How do you minimize risks when EURUSD moves 100 pips up and back down in 2 hours?

And this happens quite often. [caption id="attachment_5526" align="aligncenter" width="580" caption="EURUSD, 5 min"][/caption] There are a few choices to minimize your risks in times like these:

  1. Stay on the sideline until the dust settled.
  2. Target higher time frames with larger stops and smaller positions.
  3. Partner up with someone from another timezone.
  4. Set a trailing stop.
  5. Set alerts to wake you up on extraordinary events.
  6. Use a position management bot.

I opted for #6. What about you? The picture is worse in equities as you are locked in your positions overnight. [caption id="attachment_5527" align="aligncenter" width="580" caption="S&P500 ETF"][/caption]

Posted 24 June 2011 in forex.

Bearish USDJPY on 19th week of 2011

I am going bearish on USDJPY this week using my QTD system. No position is opened at this point. I am merely entering my sentiment into the system to trade for me. Figure 1 is a daily chart of USDJPY. Notice it's lack of life despite the USD making headlines last week. Figure 2 shows the move with a US dollar index, USDX, daily chart. Furthermore, according to the order book on USDJPY, there are massive bullish positions in the red (at a loss) which make this pair ripe for some bull squeeze. I am going short on NZDUSD as a hedge on this move. It is my favourite long USD pair these days. [caption id="attachment_5405" align="aligncenter" width="580" caption="USDJPY, daily"][][][/caption] [caption id="attachment_5406" align="aligncenter" width="580" caption="U.S. dollar index futures, USDX"][][][/caption]

[]: http://www.quantisan.com/static/images/2011/05/2011-05-08-USDJPY.png []: http://www.quantisan.com/static/images/2011/05/2011-05-08-USDX.png

Posted 08 May 2011 in forex.

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. [caption id="attachment_5361" align="aligncenter" width="580" caption="EURGBP, hourly"][][][/caption]

[]: http://www.quantisan.com/static/images/2011/04/2011-04-21-EURGBP_hr.png

Posted 21 April 2011 in forex.

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. [caption id="attachment_5342" align="aligncenter" width="580" caption="NZDUSD, weekly"][][][/caption] [caption id="attachment_5343" align="aligncenter" width="580" caption="EURGBP, weekly"][][][/caption]

[]: http://www.quantisan.com/static/images/2011/04/2011-04-18-NZDUSD_wkly.png []: http://www.quantisan.com/static/images/2011/04/2011-04-18-EURGBP_wkly.png

Posted 18 April 2011 in forex.

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