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So Strobot placed a USDCAD short yesterday that is 59 pips against us at the moment but appears to be pulling downwards.
The trade makes good sense let’s look at the daily chart.
As you can see the pair is very high – Fib wise near the top, it’s been in a bearish wedge for the last 5 or so trading days. Our short entry was actually taken early by a pin bouncing down and then back up again – not to worry 9 times out of 10 these pin bars indicate the market is going to move in that direction.
The hourly chart we can see STROBOT’s target (the bottom white dotted line), we can also see the market showing signs of moving bearish again – the market LOOKS like it wants to come down having rejected 1.26190 and then 1.26075.
I wait to see what happens but I hope STROBOT will be yet again proved right.
Update (12 hours later)
So we stopped out – but STRobot was actually right and placed another trade which will shortly not only cover the loss but make a profit overall
Now that is pretty cool trading!
So I test strobot on a few brokers. There are some noticeable differences in the trades taken between some and others. Here are some (but not all) reasons.
– Spikes in data – I noticed CeaserTrade tends to have the odd spike that will nip down and take an entry order, then go straight back to where it was before – these spikes do not appear on other brokers.
– Spread – STRobot only enters trades where the spread < 7 pips, thus, as spread is varying all the time a broker who ramps up spread to 7 pips or above even just for a moment to stop out traders (or for whatever reason they do it), can mean that STRobot may not take trades on a particular broker.
So now on to something far more interesting. STRobot’s Fib based trailing stop. I’ve always really wanted to produce a trailing stop that would move closer to price as the price got closer to the target, I’ve FINALLY achieved this. Using a FIB based calculation (yup, my secret), STRobot calculates what would be a good trailing stop, he then follows the price towards the target but gets gently closer as the price gets closer, finally getting REALLY close when the price is within say 20 pips of the target. This means that on occasions where the price bounces before the target we just stop out in profit.
This graphic is an image that shows you a model of the trailing stop, you can see as price moves up the trailing stop moves closer – not by much in this instance, so for a bigger target the robot gives the trade more space and for a smaller target less.
One of the STRobot users was asking about news trading so I’ve finally gotten down to writing it. News in the forex market is normally preceded by a period of flatness. Especially things like NFP and FOMC.
My advice on news trading is simple and the version of STROBOT 50.8 deals with this.
I will point out I don’t actually do any trading myself – although I know a lot about it my robot does it for me – but I taught him everything he knows.
Here’s what STRobot would do:-
– NO trades in the flat market.
– Place ENTRY ORDERS only (STOP orders) when there is a correct technical setup
– STRobot will phase the news – so he trades AFTER the result – this can be a break hook and go structure or something else. News creates unpredictability in the markets, we are not here to gamble.
– On http://www.forexnewsbot.com you can often find statistics and other information about what the market expects from a news result but be careful – big moves and big losses (remember the CHF move).
As I said I don’t actually trade myself I taught STRobot to do it!
More about STRobot
Well this new version is quite a landmark with STRobot winning 70% of trades on backtests. I’m currently testing with different stops and go safe values to really get him optimised.
– STRobot has been taught to recognise a flat market and stay out
– You will see him set up entry orders some of which do not actually take
– His Automatic Trailing stop will trail the market at the level of your stop loss until within 20 pips of target then switch to a 30 pip trailing stop
– He will not trade for less than 100 pips target
I have published a couple of backtests (will do more later) click here to see them.
I’m sorry I’ve not been able to write for the blog. I’ve been working with some great traders who have been bringing ideas to the table. This is now implemented and STRobot has moved to another level.
The following video just explains just what I’ve been up to.
In order to filter out some of our trades I’ve been teaching STRobot the Forex trading Robot how to use FIB levels. He now trades certain fib level areas using his existing algorithms for entry.
So STRobot will trade between the 61.8%, 33.2% and 23.6% fib levels. He trades only from those lines – where the stop is below the level (for a long) and the entry is above the level or for a short where the stop is above the level and the entry below the level.
The TP targets are the next level -10 pips.
Using the current strength system STRobot is able to find the entries and trade. He has a new trailing stop system as well that is able to hold back when the market moves and move closer when the market is losing strength.
I am going to produce a new video shortly with some of the extra features shortly.