Let it Flow

Kiki worked all weekend on her FloBot automated entry system. I call it an entry system because we have decided that we will use it an entry system, so we can catch trades in a number of markets and then manually manage them in accordance with the philosophy I have mentioned in the blog.

We are starting with the MultiCharts platform and Easylanguage as we have a production application we can deal with. We will do a MarketDelta version once MD finishes it's beta. We continue to use MD, as usual, for trading as per the chart below.

Kiki and I have been talking about the FloBot for a while now and decided to build it in modules. The modules are the different trade entry setups we use. The criteria for us is that whatever else we do, the testing of the entry must result in a win rate of at least 60% with price reaching the first scale point. When we run the testing module in MC, we are only looking at the %Wins when writing the trading script. I expect to both add and delete nuances into the script to get the win rate we want.

The interesting thing about MultiCharts is that there is a button on the chart to switch the autotrading engine off. In this way we can switch it off once an entry has been made and then go to our DOM and manage the trade from there on our usual discretionary basis. I also expect to better the %win rate in real time as we will exit trades before the testing stop loss if we see the context warrants it. 

I'm running the FlowBot with our first version and its quite exciting  Maybe Kiki will win me over with this automated entry, as it will ensure that Kiki does enter all the trades.(a problem for her) And I must admit I wouldn't mind not having to concentrate so hard for so many hours, while be able to watch more markets. What happens afterwards is another thing. I'll show a picture later this week. 


Now for Today's Trades

I started trading the ES RTH just before the bell. The first trade was a loser of 0.75 per contract where I cut it when I felt, what seems to have become, the dreaded horizontal wait. The chop continued with the 2 EMAs almost superimposed. Trade 2 had the 45CCI pull over the zero line and then fail with order flow selling. We had opened on "the zipper" of single/double prints in the Profile and I was looking for the lows of Friday to be tested so was an anxious seller at every opportunity.


Today is a perfect example of "context".  This single/double print part of the profile means that price can run up or down the zipper very easily. The first trade was a loser because I sold with nothing to lean on. I had a downward bias after seeing that the London morning trade peaked and failed at just over the 1103.00 area, just under Friday's VAL. The VB was red but the CVD had turned green and I could have been a bit less aggressive I suppose, but I would rather lose 0.75 than not be in the trade when it ran down the zipper. I had a very controlled risk. As soon as there was a HH (higher high) the selling game was over and I had to re-think what was next. This visualization of context is important. I get asked a lot of questions about indicators but not many about context. The problem for a trader trying to become successful is that you want to make everything mechanical without breaking down your mechanical rules into sub-categories of context. A zipper is a significant context for me and I trade taking that very much into account.


The HH came after Trade 5 and I have finished for the day. We are at the 99EMA and the market could fail again. If it doesn't I would look for sales against the developing VAH (DVAH) or a bit higher if it turns into a Neutral day in Profile terms. There are also still single prints of the zipper above todays RTH highs which may be tested.

Click to enlarge