Ok, so it's not quite as exciting as it sounds, but auto-trading has begun. I awoke this morning to find four orders resting in my account from TAB. As promised the orders are far from the market and entries would be able to be placed quite easily if received manually.
Of course, out of respect for TAB and their system I will not post the details of any orders or trades until they have been closed.
It's nice to see that signals are being generated and TAB is back from a nice Holiday break.
Monday, January 7, 2008
Manual Trade
Although this blog's purpose is to track the performance of FX-Auto and TAB's signals, it is also to track the performance of my auto-trading account in general. I will not make a habit of taking many manual trades, but I did take a long position of 2 mini lots GBP/JPY from 213.90 late in Friday's trading. I will not discuss my reasons for this trade because I don't feel they are applicable. I would not discuss it at all, but it will inevitably have an effect on my auto-trading account balance and I want to account for it.
Right now, GBP/JPY is trading at 214.95 so I am sitting on a nice 105 pips profit. I plan to hold this trade for awhile and possibly for a final target of 219.90, but I will evaluate this on a day-to-day basis.
Right now, GBP/JPY is trading at 214.95 so I am sitting on a nice 105 pips profit. I plan to hold this trade for awhile and possibly for a final target of 219.90, but I will evaluate this on a day-to-day basis.
TAB and Account Setup
It's finally 2008 and Team Aphid Bird has started to generate signals. For those of you unfamiliar, Team Aphid Bird (TAB) is a very succesful Forex trading system that has been offered through Collective2 since late 2006. They have had extremely impressive and consistant results due mostly to their ability to manage risk. Since the middle of 2007 they began offering their system through FX-Auto, a website that hosts trading systems that can be auto-traded for a small, added commission.
My account has been fully functional for just over a week now and I have been awaiting TAB's first trade signals. If you are familiar with TAB you know that they hault trading during the second half of December due to the Holidays and potential liquidty issues and market volatility. I seized this as a perfect time to set up and fund my account with FX-Auto and begin the new year with TAB.
I decided to open my account with FXCM rather than FXDD for several reasons. Firstly, I am familiar with FXCM, their platform, services, etc and this made it an obvious choice. I also noticed that TAB's performance was better on the FXCM side rather than FXDD. I was also concerned about TAB's entry and exit strategy since they trade 4 mini lots per trade. Here is the email I sent them followed by their reply:
------------------------------------------------------------------------------------------------
Hello,
I have observed TAB for a long time on C2 and am now finally wanting to start trading with your system on FX-Auto. My biggest concern is your exit strategy and how to set this up with FX-Auto trading. I know that you have 4 partial exits for each trade, so does this mean that contract sizes need to be set up in multiples of 4?
For example, if I am trading 3 of your currency pairs on FX-Auto and only allocate 1 mini lot per trade, how will I exit? One mini lot can't be exited in 4 partials. My understanding is that I would have to allocate 4 minis per trade so I could exit each partial as 1mini. Also, if I want to increase my size for any pair, I would have to increase it by 4 more minis?
I appreciate your time in answering these questions, they are probably ones you've received before, however, I did not see it on your website's FAQ. Also, I've noticed you don't trade in the second half of December so it would be wise for me to wait until the new year to begin with your system.
Thanks,
Travis
------------------------------------------------------------------------------------------------
Hi Travis,
Yes, contract sizes need to be set up in multiples of 4. At Fx-Auto,if you choose 0.1 lot for your trade size, then you'll be trading 4minilots automatically. Therefore depending on your initial capital,you can choose 1 to 6 currencies. But our core currencies are EURUSD,GBPUSD and EURJPY, so we recommend you to start with these currencies(or any of them depending on your capital).
Re. exits, normally you do nothing in autotrading, you just set up your account and trade size and we do the rest for you. Since you don't know the strategy and where to exit and also due to our ability to follow fx-market 24hrs, we do not recommend you to intervene manually. When you have sufficient capital and if you like to increase your trade size, then it should be increased by multiples of 4, but again at FX-Auto you need to choose 0.2 as your trade size, then you will be trading 8 minilots, or 0.3 trade size will trade 12 minilots and so on.
Due to lack of liquidity in fx-market in second half of December (end of financial year in most countries and also Christmas), we stop trading until early January. By the way, we recommend FXCM instead of FXDD if you are going to autotrade thru FX-Auto, because slippage at FXDD is worse than FXCM. Please do not hesitate to ask any questions you have.
Best Regards,
Team Aphid
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As you noticed, TAB also recommended using FXCM over FXDD due to slippage issues that they experienced with FXDD in the past. I also happen to have an Introducing Broker (IB) account with FXCM and figured that I could sign up my new auto-trading account under this IB account and receive a portion of the spread credited back. I have to pat myself on the back for being savvy there, afterall this is a business and should be treated like on. I'll only receive about 25 cents back for each mini lot traded but this is 25% back of the $1/mini I am being charged in commission for the auto trading. The choice to go with FXCM was obvious.
I faxed the required application and documents in and had my account set up in less than a week. I funded it with $2,000 via debit card and this took slightly longer than expected due to the Holiday season (or so they claimed).
I had done extensive research on the TAB signals for all of their 2007 trading and compiled this data into excel spreadsheets. I will share this in a later post. I chose the same three signals that are traded on Collective2, EUR/USD, GBP/USD and EUR/JPY. Although EUR/JPY has not made money on FX-Auto since inception, I believe it would be foolish not to include this pair if I expect to replicate the results shown on Collective2. If I had more capital it might even be wise to weight the portfolio toward the EUR/JPY pair as one could argue that it has underperformed and is due to catch up to it's historical average. I have not decided to include the other pairs that TAB offers simply because I want to evaluate them further on live trading. These pairs are not traded on the Collective2 system so they can only be evaluated from the FX-Auto data. I will consider adding these pairs in the future.
The three signals listed above where chosen for my portfolio and are ready to receive signals from TAB.
My account has been fully functional for just over a week now and I have been awaiting TAB's first trade signals. If you are familiar with TAB you know that they hault trading during the second half of December due to the Holidays and potential liquidty issues and market volatility. I seized this as a perfect time to set up and fund my account with FX-Auto and begin the new year with TAB.
I decided to open my account with FXCM rather than FXDD for several reasons. Firstly, I am familiar with FXCM, their platform, services, etc and this made it an obvious choice. I also noticed that TAB's performance was better on the FXCM side rather than FXDD. I was also concerned about TAB's entry and exit strategy since they trade 4 mini lots per trade. Here is the email I sent them followed by their reply:
------------------------------------------------------------------------------------------------
Hello,
I have observed TAB for a long time on C2 and am now finally wanting to start trading with your system on FX-Auto. My biggest concern is your exit strategy and how to set this up with FX-Auto trading. I know that you have 4 partial exits for each trade, so does this mean that contract sizes need to be set up in multiples of 4?
For example, if I am trading 3 of your currency pairs on FX-Auto and only allocate 1 mini lot per trade, how will I exit? One mini lot can't be exited in 4 partials. My understanding is that I would have to allocate 4 minis per trade so I could exit each partial as 1mini. Also, if I want to increase my size for any pair, I would have to increase it by 4 more minis?
I appreciate your time in answering these questions, they are probably ones you've received before, however, I did not see it on your website's FAQ. Also, I've noticed you don't trade in the second half of December so it would be wise for me to wait until the new year to begin with your system.
Thanks,
Travis
------------------------------------------------------------------------------------------------
Hi Travis,
Yes, contract sizes need to be set up in multiples of 4. At Fx-Auto,if you choose 0.1 lot for your trade size, then you'll be trading 4minilots automatically. Therefore depending on your initial capital,you can choose 1 to 6 currencies. But our core currencies are EURUSD,GBPUSD and EURJPY, so we recommend you to start with these currencies(or any of them depending on your capital).
Re. exits, normally you do nothing in autotrading, you just set up your account and trade size and we do the rest for you. Since you don't know the strategy and where to exit and also due to our ability to follow fx-market 24hrs, we do not recommend you to intervene manually. When you have sufficient capital and if you like to increase your trade size, then it should be increased by multiples of 4, but again at FX-Auto you need to choose 0.2 as your trade size, then you will be trading 8 minilots, or 0.3 trade size will trade 12 minilots and so on.
Due to lack of liquidity in fx-market in second half of December (end of financial year in most countries and also Christmas), we stop trading until early January. By the way, we recommend FXCM instead of FXDD if you are going to autotrade thru FX-Auto, because slippage at FXDD is worse than FXCM. Please do not hesitate to ask any questions you have.
Best Regards,
Team Aphid
------------------------------------------------------------------------------------------------
As you noticed, TAB also recommended using FXCM over FXDD due to slippage issues that they experienced with FXDD in the past. I also happen to have an Introducing Broker (IB) account with FXCM and figured that I could sign up my new auto-trading account under this IB account and receive a portion of the spread credited back. I have to pat myself on the back for being savvy there, afterall this is a business and should be treated like on. I'll only receive about 25 cents back for each mini lot traded but this is 25% back of the $1/mini I am being charged in commission for the auto trading. The choice to go with FXCM was obvious.
I faxed the required application and documents in and had my account set up in less than a week. I funded it with $2,000 via debit card and this took slightly longer than expected due to the Holiday season (or so they claimed).
I had done extensive research on the TAB signals for all of their 2007 trading and compiled this data into excel spreadsheets. I will share this in a later post. I chose the same three signals that are traded on Collective2, EUR/USD, GBP/USD and EUR/JPY. Although EUR/JPY has not made money on FX-Auto since inception, I believe it would be foolish not to include this pair if I expect to replicate the results shown on Collective2. If I had more capital it might even be wise to weight the portfolio toward the EUR/JPY pair as one could argue that it has underperformed and is due to catch up to it's historical average. I have not decided to include the other pairs that TAB offers simply because I want to evaluate them further on live trading. These pairs are not traded on the Collective2 system so they can only be evaluated from the FX-Auto data. I will consider adding these pairs in the future.
The three signals listed above where chosen for my portfolio and are ready to receive signals from TAB.
Introduction . . .
FX-Auto has received a lot of criticism. Some of it I can agree with, but for the most part, I feel that the users are blindly choosing the "best" systems and not taking proper money management into consideration. The largest fault with FX-Auto is their inability to display intra-trade draw-down. More simply put, the "max draw-down" statistic that they show for each system is incomplete because it only represents the drawdown that a trade represented at the close of the trade. For example, lets assume a system purchases EUR/USD at 1.4735 and the pair declines to 1.4355, but the system never closes the trade and the EUR/USD eventually comes back to the 1.4700 figure. The system closes now for a 35 pip loss and this is now displayed as the maximum draw-down. In actuality, the pair traded down to 1.4355 which would represent a 380 pip draw-down. For smaller accounts, this could be enough to whipe someone out completly.
But most of the criticism to FX-Auto comes from traders complaining that systems perform well during a short period of time and then fail to replicate these results in the future. Of course, the past results represented by FX-Auto are actual, live traded results and are not manipulated. Unfortunately, traders come to FX-Auto with moneybag pupils and instantly pick the most profitable systems for the past week or month. They usually tend to have no regard for proper money management, fail to evaluate the actual riskiness of each system and then wonder why they experience terrible losses. To make matters worse, most of these traders will throw in the towel on their newly found systems and jump to the next rising star after a week or two only to experience the same morbid cycle. I refer to this as unfortunate because it is possible that some of these systems are indeed profitable, but will experience draw-downs much like any system. The key is to remain patient and allow for a performance curve to develop over time.
My goal with this journal is to attempt to (if only slightly) put the debate of whether FX-Auto can actually be a lucrative venture or if it is simply a losing gamble to rest. I have also been quite disappointed with the amount of information and personal experiences with regards to this topic. Searching the web and Elite Trader only turned up a handful of first-hand accounts and I hope to contribute information to others who are curious about FX-Auto and the systems they offer.
If interested, feel free to catch up on my intentions through the thread I started on Elite Trader.
But most of the criticism to FX-Auto comes from traders complaining that systems perform well during a short period of time and then fail to replicate these results in the future. Of course, the past results represented by FX-Auto are actual, live traded results and are not manipulated. Unfortunately, traders come to FX-Auto with moneybag pupils and instantly pick the most profitable systems for the past week or month. They usually tend to have no regard for proper money management, fail to evaluate the actual riskiness of each system and then wonder why they experience terrible losses. To make matters worse, most of these traders will throw in the towel on their newly found systems and jump to the next rising star after a week or two only to experience the same morbid cycle. I refer to this as unfortunate because it is possible that some of these systems are indeed profitable, but will experience draw-downs much like any system. The key is to remain patient and allow for a performance curve to develop over time.
My goal with this journal is to attempt to (if only slightly) put the debate of whether FX-Auto can actually be a lucrative venture or if it is simply a losing gamble to rest. I have also been quite disappointed with the amount of information and personal experiences with regards to this topic. Searching the web and Elite Trader only turned up a handful of first-hand accounts and I hope to contribute information to others who are curious about FX-Auto and the systems they offer.
If interested, feel free to catch up on my intentions through the thread I started on Elite Trader.
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