So – despite the title of this post – I’m not going to go into politics this morning. Instead I want to discuss how to trade volatility at times like this, relying on forex robots.
Because the markets have certainly been erratic, with wild swings in both directions.
In the past week or two my inbox has been filled with invitations from various pundits and trading gurus.
All these experts were claiming their special webinar or live trading room that covered election day, would somehow give insights into how to trade volatility when events like this roil the markets.
Of course most of these approaches concerned themselves with short-term, manual trading opportunities. Most seemed to want to get on board a new direction, if one presented itself. The problem was, the market did present such opportunities, first one way and then the other.
Personally, I decided to stand aside from manual trading for the duration of election day. Certainly there were opportunities, and any owner of the Price Action Engine would have seen them in the way price burst through certain levels and finally confirmed a reversal at others. That’s because the Price Action Engine covers just exactly these market dynamics: how to pick the levels at which price will turn in the future, as well as giving you the tools to trade that.
But leaving aside the issue of manual trading, how did my Forex Robots cope? If we want to know how to trade volatility, do we even want to be in the market at times like this, and trust our forex robots? I’ve posted a link to a quick video showing the performance of my robots, towards the bottom of this article.See how some of my Forex Robots performed spectacularly during the volatility of the US election.Click To Tweet
Most traders I know turn off their robots at times like this. I must admit I was tempted to do the same, but one fact stopped me. Simply put, the robots I have been building (based on the Price Action Engine) were back tested and forward tested without taking into account times when the market was extremely volatile.
For example, almost all of the robots that my various software programs generated for consideration, performed fairly badly during the GFC. Let’s face it, if you ever wanted an environment in which to learn how to trade volatility, the Global Financial Crisis was it.
I therefore decided to leave my robots running for the entire duration. The results were extremely interesting. Many of the robots which had been disappointing up until this stage, performed even worse. But interestingly – and encouragingly – the relative few that had performed profitably up until now, made an absolute killing.
I have been trialling about 50 forex robots. Some of them have been running for more than three months, others for a period of only a few weeks. The software I use to generate these robots for consideration in trading, has helped me to get together such a portfolio. However, it hasn’t had a 100% track record in picking winners, that’s for sure. That’s why you need to run the robots in real-time for a period of many months before actually including them in a live portfolio.
In another 3 to 4 months I will be putting together a portfolio of the best performers, and trading it on a live account for public demonstration purposes, AND…
If all goes well, these robots will form the basis of a signal service I will be announcing next year!
In the meantime, I’ve put together a short video to give you a sneak peek into just how these robots have performed, especially during the period of high volatility over the last 24-36 hours. I hope you enjoy this, and I’ll keep you up-to-date on developments over the coming months. You can view the video here:
Keep in mind that this is early days for the robots I am developing. Especially, remember that these robots are based around the principles of the Price Action Engine. At the moment, incorporation of those principles into the robots is at a fairly basic level, but this will be a part of the continuing evolution of the portfolio over time. Hope you enjoy it.
And please remember to leave feedback below 🙂
Take Care & Trade Well,