Saturday, July 18, 2009

Market Analysis, July 17/09

Confluence is the theme for these past couple of weeks

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In the bullish scenario, the level to watch for gold is a close above 944. In the bearish case, the level to watch is a close below 905.

Volatility in the Euro has decreased on average for most of this month. The Euro sold off after the New York markets closed, which could be a tell for the open on Sunday afternoon. However, a close above 1.42 will maintain the bull case.

Deja vu? ES looks similar to the Euro and Gold charts. Furthermore, Gold and ES closed at virtually the same price point - 937. ES could confound buyers and sellers by continuing its march to new highs for 2009. Personally, I am looking for support in ES @900, that also implies that buyers should show up in the Euro @1.407 or 1.4000.
Failure of holding 900 in ES means a re-visit to the bottom of the range (875) and the Euro re-tests 1.388.

This is the bull and bear scenario to be aware of, the market will tell us which one gets played out in due time.

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Wednesday, July 01, 2009

Performance stats for Euro Futures trading System

1st month of testing my new Euro Futures Trading System has completed.

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As previously mentioned, I have been developing a semi-automated Euro Futures Trading System, and have been testing it in the month of June. Initial results look promising:

Total # of trades: 30
%winners: 22/30
%losers: 8/30

Avg. win: 61pips
Avg. loss: 90pips

Worst losing streak: 2

expectancy: 20.7pips

There's been a few times where I thought about following the system with real money. However, I always have this nagging feeling that as soon as I start using real money, the system will go on a real losing streak. Despite the real positive performance stats, I guess I still don't have complete confidence in this system. Pretty ironic, eh? I've developed a system and I'm fearful of going live with it. I will work on the psychological hurdle for the month of July. Probably the biggest hurdle to overcome is being completely accepting and at peace with the possibility of losing 90pips on a trade. The other possibility is to program a simple C# app to fire off the signals to bracketTrader. That helps psychologically to separate out the system to stand on its own and have its own identity.

There's also a few tweaks I can make to the system to decrease the # of losing trades. More to come.....

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