I am testing a system in demo for a combination of fundamental analysis and technical analysis based on mean reversion and a few other trend direction indicators including retail trader sentiment. The first two weeks have worked well. Paper trading only the first week and placed trades on a demo account this week just gone.
Early days but the results are going well so far.
4 hour charts - only trade when fundamentals are opposite to the retail trader sentiment
Determine watch list on the weekend after fundamental updates are complete
Trade 1 - enter at start of week with a small position in direction of fundament trend. 0.2% risk per pair. Catches the big move weeks that do not retrace - small trade risk.
Trade 2 - enter with limit orders on retracements against the overarching fundamental trend direction. 0.8% risk per pair. Catches the retracement for better entries when there is a retracement back to a bank/institutional order level - larger trade risk.
Results are as follows:
Week 1 - paper trading +7.9%
Week 2 - demo trading on live markets £1005 profit on £35000 demo account +2.8%
Closed trades
Open trades
Watchlist for the week. Just the one for the list this week as things change.
Watchlist for this week. Some strange changes. JPY getting weaker against most majors again but the markets are correcting against it.
Watchlist for the week ahead.
Away for the week last week so no watchlist but positions were still in place from the week before.
Performance as follows. 918 pips gain for the two weeks. 3:1 and 5:1 targets hit on NZDJPY longs.
Some nice moves this week. 412 pips average per entry on the watchlist.
GBPJPY was a stand out with 192 pips average win.
Watchlist for the week ahead.
Results for last week's watchlist. Bit of a mixed week but still positive.
audjpy -> -60 and -20 pips
cadjpy -> +15 pips and + 15 pips
chfjpy -> +26 and +46 pips
eurcad -> +4 and +87 pips
eurgbp -> +4 and +15 pips
gpbjpy -> +4 pips and +4 pips
gbpusd -> +61 pips and +6 pips
nzdjpy -> -94 and -43 pips
nzdusd -> -62 pips and -44 pips
usdcad -> +41 pips and +16 pips
usdchf -> +38 and +38 pips
Total = +93 pips
Watchlist for week ahead completed.
Lots of opportunity starting to come into play.
Full watchlist for the week ahead.
Part way through selections for this week. Starting with the following and have the LFX checks to undertake. The follower where shortlisted on Sunday night with further refinement to run through. Might end up with none again at the end of the refinement.
Nothing new to report on the watchlist front. USDRUB stopped out. Very slow on the opportunities front at the moment.
Another dull week on the Watchlist front!! Nothing weak enough to put against the number of strongs and quite a few at neutral.
USDRUB back to break even after the big shift in USD to the downside in the last week.
Expecting a move from risk on to risk off in the next one to two weeks with a fall in the S&P of more than 1% based on sentiment indicators. Might see some opportunity opening up over the coming week on FX for next week's watchlist.
Nothing showing up for the Watchlist this week apart from USDRUB staying on.
EURAUD, EURCAD and EURUSD shorts from previous weeks all closed out with good profits.
Last week's USDRUB long position remains open and is performing well. Sitting at 1.5 RR and 2 RR in profit at the moment.
Performance for open positions for last week and opportunities for new entries on USDRUB were as follows. 222 pips gain for the week.
EURAUD flat for the week
EURCAD continued to fall with an overall nominal 36 pip gain for the week on open short positions.
EURUSD continued to fall with an overall nominal 26 pip gain for the week on open short positions though it was down over 70 pips at the low of the week.
USDRUB long played out nicely!!! Two entries for the week.
20% risk position at the weekly open - up 40 pips for the week.
80% risk position on a retracement entry making 92 pips gain for the week.
Late to the table this week for the Watchlist update. Nothing too much happening - once again no real strongs to play against real weaks on the majors and minors. Only the Exotics standing out again.
So not much showing up in the watchlist this week. No strongs against weaks this weekend apart from exotics. Just riding out open trades until they get stopped out in profit.
So an interesting week. The S&P rose by more than 1% as expected. A risk on week but a strange one. EURAUD bucking the trend of the sentiment position for the start of the before turning in the direction of the fundamentals. The fundamentals held up and the watchlist from last weekend performed well again for the rest of the watchlist for the week.
Risk Management, trading the strongest against the weakest both fundamentally and technically along with a high R:R target is continuing to prove a powerful mix.
Closed: -1%, +0.99%, +1.0%, +1.7% = 2.69%
Open: +0.9%, +0.21%, +0.21% = 1.32%
Total for the week = circa 4% with open positions
Net of 237 pips profit for the week and some positions still open.
Short EURAUD - 0.33% loss on Week Open entry and 0.66 loss on Retracement Entry. Both stopped out before the pair turned around.
Short EURCAD -42 pips or 0.33% loss on Week Open entry and 0.99%% gain on Retracement Entry - 3 to 1 target hit for T1. Second part of the trade still open with a target at 5 to 1 RR. Sitting at 0.99% profit open.
Short EURUSD +75 pips for 0.33% Week Open positions - sitting at around 1.3:1 RR with targets at 3:1 and 5:1 ahead. Retracement Entry trades were nice - entry at the weekly high for 105 pips profit for 0.66% with a 3:1 RR target and second part of retracement trade hit the target of 175 pips with a 5:1 RR.
Watchlist updated for the week ahead.
No changes from last week. Same pairs on the list for this week.
So a very interesting week were lots of retail traders with trend following systems will have blown their accounts on the basis of some of the chat room noise I have seen. Lots of volatility and no sense of direction in the markets as I suspected it would be in my notes for the watchlist for the week. Nevertheless, the fundamentals and COT data with sentiment analysis still held true. Positions adding to profits from previous week for the same selections. 440 pips over two weeks for EURAUD, EURCAD and EURUSD shorts which were on the watchlist for both weeks.
AUDJPY was taken off the watchlist and position from previous week would have been closed - it had a falling week.
CADJPY was taken off the watchlist and position from previous week would have been closed - it had a falling week.
USDJPY was taken off the watchlist and position from previous week would have been closed - it had a falling week. EURAUD Short - 2 entries - 23 pips at 1/3 risk and 81 pips at 2/3% risk
EURCAD Short - 2 entries - 10 pips at 1/3 risk and -4 pips at 2/3 risk
EURUSD Short - 2 entries 40 pips at 1/3 risk and 32 pips at 2/3 risk
Selections for the week have kicked off nicely already in the forecast direction. 30 pips profit so far - EURAUD