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Semi-Automated Forex Trading

I came across an interesting blog post the other day by Hugh Kimura of Trading Heroes that was titled ‘How to get started with incremental automation in forex trading’.  You can read the full article here.  It’s not a bad read, and while you are at, add his site to your favourites as there are plenty of good articles and interviews there for Forex traders to check out.

Anyway, this article got me thinking about a post I replied to in one of my threads on the Forex Factory Forum, where I spoke about something very similar.  Forex factory is not a bad trading resource if you are after some very specific information, but keep in mind, it is similar to a lot of other forums where you have people jumping all over you if you dare suggest something that doesn’t fit the norm or their understanding of how trading should be done.  I basically use any trading forum to bounce ideas around as I know there are traders out there that are way smarter than me that may offer me some constructive feedback etc, which i do appreciate.  I also like to use them to help other traders out when I can by offering free access to any of my custom indicators, EAs or trading ideas.

But here is a copy of the post I mentioned above that refers to some of my thoughts on Forex Trading and that of semi-automation;

How goes it? Yes still trying but now having some decent success, but I wouldn’t be silly enough to think that the holy grail is out there. But I will explain some of my thoughts when it comes to forex trading. Anyone that has seen any of my threads in this forum will know that I tend to look for slightly obscure ways to trade. I don’t subscribe to what most traders would consider the norm ie using stops, risk reward ratios, support resistance etc. All good in theory but not suited to everyone. I’m not saying I am silly about the way I trade, but most would find it slightly left field.

I love my trading robots but I don’t rely on them totally. I love trading forex but I don’t want to sit in front of my trading screen all day either. The reason we trade forex is to make money. The reason we want to make money is to improve our lifestyle. I also trade forex to give me time, hence my love of robots. Going around in circles here it appears. Most of you know I basically use the same two custom MT4 indicators for most of my trading, that being the MACD Platinum and the QQE Adv. Throw in a LMA and I have more than enough to trade. I ignore news, Fib levels, Pivots, Support/Resistence, Overbought, Oversold, round numbers, candlestick patterns, divergence, moon phases etc. I keep it pretty simple, normally trading off a small time frame in the same direction as a larger time frame. I will take multiple trades, stacking these trades and then using a spreadsheet that I have already shared here, work out an overall position and then manage those trades as a whole.

I use the robots for entry only. They also give me the option of setting emergency stops, or outrageous profit targets, just in case I can’t get to the computer for a day or so. As I run several live accounts and can’t afford to have any down time, they are all run on a VPS. Small monthly expense but certainly worth it. I also use a trade copier so all the charts are only set up on the one platform, so it saves some hassle setting them all up. Money management is also controlled by the trade copier, whic is handy if you want to close all trades out when your account reaches a certain balance, so it can start all over again. I also have a desktop up that runs a mirror demo account with all my charts and my spreadsheets. I do trade multiple pairs on multiple timeframes so have a lot happening at once. I tend to trade the more volatile pairs also. Again refer to the picture I posted earlier in this thread.

The trading works on the EA opening the required trades on the parameters I have set. So I have no say in this and just let the EAs do their thing. Once trades are open (which is all of the time), I’ll update my spreadsheets and keep a very close eye on my margin requirements. All my accounts are set up for hedging, so no problems being long and short at the same time on the same pair, which does help with margin issues. I do keep an eye on overnight interest rates also, as they can rack up pretty quick when you have a large number of trades going the same way, for example if you were long EUR/AUD. Not too bad if you were short though. So a few times during the day I will check the trades and make any necessary adjustments. This may include closing out any baskets of trades that I think are getting out of hand or turning ugly, or it may involve removing an EA and setting hard stops to lock in profit etc. Normally takes me about 15 mins, so I can then go and do things I enjoy.

I tend to keep my position size very small but keep in mind I do use an EA that does increase position size on each new trade opened based on the initial position size. Something I do have to keep an eye on. Having said that, I have another EA that does trade a tad more traditionally, and I even keep that pretty small. It is strictly a numbers game for me, looking to win way more than I lose. Just like any trading I guess. This style of trading does take a little bit getting use to as the majority of the time, your account will be in drawdown which would make some traders very nervous. I have no issues if the profits are constantly ticking over and I am in control of my margin and things aren’t getting out of hand. Something I am trying to teach my son at the moment as he always questions why his account is constantly in the negative, even though his account balance is slowly increasing.

This style of trading is not for everyone. Some traders are quite happy to sit there watching the EUR/USD 1hr chart all night and just taking individual trades on whatever trading method they use. Fair enough. If it works for you, then that’s cool. If it isn’t working or you are getting the same crappy results, then it may be time for a change. Might be time to do what every one else is not doing. Just my opinion.

If anyone would like to discuss this further or would like access to any of my EAs or MT4 custom indicators, feel free to contact me and I will have no problems sharing them with you at no cost.  Cheers and good luck with your own trading.

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