Our systems and new additions are working so perfectly it's hard to
believe what we're seeing. After just finishing our third week of
trading in September our USD PAMM has just broke 64% for the month.
No, that is not a typo, our USD PAMM account is up 64% for the month
after 3 weeks and the EUR PAMM is not far behind while trading at a
slightly lower leverage.
If you have read our previous news items you would already know that
the unusual market conditions during July and August opened our eyes to
additional ways we can capture profits and protect gains that we may be
sitting on.
We reacted as quickly as possible to implement our additional strategies and customizations but it was not until the last 4 weeks that we saw the results of our changes kick in. The process just takes time; before implementing any new strategies we put them through rigorous tests; testing them on 20+ years of historical data as well as multiple time frames. This process is so computationally intensive for our computers that we are often upgrading to the latest and fastest computers in order to speed up the testing process. We often do multiple runs only changing one small parameter at a time which adds even more time to the tedious process.
Now, with most of the rigorous back testing behind us and some new systems implemented for a few weeks now, we can now start to report real world results on how things are doing.
In the recent weeks we were able to capture the third attempt in the last three month of the EURUSD to make new highs. These EURUSD strategies have been bringing home the majority of our profits, the majority of which have already taken fat profit.
Other EURUSD strategies are locking in profit with adaptive trailing stops. We owe a large portion of our EURUSD gains to the implementation of exits which are now more sensitive to market volatility.
Below is an example of one of our EURUSD strategies with entry points and exit points connected with a dashed blue line. Notice how the timing was nearly perfect as the strategy enters the market at lows and exits at near highs.
The new smarter volatility sensitive exists improve gains dramatically while capturing profits at the most opportune time before a pullback happens and any profits are given back.
Another major change worth mentioning is regarding the new EURUSD shorts.
Previously our systems were confined to only buying or going long in EURUSD positions due to the technical limitations imposed on us by FXCM which would not allow simultaneous long and short positions in a way that would help us hedge positions.
FXCM’s recent allowance of simultaneous long and short positions has us enabled us to implement strategies that short the EURUSD on pullbacks and declines. We have since added 5 powerful EURUSD shorts now implemented and intelligently waiting for a market correction from the current EURUSD highs. These new EURUSD shorts have yet to kick in and show their true profit potential.
In addition to sensitizing the EURUSD exits, we have sensitized our long USDCHF strategies to become more aware of underlying trend and volatility as well, and they have wisely stayed away from the current activity. Because in the larger picture the USDCHF is trending down, and we have been only able to buy USDCHF and not sell, you would think it difficult if not impossible to make money in such conditions. But…
As you will see in the chart below this one example of one of our USDCHF strategies, it did just that. It was smart enough to make money buying in a down trending USDCHF chart. It was able to quickly exit unfavorable trades while capitalizing on the few good ones. In the end it profited at a ratio of 1.5 to 1. Meaning for every $1 it lost it made $1.50 throughout the time period shown on the larger chart below.
Click on the chart to get the larger image. Blue dashed lines are profitable trades whereas red dashed lines are losing trades.
Within the next 3-4 weeks we should have short USDCHF strategies in place. These short USDCHFs would be able to take much better advantage of a down trend such as seen in this chart. Big profits can be more easily made with shorting strategies in a down trending market like this. The best you can really hope for with long strategies on such a chart would be to break even. But in fact we are still able to make a small profit.
So, so far we have explained how we more smartly take profits with our sensitized exits and how we can still manage to take profits buying in a down trending market. But that really does not give us the diversity we need yet to make for a smoother more profitable equity curve. This is why we saw the potential for and validated the EURCHF cross pair. This EURCHF cross pair set, though in development for a while, is completely new to our actively implemented trading system. It seems to perfectly fill the gaps and provide for additional gain where there are just no profitable EURUSD or USDCHF trades to be made.
With that said, the EURCHF strategies are really measuring up to back test expectations, and have been our greatest addition to the system, jumping in and out (long and short) with each significant market turn in direction, capturing steady profit within its seeming whipsaw nature. These counter trending strategies have performed both phenomenal in both back and forward testing so far.
The follow chart shows an example of how they are able to get in and out in a choppy market with fairly short fast profitable trades.
Click on the chart to get the larger image. Blue dashed lines are profitable trades whereas red dashed lines are losing trades.
Something else worth noting is that the recent 64% gain in our USD PAMM was accomplished even after we had just DE-leveraged the account. If we had maintained a higher leverage returns could have been much higher.
Needless to say we are very please with the recent changes and the resulting performance. It has not been a chance thing, but the result of lots of intense hard work, insight and thoroughly back testing all theories to validate their validity.
We have lots of more good and exciting news coming out over the course of the next 2 months. Check back often for more.
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