ForexMorningTrade System

[JohnnyBme]

Johnny Hi, not sure if I can help because my understanding of 'stop hunting' is slightly different?

Most traders (not us) are taught to place the SL technically, behind a natural point of resistence/support. These could be previous highs/lows, pivots, 61.8% Fib retracements, trendlines and round numbers (plus others).

As price action gets near to a point of natural resistence everyone gets cautious expecting a possible reversal. What 'stop hunters' do is pump large amounts in at this point to continue through the resistence/support (as trading volumes often decrease at this point it is realistic to do this). If they succeed in hitting everyones stops beyond the resistence/support this has the effect of taking out the oposition and accelerating the move through the resistence/support. This then gets everyone excitied and all jump on the bandwagon, reinforcing the move. This is why you often get a sudden lurch after breaking through significant resistence.

The term therfore means trying to hit a place where large numbers of SLs are naturally placed in order to accelerate an existing move.

Hope that helps?

Chris

Sure does! Thanks (Gumrai too).

 

[Adamus]

Hi Adamus,

I wish I had those numbers with me but really it does not make any sense to get a spike of 15 to 20 pips without any news in the opposite direction of current trend and then the price resumes immediately to previous trend. As I had mentioned this does not happen all the times but I have seen few times to believe there must be some gain for the market movers in this zero sum game.

I found one good article that does make some sense:

http://www.investopedia.com/articles/forex/06/StopHunting.asp

Interesting quote from the article:

"Because of this unusual duality of the FX market (high leverage and almost universal use of stops), stop hunting is a very common practice. Although it may have negative connotations to some readers, stop hunting is a legitimate form of trading. It is nothing more than the art of flushing the losing players out of the market. In forex-speak they are known as weak longs or weak shorts. Much like a strong poker player may take out less capable opponents by raising stakes and "buying the pot", large speculative players (like investment banks, hedge funds and money center banks) like to gun stops in the hope of generating further directional momentum. In fact, the practice is so common in FX that any trader unaware of these price dynamics will probably suffer unnecessary losses. "

Thanks for the feedback. I figure I could potentially get numbers from some people on this forum, but I don't think they read the flood of posts that this FMT thread has.

The link you posted was good, and it directly mentions one system that I'm already familiar with called "Fading the double zeros" by Kathy LIen, which takes advantage of price dynamics around the 00 levels due to stop hunting - or whatever.

The dynamic that you outlined though is the opposite - where a stop hunt goes in the opposite direction to the established trend. The big speculators who do that have obviously got bigger cohones than most and I figure they must get it wrong more frequently.

 

[podberry]

Hi Podberry,

Thanks for the post- I totally agree with you.

Unfortunately I think I was one of the 'newbies' that have looked at testing different settings.

But thanks for your post and reality check, I have realized that I need to follow the rules- and the rules include TP35 SL40 and BE20.

So by not using these settings, I am breaking the rules. (Which is what we paid for).

I think I need to evaluate my daily trading, not by pips gained/lost, but rather by whether the rules were followed or not.

Many Thanks

M

No problem michaelsa, at least you are honest - I Like that.

One pitfall that many new traders fall into is jumping from one trading system to another week after week trying to find a get rich quick holy-grail , but the honest truth is that there is nothing on the market (EA) that achieves this. FMT on the other hand is one of those systems that shows consistency over a period of time. So for a week or 2 your account may not show growth and you are pulling your hair out, then all of a sudden you have months that gives back 10 to 20% - Some serious traders are happy doing 20% in one year never mind 20% in one month.

So like the seasoned traders keep on saying "trade daily whilst sticking to the rules"

I also get tense every now and again when we have negative days, it is human nature as nobody wants to be stopped out with a loss. But that's the way the cookie crumbles in this game, What I do is revert back to Marks monthly trading journal for the last 2 years http://www.forexmorningtrade.com/results/ to remind myself that the good months far outweigh the bad months - Looking at that journal statement daily keeps me focused. All the Best

 

[RedGuerrilla]

Hi Red,

First i would like to thank you for your great work and i would ask you to not stop sharing this valuable information with us.
But since i am using FXDD i know that they are a dealing desk ..... and what you mentioned here is only FXsolutions is the dealing desk broker.
One more thing from your analysis i can see that you are running four demo accounts with the same start date ..... FXDD is one of them but its very far from their perfomance in terms of pips! Is it because executions? or the data?

Thank you again.

Thank you musallam . . .

I checked again with FXDD, this is what they said . . .

Please wait while we find an agent to assist you...
You have been connected to Aykan Y..
Aykan Y.: Welcome to FXDD Live Talk! How may I help you?
RedGuerrilla: are you a non-dealing desk?
Aykan Y.: yes we are non dealing desk. The only exeption to that is when clients are away from their computer and want to trade, they can call us directly and we can execute their trades over the phone.
RedGuerrilla: does that include mt4 traders?
Aykan Y.: Mt4 is non dealing desk too.
RedGuerrilla: can you give the link on your web site that shows this . . .
Aykan Y.: unfortunately we don't have a link showing this. But if you would like, you can send an email to [email protected] asking this question, so we will reply your email, that way you have a written confirmation on your side.
RedGuerrilla: okay, thank you, bye
Aykan Y.: no problem
Aykan Y.: Great chatting with you today! I hope I answered all your questions. Feel free to come back anytime.
Thank you for using FXDD Live Talk. You may now close this window.
Your session has ended. You may now close this window.


I would think it's the data, since the executions are based on the data . . .

Look at the demo trades for yourself for Feb and Mar so far, zeros are no trades or break evens . . .

 

[RedGuerrilla]

Stats for 03-15-2011



Live Accounts:

FMT 4.3, EA standard settings: 40 SL, 20 BE, 35 TP
6:30 UK Time, FXSolutions, Short/Profit, +36.0, Stats since 11-08-2010: Total= -39.0
6:30 UK Time, IBFX......., Short/Profit, +34.6, Stats since 01-04-2011: Total= +138.2
6:30 UK Time, PFG........, Short/Profit, +35.9, Stats since 03-01-2011: Total= -21.7



Demo Accounts:

FMT 4.3, EA standard settings: 40 SL, 20 BE, 35 TP
6:30 UK Time, PFG Best.., Short/Profit, +35.7, Stats since 02-01-2011: Total= +282.0
6:30 UK Time, FXCM......, Short/Profit, +36.7, Stats since 02-01-2011: Total= +326.4
6:30 UK Time, Alpari(US), Short/Profit, +36.0, Stats since 02-01-2011: Total= +242.9
6:30 UK Time, FXDD......, Short/Profit, +35.0, Stats since 02-01-2011: Total= +175.2

FMT 4.3, EA tweaked settings: SL=40, TP=30, BE=20, BE+5 pips, based on back testing, Post #5659, page 708
6:15 UK Time, PFG Best.., Short/Profit, +30.7, Stats since 01-20-2011: Total= +150.7



Notes:

All pip totals include slippage
FXSolutions is the only dealing desk broker

 

[fxsurfr]

No Trade?

 

[podberry]

No Trade - Oanda MT4

 

[wiseambitions]

06.30 GMT. Wednesday. Flat as a mill pond. No trade here. But such a near miss for a short. at 06.15 starters would have got a long.

Have any members come across a simple strategy which says something like issue two OCO orders 50 pips either side of the price at midnight. Aim for 20tp, with 20sl. I.e. If price at midnight was 1.6050 and then during the day it goes down to 1.6000 a short trade would open and would close with profit at 1.5980 or stop out at 1.6020 The other order lapses. Vice versa for a long.
Something like that would be interesting to test on days when FMT gives no signal at the normal time.

 

[musallam]

Thank you musallam . . .

I checked again with FXDD, this is what they said . . .

Please wait while we find an agent to assist you...
You have been connected to Aykan Y..
Aykan Y.: Welcome to FXDD Live Talk! How may I help you?
RedGuerrilla: are you a non-dealing desk?
Aykan Y.: yes we are non dealing desk. The only exeption to that is when clients are away from their computer and want to trade, they can call us directly and we can execute their trades over the phone.
RedGuerrilla: does that include mt4 traders?
Aykan Y.: Mt4 is non dealing desk too.
RedGuerrilla: can you give the link on your web site that shows this . . .
Aykan Y.: unfortunately we don't have a link showing this. But if you would like, you can send an email to [email protected] asking this question, so we will reply your email, that way you have a written confirmation on your side.
RedGuerrilla: okay, thank you, bye
Aykan Y.: no problem
Aykan Y.: Great chatting with you today! I hope I answered all your questions. Feel free to come back anytime.
Thank you for using FXDD Live Talk. You may now close this window.
Your session has ended. You may now close this window.


I would think it's the data, since the executions are based on the data . . .

Look at the demo trades for yourself for Feb and Mar so far, zeros are no trades or break evens . . .

Thank you for getting the right answer from FXDD... but what i know is when the broker provides fixed spreads this mean that they have a dealing desk.
Anyways, I am with FXDD from 2006, i was using FXDD us now i moved to malta because of leverage. Until now i don't have any problem with them. Now i am thinking to have one more account with another broker, the reason behind it is not to have my eggs in one basket. So from your testings can you suggest a broker? I read from forums that Alpari has a requote problem i don't how real is this point.

 

[kgk]

No trade. Ibfx live.

 

[michaelsa]

Morning All,

No trade this morning.

FXDD EA Live

M

 

[hammy66]

6:15 and 6:30 start, NO TRADE ..

still a good week so far ..

cheers !

 

[musallam]

6:15 and 6:30 start, NO TRADE ..

still a good week so far ..

cheers !

for 6:15 i got long signal (FXDD Live & Alpari Demo).

 

[Xbourse]

hi, no trade on alpari uk demo

 

[Remraf]

06.30 GMT. Wednesday. Flat as a mill pond. No trade here. But such a near miss for a short. at 06.15 starters would have got a long.

Have any members come across a simple strategy which says something like issue two OCO orders 50 pips either side of the price at midnight. Aim for 20tp, with 20sl. I.e. If price at midnight was 1.6050 and then during the day it goes down to 1.6000 a short trade would open and would close with profit at 1.5980 or stop out at 1.6020 The other order lapses. Vice versa for a long.
Something like that would be interesting to test on days when FMT gives no signal at the normal time.

Those LONG at 6.15 will be happy - the 7am candle just moved the best part of 50 pips in a few minutes!
I have in the past thought the same idea might get you a quick gain as the market moves, but thought the spiking effect might open your position and sink back and trigger your SL, are thinking that at midnight it would not have the volatillity so have a better chance of the slower move in the general direction would get you the TP? Neat idea if it worked consistently though. Regards

 

[shoot2scoot]

Wow! Nice to be on the right side of one of those moves for once.

06.15hrs Long Alpari UK
35SL, 40TP, 20BE
+40pips

 

[Pavil]

No trade, 6.30, Alpari UK Live.

 

[wiseambitions]

Those LONG at 6.15 will be happy - the 7am candle just moved the best part of 50 pips in a few minutes!
I have in the past thought the same idea might get you a quick gain as the market moves, but thought the spiking effect might open your position and sink back and trigger your SL, are thinking that at midnight it would not have the volatillity so have a better chance of the slower move in the general direction would get you the TP? Neat idea if it worked consistently though. Regards

No- the strategy of which I speak would use midnight as the pivot, and would probably not get into a trade until 6 or 7 hours later, but would hopefully catch a bit of profit in the direction of the breakout.

 

[JohnnyBme]

6:15 (actually 7:15 on Alpari-US) +40 FAST! This one was close on the indicators, but worked! Sometimes the forex gods are very good.

 

[Remraf]

No- the strategy of which I speak would use midnight as the pivot, and would probably not get into a trade until 6 or 7 hours later, but would hopefully catch a bit of profit in the direction of the breakout.

Oh - I think I'd have to read about pivots and how to do that, not something I'm familliar with :help: