FX update (23rd Sep) – EMA testing on Cable 2012

still working in Bayreuth.  My blog hit 1,000 views this morning.  I do realise that I am not writing this blog with the aim of making it easy reading and easy learning for people interested in trading.  Rather the blog is a loose collection of my thoughts to help me keep going.   So I do apologize to the few people who check this blog, for the likely lack of clarity and structure in this blog!!

Anyways, now testing the EMA strategy on Cable, 6 month period from Jun-Nov 2012.  Am halfway through.  What am I doing differently compared to the testing on AUDUSD?  Based on review & analysis of the 75+ AUDUSD trades I did in the previous days  [recall that initially I couldn’t draw any meaningful conclusions from this trades, however I did some further ‘data mining’ on Monday morning to try to discover something constructive], I did the following slight changes:

  • Ignored requirement to set a minimum size stop loss (told myself that i need to use a minimum 12-pip stop) – after reviewing the trades I have done, I concluded that i would be better off not having this requirement – I will just use whatever technical stop seems appropriate
  • Need to be more stringent on meeting the requirement of having a smooth, consistent trend in recent sessions, without having the EMA100 violated too significantly
  • Paying more attention to the patterns and S&R on higher time-frames

Having now done Jun through to Aug on Cable – findings:

  • Far fewer trades due to being more selective on consistency of trend – only 11 trades over 3 months (compared to 30-40 for Aussie dollar testing) – 10/11 using the 5M charts and 1 trade using the 15M chart – results were much better – 7 winners, 4 losers with RR of 1.46 – net gain of 5.25R.
  • Found using short-term S&R such as previous day’s highs and lows or Asian sessions highs and lows are very good for target setting over this three month period
  • Picking my preferred direction at the start and not changing the direction for the rest of the session, unless there is some significant news that changes the sentiment
  • If price starts criss-crossing the EMA100 then the remainder of the session can most likely be written off

Right, off to lunch now.  Let’s see whether I can get the remaining three months completed by the end of the day.

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