Profitability (%) of the Forex Swing Trading Signals in December. Had you traded all the signals you’d have increased your account capital by 9.253%. This is lower than usual, since we only had about 2-3 good weeks (because of the holidays) to utilize this strategy this month.
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Assume 1% equity is risked at the outset of each trade (this is what I teach). Losing trades therefore represent a 1% loss to account equity (often less, since risk is reduces as the trade progresses).
The below stats don’t show how much the forex pair moved, but rather the percentage increase/decrease in account capital from the trade. This is what matters. Results have not been compounded, which would result in an overall higher return on account capital.
If a trade didn’t trigger on the day it was published (or broke out in the opposite direction before triggering our signal), then the trade is no longer valid (and won’t be listed here) unless it appeared on the another trade signal post.
All Forex Swing Trading Signals are listed under the Forex category. Results for the trade are posted in the comments section of each post. The results below are just a summary of what was written in the comments.
The stats assume you were able to get a position and that you were able to get the proper position size based on the entry, stop loss level and the 1% account risk tolerance. I took all of these trades, and there was no problem, getting in or out. Results account for the spread and any slippage that occurred (didn’t significantly impact any of the trades).
- Overall Increase in Account Equity (non compounded): +9.253% for about 3 weeks of trading (because of the holiday), locked in. Most months are more, as we have more time to trade (the holidays always make December a bit of a weird month).
- Over the same time frame the EUR/USD was down 2.85%, for comparison.
- There were a total of 20 trades taken. This is smaller than usual given the holiday season, therefore the percentage return is lower than it has been in prior months (it’s not usual to get a +20%, or higher, monthly return with this strategy). Legal note: past performance doesn’t guarantee future results.
- 12 winners, 8 losers. 60% win rate.
- Biggest winning trade: 2.5%.
- Biggest losing trade: 1%.
- Biggest Draw Down: 2% (The most your account equity would have dropped at any given time is 2%, before it started to climb again).
- Reward/Risk = 1.54/1 (we make 1.54 times as much on our winners, as we lose on our losers).
A lot of trades didn’t trigger. Don’t cling to old signals. If the pair breaks out the other way, leave it alone. These trade signals are not predictions about where the market will go. The trade trigger has to occur in order for a signal to be valid.
Forex Swing Trading Signals – Key Take Aways:
- You don’t need a complex system to make money, nor do you need a crazy high win rate or a crazy high reward/risk ratio.
- Don’t sweat the losses. We had a couple days were we lost two trades in a row. Even three or four losses in a row is nothing–you make it back on one or two winners.
- All the trades met the trade criteria, but we have no idea in advance which will win and which will lose. Because of this, it is best to trade all the signals (according the guidelines provided in the post, as sometimes trades are highly correlated).
- Anything can happen on a single trade. It is only over many trades that you see the statistical edge of a strategy play out. The key statistical edge for this strategy is that we make more on our winners than we lose on our losers, and we have a tendency to win slightly more than we lose.
- I actively manage forex trades using the approach discussed in this video: How to Use the Forex Swing Trading Signals. This is different than Trending Stocks To Watch published each week. Those use a “set-and-forget” strategy. Sometimes the active management is better, and other times, the set and forget approach works better. Ultimately both strategies produce a profit (see: Trending Stocks to Watch Profitability Review: +20.3% (account equity) in 6 weeks).
- Stay tuned for more Forex Swing Trading Signals, published a couple a times a week.
These forex signals are based on one of the strategies covered in the The Forex Strategies Guide for Day and Swing Traders 2.0. It covers forex basics to get your started, plus more than 20 strategies which you can profit from…in additional to the signals/strategy results provided above.
Have a prosperous New Year everyone!
Cory Mitchell, CMT