I haven't been doing a lot of trading the last week or so, which given current market conditions turned out to be a very good thing. I recently added a new set of filters to my trading signals and they create very strict conditions for when I can enter certain trades - and for the past couple weeks they've been switched on most of the time. I just went back and looked at how my system would've performed without this new "kill switch" in effect and it wasn't pretty: in total it's saved me from over 150 pips in losses in a little more than a week.
How does it work? Well, part of the equation is the Bollinger Band filtering I wrote about recently. The rest of the equation involves some internal feedback that would only really make sense to me if I described it so I'll spare you the details.
Another question well worth asking is why my system would have performed so badly in the current conditions. If you've been watching the EUR/USD for the past several days you'll see why immediately: lots of very range-bound activity, with false breakouts and whipsaws that all seem to settle back into the same general price zone day after day. This is the type of market that would absolutely destroy my trading account if I let it - but with the new trade filters in place, that's less likely to happen. (I hope.)
Monday, February 5, 2007
The Kill Switch is Working
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You have plagiarized my blog at Forex Forays.com. Please take this plagiarized post down immediately or I will report your blog to Blogger and Google for violations of their Terms of Service. This will most likely result in the disabling of your Adsense account and the cancellation of any Adsense earnings.
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