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.

Paper trade: Short NZD/USD @ 0.7520, out 0.7308 (+212 pips)

This was definitely one of my better executed trades recently. Here's my logic for the entry and exit. As shown in Fig. 1, at the time of entry (marked by the faint vertical line on 10/23), NZD/USD made a negative divergence with a higher price and lower RSI. There has been a series of false alarm on the RSI overbought entry signals. However, 0.76 is an important resistance because it is where the massive downturn started in July 2008. I timed my short entry based on Figure 2. We made a lower high just below 0.76 and within the previous channel. Then I waited for the current downtrend to break the ascending support line to place the order. The order was subsequently filled on Sunday night during the Asian open when I was sleeping. Frankly, I wasn't too happy at first because my fill price was right at the low. I kept my position anyway and allowed the stop to work for me. This is probably the best decision I've made with this trade. By remaining patient, I didn't succuum to micro-managing my position like I've done before. With regard to the exit, I took profit at my target at the ascending support shown in Figure 1. That support line worked well for half of the year in this rapid ascend of NZD/USD. So I didn't want to risk a bounce by taking profit at this point. However, NZD/USD has traded down to 0.7260 as I'm writing this. Time will tell if the exit is a good one or that I should have left half the position in. The net gain for this trade is \$79.82 because I mistakenly entered a full position instead of half as I should. Here are the R/R that I saw when I entered this trade. Position size: 100% Entry: 0.7520 Stop: 0.7600 Target: 0.7300 Reward / Risk = 220 / 80 = 2.75 \< 3. I thought I was entering with only a 50% position size because of the R/R not meeting my criteria. However, I read my own forex position sizer wrong and gone in with a full position. Luckily, things have worked out. But I have since updated my position sizer so this won't happen again.

[caption id="" align="aligncenter" width="580" caption="NZD/USD"][NZD/USD]NZD/USD[/caption]

[caption id="" align="aligncenter" width="580" caption="NZD/USD, 3-hour"][NZD/USD, 3-hour]NZD/USD, 3-hour[/caption]

Posted 28 October 2009 in forex.

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