DislikedThis system has now lost five in a row, and six of the last seven. This is starting to hurt the statistics a bit, but I have not lost faith in the system. I have to remind myself that I've only been doing this live for four to five months now and I will continue to monitor how the system progresses over time.Ignored
- It's simple. There is no visual interpretation of indicators or chart patterns. It is simply a calculated projection of entry and exit prices.
- It's set-and-forget. There is no waiting in front of the chart for something to line up. Just set the orders and check in occasionally. This, I find particularly important since it eliminates so much emotion.
- I like the core concept: A linear projection based on the slope of the midpoints from the past 20 weeks. Very elegant.
- There is room for error. You aren't looking to buy/sell tops/bottoms. You just need that middle 60% of the projected weekly range.
I have just started trading this system. I'm only working with a limited set of curency pairs, so far, but I caught about 250 pips on EUR/JPY this week, which was nice.
However, one thing that bothered me right away was the fact that there is no stop loss. Even though the TP exit target is updated every week, having no stop loss still leaves open the possibility of a huge loss. For example, if price turns against your position and never looks back for a long time. In that case, the updated TP effectively becomes a trailing stop in a negative trend. Nevertheless, I decided to trade this system as is, without a stop loss, for now because I want to really get a feel for this system and learn how it works in its unmodified state.
For the purposes of research, I will be keeping track of drawdowns on my trades. More specifically, I mean the maximum negative extension from the entry point that occurs before the trade closes. By gathering statistics on these drawdowns we might be able to determine a practical stop loss strategy.
I am also interested in trying different combinations of currency pairs. I will try to balance my positions and reduce exposure, as you do. Perhaps the system is just fine how it is, it simply need to be diversified by trading it with the right basket of currencies.
In closing, don't lose faith. Sure you have a string of losses, but every system does. Your track record from forward testing is relatively short, but what's there looks fantastic! You've made thousands of pips, that's more than most can say. I think this system just needs some tinkering in the back end with some solid risk management techniques; the front end is very simple and I wouldn't want to change that too much. I will do my best to research and develop some risk management strategies for this system. I'll let you know what I find out.