Dr Zeus Does Demo

Date/Time Day Balance
4/13/2010 1 1000
4/14/2010 2 1000
4/15/2010 3 1000
4/16/2010 4 1055.05
4/17/2010 5 1055.05
4/18/2010 6 1055.05
4/19/2010 7 1055.05
4/20/2010 8 1055.05
4/21/2010 9 1080.42
4/22/2010 10 1080.42
4/23/2010 11 1171.09
4/24/2010 12 1171.09
4/25/2010 13 1171.09
4/26/2010 14 1171.09
4/27/2010 15 1383.12
4/28/2010 16 1383.12
4/29/2010 17 1412.38
4/30/2010 18 1453.94
5/4/2010 19 1620.32
5/5/2010 20 1431.94
5/6/2010 21 1546.8
5/7/2010 22 1442.09
5/20/2010 23 1640.52
5/21/2010 24 1600.9
5/22/2010 25 1600.9
5/23/2010 26 1600.9
5/24/2010 27 1427.38
5/25/2010 28 1676.28
5/26/2010 29 1691.4

I took a break after 5/7, so I numbered my trading days to produce the pretty graph. My biggest floating DD are in numbers: $188 and $173. I just let things get away from me.

I've changed things a bit so it should help with the DD at the expense of the earnings.

The exponential equation is y=941.05e^0.021x, but it gives a value of $2,006,668 at day 365 versus the linear value of $10,840. Linear seems more reasonable, but the 2 year number is only $20k, and 3 year is $60k, which seem low.

Got caught short on eur/jpy and offsetting trades didn't make up for it enough. Balance is now 1782 but NAV is down to 1505.

Numbers on previous post were NAV after closing out a set of trades. This is the biggest floating DD I've had, in both total and percent (15%). It's only 11% of my NAV from before I started this set of trades though - 1782 isn't real until everything is closed.

Oh the tragedy. NAV at 1455 after closing out all trades and orders.

I'm so dang impatient for price to make a move that I keep trying to make things happen instead of letting the orders come as they will. And, I'm not happy with a $50 profit.

Good week, I've learned a lot.

NAV is back up to $1634, with a small floating profit of $6. My drop bottomed out at about $1338 (I think - I need to run a full report and see). I'm not happy with a 21% drop, but that's what happened.

1. I was not using my oscillators wisely. I'm supposed to wait for overbought/oversold levels, and then grid in trades above or below "fractals" (Oanda doesn't have a fractal indicator, so I just use price spikes as a substitute). Instead I was starting trades in the middle of oscillator movement and then not monitoring them closely enough to insure the movement followed through.

2. No SL or TP. Initial entries never have a SL or TP, but once a grid is in place I should protect profit or limit loss. Instead, I expected offsetting entries in other pairs to protect me but didn't anticipate the heavy use of margin (made worse by Oanda's 2% margin rule vs 1% elsewhere).

The 22% increase in June is very welcome. Half of that came yesterday and today, with another 5% last week.

I'm using half the risk I was using prior to April. My returns from October to March were about 40% per month on the good months, but a big crash at the end resulted in about a 50% loss (due I think to the two reasons I listed above, plus I was not monitoring trades for several days and should have just closed all orders anyway).

I am much happier with 20% than 40% if it means keeping my drawdown lower, since I can increase my leverage after a loss and regain some ground if I feel it is warranted.

Keeping in mind that I took a two week break in May (and a few days in June but I don't have that calculated yet so I'll assume I was trading for now) I have about two full months of trading on this system. Results:

Month 1: 69% return before drop, 34% return after slide completed
Month 2: 22% return.

Counting Month 1's lower return gives an average of 28% per month. This isn't sustainable with a 9 figure account, a problem I don't have yet lol. I think a four figure account can handle this for a while without getting dinged too much by broker interference, especially since my trades run for 100s of pips.

This also fits nicely with the 40% per month I had been earning with doubled risk on a system very similar, if not quite the same, as this. A six month track records of tests on live and demo accounts gives me some confidence to put more money behind this and scale up. Hopefully I'll have more good news to report in a few months.

What a fustercluck.

Oanda has a horrible connection during NFP making it impossible to manage my trades. I can't blame them though, I should have had large sell positions open during NFP when prices are already oversold.

eh. lesson learned.

Balance is now about $1500 after I took some losses but I'm still carrying another $130 in losses. Price is turning my way and I've finally able to set some stop losses and play catch up.

So basically I gave two weeks worth of profit back to the market.

I seem to get caught by the news more often then I like, I guess I need to setup google calendar to remind me to close my trades, or at least set up SLs. Didn't I say in my last post that I was suppose to use SLs once a grid is in place? Geez I'm a dummy.

Eh. I ended up closing out at $1400. Took a bunch of trades over the past three weeks and I let them run - had about $50 in profit at one point but I closed today at $1400 since things aren't looking so hot.

I also went live this month - I have a 5% drawdown right now.

Live since Jul 22
Starting balance: $1242
Balance HWM: $1338
Current Balance: $1330
Current NAV: $1445

Return: 7.085% on Balance, 16.34% on NAV.

I had really bad drawdown during August b/c I kept selling into the uptrend. I had plenty of room to carry it though, and now I've locked in at breakeven to see if this EURUSD drop has the momentum to carry through to to the 1.26 or 1.245 targets. I should have plenty of room to let this bounce, but I reserve the option to close a profit and re-enter later.

Still need to let my stops work for me and manage the longer term trend instead of watching the hourly so much and carrying losses.

Demo
Balance: $1304
NAV: $1456
Locked: $1371

In a bit better shape here with stoplosses locking in some profit instead of just breakeven. I took some small losses early in the uptrend instead of holding them as I did in the live account, so I really have a locked loss of $29 since the beginning of the trend.


Summary: Not bad for something I check on once or twice per week. My work load is much heavier and I like being able to focus on my paycheck and let this make some money for me. I still have large drawdown issues but I'm comfortable enough with my positions to let them work out. The EU, EJ, UJ hedge works OK - not as good as I'd hoped, but it still lets me build a position in a trend.

I may start demoing a new system now that this one doesn't require as much thought for me. I'm considering DIBS since that works well with Oanda - no fancy indicators needed. THV has always interested me and I could trade it on short term charts before work, but the indicator soup makes it hard to know what to do. T101 looked promising, but now it seems more like a fancy way to trade GBPJPY with high leverage.

Live
Starting Balance $1242
High Water Mark: $1372
Current Balance: $1328+44 locked = $1372
Current NAV: $1515

Return: 10.47% on Balance, 22% on NAV Since July 22.

Moved my SL to lock in some profit and set a new HWM.


Demo
Start: $1000
HWM: $1691
Current Balance: $1303 + 83 locked = $1386
Current NAV = $1509

Return: 38.6% on Balance, 50.9% on NAV Since 4/13/10

Euro approaching my first target of 1.26.


Any idea on how to annualize these returns? My live account has been running for a month. Should I multiply 10.47% by 12 and get 125% return, or assume I compound over the period I've trade so far and get 1.1047^12 = 330%?

It depends on how you define each trade as a percentage of risk, ie - what is YOUR assumption. If you maintain the same dollar value of risk per trade you started with on day one, the first calculation is correct. If you define each risk per trade as the starting percentage of equity when a new position is entered, use the second.

Somehow I sense a "test" in the question. You have to define your trade calculation.

All else being equal, you could easily lose the same percentage or dollar value per "period" you are calculating. My question is - what is your "edge" to provide success when it is time to report P&L?

Thanks phoenix421. I increase lots every time I close out a winning set of trades (or lower them when I lose). This can occur after a few days, or in this case over a month.

Each trade is equal to 100% of the balance when I place my orders, and I grid in the direction of the trade (I buy above the current price, sell below every xx pips).

Once price breaks in a direction, I place protective SLs. Sometimes I close out losing trades, other times I let them ride - this got me in trouble last month with EURUSD. I'd be in better shape if I had closed those. This also makes it hard to define my edge in measurable terms. A 3:1 trade can be held a long time while it moves against you, and a 1:1 trade can be held indefinitely.

So far after almost a year of practicing this way of trading on various pairs and with different settings, I've found that I can almost always have a 10%-20%-30% month if I don't let losers dangle.

Edit: Just checked my account. Overnight SL held. Live NAV is now $1570 (demo is $1564) and I've left the SL in place. I feel a bounce coming at 1.26 and want to ride it out.

And... we're out. Live Balance is $1354 after stop outs. Funny enough, Demo is the same balance.

I'm disappointed that price didn't shoot right through 1.26 and am second guessing myself on whether I should have taken profit at the point and looked for a re-entry later.

I'll look at the market a bit and see where I should place my next set of orders - right now I have no orders or trades open.

What a great morning.

I've kind of taken a break for the past week and haven't kept up with my account. Granted, I've watched the market but the sideways moves told me that nothing was happening one way or another with my trades.

Sure enough, log in this morning and I've got eurusd shorts, usdjpy shorts, and eurjpy longs. And a 15% profit since end of August.

I'll take that, thank you very much! Since eurjpy is approaching the base of the ichi cloud, I'm now flat waiting on a pullback. New orders may come in next week.

Live balance: $1558.
Demo balance: oops, forgot to check. I'll have to update later.

So since my demo and live accounts had the same the net value and were trading the same system, I've discontinued demo. I might start another demo with a tweak or two, but I'm lazy.

Live balance: $1584
Live NAV: $1639
Live locked NAV: $1622

I'm short USDJPY which is why so much of the floating profit is locked in. I have a feeling my SL will get hit when BoJ intervenes this week. 83 is right around the corner though and might come first, so hopefully I'll have a chance to lock in a bit more profit. Then again, we might drop all the way to 80. Who knows.

I got busy with my real job and never re-entered the EURJPY trades. I really regret that since I missed 300 pips of movement and 40% profit. I probably should have just used a protective SL instead of gleefully taking my profit and running, but I read some "analysis" that said the trend would reverse at the ichi cloud.

I hate analysts.

Funny... when my stoplosses hit, I only locked $1615.

Just closed some more USDJPY shorts after NFP drop, new net is $1649.

That's 33% since July 22, about 15% per month. I'm OK with that. I can see where things could have been better. I'm tempted to let these shorts ride, since I really should have re-entered the stopped trades from early in the week once the down trend resumed.

BUT... there's a G7 meeting this weekend, and who knows what BOJ will do. Probably best to let UJ work off the drop, maybe bounce back to 82.15 or so before tackling 80.

Knowing my luck it will plow through today's low in the next hour and I'll be busy with my real job and can't do anything about it. EH. I do have a whole bunch of EURUSD short orders waiting though! That will be fun.

Missing the big upswing on EURUSD really hurts, so I'm glad to see that things are finally turning south and I'm getting some trades.

1.37 seems to have been a big number for some traders, but hopefully today's jump up will run out of steam and plow on down.

Target 1: 1.3550
Target 2: 1.34

It's possible though that the uptrend will continue, in which case it will target 1.45. I've got some orders in place to take advantage of that, and in fact was able to get a small profit from my EURJPY trades over night. I think the uptrend is over-extended and due for a correction but I'm often wrong.

Balance: $1670
NAV: $1521

Balance $1605
Nav $1250

I've got a synthetic long USDJPY with EURUSD shorts and EURJPY longs basically balancing each other out. Problem is the amount of DD I'm running, but I've got lots of room to move so I'm not worried.

This will probably take the rest of the year to work out, but it looks like EU is establishing a new short (I'm almost in the money there) while EJ looks like it might be putting in a good dip for more buyers (I'm way out of the money there).

I'll need UJ to make quite a big move north to close out at a profit, but the record lows make a buy cheap. Not that I'm calling bottom but there's more room to move up than there is to move down.

Oh, and I lost $45 on last week's news. I had a good EU short entry after the news, so I took a high leverage position hoping to get myself out of the EU shorts. This was after the bouncy ball news move, but I still got caught and ended up closing it. I'd be way in the money now if I'd left it on, but that was too much leverage to let it ride.

Balance: $1604
Nav: $1500

USDJPY is moving up sooner than I expected, which is good news for my synthetic long. I need another 70 pips or so to break even (I think). I should be able to hold this for a while, although I might be some protective stoplosses on my in-the-money trades.

I think we may be setting a new trend, so that gives me an opportunity to produce some new NAV highs. I'll need USDJPY to get to about 84.6 to get back to my high water mark. That seems doable in the next few weeks, especially if the current UJ trendline gets broken. If it doesn't break soon then it may take until the end of the year.

I don't really have a target set. I should probably do that for all three pairs, but if pressed I'd hunt for 300-500 pips of action in this move which should get me to about $2000.

Hooray! NAV is finally inching above $1600. Balance is $1603 (interest costs me) and NAV is a hairline above that. And dropping as I type....

That's OK. The trend is with me, I think. It's hard to go a month below HWM but these things come and go.

I've added some low leverage shorts to EURHUF and USDTRY for about 8% interest per year. They've moved against me quite a bit so I'll look to add to that position when I'm not so busy in the morning (Oanda afternoon spreads are horrible for exotics).

Now that this system has pretty much shaken out for me and doesn't require much work I'm going to look at something else for my demo account to do. I only have to trade 2-3 times a month so I need something to scratch that itch. I might post that here to keep track of my progress.

Nav: $1700+
Bal: $1602

USDJPY has broken through the ichi cloud and EURJPY looks to be establishing a base above it's ichi cloud, so that's good news for synthetic USDJPY long. I'm thinking about closing my EY longs for a while and placing some orders to pick them back up at a better price, but that's a lot of guesswork.

EURHUF and USDTRY shorts are holding. HUF is back in the money. Wish I had added to the lira, but it's too late now I think.

Nav: $1680
Bal: $2971


I don't like closing trades. So sue me. Closed my short EURUSD for massive profit, but long EURJPY ate it all up. Gobble gobble. I'm debating now on where/when to close EURJPY and/or put my EURUSD short back in. I'd like to see it bounce really good but it seems to be struggling with 1.3

Also, I added some USDTRY shorts.