Block Trading

I would like to use this space to forward test my Forex trading strategy for this new year, I will look to update this space on a weekly basis by commenting on the actual trades I took the previous week, what went wrong/right/what I could have done better etc…, while all my actual trades will be automatically logged into myfxbook account , and can be publicly viewed under:

Block_Trading System by Semi_Auto_Trader | Myfxbook

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Some initial notes:

[ul]This is only a demo account[/ul]
[ul]Will look to take 5-10 trades per week out of an average of ~16-20 signals generated by my system / week[/ul]
[ul]Primary chart is the Hourly, with the 4-hour and 15 minute used as guidelines for trend confirmation and fine-tuning my entry respectively[/ul]
[ul]Will only trade out of the pool of 28 Pairs. (i.e. the Maximum Pairing Combination of USD, EUR, JPY, GBP, CHF, CAD, AUD and NZD)[/ul]
[ul]Max Position size / Trade = 2% of Account size, Min = 0.5%[/ul]
[ul]Happy New Year![/ul]

Nice set of rules!

And nice progress so far :23:

Do you have specific rules on when to use 0.5% and when 2.0% risk? This can influent the overal results a lot.

Yes, it is based on a linear relationship between the high-watermark and the most recent performance, the closer the system is to the high-watermark, the closer the risk amount is to 2%, and vise versa, the further it is from the high-watermark, the closer the risk is to 0.5%.
You are correct that this could have a significant impact on the return of the system, on the other hand, it can also have a significant (positive) impact on the draw down as well, which, at least for me, is more important.

Total Trades: 8
Gain/Loss: +430 Pips (+12.6%)

01.07.2016 GBPCHF Sell 0 Pips
01.07.2016 EURAUD Buy +289 Pips
01.06.2016 AUDUSD Sell +63 Pips
01.05.2016 GBPJPY Sell +59 Pips
01.04.2016 NZDJPY Sell -29 Pips
01.04.2016 CHFJPY Sell +73 Pips
01.04.2016 EURJPY Sell +26 Pips
12.31.2015 EURAUD Sell -51 Pips

Overall this was an out-sized week for the system which has a mean expected return per week of ~2.5%, the reason was because it benefited from trends developing from the massive risk selling we saw last week, in fact, half the positions taken were Yen crosses, which makes sense since the Yen does well in this environment, while the remaining gainers were AUD crosses, which conversely does poorly in this environment. The first EURAUD short trade (which lost) was taken before the new year, but it was stopped out at the beginning of the week when the trend direction changed as risk-off sentiment started to creep in. The GBPCHF trade actually was placed in the correct direction, but was whipsawed out for break even when the pound caught a bid and had a sudden spike during and after the PBOC set the Yuan reference rate, it later resumed its trend downward.
Let’s see what next week brings.

Total Trades: 5
Gain/Loss: -236 Pips (-6%)

01.15.2016 AUDNZD Buy -40 Pips
01.14.2016 EURCAD Buy 0 Pips
01.12.2016 EURGBP Buy -38 Pips
01.11.2016 USDCAD Buy -69 Pips
01.11.2016 NZDJPY Sell -90 Pips

A very undersized week for the system. The first part of the week did not see a lot of trends developing and most risk-on pairs were consolidating the losses from the previous week, trends did not start forming till the latter part of the week, so in that sense, the NZDJPY trade was put on to early. However, the USDCAD trade was put on the correct side, but the entry was placed at a slightly higher price than should have been, since the pair, after briefly hitting the stop, reversed and rallied another 500 Pips by the end of the week. Similarly, the EURGBP trade as well was on the correct side, again the entry was just slightly too early, this pair also rallied another 200 Pips by the end of the week after hitting the stop loss. EURCAD trade, similar to USDCAD, was also in the right direction as the deterioration in oil prices continued in the latter part of the week, unfortunately the trade hit the break even level before resuming its bullish direction. The AUDNZD trade was the only one however placed in the wrong direction right out of the gate, it kept on going down till it hit the stop loss and never reversed back.
Let’s see what next week brings.

Total Trades: 5
Gain/Loss: +24 Pips (+.41%)

01.21.2016 GBPCAD Sell +84 Pips
01.21.2016 USDJPY Sell +40 Pips
01.20.2016 AUDCAD Buy -48 Pips
01.20.2016 GBPAUD Sell -78 Pips
01.18.2016 USDCHF Buy +27 Pips

A flat week more or less. Before the equity markets started reversing in the middle of the week, not many signals were generated by the system, in addition, reduction in position sizes, stops and targets was applied by the system due to the previous week’s losses. The entry in the GBPAUD sell was about 40 Pips too early, but would have played out well, when risk-on currencies like the AUD caught a bid shortly after the trade was stopped out. The AUDCAD buy trade was outright wrong, as oil caught a bid and CAD became the strongest currency, while AUD was the second strongest, so a wrong pairing all in all. USDJPY sell trade also turned out to be in the wrong direction, however since the target was small, it turned out not to be a looser, soon after target was hit however, the pair reversed as risk on theme was in play and the Yen started selling off heavily. The last trade, selling GBPCAD was ok as it was in line with the reversal in oil prices and hence the strengthening CAD, however pairing it with the Euro would have been a better pick.
Let’s see what next week brings.

Total Trades: 3
Gain/Loss: -35 Pips (-1.34%)

01.29.2016 EURCAD Sell +72 Pips
01.27.2016 USDCAD Sell -46 Pips
01.27.2016 EURCAD Sell -61 Pips

A loosing week, with a low number of signals generated, all 3 trades taken focused on CAD strengthening in line with taking advantage of the bounce in oil prices. The first two trades were taken simultaneously at the beginning of the week. Both the pairs were stuck in a trading range more or less for the entire week.

[B]January 2016 , Monthly Stats[/B]
Total Trades: 21
Gain/Loss: +183 Pips (+4.86%)
Win Rate = 48%
Reward/Risk = 1.48
PF = 1.34

The month started with a bang but ended with a whimper as the trends created with the risk-off environment in the beginning of the year kind of died out at the end. One of the key targets of the system is a Profit Factor of 2, obviously January fell short of that.

Let’s see what next week and next month brings.

Total Trades: 7
Gain/Loss: -55 Pips (-0.5%)

02.05.2016 USDCHF Sell -36 Pips
02.04.2016 EURGBP Buy +27 Pips
02.04.2016 NZDCHF Buy -34 Pips
02.04.2016 NZDUSD Buy +29 Pips
02.04.2016 USDCAD Sell +45 Pips
02.02.2016 GBPCHF Buy -55 Pips
02.01.2016 AUDCAD Sell -32 Pips

Another down to flattish week, the AUDCAD trade was placed in a generally correct direction, however the stop was about 25 pips too tight, on the other hand, the next GBPCHF trade was placed in the wrong direction altogether, as the CHF was getting stronger and stronger as the week progressed, GBP strength was simply not enough to continue the uptrend in this pair that started a couple weeks back. The next two trades with NZDUSD and USDCAD, were placed to take advantage of the dollar weakness that had prevailed last week until the NFP, while the trades did manage to eek out gains, they were a little late to the party. NZDCHF trade was similar to the GBPCHF trade earlier, wrong direction, while tight stops maybe frustrating for trades placed in the right direction, they are a valuable asset when the the direction is wrong, the CHF cross trades this week are a perfect example for this. Finally, last two trades, placed on the last day of the trading week, remained flat for the remainder of the day.

Let’s see what next week brings.

Total Trades: 4
Gain/Loss: +147 Pips (+1.23%)

02.11.2016 EURJPY Sell +53 Pips
02.11.2016 GBPUSD Buy -44 Pips
02.09.2016 GBPJPY Sell +73 Pips
02.08.2016 EURCAD Buy +64 Pips

A decent week but slightly below average. The number of trades taken were also below average however due to some late / conflicting signals. As the route in oil prices continued throughout most of last week, the EURCAD trade was placed in the correct direction as the pair climbed higher and higher until the OPEC production cut news, however the move in this pair, while up, was very volatile. Similarly, the GBPJPY trade was also placed in the correct direction, but also very volatile, to catch the entire move would have required a stop window of almost 300 pips, to put things in perspective, the average daily ATR for this pair is about 200 pips, almost double from what it was in early January, so volatility does not seem to be letting up. The GBPUSD trade was not a well placed trade as the pair had been trading sideways with no clear direction. The EURJPY trade was ok, but pretty much remained flat for the remainder of the week.

Let’s see what next week brings.

Total Trades: 4
Gain/Loss: -105 Pips (-1.62%)

02.18.2016 CADCHF Buy -31 Pips
02.18.2016 USDCAD Sell -49 Pips
02.17.2016 GBPJPY Sell +57 Pips
02.15.2016 GBPAUD Sell -82 Pips

A loosing week. GBPAUD was whipsawed out for less than 15 pips, but would have otherwise hit target in the beginning part of the week when AUD was showing strength. GBPJPY did not start really moving till the latter part of the week, and even then the movement was muted. Both CAD trades were placed at the same time when price action in oil was looking strong, unfortunately none of the breakouts held.

Let’s see what next week brings.

Total Trades: 6
Gain/Loss: -71 Pips (-1.14%)

02.26.2016 CADCHF Buy +28 Pips
02.25.2016 NZDUSD Buy +22 Pips
02.24.2016 CADJPY Sell -36 Pips
02.24.2016 EURGBP Buy -26 Pips
02.24.2016 NZDJPY Sell -32 Pips
02.23.2016 AUDCHF Buy -28 Pips

Another loosing week, which at this point is taking away almost all the gains from the previous month. As risk on currencies were selling off in the beginning part of last week, the AUDCHF trade was ill-placed, the pair lost even more points after the stop was hit, it did however recover later on the week , again as the risk-on theme was back in play. NZDJPY trade was late to the party as the sell stop was executed right around when equity markets started turning up. While the EURGBP trade was placed in the correct direction, generally, it was stopped out earlier than anticipated by the system. Similar to the kiwi trade, the CADJPY trade was also late and did not correctly anticipate the risk-on theme coming back to the markets. The last 2 trades managed to ride the tail-end of the risk on theme for a small profit. Curiously however, NZDUSD sold off violently for most of Friday, even after the favorable import/export news the previous day, not a good look for the kiwi.

Let’s see what next week brings.

Total Trades: 4
Gain/Loss: +30 Pips (+1%)

03.03.2016 NZDJPY Buy +38 Pips
03.02.2016 AUDJPY Buy +43 Pips
03.02.2016 EURNZD Sell -75 Pips
02.29.2016 USDCHF Buy +24 Pips

An average week in general, with not a whole lot of trends developing. The EURNZD short trade just barely missed out on the big leg down within 30 pips after the stop was hit. The AUDJPY trade also left quite a few pips on the table as target was hit before some of the bigger moves even started.

[B]February 2016 , Monthly Stats[/B]
Total Trades: 22
Gain/Loss: -61 Pips (- 1.53%)
Win Rate = 45%
Reward/Risk = 0.93
PF = 0.77

Last month brought a loss to the system, as markets were trying to find their bearings and trends in the currency markets tended to fizzle out a lot faster than they could develop and maintain.