I just finished my backtest for the period Jan 2, 2014 to date. I use OANDA Canada for my broker so some results may vary from person to person. This was for the EU London open. The signal bar was the 2:55 am EST bar.
My review was to determine how many losses on a daily trade would maximize my return. If you were to have a max of 2 TP, I would have gained 400 pips. This would have only been a risk of 30 pips max per day. By doing this, I could risk .6% of my account assuming a 2% daily risk per trade.
If I were to go for 3 TP, I would have gained 1040 pips for the same period. This would be a max risk of 70 pips per day. This would also result in lower my initial risk to .3% to limit risk to 2% of my account.
For 4 TP, the gain would have been 960 pips, indicating much more benefit than 3TP. This would be for a risk of 150 pips. So I don't see much benefit and my initial risk would be reduced to .15%.
So, for this strategy, I going to proceed with a max number of losses per trade of 3TP. There is logic to stopping after the third loss since the loss rebounds would nullify any potential fibonacci retracement or elliott wave effects.
My review was to determine how many losses on a daily trade would maximize my return. If you were to have a max of 2 TP, I would have gained 400 pips. This would have only been a risk of 30 pips max per day. By doing this, I could risk .6% of my account assuming a 2% daily risk per trade.
If I were to go for 3 TP, I would have gained 1040 pips for the same period. This would be a max risk of 70 pips per day. This would also result in lower my initial risk to .3% to limit risk to 2% of my account.
For 4 TP, the gain would have been 960 pips, indicating much more benefit than 3TP. This would be for a risk of 150 pips. So I don't see much benefit and my initial risk would be reduced to .15%.
So, for this strategy, I going to proceed with a max number of losses per trade of 3TP. There is logic to stopping after the third loss since the loss rebounds would nullify any potential fibonacci retracement or elliott wave effects.