Introducing STVolitlity, One of the biggest problems for any EA is flat markets. You get more false signals thane can deal with – part of the risk of Forex trading actually. Anyway – You can check out the backtests of the latest version 70.5 which aims to deal with flat markets.
During my development of this indicator I noticed that when a market begins to move in power, or changes direction that certain behaviours happen, you can see in the EURCAD the lowest indicator, see how the market crosses the 0 line indicating a new move or trend.
STRobot looks to trade on these indications of strength coming into the market – ofcourse, you can’t predict the future but you can see that he sees pretty much what’s going on – flat markets are indicated by blank areas in the STRobotRSI indicator, the second one up. So using these two things together we can try and anticipate bullish or bearish moves out of congestion.
There is a lot of news this week so it will be interesting to see what performance we get from STRobot.
So STRobot v70.3/4 has been trading really really well. I have some test accounts Live ones that I leave alone and I’ve just put a $50USD one on, STRobot has traded it up to $118 in 24 hours using 0.02 lot size. Click Here to see the results! (300 pips profit approximately)
So I thought I’d go through 3 trades STRobot has taken and you can see the artificial intelligence working.
STRobot detects a fast break in price, he then will place a trade straight away – ideal for news.
2. The HEDGE – STRobot had a long trade on but the market changed direction so he set up a hedge short to cover the losses of the long – one of these trades will stop out, the other will take profit covering the cost of the first trade, and ofcourse making a small profit.
2. The Slow move – STROBOT sees a potential break out of a range so places an entry order above the level it needs to break. Then as the market moves up he will let the trade happen. In this case the price has broken the level and we are waiting for the profits!
STRobot has a trailing stop system that tries to avoid getting close to soon, every fast move or slow move is followed by a pull back you will lose at trading if you let your stops run and close your profits early. You should calculate your targets and have a big trailing stop to trail up behind it, if you let it stop out in profit at your trailing stop level. STRobot’s trailing stop works more using fib levels and strength, so as the market gets closer to our target so does our trailing stop.
STRobot just took 3 NZD trades at once, one has already stopped out in profit. Looks like NZD did a sudden rally, the latest version of STROBOT (v70.3) can detect a sudden move in a pair and take a trade instantly, normally STRobot places entry order in advance of a break, but if there is a sudden move he is able to get into it very very quickly.
As you can see we are half way to target already, I expect a pull back first then a gradual run up to target.
Last nights boring trade just stopped out in profit.
STRobot has taken an interesting short on GBPJPY it looks like a nice bounce off of the 38.2% fib level targeting the 61.8%. We have Carney speaking later do we have a head and shoulders reversal in progress?
I have also marked the Buy/SELL STRobot signals on this chart so you can see what it does. STRobot ofcourse trades automatically using entry orders. So the fake ones tend to be taken out because they never happen.
As you can see STRobot has a number of good entries on this chart – not forgetting he trades 40 currency pairs.
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.
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.