Patience, Patience and More Patience

There are a number of ways of trading. One way is to trade anything that looks like a trade, another is to pick the high win rate pictures and be patient until they arrive. Its a matter of how "tight" you want to play, to use a poker expression.

You can trade, say, 30 times a day with large size looking for a small average profit per trade to make you green for the day. Or you can aim for surer trades and hit it with a bit of size and make an emerald green day. Both styles are valid but making a conscious decision which one to trade is important so you know how to create your TP. The pic below show some of my more patient trades today. Look at the pictures to see the elements that make them a high win rate picture.

The TradeStation chart below shows a sequence of those "surer" trades. The market broke at the first trade and allowed me to trade a whole series of pullbacks until the market became oversold - see the 135CCI, below -200. That was my signal that I had to wait for a new picture. Maybe there can be more trades after that oversold but they cease to be "sure" (high probability = high win rate) trades and my TP meant I had to pass on them. There are enough trades every day so I don't need to be impatient. When I translate that trading plan into an algo, I transfer those same rules and require the pullback entry to be filtered out if the market is oversold or overbought.

Trends in project management 2011

I gave a free briefing on the future of project management today that identified key trends for the project management profession:Portfolio ManagementPortfolio management techniques are being used by senior management to create an organisation wide summary of all the projects and programmes that are taking place, usually with the intention of removing a larger number as part of their cost cutting

The first week in our new premises...

Hi Everyone


Well i think it's safe to say that this past week has been the most exciting week of my life. Moving into the premises was such an amazing moment and i could not sleep or eat for about 2 days. Don't worry, i am now eating and sleeping again and taking very good care of myself as the last thing i would want is to get sick from over exhaustion. 


Moving in 100's of boxes and furniture was such a huge daunting task. I hired a moving company to help on the day but just the sheer volume of stuff that needed to be boxed the week before and then all loaded on to the 6 tonne truck (which i filled) nearly left me in tears. If i ever move again, i'm not going to pack or even be there to help the movers, i'm going pay someone else to do the whole process and go on holidays for a week instead. 


We have set up a new window display, what you think? 

Nah just kidding, this is the team from Obrien Glass replacing the front window. It had a crack from a previous incident so we got a brand new $6000 window for nothing. 


For the last few days, i've had a display in the window of plain white interesting objects to create a bit of mystery and buzz. Now that the new window is in, i can apply some signage with our logo and info about all the different things people can do in our huge space. We have a lot of traffic on this road and it's very slow for about 3 hours during the home rush so plenty of people are checking out the window. I'll also be putting some flyers outside for people to pick up if they walk past. 


The cafe space is starting to come together and i'm sooo excited to see some of the furniture arriving. Kim and Hardy, who also run Rubble Art, are turning their huge blank room into a cosy retro space that you will all feel so at home in, you may forget to leave. There is plenty of space for prams to move around freely, a choice of comfy couches or tables and chairs and some vintage favourites for the kids to amuse themselves that will take you back to your childhood years (and your kids may have to pry off you when you're finished playing). 


Some vintage look cafes can have that "we picked this up on the side of the road" feel, but not this cafe. I love the special furniture pieces they have selected and am so impressed by their designer eye. The pieces boast a mix of beautiful lines, quirky textures and super cool shapes. The only problem you will have is which setting to choose. Everything is in top, clean, super sturdy condition too. I can't wait to see the final look. 


If you haven't already rsvp'd for the VIP Pre Launch Party and would like to come, get your guest list in soon. Remember, you can invite a few others if you like as long as we have their names for the guestlist.


If any of our designers are still struggling with the product spreadsheet, just shoot through to me what you've done and i'll fix it up for you later once the majority of the fit out has been done. 



Only 2 more weeks until everything needs to be finished and ready to go!!! I'm loving every minute of it. 


I promise i'll add some images of how things are coming along soon. 


Happy Friday!!!


Nicole Herrick
KIDS STYLE HUB


www.kidsstylehub.blogspot.com

Making Adjustments

The increased volatility in most markets has been great. While the character of each market has stayed the same, the change in volatility has needed subtle changes in stops and targets.


Intraday rumours seem to be having a bigger effect than usual. I guess that with all the things wrong and the changes that need to take place as this transition continues, people try and grab at anything to try and anticipate what's to come or to make sense out of what's happening.


My job as an independent trader is to keep reading what "they" are doing at any one moment and trade the order flow in their footsteps. No second guessing what they WILL do, just reacting to the NOW, the present tense.

The process of back testing should be a structured one. Looking for a drop dead stop over a large sample of data is an important part of it. I also look for the right drop dead stop for small sections of data, divided into different volatilities. I use the same basic methodology. What changes is when I exit and that depends a lot on the volatility. It also depends on whether or when I double down.



Using a simple algo does this job well. You don't need to be a programmer to do this with the tools we have available today. Most charting packages have some form of back testing using some pseudo language. Putting some form of structure around trading, even discretionary trading, is critical to getting to CP. I see it every day with students. One of the exercises I do with some students who need it is to ask them to score their compliance with their TP on a daily basis. 


We all go off piste at times and it usually costs us. Keeping to a back tested and proven TP is the road to CP so being reminded of this every day by marking every trade for compliance, is a good way of keeping discipline and putting focus on the TP. Of course it's all a lot easier if you use the algo to enter the trade.

The Right Tool for the Job

We have a host of electronic tools available to us now, at a cost that is comparatively very low.


Whether you are using MarketDelta and its best of breed volume analysis or MultiCharts and TradeStation's best of breed automation, the testing tools mean that there is no excuse for being surprised in live markets.


One tool I'd like to mention is WalkForward Analysis that is available in bot MultiCharts and TradeStation. At the present time, the functionality of this tool in TradeStation is superior.  However, the speed of MultiCharts and the data availability of MultiCharts is currently way ahead of TradeStation. 


Having said that, traders who haven't used Walkforward Analysis
(https://www.tradestation.com/education/university/school-of-strategy-trading/video-tutorials) and who have access to the TradeStation page linked here might see something of real value.


WFA is one of the techniques we will explore in the November Workshop.

Another interesting tool is MarketDelta - probably the best discretionary traders charting package.  I've been showing DAX charts using MarketDelta not only because I like to trade the DAX but also because many U.S. traders have "discovered" this market. It starts trading in the middle of the U.S. night so suits many people who want to trade at that time. It goes on 'til the close of the NY Stock exchange. The trades below show how clearly the order flow can be tracked. This chart above shows the U.S. RTH first couple of hours.

On the Road to CP

OK, you have got the aims of your trading plan defined.

I want to earn an average of $300 per day as a first goal.

I want to work from 9am until Noon, NY time

I want to trade the eMini ES
I want to be a very active trader looking for quick profits

I will put $25,000 into my trading account
I need a win rate of more than 65% to trade in a relaxed manner

Now lets get to the next bit. How do you achieve these goals?

Firstly, you assemble your tools that you can use in your trading plan, either on a discretionary basis or in your algo.

The ones we will look at and choose from in the November workshop will include:

• 33 and 99 EMAs and how to use these two very important metrics - a trading methodology in itself
• the large and short CCIs, defining trends and triggering trades
• Pullbacks and how to use them
• First Hour strategies
• Several Order Flow tools: Pressure Indicator, Order Flow Metrics indicator
• HH and LL
• Wrapping money management around a system to make it more profitable. VERY important

We test to see what combination(s) of the tools are profitable generally. We find the best maximum stop loss and best logical first scale out target to use as the basis of further developing the trading plan.

I then teach the techniques of how to bring the tools together to create the trading plan that meets the requirements as set out above. We then include in the TP what the trader must do to ensure that the TP stays as profitable as possible, a maintenance mode.

The TP needs to be specific enough for an algo to be created from it. We then create the algo logic rules.

The ES was climbing all the London morning. Plenty of pullbacks to trade as it motored north. Flo was in her element and I didn't have much to do but watch.

It All Starts from "How Much Do I want to Earn"

As I was working on the program for the upcoming Workshop on November 5, I thought that I should share in this blog some of the information that we will be working on, at least to the extent that it can be in a blog.

We will be starting with a blank page and ending up with a bespoke trading plan and algo logic rules for each attendee to match their particular requirements.

To find those requirements, we start from the title of this post:  "How Much Do I want to Earn"? Once we answer this question, the next one is: What hours do I want to trade? We then ask: Which market do I want to trade? And then: How much risk capital will I use?

These questions set us up with some metrics that we can use to start off working on or Trading Plan (TP).

For example, my answers may be:

I want to earn an average of $300 per day as a first goal.

I want to work from 9am until Noon, NY time

I want to trade the eMini ES
I want to be a very active trader looking for quick profits

I will put $25,000 into my trading account
I need a win rate of more than 65% to trade in a relaxed manner

Once we have the answers to these questions, we can construct a trading plan specifically to meet these requirements.

The MarketDelta chart below has signals based on some new volume work that I'll be showing in great detail in the November workshop. The confirmation of the order flow and momentum is really clear and can be duplicated in both discretionary and algo trading.

As these markets become more technology driven, the discovering of what "they" are doing has become easier with all the tools available today. I have attempted in this blog to get my readers to think about what is happening rather than trade indicators as squiggly lines. We are trading order flow. Our tools help to reveal it. Order flow's footprints are there for us to walk in. Those of you on the road to CP will find the journey shorter if you use the available technology to do the heavy lifting.

ES rallied in Asia, pulled back in early European trading and then rallied strongly ahead of RTH. It topped at around 1150.00 which corresponded to the bottom of the buying tail of the Sep 13th Profile and then sold down ahead of the RTH open. The chart below shows the key points. The order flow is readily identifiable with the tools we use.

Other Avenues to Get Capital for Small Business

If I hear it one time a week I hear it ten times (well maybe an overstatement there) but anyway I hear it weekly.  And if you work in the business development/economic development field of helping small business owners and future owners then you do to.  There is simply no way around it - you are going to hear it. What is it you ask?  The statements "No bank is willing to lend to me." or  "I can't

Google Apps highlights – 9/23/2011

This is part of a regular series of Google Apps updates that we post every couple of weeks. Look for the label “Google Apps highlights" and subscribe to the series. - Ed.

It’s back-to-school season, and we’ve made Gmail, Google Docs, Calendar and Sites easier to use and more powerful for students and non-students alike—including some important accessibility improvements to help blind users be productive in our apps.

Multiple sign-in and other new preferences in Gmail for mobile
On Wednesday, we added some helpful new features for people who use Gmail on a mobile browser. You can now sign in to more than one Gmail account at a time, and toggle between them easily from the account switcher menu at the bottom of the mobile inbox. This can be a good time saver if you have multiple accounts or share a mobile device with family members. Gmail for mobile also now enables you to set up mobile-specific email signatures and create vacation responders right from your phone to let people know when you won't be available by email.

Calling credit auto-recharge
Now you can automatically add international calling credits for phone calls in Gmail when your balance gets low. Just visit the "Billing" area of the Google Voice settings page and click "Add credit" to put your account on cruise control.

Allow people to comment but not edit in documents
Sometimes, you might find yourself in situations when you’d like to share a document for feedback, but don’t want to make the document's content fully editable. The comment-only level of access launched last week is a nice option for these scenarios. You can let others discuss and add their thoughts to your document—without allowing them to change your work. You can allow document comments from specific individuals or groups, from anyone belonging your organization or from the general public.

Format painter, Fusion Tables, drag & drop images and vertical cell merge
Comment-only access isn't all that we've added to Google Docs over the last few weeks. Other notable improvements include a text format painter in documents, which is a fast way to copy and paste font, size, color and other text styling. Spreadsheets now support vertically merged cells (in addition to horizontal merges). In drawings, you can drag images from your desktop to the drawing canvas, then continue editing your graphic. We also added Fusion Tables as a new document type in the documents list. Fusion Tables are a powerful way to gather, visualize and collaborate on large data sets that might be unwieldy in a typical spreadsheet.

Fusion Table data visualized on an interactive map

Accessibility improvements in Google Calendar, Docs and Sites
We think technology can do a better job getting out of people’s way and helping you be more productive with less complexity and fewer frustrations. In this spirit, we’ve recently made a series of improvements to make our applications more accessible to blind users. We have more work to do, but Google Calendar, Docs and Sites now offer better support for screen readers and improved keyboard shortcuts. We hope these changes make our applications more useful to all users.

Who’s gone Google?
Organizations are moving to Google Apps for a diverse set of reasons—including cost savings, streamlined teamwork and better mobile access. We’ve even started hearing from schools and businesses who have made the switch to reduce their impact on the environment. No two organizations choose Google Apps for the exact same reasons, but in total, the momentum of Google Apps keeps growing.

We recently shared the news that 61 of the top 100 universities ranked by U.S. News and World Report have gone Google. On the business side, there are now more than 4 million companies using Google Apps, and businesses are joining at a rate of over 5,000 per day. In all, there are more than 40 million users that regularly use Google Apps in their organizations.

I hope these product updates and customer stories help you and your organization get even more from Google Apps. For more details and the latest news, check out the Google Apps Blog.

Posted by Jeremy Milo, Google Apps Marketing Manager

Algos for Discretionary Traders

I have had a few emails asking what use is an algo for a discretionary trader.


The main benefit, and there are many, is that with an algo a discretionary trader can test an idea.


I get lots of ideas, some good and many useless. Just eyeballing a chart does not really do it for me. I want to see the numbers. For example, how much of a larger stop loss do I need on an entry that is further from the 33 EMA? What about the target? Does it need to be closer?


The algo can give me these answers, which I can then fine tune at the right edge of my chart after having the basic information, rather than putting my money at risk blindly.


The second main benefit, and there are many more, is that I can mechanise my entries. The algo can recognise the picture faster than I can and execute the trade more quickly too.


The third main benefit is that if I have tested metrics, I can see when the market changes so that I can make my own adjustments. Different stops and first targets apply in different market volatility environments.


And the list of benefits go on. With today's technology, a trader doesn't have to be a real programmer to be able to use the technology to make it into his own personal holy grail.


When I woke up this morning here in France, I saw the ES rally had continued in Asia after the NY close. What were they thinking? My vision was still a retest of the lows and a probable break of them. I turned the Flo algo on that fitted with that idea. The morning trades were 3 for 3. Learning to use the right algo for the conditions is a great improvement on just one algo. Knowing that if I had picked the wrong algo I would still make, but not so much, was an important confidence building factor. Testing!!!

 

Outside In Trades

We haven't discussed Outside In trades much in the blog. That was by design, as most new traders try to become knife catchers- a very risky business unless done with a tested plan.

As an ex-local, Outside In trades come more naturally to me, as that is what we did on the floor. When the rubber band was tight enough, we provided liquidity at a price.

Doing the same thing as a retail trader is more complex due to the invisibility of the pit - brokers and other locals - and the fact that it costs more to trade from upstairs than it does in the pit.

That being said, Outside In trades are a good weapon in my arsenal. I've referred to those trades in the context of doubling down. The theory is that if the market was overbought or oversold where I put the trade on initially then by averaging I'm getting both a better price and trade location. The governing factor is to know where price has to go for me to be wrong and that the amount of loss that would create is compatible with my trading plan. Back testing these types of trades is of course part of the process. I know what I can expect when I'm trying to catch the knife and I know what I am leaning against.

Notice the volume information not only in the footprints, but the volume breakdown and the Volume profile on the right. The high and low volume is what stops the market as it's either activity that caused the move stopping or opposite activity coming in that stops the move. These supply good exit info.Of course I also have an algo that trades these pictures.

In the mean time, economic and market transition is continuing. The U.S. and China are the main managers of economic transition and we, the traders, are the managers of our own market transition as the pits disappear and the algos take over.

These electronic algo driven markets feed on themselves and learning to cope with this self cannibalistic activity will be the difference between survival in the markets or going the way of the dinosaurs.

Afternoon delight:

New book launch

Very exciting - my new book Managing Business Transformation: A Practical Guide has just been launched.Buying this book gives you access to a ready made business change lifecycle, describing lots of change activities to move you from initial idea to successful implementation. The change lifecycle has 4 steps:- Understanding the change- Planning the change- Implementing the change- Embedding the

Sale of the Century

Come on Down!


The DAX opens at 7am London time, 1 hour before the actual stock market opens against which the underlying index is calculated.


The open looked weak, but then the market just moved up in almost a straight line- but lethargically. I saw this big cave in the Market Profile before the open and my vision was that the price should go there, so I was looking for a sell opportunity.


I didn't get it until price hit yesterday's VAH. I also saw tails on the candles indicating higher price rejection. "They" were selling the highs. So I did too. Especially since my fav Fib area was there too and a double top.


Where did I cover? At the opposite Fib. "From sea to shining sea"  as the American national anthem says. The sale was around 5580 and the cover around 5520 gave me 60 points per contract or 1,500 Euros. On a 5 lot that would make a nice day. Patience and a trading plan.

Winter is arriving here in the mountains in the Haute Savoie. The first sign was that on the week-end my favourite cheese, Vacherin, had arrived at the supermarket's cheese counter. The cheese with a little caraway seed sprinkled on it, french bread (baguette) and one of my favourite red wines.....


The second sign was that our housekeeper, who lives higher up our mountain, said it had snowed on Sunday afternoon.


I can hardly wait for the skiing to begin. Looks like a better season is on its way this year.

Aligning project and change management practices

Have just spent 2 days with 150 project managers and change managers at the Association of Change Management Practitioners European Conference. Key topic has been the integration of change management into project management.Although effective project managers accept that making sure what they deliver is successfully implemented is within the scope of the project lifecycle a lot of project

Make 2 ES Points A Day & Charts Are Back!

I keep thinking about a guy I've written about a couple of times: the guy in California that traded T-Bonds in the 1980s. He would look to make only make one trade in his size when the market opened and then hopped into his Porsche to go to the beach.

It's beginning to look better and better to me day by day. Maybe not just one trade, perhaps just trade for an hour and a half.

A simple Flo algo I have, does exactly that. It starts trading the ES at the open of RTH and finishes an hour later. The target profit is $87.50 per contract per trade. The win rate for the last 6 months or so is about 75% and the return is almost 4 times the drawdown over that period. Profit Factor is 1.47. The big number is $4,528.50 after commissions. These are hypothetical numbers, as I have only been trading this particular algo live for about 3 weeks.

Now $4.5k per contract in 6 months doesn't look terrific. It averages out at a little over 0.75 points after commissions per day. But it looks solid. And it's only working an hour a day. And trading 4 contracts would make a nice day.

The interesting thing is that by using this as a basis, scaling out half at the $87.50 target and using discretion with a breakeven stop, I can more than double that average profit.

The point I am trying to make with this post is that the starting point for designing your trading plan, whether as a discretionary trader or as an algo trader, is to define what you want out of your trading and then design and engineer the rules to meet those objectives, of course basing it all on a methodology that sits well with your DNA.

Designing a TP with a matched set of algo rules is what we are going to do with each attendee at the November 5 workshop. Each trader, if he knows what he wants, will end the sessions with a personalised TP and algo rule set.

I was leaving it to Flo today as I was busy working on the Nov Workshop program. The chart below shows the only two trades Flo found on this chart. She missed an earlier entry as the picture missed the entry requirements in the algo by a hair. That's fully automated trading. I would have made a little more with discretionary exits too, But I didn't have to watch the market so 12.5 points or $625 per contract wasn't too shabby. The high win rate gives me confidence to trade size.

The first trade was a late entry after the trend change, as was the second.

There are so many ways to use an algo, whether by a newer trader who uses it to make sure that he sticks to a back tested TP or by a more experienced trader running several algos on different markets or anywhere in between.

I truly believe that algo trading, either for just entries or fully automatic, is the Holy Grail of trading. 

VIP Pre-Launch Party...

Hi Everyone


Thanks for all your feedback on what date we should have the VIP party. Friday the 14th October was the clear winner, so get your party frock sorted!

As readers of this blog you are all invited. Please RSVP by emailing me. Yes, you can have a plus one, and if you ask very nicely, i may also let you have a few extra pluses.  You must email through your name plus the names of all your guests so that we have the right numbers for catering. Please don't pass this out to the masses though. 


The keys for the new premises are not in my hot little hands just yet but as soon as they are i'm going to be super busy getting all the displays built and fitted into place so if you're emailing or calling me, i might not respond that hour but I will respond to all by the end of the day. 


A few of you have have very kindly offered to help out so i'll be emailing some things i need help with shortly. Thank you sweet peeps!


If you're a designer with KSH, your spreadsheets are not due back until the 1st October so you have time to get them sorted. Products are due in by the 7th. Yes you can deliver them early, as soon as i get the keys i'll be there 24 / 7. 


Off to rent a VERY large truck ;)


Happy designing!


Nicole Herrick
KIDS STYLE HUB
www.kidsstylehub.blogspot.com

Important EL Algo Workshop Update

Our new payment system is now operational. If you have been waiting to pay by credit or debit card, please go to the Sign Up page here. Lots of bureaucracy, but we have ended up with a very secure internet payment system.

A Wine Day In Haute Savoie

The wine grapes have or should have been harvested now and the wine sales of September have begun. There was a special Sunday opening of our nearby super store today, just for selling wines and nothing else. They had sent out their catalogues about a week ago with the offering from about 2 Euros to 500 Euros a bottle. Many of these wines cost up to four times as much in London. If names like Margaux, St-Emilion,Pomerol,Fronsac and even Gewurtztramminer mean something to you then you know what I mean.


Although we have a local wine merchant who sells us wines from small vineyards, we couldn't pass up the big discounts that were on offer today. It was just like a Market Profile trade. Price had been brought down below the value area and it attracted buyers. We got there at about 7.45 am for an 8.00 am opening. There were already about 20 people ahead of outside the big, wide and high roller shutter leading into the store. By the time it was almost 8.00am, the area behind us was full and the French natives were restlessly awaiting the opening with lists in hand and planning their campaign to get the best deals that were only available in limited numbers. Some wines were in very short supply, only 300 bottles or 50 cases. 


At 8.00 am the roller shutter started rising and the waiting crowd edged forward only to see a row of security guards lined up behind the roller shutter with their eyes bugging out in surprise at the sight of the eager crowd about to trample them. I hadn't seen anything like this since my one visit to a Target opening at 5 am in Minnesota on Black Friday and the opening of a Harrods sale in London just after Christmas. People were using shopping carts as battering rams and to block others from their deals. I made the "mistake" of being polite and allowing a woman to barge in front of me at one shelf and she cleaned out all of the particular wine I had wanted a dozen of. No good deed goes unpunished. 


Anyway, there were plenty of other wines to choose from and Mrs EL and I had done a little homework the night before, so we did have backups. All in all a great morning was had and our wine cellar is looking a lot fuller. We have racks for about 1,000 bottles but room for probably 5,000 bottles if we added racks. I'm not good at laying down wines for the future although I really should, but I'm a day trader and such a long term trade would go against my DNA.

Does It Really Work?

There are so many myths in our business about what works and what doesn't.


“It ain’t so much the things we don’t know that get us into trouble. It’s the things we know that just ain’t so,” said early American humorist Artemus Ward.


Of course there is a three step way of knowing for sure.


Firstly, I backtest it. If that passes, then I can SIM trade it and if that passes I can finally trade it with real money on small size.


Sounds simple, reliable and it makes sense, but there are many traders that don't do that. If they did, most of the traders wouldn't fail at trading.


We have the technology available at very low or no cost to do this. Yes, it requires effort and yes, I backtest and SIM trade many things that just don't work as I thought they would. Some only fail when I trade them with real money. But better that than throwing money away without a chance of success.

Simple Algo

This is my basic algo's stats. By basic, I mean that there are no bells or whistles and that the profit target that the algo is based on is 1.5 ES points. It trades from 8am London to 9pm London times.


I can use this basic algo to auto trade or hybrid trade. The profit target is my first logical scale out point and with hybrid trading I exit part here and manage the rest of the exits manually. The important thing is that the profitability and win rate are here to begin with and allow me to take the rest of the trade to a more optimal profitability. For autotrading I re-optimise to find the best balance between profitability and draw down, but make sure I keep the robustness with walk forward testing.


If you are a trader looking for just, say, 2 to 4 ES points a day then creating a high win rate algo such as this may be an idea. The stats cover about 6 months of data and the required daily earnings can be tuned by the right number of contracts. The tight target brings the high win rate. This algo can be further improved by tightening the times of day that it trades.


Designing an algo means I start with a trade premise and this one is my basic pullback in the direction of the trend. I can make it more or less aggressive but it will impact my win rate but may be more profitable as an auto trader. The process is to always have in mind what the end result needs to be. 


Starting with a blank piece of paper, I set out what I want to end up with in terms of metrics. The idea is not to necessarily catch all the trades that may exist. Only those that meet your risk and other criteria. The idea is to make money and tailoring the algo to your precise requirements is a good way of achieving that. It's not a matter of opening an optimisation and looking for the largest amount of profit the squiggly lines can produce in back testing. It's what it can make in real time with real money that counts.


Once I have a good basic algo, I can build on it and bolt on scaling out, break evens, and other actions to maker it more suitable for auto trading, but always from a trading point of view - market action.

Some of my early students are successfully implementing hybrid algos on their own - no real teaching by me, although I do pass on tips if asked. They use the basic stuff I showed them and use the algo for instant trade recognition and trade execution. The benefits they are reporting is being able to stick to their TPs and not missing a trade. Some of my other students are coming to the workshop. All the new people at the workshop get sent the Theory DVDs from last year's training to get them up to speed before the November workshop.


All you guys who are waiting for the new credit card button to pay, we are almost there. The bureaucracy is unbelievable. Anyone who can't wait, can bank transfer if they want. Just email Candace at candace@electroniclocal.com for instructions.

Occam's Razor

Occam's Razor is the first expression, I believe, of the principle to KISS - keep it simple, then you're not stupid. It talks about the fact that the simplest explanation for an occurrence is the best.

In early times, it was taught that the sun revolved around the earth. Copernicus was punished because he disagreed with this teaching and said that the earth revolved around the sun. The proponents of the incorrect theory, introduced a host of extra rules and exceptions to try and justify their incorrect view. Copernicus' proposition was a simple explanation to all the observations and of course, simple was best and correct.

In our trading, we try too hard to complicated things. Order flow determines market direction. It has to. Liquidity providers take the other side of the trade but eventually they too have to join the direction of the order flow to cover.

Until their is sufficient order flow in one direction and a trend develops, markets randomly move around reacting to short term orders.

Our challenge as traders is to look through the noise and recognise the order flow that will give us a profit. We use a number of tools as well as relying on market psychology to unravel this puzzle. But keep it simple as the more complications you add, the more contradictions and analysis paralysis you will encounter. It is tantalising to add more and more to a chart in order to be "sure" but in fact has the opposite effect. The proof of this proposition is when I create an algo and add, say, 6 indicators that line up, I end up with very few trades in my backtesting and an algo that fails the walk forward test. Yet when I use the simplest of trading principles, I achieve my goals of win rate, profitability and robustness.

Long weekend report...

I went out to FAR on Friday night and stayed till 5PM on Sunday.

John from Microcosm was out at the site and brought out the first completed tank to come from the microcosm/unreasonable joint development effort. With peroxide it has a mass ratio of 36,
(I earlier said 40, but I messed up the correction for peroxide density) and theoretical burst of 600psi and expected burst of around 500. So far its only been hydroed to 180 or so.

This weekend I only ran one experiment, I launched a Novatel OEMV-1HV high vibration GPS on my little HPR rocket. It was the first GPS flight on that rocket that held lock for most of the flight.
From ignition to touch down it lost less than 3 seconds of data. It lost data when the nose cone/parachute ejection charge fired, and it lost data when the nose landed on the ground and rolled around. The GPS is in the nose cone, so getting slammed with a hard ejection charge data loss is not unexpected. The GPS only data can be found
here:http://www.rasdoc.com/data/GPS9_11_11.txt

The GPS can do 20 fixes a second, but I was more interested in seeing if it kept lock so I turned it down to 5 samples a sec to reduce data size for this flight. I also sampled the analog devices IMU at 50Hz during the same flight, so if you want the data set including values from the IMU ask and I'll upload that as well. The GPS is an expensive part $1245 or so. It can be ordered without the COCOM limits for non-export usage, for another $1K or so.

Other than my one flight and the SDSU fireing.
(here: http://www.youtube.com/watch?v=zzFeqNtMftM)

The other FAR experimental projects were all plagued by Murphy.
Two projects failed to make any flames at all, and the Sugarshot test had a spectacular night time cato. Later this week look for some spectacular youtube video when they post their results.

Nature even got in on the act with some awesome thunder and lightning.

Drumroll please...

Hi Everyone

It's official, Kids Style Hub be in HAWTHORN! 

I am so excited to have secured a gorgeous retail store in THE perfect suburb. It's been a long and very stressful journey to find the right property and i've had my dreams crushed on more than one occasion (it's quite hard to rent a very large retail property when you're a new business) but I really do believe this is even better than other properties I missed out on. 


It feels like the weight of the world has been lifted off my shoulders and I can't wait to move in next week and start fitting it out. The official opening date has now been set as: 

Saturday the 15th of October

We will also be having a pre launch VIP party for designers, media and a few other VIP's. It's an invite only event but if you're signed up to the blog, you will receive an invite soon. What night is better for everyone Thursday 13th or Friday 14th? Comment below this post to let us know your preference.

I sent out the product spreadsheets to all designers on board last night. If you have already sent in your signed terms and conditions but haven't received the spreadsheet, let me know. 

Our delightful store in Hawthorn will incorporate the retail store, cafe, crafting zone, party room, learning room, photographers gallery and large photo studio. There is not enough space at the moment for the designers studio spaces to rent out but i am hopefully renting the space next door in a few months to add this element into the mix. I think coming up to Christmas will be a crazy time for everyone so it's better to look at that side of things after then anyway. I'll be contacting those designers that have expressed interest in renting a studio space in the coming months to gauge who is still interested and talk about rental rates.


I've been ebaying like crazy the past week buying up some quirky items for display like Queen Ann style dressing tables which will be painted white for that shabby chic effect, some super cool vintage suitcases etc. I am designing some round tiered podiums for display as well as i think they will be easier for prams to glide around. Ooh and i've also designed some 3D laser cut timber chandeliers that span 1.5 metres and will be painted yellow for that wow factor. 


For a sneak peek of the property, head to the blog. 


Happy designing!!!


Nicole Herrick
KIDS STYLE HUB
www.kidsstylehub.blogspot.com


Forward this post 

Why Double Down

Doubling Down or averaging a losing position is strongly criticised by many people. I'm not one of them.

I'm not advocating to average every loser, but doubling down is a valid strategy to have in your arsenal of tools to use as a discretionary and as an algo trader.

A good example is from yesterday's ES chart.

The ES opened in RTH and I switched to the Dow Euro after I had a couple of nice longs in the ES. The ESTX50 trades a little differently from the ES as it's a European stock index.

I sold the Fib, as you can see on the chart, looking to buy back as it came back into the Keltner Channel towards the 33 EMA. It didn't happen as expected and I sold twice more as it powered through the Fib area and went overbought. By that time it was way too far from the 33EMA and I was confident of a pullback as eventually it always comes back to the 33EMA. I did have a drop dead stop.

I ended up with a 2020 average sale price and took 5 points out of the trade on the first push down. I covered half there as the price had broken through the Fib area and was looking for the price to then bounce and either take off or fail. We were far enough from the 33EMA for me to believe I could take a profit on the second half of the piece. In fact I was able to re-short the half that I had covered as the breakout failed, covering nearer to the 33EMA.

Back to work and under pressure

There is a real ‘back to work/rushed off our feet’ buzz at Maven this week so we are trying to work smarter to fit everything in. One technique is to move as much as possible into ‘housekeeping mode’ i.e. turn tasks into regular actions that are carried out in the same way every time. The reason for this is that I want to reduce the time we take to do simple tasks so that we free up more time to

Another Trading Picture- In Oil

Lots of things remind me about trading. The picture of the painting below which is in one of Budapest's museums is one of them. Kiki took the picture and it obviously hit a cord with her too.

The guy eagerly caressing the girl could represent the trader while the girl picking his pocket is the other market participants.

This, to me, reminds me of the importance of testing and quantifying my performance. Hope does not have a place in my trading plan, neither does luck. I am always glad of a little extra luck, but never make luck the basis of any part of my trading plan.

Back to more active trading today, in the Euro. The Euro had come down hard against the dollar last week, so I was watching to see if the downdraft would continue today. There was one more blip down as I was getting up - I wasn't at my screens at the time. Price then rallied back to "value" at the EMAs. "They" then had a few attempts to sell it but I didn't expect it to work as my Order Flow filter was green and the Pressure Change Alert was signalling too. I sold the 99EMA twice, with a some joy the first time and only a little the second time.


I decided that as the market couldn't go down, it "had" to go up and waited for the trend to change - bigCCI > 0. I bought the first pullback, scaled and loaded as the market moved my way. I called it a good morning as we hit my fav fib.

Transition to Live

Becoming CP has a last step: the transition from SIM to real money trading. This is not always an easy transition. It's not a trading issue but purely a psychological issue.

People who have more capital seem to cope with it more easily. The fear of loss is greater if your trading account is smaller and you trade a larger contract. If you read this blog from it's earliest days, you will see a number of posts talking about this problem. 

Transitioning from SIM to live should be done trading the smallest size and with the most modest expectations.

Trading SIM allows you to perfect your trading skills without risking any money. It develops that muscle memory. When you add all the backtesting that I have suggested, it makes you a believer in your methodology. It makes you believe in your skills when you see your weekly stats as a consistent and satisfactory set of numbers.

Transition to live should just be the addition of one variable: changing the account number of your execution app from your SIM account to your live account. Everything else should be the same. By the time you are ready to take that last step, you should be able to carry out the two steps of instant trade recognition and instant trade execution, in your sleep, without any real thought as your muscle memory should be taking over. 

Until you reach that level, CP in SIM and instant trade recognition and execution, you are not ready for live trading.

This was our last day in Hungary. We were at Lake Balaton today, the Gold Coast for the Hungarians. Summer is over now and things had wound down. Back to France tomorrow for Mrs EL and me and back to London for the rest of the clan.

I'm looking forward to going back to work on Sunday.

Ask us your Google Places for business questions

A little more than a year ago, we collected your questions and feedback on Google Places for business via a Google Moderator page. You sent us some great feedback, and we had a blast responding! Check out our video responses here on YouTube, covering things like features of a listing, Report a problem and ranking.

It's important to us to continue hearing your great feedback — and we suspect you've had a lot of questions and ideas throughout the past year — so let's fire up another Moderator page. Starting today and for the next two weeks, you can submit your questions and ideas, as well as vote up other submissions from users. We'll answer some of the more popular questions directly on the page and post a new video or two to the Google Places YouTube channel.

Start sharing your ideas right now, and stay tuned to us here on the Small Business Blog to see a roundup of responses.

Posted by Vanessa Schneider, Google Maps and Places community manager

Backtesting and Walking Forward

The process I use for backtesting is different depending upon whether I want to use the algo for fully automated trading or for Hybrid Trading, where I will manage the exits.

I do this because I am looking for different things in the backtesting.

Before I start looking at each type of optimisation, I run a full optimisation testing all the main inputs in order to validate the model.

For a fully automated strategy, I want to see the most money made, but I need to qualify this with a number of prerequisites, including in no particular order:

• Average Trade Size big enough
• Maximum Drawdown small enough
• Win Rate high enough
• Outliers should have minimal or no impact on results
• Walk forward analysis pass  

Walk forward analysis  is important in order to have the best possible robustness of the algo.

For a Hybrid Trading backtest they include:

• Win Rate (most important)
• Stop Loss levels

My main required metric is a high win rate, as the true profitability in using the algo will depend upon how well I manage the trades.

The process of building the algo and testing it is quite a complex one. As I have said before, I first was involved in the process in the mid 1980's and learned how to create algos successfully by trial and error. There was a lot of error. I discarded auto trading a number of times over the years as the technology just wasn't there to do it successfully. Teaching Kiki to trade was responsible for me getting back into auto trading once again in 2009.

The way that the data is used in the process and the way that an algo is created based upon sound trading principles not math and squiggly lines has proven to be the key to successful algo building. There are numerous biases that need to be taken into account, not the least of which is that position bias that has resulted from the way that the data trends. Building the algo requires the elimination or the accommodation of the type of market activity that is revealed in the historical data.

It is because of this complexity and because of the difficulties that I have seen  very smart traders have had with the process that I decided to do the workshop in November.

The technology available to us, retail traders, has reached the level required for doing this successfully. We can't easily, if at all, trade many times a minute but that is NOT my aim. The aim and the arbiter of success is profits in my trading accounts. No number of successful computer runs mean anything. It's the making of real money in real time that counts. Of course I test in a SIM account because I know that if I'm not profitable in SIM then I can't be profitable with real money.

The November Workshop will break down my principal trading pictures into their components so everyone has a full understanding of how and why they work so well. We will then put the components together into trading logic for a computer.

Whether you want to use the algos for just signals and alerts, or hybrid trading  where the algo takes care of the instant trade recognition and instant trade execution and you manage the trade, or you want to fully automate your trading, this workshop can provide you with the tools you need to be self sufficient.

One more day in Budapest and back to France on Saturday. It's been great here. Last night we went to the world premiere of a 3D production of the opera, Bluebeard, written by Bela Bartok. I really liked the opera and using 3D projection of the scenery was very novel.

Suburb announcement very soon...

Hi Everyone


This week has been non stop driving! Finding out parking options, what's nearby, local businesses we can help support, transport options, you name it, i now know where it is. I'm really excited about  moving to a new area and finding all it's hidden gems, and very soon, i'll spill the beans about which suburb we'll be in!

I cannot tell you how excited i am about all of our fabulous designers officially on board now. Parents are going to be like kids in candy stores. 

I am in the process of setting up the website and store product system now,  i should have the product spreadsheets ready in the next couple of days.  I have also set up the official Kids Style Hub email system now too, so from now on you will be seeing emails from me as nicoleh@kidsstylehub.com.au. The old email addresses are still valid for another year as i phase them out though. 

Our launch date is still slightly adjustable and will be between the 1st and 15th October. It just depends on how quickly i can move into the premises and start fitting out. Oh how i wish i had a magic wand and could just make things happen when i want them to! 

Is everyone a KSH facebook liker? And as designers, make sure you also sign up to the style mag and customer newsletter roll out here so you can keep up to date on how we market your products and offer any suggestions of what you think we should include. We're all part of the team! 

Right off to do a million things at once! Keep any questions rolling in, i may be busy but i'm never to busy for our gorgeous designers. 

Happy designing


Nicole Herrick
KIDS STYLE HUB


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