Hello fellow Pipsters,
I would be thankful to hear your thoughts on a humble strategy I came up with after a little more than one month of trading Forex. Borrowing a term from the hedge fund world, it can best be described as an “Event Driven Strategy”.
The way it works is quite easy. I only trade on days when a significant economic figure is announced. Case in point would be the statement made by Mr. Draghi earlier today, Ms. Yellen’s speech at Jackson Hole would be another. These cases are exemplary because in both cases it was possible to make a very educated guess about what would be announced. So on the day the figure is announced, I bet a significant amount of my portfolio (around 40%-50%) on the actors in question to act the way I expect them to act based on what they said in the days and weeks running up to the scheduled conference where the figure change will be announced.
To hedge the risk of a bet not playing out despite my thorough diligence on the statements made by the responsible parties and the market environment in the run up to the said conference, I also set a stop loss order. If the market is against me, I will not lose any money.
This strategy has worked quite well for me since I started to actively trade at the beginning of August (39 days ago). I am currently up 18.16% on my initial deposit, with no significant losses to speak of (as of Sep. 4, 2014, 18:18 GMT).
I would be delighted to hear your thoughts.
With kind regards,
Alpha94
PS: Attached is a chart of today’s intraday EUR/USD development to commemorate my biggest missed profit yet. Had I not chickened out after the first small drop, I calculated that I could now report a handsome 48% projected return on initial deposit. The green arrows show where I entered (short obviously) and left the trade. I want to know how I can avoid such mishaps in the future. I already figured I simply did not have enough confidence in my convictions and therefor took the money and ran at the earliest chance possible.
EDIT: As I am a newbie, I appreciate every advice I can get. If there is anything wrong/unintelligible in my original post, please point it out!
