Strategy Update

Felt uncomfortable in my gut as I continued backtesting. I was right. For the period of Dec 17 to May 18 here are the results:

10pip limit 40pip stop: 30pip loss

10pip limit 55pip stop, end of day close: 68pip gain

Not very promising at all. Granted there were some trades that may have worked out if it had gone in my direction before dropping, but I don't have the time to check lower timeframes. For example, if a day saw a high of 80pips and a low of 80pips, I wouldn't know which hit first. I could probably find out, but I always err on the side of caution, so I would consider that day as a losing trade.

However, a simple tweak to the strategy saw a 430pip gain instead over the same period. 20pip limit, 55pip stop. This return was better than the 20pip limit 40pip stop (380pip gain), and the 20pip limit 40pip stop end of day close (224pip gain).

I believe it worked out because I make more per trade, and because 20pips is kind of a stretch goal, it can ride out some stophunts. Let me explain using the following data:

Date

Highest

Lowest

Open

Close

Thursday, 21 December 2017	76985	76535	76666	76960
Wednesday, 20 December 2017	76799	76460	76504	76667
Tuesday, 19 December 2017	76843	76476	76737	76505

So opening a trade on Tuesday, I'd make my 10pips on the earlier strategies. However, this would mean I would open a trade on Wednesday, and that ended up being a losing trade, because I was fooled by the red bar close (stophunt) on Tuesday. However, with the 20pip strategy, my position would have remained open on Wednesday, thus preventing me from making a losing trade that day, because on Thursday, the real trend kicked in, and I would make those 20pips. In fact, while I just made 30% over the past 3 days, it would have been 60% had I started this strategy!

This post has cost me 10%, cos I missed making the trade at 0000hrs today, and right now (0025hrs), I would have made 10pips. However, this is definitely a worthwhile investment. Will come back again next week using the new strategy. I'm definitely using the 20pip limit - but will be considering whether I can change the close to end of the day instead of just a 55pip stop. Will backtest that again and keep you guys updated. Trade safe!

Yours,

X