just one of those things that doesn’t help endear my trading activities with my better half who is typically inclined to regard this as gambling and should be punished accordingly. This causes me to go into reassurance mode, something is required of me often. I didn’t mention in pipsqueaks number two when we were at Disneyland my wife was concerned when she observed some individuals who are acting up in a queue; she was convinced they were on acid. I reassured her that no one goes to a place filled with 7 foot tall talking mice and log rides where mechanical bunnies sing to you and drop acid – it just doesn’t happen. I do have to reassure her from time to time that Forex trading, if treated irresponsibly, could be considered gambling, but more correctly it’s speculating, and, with serious intent, is a business, to be regarded and treated as such.

 

But enough on semantics, I found this EA a few months ago and I’ve had an interesting time experimenting with it. It functions as a money manager and as an auto trader and can take various indicators as plug-ins, while on the other side acting as a money manager. Now that’s the part I like. I can set up a bunch of very small risk trades, and collectively trail stop the entire collection of trades as a group, locking in progressively higher take profits (as well as a collective SL in case my market analysis wasn’t quite up to snuff that day). The downside is that this particular software has a pretty steep learning curve it will take some little time to learn, but I think it’s worth it. It’s earned a place in my collection of tools for Forex trading. It comes with some useful scripts which allow you to, say, change the timeframe of lawyer open charts, change the templates of lawyer open charts, and automate the downloading of historical data. All in all a neat little program and something worthy of consideration.

 

I think my fondness for the concept of basket trading started with Krystal’s Poppin Picasso trades several months ago when they were first introduced. Now this is a group of four currencies, and, after entering positions, it was soon apparent that even if one currency pair didn’t perform well, it typically was healthy profit on the other trades so the overall trend was a nice tidy profit at the end of the day. This appealed to me instinctively because I’m such a risk-averse trader. Since these trades are broken into multiple take profit levels, I would create three trades per pair, a total of 12 positions. This got crowded pretty quickly, so I became accustomed to using EA’s to help me manage this stuff. This also helped enable me to experiment with trading the New York session open as that’s one busy time to be looking at four to six charts looking for entries. This for me is still a work in progress as I practice placing trades during the late London to New York session open.

 

Casino has an interesting auto trading side to it which I have experimented with (mostly unsuccessfully). I think with practice I might find a sweet spot that would work well for me, but so far results are mixed (and thereby feeding my disdain for auto traders in general). It does have a lot of interesting indicators which, at a glance, will show you trends in different time frames, strengths of currency pairs, worldwide broker times as well as local times, one click chart launching, as well as some interesting graphing capabilities. It’s basically a giant control panel, with emphasis on the word giant. It really only works on 1920 x 1080 displays and takes up most of the screen real estate. But for those bold enough or curious enough to try it I think it’s worth the effort, and it can be found (along with the VR Stealth Pro) on Forex Factory as well as links to its training videos on YouTube as there is no official documentation.

 

A lot of people ask me if I still trade Sominex and the answer is yes I do although I did not trade it live this week as I am testing several modifications to the strategy in an effort to improve its performance. Sominex is super convenient as I am currently not staying up for the London session as I was accustomed to in the past. I am, however, getting up early for the New York open (4 AM Arizona time), doing still more demo trading. And I’ve hardly touched some of the newer strategies – I need to practice more with the Wick Hunter, the new patriot EA, and the Superman, just to name a few. These along with the Poppin Picasso and Davinci trades are just some of the benefits of being a slick trade Sapphire member. So if you’re new to Forex or just want to learn some more why not become a member, you’ll be glad you did! At least you won’t be bored that’s for sure!

 

Next week, I’ll be taking a look at Forex trading without Windows. Until then take care and as always, thanks for reading.

 

JC

 

Didn’t catch last week’s Pipsqueaks?  CLICK HERE to access!

 

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