Description: System uses a combination of technical & fundamental analysis to determine entry and exit points across major currency pairs. Traded over a varying schedule where time, location, and market access are not constants.
Risk and money management are the linchpins of this system’s profitability. Position size is flexible and adjusted to keep trade risk constant as a % of account balance, independent of net pip accumulation. Profitability can only be judged by % of equity growth.
Example to illustrate below:
Trade 1: SL = 25 pips @ 2% of account balance w/ 62 pip target has potential of 4.5% equity gain
Trade 2: SL = 120 pips @ 2% of account balance w/ 300 pip target has potential of 4.5% equity gain
With balance of $1,000 and trade 1 is win and trade 2 loss then:
net pips = -58
net $ = +$25
If trade 1 is loss and 2 is win then:
net pips = +95
net $ = +$25
Also because of risk management, win ratio is also not correlated to net $/% equity growth (without accounting for RR). The following example will help further illustrate this point:
If 5 losing trades at 50 pips and 0.5% each
& 2 winning trades at 10 pips and 3% each
Then the following stats would be produced:
Win ratio: 40%
Net pips: -230
Net profit: +3.5% (+$35 @ $1,000 balance)
Type of Trading: Real
Started: Mar 20, 2015
Tracking: 0 users
Currency Pairs: AUDJPY, AUDUSD, EURAUD, EURCHF, EURGBP, EURJPY, EURUSD, GBPJPY, GBPUSD, NZDUSD, USDCAD, USDCHF, USDJPY
Essentials: The xCombo system has made 37 trades with an average winning trade of 80.39 pips / $101.97, the average losing trade around -41.98 pips / -$22.71 and an average trade length of 1d.
The best trade it ever had was (Apr 14) 230.0 in pips and the worst trade was (Apr 30) -174.4 in pips.
It has won (4/14) 28% of its attempted buys and (8/23) 34% of its attempted sells.
Pros & Cons
- Its average win is larger than 10 pips which is usually a good thing.
- Its average stop loss is less than 50 pips which is reasonable.
- Drawdown has been kept under 30% which is good.