Week in Review: 13th January - 19th January 2013

I suffered a hit to my account this week, as I'll explain.

TRADES IN REVIEW

AUDJPY

This trade didn't go well. A low volatility candle appeared on Friday's close. My pending long was triggered on Monday before price reversed and hit my SL on Tuesday.

 

 

My position size was 3% in this particular trade, which is high, and is responsible for my account hit.

 

XAGUSD (silver)

 

This trade resulted in a win. There was a low volatility candle on the weekly TF and I took the trade using my Daikoku system.

 

 



 

USDCHF

 

This was a good trade. I saw low volatility on Wednesday and created pending orders on Thursday, resulting in a same-day win.

 



 

Thoughts

 

Even though I won two out of three trades, because of my R:R ratios, I still ended the week down. Plus, the trade that lost had a position size of 3% while my winners were 1%. Why the different position sizes? I felt confident with my first trade, but after the loss, I felt I needed to further backtest the Daikoku system on the daily timeframe and so reduced my trade on the USDCHF to 1%. That's trader psychology for you.

 

My trade on XAGUSD was only 1% because I find it difficult to accurately calculate my position size ($ per pip) on the precious metals. If anyone can point an online calculator my way, I'd appreciate it! Otherwise I tend to be conservative and use a low number of microlots.

 

SYSTEM DEVELOPMENT UPDATES

 

Daikoku Conversion and Backtesting on Daily Timeframe

 

I only performed a little backtesting this week, using the EURUSD. I've reduced the daily range of a valid signal to 50% or less of yesterday's range. This erased a quarter of all entries that I've already gathered on the AUDUSD and USDJPY. Taking this into account, my total number of sample trades is 800.

 

The profit factor at the optimal R:R ratio is currently 1.29. It's tradable.

 

Pinbars on Weekly Timeframe

 

This has been the major focus of my efforts this week. I've been designing a new system on the weekly charts, using pinbars as entry signals. The backtest is nearly 40% complete. I've tested four currency pairs and have seven more to go. I hope to get one or two more pairs tested tonight. If the backtest is successful, I'll post some details next week, but so far the results are nice.