Forex Howto

If you feel at a loss for words to describe the now global financial cover, this spoof cover floating around the internet for September’s Economist says it all:

The Economist Sums Up Financial Crisis: “Oh Fuck!”

The RBA have taken a big chunk out of interest rates. Dropping from 7% down to 6% in one big drop.

I shut down my AUD hedge (I live in Aus) this morning (damn it has hurt a bit!) and I’ve taken a small short position hoping that this might continue to fall.

Ck has had a big life direction change, and I find it comforting to see others seeing things in somewhat the same way that I do, particularly somebody who has had a quite a bit of exposure to expert advisors. Specifically regarding constant optimisation of an expert advisor.

My view on automated trading is that it should be completely automated with no human input (beyond the initial programming and configuration), this means building a program which reacts automatically to changing financial markets and trades accordingly. Yes this is pretty much the holy grail of trading software, though if you’re always manually tweaking the parameters to your “automated trading application” then it’s really not all that automated is it.

Do I think my systems are close to the holy grail? Not yet, with some more inbuilt cointegration analysis of the different timeseries I think it should get fairly close, might also need to add some analysis of different time periods for position sizing (increasing sizes when multiple timeframes are giving similar signals).

Just made a nice quick 1% with my trading, generally I need to hold my positions for a little while, though this time I managed to turn my trading apps on at a time when it looked great so I opened my positions and straight away it started working, closed it out when it was a little over 1%, normally I’d wait as it wasn’t near my target (according to my indicator which is a work in progress).

In other news, my EA in the Automated Trading Championships isn’t doing so well… Not sure what’s wrong (it now has a connection). I suspect going to 1 minute timeframes was probably not the best thing to do, oh well we’ll see if it turns it’s fortunes around.

Last year in the Automated Trading Championships I ran a long term though risky EA I threw together very quickly just before the championships started, that EA was actually half decent (I was leading for a couple of weeks). I remember many people complaining about their EA’s being unable to open or close positions which fortunately didn’t really affect me, however with the troubles I’ve been having this year I can see that it’s a bit of a joke. It’s 2 days since the competition started and my EA has yet to start trading properly… The apparent reason for it?

C’mon guys (MetaQuotes), you’re meant to be showing how good your platform is for automated trading! If you can’t manage to have EA’s online consistently then what hope does the rest of the world have?

While I’m under no illusions that being unable to trade will prevent me from winning the championships (I’ve mentioned previously that this EA is really being run as a live test). I still find it amazing that they can run it so poorly, and with barely a word from the organisers.

I’m disappointed. My EA in the Automated Trading Championships appears to not be functioning… however the copy I’m running locally is working well without any issues.

No trades have been executed since the beginning couple of seconds of the championships and I can’t see any expert advisor logging either to give a hint as to what is going wrong.

My master and investor passwords on the files page of my profile are also displaying as blank.

I’ve sent MetaQuotes an email, I am hopeful that I will receive a prompt and useful response.

Needless to say, I’m underwhelmed by my experiences with the Automated Trading Championships this year.

My EA seems to be broken. With one set of trades in the first couple of seconds of the championships it hasn’t done anything else (it really should have). I’m not sure what is the cause of this, the only thing I can think of is perhaps it is the way that the historical data is made available for the other currencies. My EA needs a reasonable amount of historical data to make trades. If this is the case then I expect it will start making some trades later today, if not then I guess there is something more serious wrong with it.

The competitors who are leading are going like crazy… and mighty profitable as well, very nice start, hopefully they can keep it up and share some of their secrets.

I’m not sure if I messed up though for some reason my EA had a very quick loser when the Automated Trading Championship started.

Or maybe I messed something up in the last minute changeover to running on 1 minute time frames instead of 5 minutes. Oh well we’ll just have to wait and see and hope there is something strange going on with the data.

A great writeup by Harvard economics lecturer Jeffrey Miron detailing why the government shouldn’t bailout the bankers.

The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Bankruptcy, not bailout, is the right answer

Interesting that the $700 billion bailout package didn’t workout in the US (at least not yet). Sucks to be a banker knowing that they aren’t going to come and make your stupid purchases magically disappear.

Assuming the deal doesn’t pass on a second or third try, I think it will be for the long term benefit, the short term is going to suck like the latest Dyson vacuum cleaner, though the alternative will suck like you wouldn’t believe (think a hundred Dysons).

I’m surprised there hasn’t been more movement in currencies, the DOW Jones and S&P 500 fell like a rock.