Forex Howto

I was doing some browsing last night and thought I’d look more into the FX Manager features which Oanda has. I managed to come across an interesting page on BarclayHedge listing the top currency traders for the past 12 and 36 months. After a little more digging I found some websites for these FOREX money managers, I was surprised to find one of them openly using Oanda FX Manager.

The original thread I found is here (I view the returns some of the thread participants discuss as rather extreme).

• Rove Capital
• Genoa Capital has some quite detailed information about their strategies.
• Zone Capital is an Aussie FOREX trader who isn’t currently on that list, though I’ve visited there before.
• Tri Global FX has an interesting question on their Managed Accounts page “Are you interested in our Capital Preservation Program?“

I’m somewhat curious in the feasibility of using FX Manager as a possible future venture. Some people (eg. see the thread posted above) will ask why would you want to trade other peoples money when you could make a fortune with your X00% annual returns. My belief (and I’m sure lots of smart people will back me up) X00% returns is over leveraged stupidity about to be wiped out. If I could make a consistent 40% I would be incredibly happy. I would need to look into what the certification requirements are in Australia.

Looking briefly at Zone Capital it would appear that it’s not too difficult to be able to take money from wealthy investors who qualify as a “Sophisticated Investor”, here’s what Law Central has to say on this page.

There is a special investment opportunity. But it is only open to the “big boys” – not mere members of the public.

If you are only a member of the public then you don’t get exposure to these special (unregulated) investment opportunities. The Australian government feels that you need protection. Members of the public can generally only invest in investments which are highly regulated. Examples of regulated investments are often contained in a Prospectus or a Product Disclosure Statement. These investments have to go through many hoops before they can be offered to the general public.

There is at least some protection and regulation for mums and dads.

However, many promoters don’t want to nickel and dime the small stuff with the mums and dads. They don’t want to go to all the trouble of dealing with a large out of date government regulator called ASIC (Australia Securities Investment Commission). They want to go to a smaller number of the “big boys”. The “big boys” are the Sophisticated Investors. They have a lot of money to invest or they earn a lot of money each year.

The Australian Government thinks that if you are that so wealthy then you don’t need the protection of things such as the Prospectus and Product Disclosure Statement.

However, before you can get the lofty status of Sophisticated Investor your accountant has to sign off on a complying Sophisticated Investor Certificate. You then show the Certificate to someone that wants to take your money.

Just a follow-up to my last post in which I was worried that I may not get accepted into the Automated Trading Championships, well I just received an email saying that I’ve been accepted!

Now to see how my EA actually performs

I’m worried that my EA won’t be approved for this years Automated Trading Championships.

I was told that multi currency EA’s would be manually approved after registration closed. After registration closed I received an email stating that my EA had errors (zero division error). I sent them an email telling them the only reason this would happen is if there wasn’t market info for either EURUSD or AUDUSD (yes I should have checked), which in all reality means that the testing setup was not setup correctly.

So, I hope that I’m worried for no good reason though sadly this year may be without me as a competitor

BARGAIN hunters in equities will have noticed an encouraging sign last week. On September 17th, the yield on British equities, as measured by the FTSE All-Share index, was higher than the yield on 10-year gilts (see chart). This last happened in March 2003, just at the start of a rally in the London market that saw it double over four years.

Bullish news from the FTSE

I thought some of you might get a chuckle out of this cartoon

I read an interesting story on the BBC site the other day and at the end of it they had an interesting graphic which I thought I should share which shows the massive scales of losses which have happened in banking recently.

If you’ve read some of my recent posts you’ll know that I’ve been rushing to get an entry in to the ATC 2008.

Well, the time has almost come and I’ve decided to enter my multi currency EA which has been around for a little while now, it isn’t perfect (far from it) and needs to be fully developed, however, I’m going to run it as a test to see how it goes running live for a reasonable amount of time (I never leave my computers on 24/5).

My limited testing shows that it should make good money if it can close positions quickly, possibly some profit if it can close them within a day or so, and a loss if it holds them open for too long. It would also be better if I could have much finer control over lot sizes (0.1 standard lots is not fine enough when you’re hedging).

I’ve been testing (very small amounts of live money) a strategy that seemed to be basically foolproof. Today I realised it isn’t!

It’s a mean reversion based strategy which is mean reverting, though unfortunately there is some creep in it which changes the status of the mean reversion without the position coming good.

I was trading it on 5 minute charts however since my losing trade I might switch to the 1 minute chart and see how we go, I think the trick might be to keep the position holding time as low as possible.

I won’t have time to thoroughly test this strategy for a little while (proper work calls).

I’ve decided to just enter this EA into the Automated Trading Championships and see what happens, I have no doubt that I won’t be winning, though I’ve simply run out of time for something better this year

Having a domain name like Forex Howto really needs to have some tips to help new traders get a bit of a headstart in the world of FOREX trading.

If you’re a new FOREX trader, I’m not going to tell you how to make money, I think you’ll be much prouder when you figure it out for yourself, not to mention you’ll be a lot wiser for it.

What I will give you is some tips that will help you survive trading in the forex markets.

I’m currently rushing to get an EA (Expert Advisor) finished for this years automated trading championships.

In my live trading I’m using/testing a strategy which appears to be producing very nice profits. I was hoping to enter an EA based around it, however it appears the less flexible lot sizing makes it substantially less profitable than when I run it on Oanda with their very flexible lot sizing. It’s a USD neutral strategy so it is important to take the USD out of the equation (perfectly balanced).

So, I’m rushing to get a replacement EA completed for the championships. I’ve been playing with some Neural Networks during the last year, hopefully I’ll be able to translate them into MQL and get one entered this year.