This is just a quick update on our September trades using the NYTime system. You might remember that we had a few losses in a row near the start of the month, but overall there were a handful of good trades scattered throughout the month which saw us return a profit overall.
To recap on the strategy:
We use some money management rules to determine how much we’ll risk. This varies between 0% and 4% (reduce by 1% each losing trade, increase by 0.5% each winning trade, jump to 2.5% if we have a win while at 0%)
We look for a break of the high or low of the 9:20am (EST) candle (of more than 2 pips)
We go long if the high is broken, short if the low is broken
The stop loss is placed just the other side of the 9:20am candle
Move the stop once price closes past our first target (where the first target is 1.5 times our initial risk)
The stop moves to 0.4 times our risk, away from our entry price
Close the trade at 1:50PM NY Time (if not already stopped out)
For September, we made a return on our initial investment of about 4.8%. This is below our monthly average to date, but still a profit.
Based on the trade results during the last few days of August, I calculated that our first trade in September started at 2.5% risk. We had a loss which reduced our risk to 1.5% for the next trade. The next was a winner (75 pips) so we made nearly 7% return on that second trade.
Here are the results I calculated:
The “Running Balance” assumes we started off with an account balance of $1000. On the first trade we lost $27.63 which brought our running balance to $972.37. The second trade we made a profit of $67.46 which brought our running balance back up to $1039.83. This continues through the month and we finished off with a balance of $1048.32. So, our return on our initial investment was:
($1048.32 – $1000.00) * 100% / $1000.0
The ‘Ratio’ column is the %return on that particular trade. You’ll see on the first trade that it’s actually a little more than a 2.5% loss (which was what we were risking), and this is because we’re taking into account the spread in our calculation of the ratio and hence our running balance.
The ‘Stop Loss’ column just shows our last stop loss position in each trade. So, this may be the initial stop loss point, or it could be the trailing stop point if our trade went into profit far enough.
In summary, our results for September were fairly choppy. We had a maximum drawdown of 8.3% (where our running balance dropped from $1039.83 down to $950.21), but we did make 97 pips overall finishing the month 4.8% higher than we started.
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