Pal Anand
Software Consultant

Pal Anand is an independent software consultant in British Columbia. He earned a Masters degree in Computer Science from Clemson University. When he is not writing code for clients, he is using TradingSolutions to fine-tune his models for the foreign exchange market. These models have shown to have an incredible profit potential. For example, he entered a real-trading contest with real money, with his broker (www.fxcm.com) in which he took second place by earning a 247% * return in just over a 10-day period he traded during that month. Mr. Anand is not afraid to put some significant personal capital behind his system. In one case he took a large position, and the next evening overnight the position rose in value by over 200% *. Using a trailing stop, he ultimately settled this position for a 140% return in 1 and 1/2 days (less 2.5% in roll-over charges).

Mr. Anand originally developed models within Excel/Access, but found it to be rather limiting, inaccurate and cumbersome. The transition from Excel/Access to TradingSolutions was a very easy one for him, since TradingSolutions has a similar spreadsheet interface. What he could now do is easily implement his ideas as Entry/Exit Systems and automatically backtest their performance. He also enjoys the speed and accuracy of TradingSolutions. He is able to accurately process all of his models for the 17 currency pairs he tracks and get the next day's trading signals in under an hour.

Mr. Anand has benefited a good deal from the online discussion forum set up for TradingSolutions customers, as well as the TradingSolutions Solution and Function Libraries. Within the forum, users regularly post ideas, functions and complete "trading solutions" that can be imported directly into the software. Some of the most useful functions that he obtained from this resource include the Z-Score which allows one to find those investments that are at a turning point, i.e., that will either change their price direction or breakout in either direction based on whether the volatility is high or low respectively. Breakouts usually occur at 16, 32 or 64 period time-frames corresponding to Gann's "cycles" or times we can expect to see price move up or down.

We asked Mr. Anand for a high-level description of one of his systems. Here provided an outline that summarizes one of his most profitable ones:

• At the end of the trading day, calculate several values with different time-frames for the Stochastic, and RSI. Calculate Z-Score and CCI General also.
  • If both (RSI and Stochastics) are oversold then a long signal is indicated.
  • If both (RSI and Stochastics) are overbought then a short signal is indicated. Z-Score must be negative (preferably -2) for a long signal and positive (preferably +2) for a short signal.
  • CCI General must be similarly negative for a long signal and positive for a short signal.
  • The above mentioned indicators may be appropriate as inputs for a Neural Network.
  • Ensure that the current trend (3Bar/10Bar EMA) is in the opposite direction. Remember we are going against the trend because we are looking for Trend changes based on the "Contrarian" theory.
  • The above steps are guaranteed to filter a top or a bottom and tell us what signal to look for (buy or sell) and when to look for that signal. This solves 50% of the problem of timing the market tops and bottoms.
• Once he determines what signal to look for (buy or sell) and when to look for a signal, he then searches for those signals using an Entry/Exit system based on a proprietary algorithm which has been in R&D for over 45 years. This solves the other 50% of the problem. Actually, you can use any Entry/Exit system to detect signals, including Traditional canned systems and Advanced Neural Network based systems with the appropriate inputs.
• Verify the signal detected with at least one other signal in a different time-frame (3 bar with 4 bar with 5 bar etc.). Verification is more difficult than Detection.
• Interpret the detected and verified signal as to whether it is a short-term or an intermediate-term or a long-term signal. Ignore short-term signals. Short-term profits lead to long-term ruin. Interpretation is more difficult than Verification.
• Once the signal is verified and interpreted, enter the trade at Market On Open (previous session's Market On Close) with a 1-point protective tight stop (for the current session only) for intermediate-term trades and no stops for long-term trades. For long-term trades preferably combine an inexpensive put or a call option with the straight underlying long or short instrument, thereby simulating an expensive call or a put option respectively.
• Use Gann's Rule of Eights stopping methodology for Intermediate and long-term trend changes for the next session after entry.
• Try to put a Target profit limit also, by using the Medium Term (32 Bar) Gann swing points and determining the limit by an appropriate method.

* Trading currencies is very risky and you may loose all or some of your investment. Past results are not necessarily indicative of future results. More risks of FOREX trading.