Wednesday, November 7, 2012

Latest developments...

- A few days ago I decided to daytrade using price action. I knew what I was getting into and only traded single microlot orders. It confirmed my distaste for price action - it is overwhelmingly subjective and I found myself able to draw support & resistance lines anywhere on the chart to justify any price action "signal". I entered three trades - closed two at BE, lost the other one.
- Backtested the low-volatility Hermes trading system on the AUDJPY from 2001 to 2012 (it passed).
- Now this is probably the most significant breakthrough in the last few weeks. I analysed my entries based on the low-volatility Hermes system, and found that half of my entries were triggered on Tuesdays, meaning Mondays tend to be lowly volatile. Well duh. Mondays tend to 30% less volatile than the other weekdays. I think it's highly possible to design a new trading system based on the breaks of Monday highs and lows. The break of a Monday high or low may set the intra-week trend. I'll do a preliminary backtest to see what values pop up.

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