50% in five months

Update:

System One is sitting on about $100 of drawdown, still mostly GBP pairs. If this doesn't improve I will restart this system next week with some adjustments for GBP.

System Two has a combined profit of about $16,000, about $9000 in one account and $7000 in the other. I've got huge USD/Silver positions, about $12,000 profit on my short side and $8000 loss on my long side, so that's interesting. Exotics are also big contributors. Total margin needed is about $400,000, so I don't think you could do this with less than $1,000,000.

The hardest part of either of these ideas is determining exit, and it's probably why I wouldn't go live with either one of them. It's too hard to track this many pairs, and setting an exit based on profit doesn't make sense. Should I leave now, with $16,000 in profit? What if it goes up? What if it goes down? I have no idea if this is a good spot or not.

Probably I'll keep this on demo for a few months and see what it does. My guess is that a few currencies drive the whole market. Already I can see that in one account I am short both EUR and USD for about $2.5MM each, and the other is short EUR by $1.7MM, short USD by $800K and long JPY by $1.4MM. My guess is that I'm trading risk aversion which tends to adjust on a monthly cycle, so that gives me 3-4 chances to add to winners before closing the grids and restarting.

IN OTHER NEWS....

My demo JPY basket, previously closed up 79%, is now 88% over Jan 6 start with open trades. This has been my most successful system to date. I am concerned about over trading, but so far drawdown has been limited to 12% (that I've seen). I may put this on MT4 where I can track performance with a system analysis EA.

Live account is up 68% since Dec 8, with a small open position in a slight profit. (trading EURUSD - USDCHF, and EURJPY - CHFJPY on Oanda).

I like how no one is reading my journal. Maybe it's because I'm in in the trading journal ghetto, or maybe 50% in five months is too boring.

System one, trading a bunch of majors and crosses at 25 pip spacing, is still in drawdown, about -$120 across two $1000 subaccounts. This kind of surprises me since I've had so much success trading just a few pairs, I thought adding more would even things out. I caught some bad entries on the JPY longs as they pumped up and back down again, so either I need to add stops, rethink my starting entry, or both.

My big account strategy (system two) is up $24,000 combined in both subaccounts. Used margin was $400,000 at its highest, using Oanda's 50:1 leverage (25:1 for exotics, of which I traded quite a few). Margin requirements would be less at a 100:1 broker obviously.

JPY basket, 25 pip spacing, is at +3% profit with open shorts after a high of about 10% profit yesterday. I'm not sure if I want to TP here or not. It looks like JPY pairs could drop some more, but I'm not smart enough to know for sure. I'll probably look for a point to either TP or cut losses and reset my grids for either a drop through resistance or a pump back up.

My live account is about even since I de-leveraged my EURUSD trades due to uncertainty.

I'm most pleased, and puzzled, with my system two. I just can't figure out how to TP on this thing. It isn't easy to track 50 pairs, and that's too much work for my lazy self anyway. I thought about a trailing stop, but I've had advice not to do that. I might just place a hard stop on trades when they are first entered, and then adjust that once a week. Maybe ATR based. I only had a $6,000 profit earlier this morning so I want to be able to ride out the swings. Weekly candles would help, I think.

Wish I had kept some of those EURUSD shorts. Still, even de-leveraged as I am my live account is now up 77% since December 8 and accelerating. I'm targeting 1.38, 1.37 below that, and then 1.35. 1.35 is the number that a lot of multinationals are planning on, so if the real money is betting on that (in Airbus's case, they lose $1BB for every .01 above 1.35) then I think it will get to 1.35 eventually.

Changes coming next week to my basket strats. My big account is up $18,000, down from a high of $24,000. I think I've on the track of a winner, but right now I'm looking at warm spoor instead of taking aim at the quarry.

The issues are thus: 1. I've got bunches of losing trades. 2. I don't have an exit strategy.

So here's my thoughts. I'm going to restart this on Sunday but this time set some stop strategy to it. ATR seems to be the way to go since that adjust the risk level on a per pair basis. It's more work, though, and I don't like that.

Also, instead of taking market orders on all of the pairs I could use limits and place the trades at a breakout area. Although if it's already in a trend I'd be better off with a market order, but I need to be consistent. So maybe longs at the previous day's high, and shorts at the low.

Stops should be ATR related - I think 1 ATR should be enough. Additional limits can be placed every 1/2 ATR. Check it once per day to adjust the stops.

Sound reasonable? Just looking at a few of the pairs I traded, this would get rid of a lot of the losing trades and keep me in most of the winners. I need some sort of re entry rule for pairs that get stopped out. Maybe 1 ATR beyond the previous entry, or something like that.

Oh, and I'm still doing the exotic high interest thing. 1 unit usdtry, 2 units eurhuf. +$2.70, earning $0.57 per day interest. Account is up to $1508 so it's earning 13.8% per year, which I would be thrilled to get anywhere else. No real rules here, so I should write something to be consistent.

I have a few mistakes to own up to now. My January live profit has just about been wiped out by market moves since Friday. I'll need to evaluate some decision making and see if I can adjust my system. This is a good opportunity to make some scaling-in changes that I've made on demo and that seem to be helping with drawdown.

I believe my main issue has been trying to judge performance on a daily basis, even though my goal is a positive month, not a positive day. As a result, my grid has been too tight and I simply can't manage a grid that may add 8-10 positions during a day.

It's certainly not insurmountable. However, my strategy for the past two months as always been to take profit when price reaches a ledge, and instead of doing so on Friday afternoon I left my trades running. Once I found myself "hoping for the best" this morning, I realized my psychological error and closed all trades and orders.

Even after some stupid decisions on Friday and Monday, I've doubled my live account as of today since December 8.

Closing all trades, patting myself on the back.

Have a pat on the back from me too dude, still confused on your method so keep on going please.

Hi Turveyd,

Thanks for following. Live account system is easy. This week I made it even easier.

If I had a hedging broker, these would be the rules:

Short trades every 20 pips below price at 1:1 leverage.
Long trades every 20 pips above price at 1:1 leverage.
Pairs: EURUSD, USDCHF, AUDUSD, NZDUSD

Short trades every 25 pips below price at 1:1 leverage.
Long trades every 25 pips above price at 1:1 leverage.
Pairs: EURJPY, CHFJPY, USDJPY, CADJPY, AUDJPY, NZDJPY

Oanda doesn't allow hedging, so I pick two highly correlated pairs and short one of them and long the other. I may adjust the JPY leverage to 0.75:1 per order, since they all move together and if you get going the wrong way the margin use really goes up.

I may try this on an MT4 broker that allows hedging to see if going long and short in the same pair works as well as what I do at Oanda. I think it will work better since your margin usage goes down if you end up with trades going both ways.

Today's leverage reached 35:1 and used almost all of the margin I started the trades with, so I really had to close the whole thing down and start over.

Anytime, still confused as a confused thing, but its been a long tiring week so don't even try to explain this week

Just keep doing what ever your doing!!

My USD/TRY EUR/HUF account is now over $1700, so that's another $200+ in three months, or around 4.4% per month. Not overwhelming, but it beats everything else I've tried except for DIBS. Right now I can handle a 25% drawdown easily since I'll make that much in interest in a year.

It's a good thing that carry account could handle drawdown, since that's what happened. Dropped to under 1600 and has slowly crept its way up to $1746 now.

The other system was getting quickly overleveraged so I dropped it down to EURJPY, EURUSD, and USDJPY. It still crashes now and then but usually one pair will take off and fill a bunch of orders and let me take profit.

It's been earning 20%-40% per month in one variation or another, and I think this last iteration is probably the best for catching long multi-week moves and keeping the account above water. Still gets some bad drawdown though - 15%-20%.

I took profit on Aug 5 at $1852. I was earning about $0.97 per day at the time. Re-entry set well out of the current range so I thought it would take weeks to get to it. Re-entry (3x leverage) hit on Aug 12, and closed on Aug 17 for $104 profit ($1956 balance) of which $4.32 was interest.

Second re-entry (3x leverage) set and hit on Aug 19. Current in drawdown ($1933 NAV) and will monitor. Interest will be about $0.88 per day or 16.4% per year.

The hardest thing with trading USD/TRY is knowing the fundamentals. There's not a lot of news, so there can be surprises. I think the current change in direction is due to dollar strength and will eventually reverse. The carry is simply too strong to maintain a long term bull market.