Win on NZDUSD, equity update

My trade on the NZDUSD resulted in a win. I used a 1.25:1 reward:risk ratio when trading with the trend.

Equity Update

Since going live at the start of September, my equity has grown by 5%. If annually-adjusted, that should mean a performance of 17% p.a.

I've used various levels of risk, from 1% to 5% per trade. I found 5% risk to be quite high, particularly for mechanical trading. I've reduced my last few trades to 1% risk or less and found it much more comfortable - in fact I forget I have trades open at this level. The key to winning mechanically = low risk * high frequency. It's the high frequency part I need to focus on.

Entry signal on NZDUSD, full-bodied candles

A low volatility candle appeared on the NZDUSD over the weekend. The NZDUSD is running into some resistance, so it will be interesting to see how this plays out.

Full-bodied candles

 

I'm currently backtesting a new system based on full-bodied candles. Essentially, the open and close of a full-bodied candle should occur within the top and bottom quarters of the candle. I'm building a database on the USDCHF which will also contain RSI(14), ATR(14) and ADX(14) values to see if there is any relationship between these variables and profitability.

 

I have noticed that full-bodied candles can be profitable when their range is between 100% and 150% of ATR(14), trading with the trend. The sample size was 100, from the USDCHF between 2001 and 2006. Our entry would be the break of the candle's high or low, and our stop loss would be the opposite end of the candle. With a 1.5-to-1 reward-to-risk, profit factor was 1.36, which is okay. The profit factor for all R:R ratios above 1 are also positive, so thus far this is looking promising.