Sunday, November 25, 2012

Review of November trades

As of the 25th of November, I've taken four trades for the month. Two were losers, while two were winners. Overall, my account is up ~4% for the month, give or take (it's hard to calculate since I am always injecting equity from my day job, obscuring the growth of my equity curve).
GBPUSD - 7th November 2012
I saw a low volatility candle on the GBPUSD at the end of 6th November, and laid out my pending long and short at the break of the candle's high and low, respectively. Both the long and short were triggered on the 7th November. Sadly, price whip-sawed for the next few days, stopping out both my orders. I was aiming for a 1.75:1 reward:risk.

XAUUSD, NZDUSD - 23rd November 2012
There were two low volatility candles that caught my interest during the 22nd November. They were on the XAUUSD (gold) and NZDUSD. There was an additional signal on the XAGUSD (silver), but due to extreme correlation with gold, I decided to skip the silver signal.



As you can see, the high of both low volatility candles were broken, triggering a long. My reward:risk was set at 1.75:1, which was easily hit. I walked away with two winners. Since my reward:risk is bigger than 1:1, I am ahead for the month.
My main concern was the possibly strong correlation between NZDUSD and the precious metals. NZDUSD is a commodity dollar, although I don't believe New Zealand is a big exporter of gold, unlike Australia.
Miscellaneous news
I'm currently optimising my "Hermes" low volatility breakout system, the system my previous four trades are based on. I'm testing to see what happens if I try to trade with higher values of ATR, up to 67%. I'm also testing an RSI(14) filter to see whether trading with the trend can be advantageous. Results are too early to tell at this point.

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