At the end of February, I mentioned that I thought things were looking up in regards to how the strategy was going to perform. I went into March from having the worst performing month to date, a negative c. 1,140 pips, but I noticed that the last week of Feb had indeed improved. This improvement of performance continued into the first week*, netting 145 pips by the Friday. The third week was also profitable, and the end of the month was pretty much breakeven. However it was the second week of March that contributed to another month of negative results. Primarily from the GBP/JPY, however there was one large loss on the USD/JPY that week.
That loss was in fact 128 pips, I am not sure how that happened as my I set my stops to a maximum 100 pips. I had been triggered into a buy in the morning and when I looked into it, on the hourly chart there was a candle at 18:00 which dropped over 130 pips! I’m presuming this was a result of slippage on some news event and as a consequence my stop order wasn’t met as the price I required. It’s unfortunate still as my sell order had been automatically removed (I take all orders off at the end of the day) so I didn’t even get the downside movement. Still my USD/JPY trades ended the month in the positive.
Even though that I had another losing month, I saw that the losses were smaller and fewer than previously (with the exception of that USD/JPY trade) and that there was some upside within all the negative pips.
* This month’s trades ran from 6th March to the 31st, as February’s month end of trading ate into the first week of March.
In the last week of March I travelled to Austria for a week’s skiing. It turns out that trading this strategy whilst away on holiday wasn’t any different to trading it from home. The routine was the same, because I was heading up for the first ski lift in the morning I was up at 7am (6am UK time) which was no different to what I would be doing back home. 15 minutes before breakfast placing orders and taking a note of the price and that was it, I then let it run to do its thing.
To be honest, I thought this was a pretty decent month; however…… as you can see GBP/JPY let the side down. I had 9 GBP/JPY trades with only one winner (which was 9 pips!) and the average number of pips for the other 8 trades was negative 72 pips.
Shame as the other pairs put in a solid performance. And I would have had my second positive month if it wasn’t for those losses.
The Win/Loss ratio is a little more even compared to recent months, with a 47% win percentage. However these wins didn’t out weigh the losses in regards to average pips per trade, resulting in an average pip per trade (win or lose) or -5 pips.
Again I was hitting the region of 50 trades a month on average, which again tells me that this strategy is consistent.
Ultimately I ended up with a loss of -230 pips. But I’m looking at the positive in this, it is a smaller loss seen in the past few months, especially February, and I hope it continues to improve.
Fictitious 50k Account
Even with a higher risk appetite of 2% per trade, March’s draw down only reached -6%. In comparison of a low risk strategy, which you would likely do due to the number of trades which are taken each month, the strategy only lost less than 1%.
However the number starts to get bigger when we look at the running total of the strategy since its conception. High risk equals -37% which is massive. However low risk -3.7%. Over a five month period, I know it’s not ideal, but when you think about it, it’s not the worst either. And there is still over half the year to look forward to, to hopefully pull this back into the black!
ADDITIONAL BITS AND PIECES
As always, few bits I’ve seen over the last month.
This Month’s Book – A Man of All Markets, by Edward Thorp
This Month’s Podcast – ChatWithTraders: EP 115: What hand traders can learn from system traders, and vice versa w/ Adam Grimes & Two Blokes Trading Podcast – Technical Trading Strategies
This Month’s Quote – “Hope is not a strategy. Luck is not a factor. Fear is not an option.” – James Cameron
Other Interesting Stuff:
Trade The Plan; Rinse & Repeat