Our live tests on the Strategy Runner forex trading platform have been prolonged. The problem is that Strategy Runner employs a very cumbersome way to enter the market. When we started our tests, we didn’t think this would matter, but it does - especially when trading right after economic reports and news releases. Forex scalping becomes extremely difficult with the way the platform is currently set up.

In the next week or so, Strategy Runner agreed to add two additional buttons to their platform that will hopefully allow Nigel to enter and exit the market faster. This won’t solve all the problems (since the platform needs more modifications to meet our needs), but it should increase the quality of execution to an acceptable level. If this happens, we will inform clients at FXLQ to transfer their accounts to ODL.

MT4 Currenex Tests

On Friday we received the login information for the new MT4-Currenex project we have been waiting for. The brokerage firm involved still has to resolve the latency (delay) issues present, but even having something to test is progress. We will continue to monitor the platform and pricing. When everything is ready for live testing and we get to run some successful live trades, this might become another option for our forex traders.

New Forex Trading System

We will be testing a new, fully-automated forex day trading system next week that works directly with Currenex. It does not need MT4 or any other platform to run and the server where the program is installed is located in New York. Since all Currenex execution servers are also in New York, this should reduce execution delays significantly. I will let you know what the live results are once we have them. This might be another option for some of you to diversify.

New Forex Scalper

Next week we’ll also be running some live tests with an additional forex scalper. If these manual tests are successful, we’ll also start testing a fully automated version of the scalper’s strategy.

I know we don’t have a solution for our FXLQ clients yet, but I know that we soon will - the [near] future looks very promising.

I have been receiving some emails asking about the status of our old forex day trading broker, FXLQ.

This leads me to believe that some clients have not read my blog posts earlier this month about the termination of our relationship with FXLQ. You won’t see any activity in your FXLQ brokerage account because we cannot trade there anymore. It is obvious that we soon need to start day trading. Brokers currently being tested include one who provides Strategy Runner with Currenex, a London forex broker who will provide Currenex via MetaTrader, and a Swiss broker who has a similar setup.

The two MT4 day trading brokers are almost ready to release their Currenex products. This might happen this week, but it is not a guarantee. The only Currenex broker where we are actually trading live with Strategy Runner is ODL. So far, the Strategy Runner day trading software is performing great, but we need to run it through some more dynamic market scenarios to make sure that it is acceptable under extreme conditions. I want to make sure that the conditions are right before I give you the green light to transfer your accounts from FXLQ to another forex day trading broker. I am planning to make that announcement by the beginning of next month.

Please understand that we’re not resting on our laurels. If there’s someone that hates the status quo it’s me! Believe me, there’s a lot going on in the background. But one thing that I won’t do is rush into a relationship with a new forex broker or into trading under unacceptable conditions.

Neither you nor I make any money if the money is just sitting in a brokerage account. I do not earn any interest on it - that’s for sure; so I want the action to resume; really!

Please keep checking this section of my day trading blog for future updates. The day trading broker green light may come at any minute!

Our Forex day trading system might have a new home soon. Today is the second day that we have been testing the Strategy Runner day trading system with Currenex. The executions have been pretty fast so far, even though the Forex market hasn’t provided us with the quick trading opportunities we like.

Tommorrow’s PPI (Producer Price Index) numbers and Friday’s CPI (Consumer Price Index) and Consumer Sentiment reports will probably create ample market volatility to put our managed day trading system on Strategy Runner through some more vigorous testing. I’ll keep you posted on the outcome.

We continue to monitor the live performance of four additional traders. These individuals are running their Forex trading systems on MT4. Two use some automation and two are fully automated. Nigel is helping us look for other traders as well.

Today I started testing an MT4 day trading system with institutional (non fixed-spread) pricing which shows promise. By next week I should also be testing a Beta version of another MetaTrader system with Currenex pricing. Either one of these might also be viable alternatives for the Forex robot day trading system.

The Strategy Runner account is already funded. Strategy Runner is supposed to enable our Currenex login on their server today. This was supposed to happen late last week, but it didn’t (for reasons beyond our control - I hate those). We might be able to day trade tomorrow.

The MT4-Currenex solution I discussed in my previous post is not ready yet. While I wait for that, I’m also looking at a second firm that is promising institutional pricing via MT4 (but I’ll believe it when I see it).

Last week, I also discussed bringing additional day traders on board. I’m still running a few traders through some final live tests. It is important to note that unless these traders pass all my tests, I won’t work with them. I’m very picky when it comes to these things and won’t settle for mediocrity when it comes to trading.

Some of you have asked why these traders won’t get shut down on MT4 while Nigel’s scalping program was. The reason is that they will hold on to trades for at least a minute or two longer than Nigel - something that we cannot force our existing managed account program to do or it won’t work.

Some have also suggested using HotSpot or MB Trading / EFX Group. I have spoken to HotSpot in the past about their institutional product (HotSpotFxi), but they don’t have the same liquidity as the Currenex brokers we work with. MB Trading and their subsidiary, EFX Group, don’t have a PAMM or master account available; which means that we won’t be able to try them out for managed accounts until they do.

I assure you that we have probably looked at most forex trading platforms and liquidity pools out there. The information I usually provide in this blog is just an iota of what we deal with on a daily basis - not because I don’t want to give you all the details, but because I do not have time to write about every single little thing.

FXLQ - Transferring Accounts to Another Broker

FXLQ has agreed to transfer your forex accounts to another broker when you request it. Since we don’t know right now where we’ll finally wind up, I ask you to simply stay put a bit longer. We’ll let you know when you should move your money out of FXLQ soon.

Yesterday’s post (”Forex Robot hits the Road - Trades Credited” explains why we are considering various alternatives for our managed day trading online program. If you haven’t read the previous post yet, please do so at this time.

Please keep in mind that the options I’ll be telling you about today are not mutually exclusive; i.e., you might decide to participate in more than one, whether you are an existing client or a new investor. Part of the reason I’m providing these options to you is because some of you might not qualify (”for reasons beyond our control”) for our existing online trading program going forward.

For a while, I have been considering the Strategy Runner-Currenex combination as an option for our current scalping program. We are already set up at a Currenex firm that works with Strategy Runner (SR) and funds for live testing should be coming in tomorrow or Thursday. If all goes well, live test trading might start late this week or early next week. If these live tests are successful, this might certainly be an option for Nigel’s program. I’ll have a better idea by next week.

At the end of this month, a Currenex firm that we’re working with is supposed to launch a true Currenex-MT4 combination (unlike what we had at FXLQ). If successful, this will be the first of its kind (to my knowledge) - an ideal environment to run the current forex scalping program. Having said that, here are our future options:

Trading with Strategy Runner - Strategy Runner is fast and works well with Currenex. It offers one-click execution and the ability to automate stops. The disadvantage of this option is that the account minimum for the Currenex broker we’re working with is US$25,000. This will leave many investors with $10,000 out of this program.

Trading on Currenex via MT4 (when ready) - In about three weeks, this option might be ready. This would be an ideal scenario because all of the indicators and “gizmos” used for the current scalping program are written in MT4 language. The problem with this option is that the broker might run into unexpected difficulties that delay the program launch. Remember that MT4 was not really designed to execute on Currenex. It must be rigged to work with it. Another drawback of this program is that a minimum of US$25,000 (possibly $50,000) is also imposed by the brokerage firm.

Using a Different Day Trading Program on MT4 - Nigel’s scalping program is no doubt excellent, but only the above two options are available right now to trade a certain amount of capital with it. All existing MT4 firms will shut us down once Nigel starts trading more than a few lots at a time. This might change in the near future, but it’s the reality right now. In the future, it might also be possible for us to accept $10,000 again for our current program (using the first two options), but not at this time. That’s why I have been filtering many traders in the background. I have four that I’ll be running through our final analysis this week; two running fully-automated robots and two manual day traders. Their systems will work with another MT4 firm that we have started working with already based on the recommendations of various system day traders that we know and trust. These systems are very short-term in nature, but operate in a way that won’t get them shut down by the brokerage firm. While these programs won’t replace our current scalping program with Nigel, they complement it and provide further diversification for our existing clients.

Please feel free to call our office to discuss these options. If you are an existing client, I ask that you give me until early next week to make a final recommendation.

To more prosperous days ahead!

This day trading business is definitely an exciting one! Maybe we should release an action/adventure motion picture in the near future! Hollywood, here we come!

It’s a hat-trick. We have experienced three back-to-back days of unacceptable delayed executions on MT4, resulting in losses. The good news is that FXLQ credited all three of these losses on Friday (3/2/2007). I already discussed Tuesday’s and Wednesday’s loss in my 2/28 post (”Will New MT4 System Solve our Trading Problems?“). I will discuss Thursday’s loss (the third one) today - plus some other exciting things. See the trading log below and my comments throughout.

This is the beginning of the log:

The day starts with an attempt to buy 25 GBPUSD at 1.9626 at 09:44:59 UK time (see below), which got rejected exactly 1 minute and 30 seconds later when the price was lower; i.e., when the trade would have been profitable. Click here to see the chart.

An order was then placed to buy 25 GBPUSD at 1.9633 at 14:37:32 UK time (see below). This order got filled 1 minute and 22 seconds later when the price was lower; that is, when the trade would NOT have been profitable. This is totally unacceptable and it seems as if someone, somewhere is just holding the trades in queue to see which way the price goes – and is then deciding whether to fill them or reject them (“off quotes”). It is impossible for a trade to have been filled at a price that occurred 1 minute and 22 seconds earlier, unless the price didn’t change throughout that time - which wasn’t the case here. It is obvious that this execution did not occur earlier because the programmed stop would have been triggered - and it wasn’t. The execution was just reported late.

Notice that the first line of the day trading log above shows: “07:38:47 Expert StepStopExpert_v1[1].1 GBPUSD,M5: loaded successfully.” This means that the Expert Advisor (fancy name for a computer program) that places stops on GBPUSD was already loaded. Despite this fact, if you look at the trade log and the corresponding screenshot, the row highlighted in blue shows that the stop was never activated (see “0.0000″ in the S/L column). This is obviously unnacceptable.

The final attempt to exit this trade (at 14:39:55) also resulted in a 17-second delay (from 14:39:55 to 14:40:12). See below.

I asked FXLQ to credit the above trade in question as well as the previous two. This they did on Friday (3/2). I also demanded an explanation for these “mysterious” execution delays that are putting client capital at risk. They couldn’t provide it and told me that they couldn’t guarantee that these problems would not occur in the future. Furthermore, I was informed that the new multi-bank system will not allow the use of Expert Advisors (EA’s); i.e., the programs that we currently use to place stops automatically. This might not sound like a big deal, but it is. If stops have to be placed manually (i.e., without the use of EA’s), it will slow down scalping significantly or make it impossible altogether. Having automatic stops is also the safest thing for the client.

To top it all off, I was told by FXLQ that they wanted to cancel my IB (Introducing Broker) agreement since they weren’t going to be able to provide me with an appropriate solution! This infuriated me even more. Why didn’t they tell me this before? Why now; especially since I have been demanding answers from them for almost a year now?

I then received a termination letter by mail from FXLQ. The forex robot needs to hit the road again! I can’t say that I’m ecstatic about this, but I’m glad in a way. This means that we are being noticed. We are making waves. If this program didn’t have such great potential, we wouldn’t have been experiencing so much resistance. Thank God that I had already been working on a few backup plans in parallel.

I will tell you about them by tomorrow. I don’t anticipate not being able to trade for more than two weeks, so I ask you to stay put until I make another announcement tomorrow.

As the above incident was taking place, a psalm came to mind (Psalm 141:4):

Let not my heart be drawn to what is evil,
to take part in wicked deeds
with men who are evildoers;
let me not eat of their delicacies.

I’ll continue pushing forward; seeking what is right and appropriate for all of us - despite resistance :).

To more prosperous days ahead!

Whether or not FXLQ’s new multi-bank MetaTrader (MT4) system will solve our current day trading problems remains to be seen.

This morning, FXLQ was supposed to go live with their new day trading system (at least that’s what we were told). If all goes well, we should be trading currencies tomorrow with the new setup. This is not a sure thing yet; nor is it certain that the new system will eliminate the delayed executions and huge number of trade rejections we’re experiencing.

Yesterday, the problem with the delayed executions resurfaced. As a result, there are two trades that we want FXLQ to reverse. Let me explain (please note, all times are in London time):

Yesterday, a trade was placed at 15:00:41 to buy 25 lots of EURUSD at 1.3235. The trade was not accepted by the server until 15:01:34; 53 seconds later! Throughout these 53 seconds, the trader was held in “limbo,” not knowing if the trade was going to get filled or not. By that time, the price had dropped to 1.3227 or lower, which should have led to a trade rejection – since the price had moved beyond the 2-pip deviation setting that’s supposed to be present on our MT4 system; instead, there was a fill at 1.3235 (a price that occurred 53 seconds earlier)! We asked FXLQ to immediately bust this trade and are still waiting on the outcome. Here’s the corresponding section of the log:

Click here to see the chart of the EURUSD during this incident. The crosshairs point to the one-minute bar (15:00) when the trade was placed and shows the 1.3235 and 1.3227 price levels (horizontal lines).

In today’s trading session, the delays were also present. This led to a losing trade that we are also asking FXLQ to reverse. I’ve added the section of the corresponding log below with comments in between.

In the first section of the trading log, the order took 37 seconds to be opened (from 08:30:59 to 08:31:36)! Once the order is placed, it should be filled right away or time out in a few seconds (see below).

1st attempt to exit trade at 1.3188 – placed at 08:32:08.

Order held for 1 minute and 30 seconds before getting off quoted! (see below) – This is not acceptable. The trader should have been out way before this time, as would have been the case on any other trading platform or system.

2nd attempt to exit at 1.3194 – order placed at 08:35:20.

Order held for 61 seconds before getting off quoted! (see below) – This is not acceptable. Again, there’s no reason to still be in this trade at this time.

3rd attempt to exit at 1.3196 – order placed at 08:36:32.

The order was held for 11 seconds before getting executed at 1.3196; 8 pips worse than it should have been executed over 4 minutes earlier (see below).

For a chart that illustrates the problem above, click here.

We have begun testing a group of new day traders to be able to accept more assets.

Even though our current robot program is excellent and so is Nigel (the trader), forces beyond our control (which you should be familiar with by now) have prevented us from accepting new assets to keep pace with the demand for our program. While I’m confident that this will change soon, in the meantime we started assessing new manual and automated (algorithmic) day traders that have different trading styles. This might allow us to accept some more assets in the short term as we wait for liquidity conditions for our current program to increase and execution problems to diminish.

I think there’s a huge opportunity for growth in the automated day trading (a.k.a., algorithmic trading) front. I have seen some fascinating programs recently and will be working in the background to launch a fully automated managed account in the near future.

FXLQ said that they should be testing the new MT4 system live in a day or two. This was supposed to happen on Sunday (2/25), but it didn’t. IF FXLQ conducts the live tests this week, we might be able to run live trades with a test account soon. I won’t be holding my breath though!

Today, the forex market was pretty boring – void of any important news. Starting tomorrow and lasting through Friday, a series of important scheduled reports and speeches will probably increase market volatility. This should create a good environment for scalping. Let’s see what’s in store for us.

Day trading results so far this week are slightly negative. “Off quotes” are still coming up quite a bit on the MT4 platform, but at least the rejections are pretty fast.

We are still waiting for FXLQ’s launch of their new MetaTrader day trading system. We were supposed to receive a demo with their new, improved feed last week. We didn’t. We don’t know what’s going on and nobody has contacted us to give us an update. Tic…toc…tic…toc…

We are also in talks with a few other firms that are working on providing Currenex pricing through MT4. One Currenex firm that has very tight spreads and good liquidity told me that their MT4 platform should be ready in March (next month). If this is the case, we will have more options to diversify. Since our platform of choice is MetaTrader, this should be a big plus for the robot program.

I am also in talks with a few talented algorithmic (automated) traders that have all their day trading systems written in MetaTrader language. The ability to access a clean Currenex feed through MT4 will allow us to allocate some funds to them and accept more client capital.

Currenex Trading System Does Not Work

Today we put at end to the live tests with the Currenex Trading System. Even though the platform that was designed for us was pretty good (in theory) for manual scalping, the Currenex data was getting delayed during active forex market periods (like after news releases). For some reason, receiving Currenex pricing data over the internet (even while using DSL or Cable) is problematic.

It seems that we’ve exhausted many scalping options already. Here are the possibilities I see going forward for the DTT robot program:

• FXLQ’s new MT4 system - Hopefully it will allow us to increase the lot size we are trading.
• Strategy Runner plus Currenex - Strategy Runner can connect us to Currenex using Radianz, so it should be a lot faster than going through the regular internet. We might be testing this in a week or so.
• MT4 plus Currenex - This will be huge if any of the firms I’m in talks with pull it off. It might actually be the best scalping solution out of all three - and a sure blessing for automated day trading systems.

We keep pressing forward in our day trading journey!

FXLQ made some changes at their end that eliminated some of the trade delay problems.

Even though there were still many “off quotes,” both trade executions and rejections were relatively fast. Whatever FXLQ did seems to have gotten rid of the long delays we were experiencing when orders were being submitted.

Four forex scalping trades were generated - three positive; one breakeven (which should have also been profitable - I’ll explain below). So what’s the problem, you ask?

The biggest problem I noticed today is that a huge number of “off quotes” is generated when exiting trades if the market is not moving much. When you look at the trading log (click here to see it), this will become apparent. Look at the entry in the trading log at 14:12:32. That’s the first time when the order to close the short 25.00 EURUSD position (order #200373) was submitted. The order was rejected 18 straight times with an “off quotes” message even though the price was barely moving. These are the prices at which the trade rejections occurred (in order): 1.3095, 1.3095, 1.3094, 1.3095, 1.3095, 1.3096, 1.3096, 1.3096, 1.3095, 1.3095, 1.3095, 1.3096, 1.3096, 1.3097, 1.3097, 1.3098, 1.3099, and 1.3099. Notice that from one rejection to the next, the price never moved away by more than 1 pip; so the rejections were not because the market was moving fast.

Instead of getting out the first time at 1.3095 with a 4-pip profit, the trade wound up being a breakeven trade.

Currenex Platform Update - Incorrect Handling of Exit Market Orders

During yesterday’s post, I mentioned that we had problems with the execution of an exit stop on the Currenex Trading System (CTS) we had been testing. Today, we found out why the problem occurred.

The CTS platform was supposed to send simple market orders to exit trades after the stop price was reached (limit orders are used for entry orders). For some strange reason, the programmer had designed the platform to send Market + IOC (Immediate or Cancel) orders when the stop was triggered. An IOC order is supposed to execute as much of the specified size as possible at the price when the order was sent and cancel the remaining portion of the order. On Currenex, market orders can’t be cancelled, but IOC orders are cancelled instantly if the price when the order was sent is worse than the market price when the order arrives. This can be problematic in a fast market, causing orders to be cancelled as the price keeps moving away fast.

This problem is what got us out of the market a price that was over 20 pips worse than it should have been. The platform kept trying to execute the exit trade, but the price kept changing. Consequently, the order was cancelled by Currenex several times causing us to get a worse price than we normally would have. I immediately instructed the programmer to change the exit orders from Market + IOC to simply Market. We might try a few scalping trades with this puppy again next week.