Saturday, March 21, 2015

Back to the KING e-mini futures trading forum

I got sidetracked a bit. Not the very first time, to be honest. First a friendly hedge fund with one project too many, then some other things. But sooner or later, I  always get back on track.

The forum has been up for a few months now, just not very active. I have added a number of new topics to it, the most important ones having to do with George IV, which I think can serve as a good foundation for a solid e-mini futures trading education not only for KING students, but for many others as well.

Once you learn how to use it and learn to appreciate its principles, you will become a better, smarter trader. The trading basics are very important, as I emphasize on my site.

So I am back, and the forum is next along with Version 3.0 of KING to all those who decide to join the forum. It will be a minor upgrade, just to tie all the loose ends in Version 2.0.

The key, as I also stress a lot on my site, is practice. The course is very comprehensive, probably the most comprehensive of e-mini futures trading courses you will find on the market. Some may even find it a bit overwhelming at first, but learning is a process and not a one night stand. If you start and keep going, you will certainly be making progress. Focus on the process and the results will come.

If you are a KING student expect more information via e-mail in March and the forum will most likely be open to many more people in April. Stay tuned then.

Friday, March 20, 2015

13 loses again!

And here is the proof.
Everybody has some unresolved issue or two. I don't hide mine, even though these days this type of behavior would probably earn me the moniker of a "13 beater." Whatever, punks!
And you too could be a 13 beater, if you don't feel intimidated by the PC crowd. Start from KING, the e-mini futures day trading course created with 13 beaters in mind, by one of their own.

Thursday, March 19, 2015

Fibonacci and trading again - another perspective

If you read one of the more recent pieces posted on my site in its A Word of Advice section, then you know that I have some reservations about using the Fibonacci indicators. At least when it comes to using them alone or as some sort of a superior, unique tool.

These or other technical indicators are best used in combination with diverse tools that technical analysis has to offer, and what it has to offer is not necessarily always an indicator. Patterns of all sorts, including indicator patterns may even be more powerful than more traditional uses of indicators.

I like to use indicators to indicate certain trading situations, and not necessarily as a way to generate signals. I find them more useful this way and I do rely on the patterns they form quite a bit too.

The Fibonacci numbers in trading are used in two basic distinct ways.

One is a more straightforward use for the periods of moving averages or the periods of other indicators, though some of these indicators are usually derivatives of moving averages and their periods are simply the periods of these moving averages.

For instance, you can choose the following periods: 5,8,13,21,34,55,89,144, and all of those are Fibonacci numbers or, to put in another way, the terms in the Fibonacci sequence that has this simple (and defining property) that its next term is the sum of two preceding terms, hence 55=21+34 or 34=13+21.

Of course, you can choose periods of the moving averages in other ways as well, but many traders, myself included, often rely on the Fibonacci numbers to do the job.

The other way is to use the Golden Mean (or Ratio) to find support or resistance levels. The Golden Mean is an irrational number equal approximately 1.61803. This inverse of this ratio is also used and it happens to be 0.61803 or (Golden Mean -1). You can also use half of that smaller ratio or the square of the Golden mean, which happens to be (Golden Mean +1), or 2.61803.

The problem with this approach is that you first need to choose the base, from which you measure the ratios, or two levels from which you can draw other levels corresponding to those ratios. This is not a unique or objective approach, but if you combine it with other indicators, it may work just fine even with some subjectivity involved. Still, the key is to use more than just the Golden Mean ratios, other tools are necessary too if you want to do this reasonably well.

The Golden Mean is related to the Fibonacci numbers. More precisely, the ratio of two consecutive terms in the Fibonacci sequence (from which these numbers come) tends to the Golden Mean as these terms tend to infinity. For 144 and 89, we get 144/89, which is approximately 1.6180, which is already very close to the Golden Mean value. For numbers higher than 144, this ratio of consecutive terms is even closer.

As mentioned in another post on this blog, I recently played quite a bit with Mathematica, an excellent piece of software for doing all sorts of computations, invented by a fellow theoretical physicist, Stephen Wolfram. This started because of some little project that I was asked to do for a friendly hedge fund that I have been collaborating with on and off for a few years now. But it did not stop there, as I was keen on exploring many other cool things in the realm of mathematics, and trading as well. Mathematica can be a powerful tool for such explorations.

One of the things that I have explored were minimal modifications of the Fibonacci sequence.

It turns out that such modifications (all three of them) may not even have been studied before (at least I was not able to find any information about it), so this could be an original work. I wrote a brief paper about it and posted it to an online repository of research papers called viXra, a place where people share their scholarly research in many areas of science, mathematics, and humanities.

The gist of the paper is that you can have integer sequences whose consecutive terms ratio tends to the Golden Mean, but the sequence terms themselves have nothing in common with the Fibonacci numbers.

From the traders's point of view what this means is that moving averages can be based on other sequences than the Fibonacci sequence, such as the three ones proposed by me, and you can still use the traditional Golden Mean ratios to determine the Fibonacci levels. There would be no inconsistency in that. It would be a more general (extended) Fibonacci framework.

Of course, as I said, earlier, you can choose your moving averages outside of any Fibonacci framework (traditional or extended), but if you want to stick to a consistent Fibonacci framework, you now have a bigger choice: not just one sequence, but four in total from which to choose the periods of your moving averages.

This paper can be read here. It lists the first 50 terms of each modified Fibonacci sequence, and, as I said, there are three of such minimally modified Fibonacci sequences.

You can also study these modifications using Wolfram Alpha, a very handy tool that shares some features with Mathematica.

Here are the links to the code that produces the modifications in question, preceded by a screenshot of what you get in the case of the last of them (FSM),

FMPM (Fibonacci Minimal Positive Modification),
FMNM (Fibonacci Minimal Negative Modification),
FSM (Fibonacci Simplest Modification).

Feel free to play with them!

Monday, March 16, 2015

The next 100 years

I am an e-mini futures scalper by occupation these days, so I probably should not care much about this time frame. However, being a trader you are a speculator, so it should rather not come as a surprise that I am quite interested in speculation of all sorts, except for conspiracy theories.

It is because of that that I like the work of George Friedman. I have read his book "The Next 100 Years," which you can order through affiliate link below, and I have recently watched a few videos with him in the main role.

George Friedman looks and speaks a bit like George W. Bush, but seems to be more articulate than the former US president. He also lives in Texas.

The first two of them are part of a larger whole, the last one is from some lecture that he gave to a largely Polish audience (in Poland), where he talks about Europe and Poland in particular. The lecture is entirely in English, so don't be discouraged by a brief introduction in Polish, which is quite normal considering the venue of his talk.

I think he is right about Europe. The EU's main force, Germany, seems to be more interested in Germans' prosperity than the prosperity of all Europeans. That is fine, but does not bode too well for Europe as a truly united continent. In other words, it is unlikely that the American success will be repeated in Europe any time soon, hence Mr. Friedman's good advice to Poles is simply to look after themselves and rely on the US as the most natural ally considering Poland's geopolitical situation.

George Friedman sees Poland as an emerging European power. Only time will tell if his prediction, whose time frame in this case would be the next 20-40 years turns out to be true. Poland was once (the 17th century) the largest country in Europe, quite dominant militarily and politically too, but declined and was erased from the map of Europe in the late years of the 18th century, then re-born in 1918, following the first world war that crippled Russia, Austria, and Germany, countries responsible for the demise of the once powerful Polish-Lithuanian Commonwealth.

Whether Poland will regain her status of a major power is indeed quite speculative, but I kind of like Mr. Friedman's speculation, though, in this case, being Polish by birth, I am quite biased. Let me note, however, that his opinion about the resurgent Russia has been vindicated by the ongoing war in Ukraine, so it may be wise to listen to what he has to say about other countries as well.

If you are interested in what a leading expert on future has to say about the next 100 years, check out those videos and many others on YouTube. Anything he has to say about the global future is worth listening to, in my opinion.

Tuesday, March 10, 2015

Perfect 10, perfect 12, and 700!

March 10th marks another milestone for KING, an e-mini futures day trading methodology and course - the day the 700th daily trading report was posted on my site, with the first one being posted in late 2008 and the 600th about a year ago.

This, most likely, is the last full 100 when it comes to such reports. I may reach 750, but I seriously doubt I will reach 800. But then again, I was doubting I would ever reach 600, if I remember it well, so 800 is possible too, just much less likely than 600 was.

Here is this 700th daily trading report as posted on my site, preserved for posterity in the image form (see below). However, I added two more trades on top of that, so it's really a perfect 12 with two perfect tens as the last two trades scored 10 points (per contract) each; see the Twitter update that follows.

 Click on the image above to enlarge it.

It was an excellent day for George IV, a mechanical trading system, as well. It delivered maximal winners in each market, 6 points in ES, the S&P500 e-mini futures market it was designed for, and 60 points in YM, the Dow Jones e-mini futures market.We are now up quite a bit in all categories this system, that had a great last year, is being tracked.

I mentioned this system's performance here recently (two posts ago), so you may want to check out that post for some more information about the system and its performance.

Monday, March 09, 2015

Singaporeans and day trading e-mini futures

There are now at least four KING students from the mighty country of Singapore. At least, because I might have missed someone, but I am sure about these four.

It is a small country, but very wealthy, with a high standard of living, a highly educated population, things that not so many Asian countries can boast of.

I have never been there, but I know someone who lives and works there. He is "a Lee Kong Chian Centennial Professor at the National University of Singapore and also the Director of CQT (Centre for Quantum Technologies)," to quote after Wikpedia. He is also a professor at Oxford University, UK. His name is Artur Ekert.

We were physics undergraduates at the same time and graduated from the same Alma Mater, the Jagiellonian University in Cracow, Poland. I would bump into him time and again during those years.

That means that I now have more KING clients from this country than from Germany, the latter with the population well over 10 times of the former (according to Wolfram Alpha), which is another way of saying that Singaporeans do not have the same prejudices as Germans.

Some of KING students come from Hong Kong, or Taiwan, two other highly developed Asian countries, but the overwhelming majority are Americans, then Canadians, and the British.

I obviously welcome everyone willing to learn. If I happen to turn anyone down, that is only because I don't think I can help them, and not for any other reason. However, I should probably add that KING is exclusively for the people of planet Earth, as you can also read here.

Sunday, March 08, 2015

George IV (e-mini futures trading system) - a performance report for 2015

George IV is an e-mini futures day trading system for YM and ES, two very popular US stock index futures markets.

The system has been around since late 2007. I tracked its performance for the first two years (late 2007 to late 2009), then stopped it, being too busy with KING, and then restarted it in 2014. You can see all these data on my site.

In 2014, I was tracking its performance using only one strategy, the original one, and with an extra condition that was not in the original version, the TBA rule. This rule was meant to eliminate trades that had an increased chance of producing poor trades, even really bad, meaning leading to maximal losses allowed by the system.

In 2015, I decided to track the system, in both markets, with this rule, and also disallowing it.

It turns out that as of early March, when this rule is not interfering with the system, the system is performing better, but we still need more trades to see if it is not some fluke.

However, we are back to the positive territory in both markets and both categories having started the year in a positive manner too. The system is not doing as well as it did last year (which was very good), but it is doing pretty well in the no TBA rule category. It would have done well in that category last year too, although I am not sure if better than in the other category. If so, only a little bit better.

See below for the graphs of the equity curves in YM and ES in the no TBA rule category for this year.

(Click on the images to see them enlarged.)

The system is only $400, which is really a steal. If you are smart, this system alone should put you on the track to becoming a successful YM or ES day trader. It's a favorite of many successful KING students.

I also often recommend it to those who are not sure if KING is right for them. It's more expensive, so it makes sense to review George IV first to see if you like what I offer. Most of those people end up buying KING afterwards.

Friday, March 06, 2015

Only with KING!

As just posted in my Twitter feed.
And here is the tweet that explains the last one.
If you don't know what KING is, you can always remedy it by checking out my site, specifically the section dedicated to this e-mini futures trading methodology (course).