With only 10 trades made on my Live Account and just 6 on a recently opened Demo Account, the Swing Trading Methodology shown in this blog has now provided strong Rates of Return of 47,5% and 36,99%, respectively. Using accurate Technical Analysis and detailed Trade Setups that target the best paying opportunities each month, these results have now beaten all of the top 10 Currency Traders as ranked by BarclayHedge for the 9-Month Period to September 30, 2014.
PERFORMANCE OF METHODOLOGY
The graph below shows the increasing trend of gains for the Dukascopy Live Account since the use of this Methodology. After an initial loss of 100 Pips on the AUD USD (see Recent Trades), the account recovered with several winning trades to produce strong, consistent results.
TABLE 1- LIVE ACCOUNT RESULTS
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| No Trading was done in August; Reflects a Risk Per Trade of 5% |
GRAPH 1 - DUKASCOPY LIVE ACCOUNT
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| Dukascopy Live Accounts cannot be linked/verified by Myfxbook |
The Demo Account at FXCM, which reflects these Live Account trades (behind by 4 trades), is also producing admirable gains after only 3 Months, averaging over 100 Pips per trade.
GRAPH 2 - DEMO ACCOUNT RATE OF RETURN
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FXCM Demo Account that tracks my Live Account Trades (behind by 4 trades)
(Verified at http://www.myfxbook.com/members/DRFXTRADING/duane/1079693) |
PERFORMANCE STATISTICS
Relative to the benchmark returns of the Top 10 Currency Traders, the Methodology continues to hold its own. All of the YTD Returns for these Trading Advisors have been surpassed within a shorter time by the Live Account (47,5% in 6 Months) and the Demo Account (36,99% in 3 Months).
RATE OF RETURN- BARCLAYHEDGE RANKINGS
THE TRADE
The NZD CHF had formed a Medium Pennant Consolidation between its Downtrend and Uptrend Lines since September of 2014. This period of market indecision and low liquidity was eventually broken on December 26, 2014 by a strong Bullish Candlestick Formation.
DAILY CHART SETUP
DAILY CHART BREAKOUT SIGNAL
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| FXCM Charts used for Market Direction and Entry Signals based on New York Close of Daily Candle |
This was the signal to indicate that the pair would rally towards that major Resistance high of 0,7877. Having determined that the setup was in sync with the Methodology, a Market Order was executed at the close of this Bull Candle.
TRADE SHEET SUMMARY
Entry took place using the patterns and setups on the 4 Hour Chart. The Stop Loss was placed below the small Pennant that led to the Daily Candle signal.
4 HOUR CHART ENTRY SETUP
The target of 200 Pips was set for this trade in keeping with the Trade Parameters. This was expected to coincide with the major Resistance area and the Breakout Equivalent of the Daily Chart's Pennant.
DAILY CHART- BREAKOUT EQUIVALENT TARGET
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| Breakout Equivalent is the target for all Consolidation Breakouts |
4 HOUR CHART - LIMIT ORDER
This trade took the anticipated time period to reach its 200-Pip target on the Demo Account (194 Pips net of the spread).
DAILY CHART - DEMO TRADE RESULT
DEMO ACCOUNT TRADE SUMMARY
On the Live Account, however, the market actually overshot the target to provide a 231-Pip gain. This was the result of a large spike that took place on Sunday January 4 at 22:00 GMT.
DAILY CHART- LIVE ACCOUNT RESULT
Although I am yet to get a reason for this spike, I am not one to complain especially since this was the scenario a few days later...
DAILY CHART- SHARP REVERSAL DUE TO REMOVAL OF CHF PEG
THE TRADER'S DILEMMA
Mid-way through the breakout of this trade, you will notice that the market started to move sideways and then pullback before U-turning sharply. This tends to happen with breakouts throughout the market as part of the natural waves of price volatility. However, in order to assure profitability during these periods, it is important that we never monitor our trades while they are moving towards our large Pip targets.
If we are tempted to monitor our trades by looking at the charts and the floating balance, it is very likely that we would exit trades at these areas for much smaller profits. Despite being temporary, these pullbacks create a level of uncertainty in the trader that makes it easy to want to exit for an assured, visible trading gain. A bird in the hand can be worth more than two in the bush especially when we Day Trade within a very short intra-day period. With Swing Trading, however, we have to allow the market a significantly greater degree of freedom in order to reap the benefits.
The larger trends and breakouts will always take a longer time to hit their respective targets. This movement will also always include momentary periods of pullbacks that are natural aspects of market behaviour seen across all Financial Markets. Interfering with this will only compromise the success of your strategy and ultimately your Long-Term profitability. Stick to your guns, hold onto your trades and let the money roll in for you.
MAIN TECHNICAL HIGHLIGHTS OF TRADE
- Medium Consolidation Breakout (Sections 6 & 7 - "Consolidation Trading on the Forex Market")
- Relationship Between Daily and 4 Hour Charts (Section 4 - "Currency Trading with the Daily & 4 Hour Charts")
- Trade Parameters and Targets (Section 2 - "Currency Trading with the Daily & 4 Hour Charts")
- Breakout Equivalent Targets (Section 9 - "Consolidation Trading on the Forex Market")
- Entry based on Daily Charts (Section 9 - "Consolidation Trading on the Forex Market")
If the Methodology and the Forex Market continue to move in sync with each other, the next major goals of 50% and 100% returns are only a few trades away. This assumes an average Pip gain of 150 Pips ,which is mid-way our target range of 100 to 200 Pips per trade. Depending on market conditions, both will be hit by the end of the 1st Quarter.
PROJECTED RATES OF RETURN
Not a bad way to start the New Year.
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Duane Shepherd
(M.Sc. Economics, B.Sc. Management and Economics)
Contact: shepherdduane@gmail.com
Facebook: DRFXTRADING
Website: www.drfxswingtrading.com