[B]Original System:[/B] No changes
Closed Trades: 6
Win/Loss Record: 0-6
Realized Profit: -18.8%
Open Trades: 21
Win/loss Record: 10-11 (today was A REALLY TERRIBLE DAY)
Unrealized Profit: 16.17%
[B]Total Return: -5.61% in 35 days[/B]= -.165% daily return= [B]-45.23% annualized return[/B]
note: this is the first time the original system is losing money
[B]KS system: [/B]CAD/JPY long hit TS for .6% profit
Closed Trades: 16
Win/Loss Record: 9-7
Realized Profit: 2.145%
Open Trades: 10
Win/Loss Record: 5-5
Unrealized Profit: 1.65%
[B]Total Return: 3.213% in 30 days[/B]= .105% daily return= [B]46.93% annualized return[/B]
note: Mega Props to San Miguel, who gave me the tips for this system which has survived profitable after my first ever mega disaster day. It does seem that your idea of using Trailing Stop losses is superior to my two exit methods.
Also, the most important thing to consider with the KS system is that the Trailing stop has resulted in 56.25% profitable trades. Though not yet statistically signifigant, should this system prove above 50% profitable in terms of closed trades, the leverage could be increased by using a 2% or 3%/trade capital risk.
For example, if we wanted to compare apples to apples with the KS vs Original system and make both 3% capital risk, then the performance of the KS system would be:
Total Return: 9.639% in 30 days= .307% daily return= 206.3% annualized return
[B]CT system:[/B] EUR/AUD short hit TS for .5% profit
Closed Trades: 2
Win/Loss Record: 2-0
Realized Profit: 8.74%
Open Trades: 5
Win/Loss Record: 4-1
Unrealized Profits: 4.475%
[B]Total Return: 11.2644% in 14 days[/B]= .765% daily return=[B]1,516.49% annualized return[/B]
Note: Again mega props to San Miguel who’s trading systems are kicking ass while mine are crashing and burning.
In terms of Carry Trades profits: .333% after 14 days= 4.12% of realized profit.
This is a surprising since this system’s peak leverage was 7.7:1 but so far the carry trades alone are returning profits at a rate of 8.68% annually.
Given the fact that there are currently 9 valid carry trade pairs, one could easily make 10-12% annually from the interest payments alone! That is performance equivalent to the stock markets historical 70 year return!
[B]Real Money System[/B]: USD/JPY long and EUR/CAD short both hit Sl
Closed Trades: 4
Win/Loss Record: 0-4
Realized Profit: -6.2%
Open Trades: 13
Win/Loss Record: 8-5
Unrealized Profit: 1.3%
[B]Total Return: -4.9% in 9 days[/B]= -.557% daily return= [B]-86.97% annualized return[/B]
Note: This days terrible performance exemplifies what happens when the markets turn against you, at some point today almost all my trades were in the red, the opposite of the great luck I’ve had for the past month where almost all my trades where going my way.
This kind of day is a certainty for any trader and so such “black” days as this are important in terms of data collection.
The fact that San Miguel’s systems, which use a trailing stop, managed to maintain profitability where mine collapsed is solid piece of evidence for the use of trailing stops.
Of course I only have 35 daily data points so no statistically signifigant conclusion can be drawn yet, but I am very glad that I have continued tracking 4 different systems that utilize 3 different trade management techniques.
If my chosen system proves unprofitable after 40 days whereas the KS and CT systems inspired by San Miguel are profitable I will be switching to one of those, (in terms of my real money system).
One Final Note: I am adding one final system to the 4 I already track.
It is called the CTPP system, which stands for Carry Trade, protect profits.
The idea behind it is this: Carry trades, of which there are currently 9 pairs, do offer a strong potential for guaranteed profit.
In fact, if we look at the daily interest payments for the CT system, average them/day and extrapolate them over the course of a year, we find that one would earn 8.8% from carry trades.
Now that is with only 6 trades ever entered simultaneously, if we extrapolate this to all 9 then we get 13.2% annual carry trade profit.
If we were using higher leverage, ie 5% capital risk, which allows a maximum of 10 simultaneous trades, (this system only trades the top 10 carry trades) and used trade management that maximizes the % of profitable trades above 50% then perhaps the following system will do well.
5% capital risk/trade, SL set at KS
note: on fresh trends, SLs are low and leverage is very high, 5-8:1/trade. This limits this system to 3-4 simultaneous trades max if trend is new, 4-5 if trend is established.
- Kumo Breakout
- Chikou Span confirms
- T/K cross confirms
- Kumo cloud direction, bullish or bearish confirms
- 3 and 1 hr time frame confirm
Check trade same time each day, at 21:00 Eastern time, if trade is up 100 pips or more, set TS of 100 pips.
Exit when TS takes you out, SL takes you out, or trend reverses, (as indicated by new entrance, highly unlikely to occur).
The idea behind this system is that the TS when profit is above 100 pips will lock in profitable trades and create 55-60% profitable trades in the long run. This means that the 5% capital risk will be acceptable and allow for hyper leveraged trades that both result in massive profits and high carry trade profits.
If I am wrong then the draw down on this system will be very high.
If I am right then the profits will be enormous. As an example, I backtested two succesfull trades, EUR/AUD and EUR/NZD shorts when the trends were new, to see what kind of profits occur in best case scenarios.
Result: EUR/NZD trade entered 12/28/09 closed 2 days later for 489 pip profit worth 19.6% profit and EUR/AUD trade entered on 12/29/09 closed a week later for 469 pip profit worth 25.9%.
These are 4:1 and 5:1 risk/reward ratios.
Assuming the Ichimoku, with 6 confirmation signals, gives you an edge in terms of picking the right direction, and the TS locks in profits that are likely to happen, the combination of of massive profits from trades, (almost scalping really) and carry trades worth about 26% annually, will create a very profitable system.
Worth testing? I think so.
Note: there are no valid signals at this moment, but NZD/USD is both a new trend and looks to be promising for tomorrow.