Recently I decided that I needed to pause the two automated trading strategies that I had been running. One had been tested to the point that I was comfortable running it on my live account and the newer one I was running on my demo account. It wasn’t that the strategies were completely failing, just that the accounts were slowly and consistently heading in the wrong direction. With it being so close to the end of the year, I decided that I would just take a break from actively trading for the rest of 2018. I reasoned that this would give me some time to come up with some fresh ideas and tweak my strategies, then in 2019 I would start fresh.
It was a little over a week ago that I made that decision. What am I doing now? I have dusted off some older robots and am running one on my demo account (and doing pretty well actually) and modifying some others to be tested on my demo account. While I laugh at myself for changing course so quickly, I think things actually worked out well. Here’s why:
1. Taking the break, albeit a shorter one than I planned, helped me to relax and clear my mind. There is something about having trades opening and closing non-stop 5 days a week that curbs creativity. It is as if I can’t be in “production mode” and “design mode” at the same time. Since I paused the trading I have had fresh ideas and although I am actively trading in one of my accounts now, it is with smaller trade sizes and more of a “test mode” than “production mode.”
2. By coming out of “production mode” I have re-kindled my passion for trading. I realize that coming up with new ideas, testing them, and systematically tweaking them is what I actually enjoy the most about trading.
3. Actively trading on a live account is much more valuable than trading only on a demo account. It is just different when real money is involves and thus emotions come into play. Even if I’m not profitable financially, I am gaining experience and getting practice keeping my emotions in check. Don’t misunderstand what I’m saying. I’m not recommending anyone run an untested strategy or expert advisor on a live account. That is foolish. What I am saying is that if you have a strategy that has been proven to be somewhat consistent, there is value in moving it to a live account for additional testing and “practice.”
4. Because I signed up with my broker through Forest Park FX, I get rebates on the spreads I pay for all my trades. This is nice because even if I am just breaking even or going slightly negative, at the end of the month I get a check in the mail. Of course the check doesn’t always offset the losses but it does mitigate them a little bit and it can turn a break-even month into a winning month.
If you are curious about the strategies I was running before pausing, they were one of Rob Booker’s strategies called the Honeymoon Finch. I was running it two different ways, one live and one on demo. I think both have promise and have some ideas for minor changes I want to make in the future.
The EA I’m running on my live account now is one I built called the TSR, it runs on the USDMXN. I think this EA can be profitable without any changes to the code provided it is managed properly. That is what I’m still working on, determining rules for when to put it on the bench and when to put it back in the game.
The other strategies I’m working on are updated versions to my scalping EA, AC920 that runs around major financial announcements and an EA/indicator that records tick data, eliminating the need for a subscription to tick data.
I’ll provide an update on how things are going after the first of the year. Merry Christmas and Happy Trading!
