Review of the trading week 5-9 January 2015

10 January 2015, 08:41
Kristopher Longmore

Review of trading week 5-9 January 2015

Sico (my automated system offered on MT4's signal service) had an excellent week, netting over 5% over the five trading days. It did especially well on AUD/USD, EUR/JPY and XAU/USD, with some perfectly timed entries into significant short term moves. This brings the total profit for January to 23.2% - a very good result so far! If market volatility continues in the following weeks, we should see a very good end of month result to kick off 2015.

Since Sico started live trading, we have had 100% profitable months, 72% profitable weeks and 62% profitable days.

One negative aspect of last week's trading was the 2.5% loss sustained during the Friday US session. Sico had a profitable Asian and European session and should have ended the day in profit, but didn't close out trades prior to the release of the non-farm payrolls data. The wide price fluctuations caused a loss. My intention when designing the system was that Sico would not trade around non-farm payrolls time, and the error was in my coding. I have rectified the issue and it won't happen again. On the positive side of this, all of my back-testing (which entails extensive walk-forward analysis and out of sample testing) was conducted with the faulty code. The test results were very positive, even with this fault. With the fault now removed, the test results are even better and this should be reflected in trading going forward.

I do apologise to subscribers for the oversight, and I can assure you that the problem has been fixed.

Another potential trade, if anyone is interested: on my discretionary trading account I shorted the Australian share market (the S&P ASX200 Index) on Friday, and plan on adding to the position on Monday. This trade won't show up in my signal service, as the signal is a purely automated system running on a separate account. The index tested a resistance trendline on Friday on low volume and closed near the lows. To me, this indicates a failed test of the resistance by retail investors and no interest in buying from the smart money. In addition, price has bounced off a similar level 4 times in the last 9 trading days! The only test on decent volume closed near the lows of the day, so the smart money was probably selling at these levels, a further sign of weakness. My stop is above the last swing high and I'll take some profit around 5320 and close the rest around 5110, unless there are further signs of weakness at these levels. I'll close the trade manually if the trendline is breached on significant volume. As always, do your own research and don't trade any money that you can't afford to lose!

Happy trading and good luck in the markets in the week ahead.


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