First QTD trade, 0.19% gain long EURGBP

My semi-automated trading system, Quantised Trading Desk, closed its first trade this week. I was bullish EURGBP and USDJPY, and bearish NZDUSD as per the previous discussions. The QTD system saved me from the premature calls in both USDJPY and NZDUSD by not making any trade this week. That, in and of itself, has made me very happy with QTD’s first week of live trading. Particular in light of how fierce that USDJPY down move has been.

As a bonus, QTD entered a long position in EURGBP for a small 0.19% gain as illustrated below. My parameter were a maximum of 0.25% risk per position. The gain could have been better if it weren’t for that 61% retracement. Not that I’m complaining as I haven’t even looked at the market this past couple of days while the system is trading for me.

USDJPY touched my threshold support price 80.70, my bullish sentiment needs to be reevaluated. NZDUSD just cracked a higher high (marginally though), so I’m easing on the bear button for now. EURGBP is testing some resistance to, so I’m not so eager to dive in again. Overall, I’ve been 2/3 wrong. I’ve told you before that I’m very bad at timing the market. That’s why I developed QTD to trade for me.

Seeing that it’s a long weekend, and I’ll be way from town, I’m just going to shut down my remote trade server in London until next week when I can have some time to re-do my analysis.

EURGBP, hourly

Bullish EURGBP as hedge and Bearish NZDUSD as diversification

I’ve had more time to study the market tonight and is running a second and a third instances of Quantised Trading Desk (QTD) to trade 3 currencies in total simultaneously. For my dollar bull sentiment, I’m dividing between USDJPY long and NZDUSD short. QTD still hasn’t taken a position in USDJPY in the past 24 hours. That’s a good thing as USDJPY is still drifting downward today even as the dollar is gaining some ground. My line in the sand is at 80.70 for USDJPY and above 0.8100 for NZDUSD.

EURGBP long is a hedge against my dollar longs. Again, I’m not making any trade at this point but merely setting up QTD to wait for the right moments to enter. A break below 0.8660 for EURGBP would challenge my bullish bias.

These three currencies should be my complete market bias for a while. I’m just going to let QTD do its thing and trade for me. Hopefully this will be the last you’ll hear from me about my market bias for a while.

NZDUSD, weekly

EURGBP, weekly

Paper trade: GBPJPY @ 145.24, Stop 144.70, Target 148

Update: I’ve switched over to long EURJPY @ 125.40 as EURGBP’s downtrend seem to be running out of steam. Moreover, EURJPY looks better on the daily chart with a clear support and an oversold reading.

I’m back in my long GBPJPY play at 145.24. The currency pair is breaking an hourly resistance since consolidating around 145. I had a low ball offer at 144.20 since taking my profit last night at 146.42. But that bid for never filled. So I’m re-entering on a short-term breakout. For this entry, I am risking 0.1% of my account.

This re-entry is a tough decision. Almost all the respectable pros that I follow on Twitter are on the other side of this trade via other currency pairs. However, my long setup is valid as long as GBPJPY is above 144 level. So I’ll take this trade until proven otherwise. Although I must admit that my confidence in this trade is very low.

I also considered long CADJPY instead as it seems to offer more upside potential. However, as I’ve been following the GBPJPY pair this week, I’ll stick with my plan.

I also have a limit order to add more at 145.81 as you can see in Figure 1 below.

GBP/JPY, 3-hour

Paper trade: Closed GBPJPY @ 146.42 for +140 pips

Just closed my GBPJPY long at 146.42 for around +140 pips average gain, or 0.4% in the account balance. Damn good for a 24 hours holding. Obama just finished his State of The Union address at the moment. I am not impressed. Still all talk of change but nothing concrete yet. Anyway, that’s beside the point in this trade log.

146.50 price level for GBPJPY is the 10 day moving average. It has also been a strong support back in late December. This should be a good resistance level. My guess is that GBPJPY should stall, or even retrace, here for a while. Thus I’m taking profit at this price as shown in Figure 1 (yellow triangle).

I still believe my bullish setup from yesterday is still good. So I’ll be watching this pair for a re-entry.

Update: I re-entered at 145.24 the next day.

GBPJPY, 3-hour

Paper Trade: Long GBPJPY @ 144.24, Stop 143.60, Target 148

My previous short-side setup on GBP/JPY played out beautifully. Yet I wasn’t able to ride it down because I got stopped out on a stop-hunt counter-move before the dive, see Fig. 1. Now that GBP/JPY has reached its other end. I am betting for it to go reverse with a long position. I expect this move to be more fierce with more upside potential as it’s in the direction of the long term up trend. Some people are calling the top has been printed in the markets and the wind is now blowing the other way. I am not one to guess what the market is about to do. So it’s business as usual until the trendline is broken.

What I really like about this setup is that GBP/JPY is testing a double trendline cross on the weekly, Fig. 2. Secondly, the 3-hour chart of Figure 1 is showing a RSI positive divergence on this test of the long term support. I am quite confident of this setup. However, I am not confident about the timing as GBP/JPY is known to be a wild horse and volatility could very well stop me out, like last time.

With British preliminary GDP number coming out in about 6 hours, it might have been wiser to wait until the after that to enter. On top of that, the markets have been on a stall for the last few days waiting for data in the next 48 hours. End-of-week volatility this week is expected to be significant.

Anyway, I’ve put in a position already and will just let it run. This a small initial position with 0.1% of my account at risk. I have also placed limit orders above resistances to add to this position. We’ll how this turns out soon enough.

Lastly, even though I said I’ve been cut off from trading at my day job. It doesn’t mean I’m completely out of the game. I just have to adapt my manual trading strategy while my automated system is still in development. Basically meaning that I’ll trade with a slower timeframe for longer-term moves. All the better, as longer term moves are generally less deceptive.

Update: I closed this at 146.42 for +140 pips gain the next day.

GBP/JPY, 3-hour

GBP/JPY, weekly