Ok, here is the update for Friday, it is early but as you’ll see there is no point in waiting.
system 1, random integer gen didn’t improve luck, said “sell” Euro today and that trade stopped out.
system 1 is batting .250, 4-12 so far.
Thanks to proper money management system 1 is only down 5.6% despite loseing 4 in a row.
Perhaps better luck next week.
system 2, well my projections about last night were way off.
USD/CHF short and USD/JPY long both stopped out, very disappointing, what’s worse today’s trades,
AUD/JPY long, GBP/USD short, and CAD/JPY short all stopped out as well.
That’s 6 stop outs in a row! Very disappointing.
But when I checked a histogram of my days so far I found 6//15 had been 2 wins, 1 loss, while only 2 had been 3 losses. Since each should be 1/4 in the long term I can expect some more luciprop, (“devil’s 3”) days ahead.
On the plus side, days in which I was 3-0 are also 2, so I should see more of those as well, with 1-2 days pretty much where they should be.
Any way, out of 47 closed trades over the last 16 days, this system is 23-24, 48.9% wins.
Throw in the fact that EUR/GBP long is up 13 pips and 3hr and 1 day charts so continued strength, and you can see that the power of statistics is strong.
If EUR/GBP long can reach 20 pip profit, (was only 3 pips from that), then this will be the 24th win, making system 2
50% wins, 50% losers as I expected.
In terms of pips it has made 240.8 pips in 3 weeks, which amounts to 80/week which has resulted in 10.62% ROI in 16 trading days, which comes out to .609%/day, or 356% annual returns, assuming 250 trading days, or assuming 313 trading days, (meaning trades are placed on sundays and friday’s) 567% annual returns.
Of course I expect those numbers to drop as time and data points accrue, but I still hope that 200% returns can occur, so as to double my account every year, even if taxes are 50%.
system 2.A, well the stopped out trades of system 2 occured here as well, which would have crushed this account, EXCEPT FOR THE EUR?USD TP!
That’s right! System 2.A had it’s first TP at 5:1 Reward/risk ratio!
That one TP boosted my account by 5.13%!
And prevented system 2.A from dipping into the red!
Instead its up 1.61%, though after 16 trading days, that’s only 36.67% annually assuming 18 trades/week.
Still, I am very hopeful in this system, let me give you an hypothetical example of why.
July 25, my system randomly chooses AUD/JPY short, I get in at 105.5.
By end of the day I am up 80 pips, set SL to +40.
Check back at close of next day, am now up 550 pips, set SL at +225, trade is still open today, with guranteed win at 9:1 reward/risk ratio.
Though, I wonder whether it would not be better to tighten the manual trailing stop loss when you get that big?
I mean to give up hundreds of pip like that?
Maybe I should increase SL to +55% of profit at 100 pip profit, 60% at 200 pip profit, 65% at 300, 70% at 400 and 75% at 500.
This may limit one’s potential profits, (GBP/JPY recent plung was over 1200 pips from top to bottom) but who can complain about 200 or 300 pip profits?
So I will officially adopt the new manual trailing stop loss rules for system 2.A and system 3 as well.
Though for next week, the TP for system 2.A will still only increase to 150, and continue to increase by 25 pip increments for as long as I manage to hit them, but now there is a better way of locking in profits as I approach TP.
system 3, still no trades, a bit of a dry spell, but what can you do? I’ve learned the you can’t force trades and trying to get into trades where 5 and 10 day EMA are moving in parellel and 5 day barely crosses are terrible trades.
I now stricktly wait for real, overt crosses, instead of waiting for 5 day EMA to barely cross under or over and RSI to be 50.2 or 49.8 or some such.
Should keep the trades quantity lower but the quality higher and the profits more consistant.
As a reminder, this system is up 6.6% in 16 trading days, which comes to 249% annual returns assuming the trend keeps up.
As a final note please remember to visit the official sysem 2 blog at Forex Made Easy: Money Management Is Everything and vote in the poll.
So far I am up to 3 confirmed visiters, which is not bad for a 3 day old blog, but I would like to see that number reach 12 by the end of the month.