Pro Forex Trader Interview With Psychologist Walter Peters

This is a great interview with Walter Peters, conducted by TradingHeroes.

Going Live

I'm currently opening a new account with Pepperstone. I hope to be trading live again next week with the low volatility breakout system that I described in the last few entries.

My overall aim is to become a mechanical trader by simultaneously trading multiple, low-correlated systems. My vision is :

- a smooth equity curve from using low risk money management (<1% per trade) in combination with multiple systems (the systems in drawdown should be more than compensated by systems in profit at any particular time due to low correlation).

- a rapidly rising equity curve from high frequency of trades (multiple systems will provide many trading opportunities every day. High frequency + the effect of compounding = steep equity curve).

Composite Equity Curve for daily range < 50% ATR(14)

Here it is! Time to enjoy my weekend.

By deleting duplicated trades, we are left with around 600 trades that took place from 2001 to mid-2012.

That gives us approximately one trade per week (600 / 11.5 years = 52).

50% ATR backtest on GBPJPY

Good results from the GBPJPY backtest. Expectancy was 28.5% after spread. Sample size was 171 trades.

The next step is to collate the results from all five currency pairs I've tested, eliminate duplicated trades and create a composite equity curve.

Personal links

I know I don't have many followers, but just in case, I've now classified most of my personal links as "outdated" / "obsolete". My mental framework as a trader is continually evolving and some of this information is no longer relevant. However, I'm not in a position to type up concrete alternative plans / forecasts / etc at this time.

50% ATR backtest on USDCAD

Below is the equity curve for the USDCAD from 2001 to mid-2012, using a 1.67:1 R:R ratio, 2% risk and a $10,000 initial balance.

This is from using my daily range < 50% ATR(14) breakout system. Expectancy was 24.1% after 123 sample trades, which is acceptable.

50% ATR backtest on AUDUSD

The result of the AUDUSD backtest is pretty bad. With a 2.5 reward-to-risk, expectancy was an unremarkable 1.43%.

However, if we reduce our reward to 1.67R, expectancy climbs to 10.88%. With a 1.67R reward, the expectancy for the USDJPY is 26.68%, and the EURUSD 31.15%.

The equity curves for 1.67R are below: