Back to the drawing board


Well that trading plan I posted a couple weeks ago was a bust.  Here’s a chart representing the results of 19 trades (in order of entry, but not exit).


Part of the problem was that I didn’t move the trailing stops to break-even soon enough, so I let a lot of decent profits turn into losses. Also, I took a lot of highly correlated trades, so had more exposure to certain individual currencies (cough yen cough cough) than was prudent.

But another issue was my overall comfort level with momentum type strategies, which is what this was. The setup just involved looking for weekly bars that were above/below the 55-week SMA and which closed in the top/bottom 25% of the weekly range. What bugs me is the extremely wide stops that I end up with, and the whole buying high and selling low thing.

I’m a much bigger fan of trying to identify potential turning points at support and resistance, because the stops are so much tighter, leading to a much better Risk/Reward picture.

Anyway, I’m back in Excel with about 26 years worth of weekly bars on EUR/JPY looking for better entry conditions. Yay for research!

That’s all for now. Until next time…keep pipping up!

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