Trade week in review: 22 April to 28 April 2013

I ended this week in profit with an increase of 1.1% to my equity. I received a glut of entry signals this week, which presented an interesting trade management dilemma. You can't trade every signal because of correlation. If you trade two highly-correlated pairs at 2% risk each, it's almost the same thing as a single trade at 4% risk.

 

I entered a total of 12 trades with risk levels varying from 0.5% to 1%. Most won and a few lost. I still have three trades left open over the weekend, although they are currently in negative territory.

 

Posting 12 trades would be quite tedious so I'll just give a few examples.

USDCHF

This trade was based on my new system Set. This system focuses on the two-bar reversal pattern on the weekly time frame. The above setup doesn't visually look like your conventional two-bar reversal, but according to my mechanical definition, it qualifies. You essentially want the open and close of two bars to occur within the top or bottom 40% of the two bar range. I used a 0.25:1 reward-to-risk ratio and bagged a win.

 

Some more trades were opened like this. A few won, and I have three trades left open on the AUDUSD, NZDUSD and EURUSD. I'm a little concerned about the first two because of high correlation between the AUDUSD and NZDUSD.

 

USDJPY

 

I saw some low volatility signals on the USDJPY and other pairs throughout the week. I used my Hermes low volatility system and bagged a few wins. However, I also lost two trades. Here is how I traded the signal on the USDJPY. I used a 0.5:1 reward-to-risk.

UPCOMING SIGNALS

System "Set"

Three bearish two-bar reversal patterns have appeared on the EURNZD, AUDCHF and USDCAD weekly charts. Looks very promising and I will probably trade the EURNZD and USDCAD independently (correlation between EURNZD and AUDCHF would be too high, so I will ignore AUDCHF).

System "Daikoku"

There are two low volatility signals on the weekly chart that I find intriguing, the XAUUSD (gold) and CADJPY. There is also a signal on the AUDUSD, but I'll ignore it in favour of XAUUSD due to traditional correlation between gold and the AUD.