AUDJPY: Signs Of A Bottom?

First, I have to warn you, I'm eternally bullish on the AUDJPY. This means I'm wrong on my predictions a fair amount due to my long term viewpoint.

With that said, I've noticed a chart sign that implies some possible upward movement.

Take a look:


It may not be easy to see, but notice how the recent tails, at 09:00, under the last few candlesticks did not project below the closing prices during a recent, at 03:00, previous low?

Up until now, for days now, we'd see the close of each new low at the level of the tails of previous lows. This doesn't mean we can't go further down -- especially during the Asian session. However, it does mean that we have the potential to be running out of downward pressure.

If so, whether it is short lived or not will depend on upcoming news and the impact this has on the sentiment of traders. As you know the political unrest in the US and the tightening in China has set the mood negative lately.

UPDATE: Boom. Instant downward movement to invalidate my sign. The fact it showed temporarily may hint at trend weakening. We do have a fair amount of gloom and momentum to work through.

UPDATE: It's now 23:00 and AUDJPY has just risen to just under 81.60 which would seem to suggest that downward pressure had indeed been flagging. Of course, nothing goes straight up or straight down... but trading 100+ point moves is rather nice.

Weekend Robot Development II

While not fully tested, as the market isn't open for trading, I have also completed both the meta-robot concept and a notification system.

The meta-robot will look at the trades made via the current profitable robot and impose rules that require trades to open at a better price. The required difference, in pips, will be divided in two and added to the meta-robot's take profit point. For example, if the existing robot makes 6 pips on a position then the new meta-robot may open two pips lower and require a take profit of 7 pips.

The combination of a lower entry point and a lower take profit point imply that the meta-robot will always get a better deal. It will also have a higher chance of getting out of it's positions faster. Heh, nothing wrong with making pips faster! Of course, this also implies that the meta-robot may have less ability to open positions as better priced positions may not always be available. There is a bit more complexity to it but I won't bore you with the details.

Anyway, as usual, real life trading will tell the real story.

Finally, the notification system is implemented as a request to a web site. The web site will be able to look at the request parameters and decide what to do. For now, the web site does nothing interesting. Once I've seen the system in action for a while, and I decide it's working well and that it's useful, I'll see about putting more effort into a delivery system.

Weekend Robot Development

Now that the weekend is here it's time to put on the thinking cap and figure out how to increase earnings, reduce risk or both.

As mentioned in a reply to a comment on the previous post I've reallocated funds, put in a reserve amount and added a manual release amount.

The reserve amount holds back capital from the lot size calculation and the total margin available calculation. This capital is ignored such that the robot acts as if it only has balance - reserve under management.

The release amount, if any, adds capital into the margin available calculation but does not change the lot size calculation. The purpose of this is allow a series of discretionary actions to reactivate the robot once it has stopped trading due to an extended period of unhelpful price movement without adjusting the risk per trade.

The amount of capital released can be reduced as the price moves in a profitable direction. I'm also hoping that the robot will earn above it's target rate so that some capital can be painlessly shifted to reserved status each week.

Unfortunately, all of this might make it harder to report standard profitability numbers. Whether rightly or wrongly I'm going to use the unreserved capital balance as the measurement value of the account. It's what the lot size is based on and I intend to grow that amount X% per week. I'll also be using that value for my theoretical compounding calculations.

Remaining on the burner are concepts such as the meta-robot and email notifications to be issued when the meta-robot identifies various conditions suitable for discretionary decisions. If these turn out to be useful I might even set up some type of free mailing list.