Trade Components

GBP/USD:  I haven’t ‘marked the spot’, but at one point during the month, I completely reversed my methodology.   I may give it a while, or call this pair quits after I have reviewed my overall portfolio exposure.

AUD/NZD:  Slightly disappointing, but still a useful profit in the pair that currently represents the majority of my trading exposure.  New Zealand, of course, raised interest rates during the month, and I expect Australia to do the same this coming Wednesday.    

In my third AUD/NZD account (see below), I really over cooked the exposure; however the purpose of this particular account is to push the envelope hard, in the hope that the account will eventually grow exponentially.    On the other hand if the account completely blows-up, it will have very little effect the overall performance.

GBP/CHF:  This is another pair that backtests extraordinarily well, yet is not currently delivering the goods this year.  Trading support and resistance certainly can work very well as evidenced by February’s performance, but with a volatility of around 200 pips a day, any losses quickly add up.   In fact, I use a stop loss of around 400 pips for this pair, and this got hit for the second time this year.  This is something that should only happen 2 or 3 times a year!

USD/CHF:  Like GBP/USD, I reversed my strategy during the month and wait to see the outcome. 

‘Spread Basket’ is one of my most important systems, although this is not apparent from the equity chart.  Currently I am trading 11 pairs; although some are being traded nominally purely to accumulate trade statistics.  (I take the results and run them through a database, and some associated analytics, to find out what is working or not).

Last month I only traded 3 of the 11 pairs at normal trade sizes, but these obviously turned out to be the wrong 3!  The make-up of the basket is reviewed monthly.

The two Spread/Breakout accounts are an attempt select the best currency pairs for each methodology.  They are working very well in simulation (see Spread/Break Hedge below), but as yet I haven’t had the same success in live production. 

The thing is that in the short-term very small differences in execution timing and rates can have a significant impact on results.  This something that should wash out over time.

Shown here are three new accounts created  in response to the increased ‘edginess’ I referred to earlier.  They were set up to trade short-term breaks rather than my normal support and resistance trading.   This month they seemed to provide a better balance to my portfolio, and if nothing else, have made me a little more relaxed!  

Shown here are a few of the methods I currently have in simulation. 

As can be seen GBP/USD is still behaving very poorly - while AUD/NZD is working very well.   Long-term trend following, and Line in the Sand were both mixed, indicating no particular ‘trendiness’ for the period. 

The mixed Spread/Breakout approach, as mentioned earlier, shows great promise, if only I could duplicate these results ‘live’!

Finally I have started to do some simulations on 5 Japanese Yen pairs.