A number of improvements have been made to the trading system as the latest decline was made possible by these imperfections. We'll go into this in more detail after looking at the development of the markets. Also trading in the 4 hour chart has been reversed until it can be better implemented in the trading system. This will be discussed in more detail in another subsequent article.

The Markets

To research the markets and save time, but still get a good general idea, I use 2 charts: The S&P500 and the USDJPY. It is impossible to extract all market information from this, but by also being aware of the latest market developments you can go a long way.

S&P500 Weekly

The chart shows a number of signs of a downtrend. I have indicated these moments with yellow arrows. The price there is below the Ichimoku Tenkan-Sen and Kijun-Sen, the MACD is falling and the Stochastic is also showing downward momentum.

It is difficult to say whether this trend will continue. The graph itself shows this, but other factors are also important for a further decline. That is why we will also look at the USDJPY chart.

USDJPY Weekly

The vertical blue lines correspond to the lines in the S&P500 chart, this is for reference only. What this chart clearly indicates is that the USD is in an upward trend for the time being. Only with full risk aversion will the USD fall along with the S&P500.

So as it stands, there is no complete risk aversion which does not support the decline in the S&P500.

When trading pairs, the movement of the S&P500 and USDJPY should be of no significance as it is possible to go Long and Short and choose any currency combination that best suits a particular market situation. Of course it is good to know to understand the market.

Improvements to the strategy.

When making a strategy, there are a number of points that are important.

1. First of all, a strategy should not be over complicated.
2. Second, a maximum number of variables is important.

Why these points matter is subject for another article, but the short answer is to avoid curve fitting. Within these limits, it is therefore necessary to look at how a strategy can be improved, and that is not always easy.

Since there has been a decline in the strategy from the end of June, I have tried to analyse the behaviour of the positions taken over this period. I also extrapolated this to a period of 10 years for all currency pairs. The new implementations are:

1. The Take Profit has been increased for both the 4 hour strategy and the day.
2. In addition to the existing Stop loss, a Close has now also been added based on the existing indicators and variables used.
3. For the strategy in the 4 hour chart, the Stop Loss has been increased to prevent positions from being closed due to noise.

The 4 hour strategy will be extensively tested with a Demo account for several months. I will share the findings of this and the graph in the coming articles. Only when this is satisfactory will the strategy be applied live again.

The pairs traded in the coming period

For the coming period the following pairs are traded:

1. GBPJPY until October 1
2. NZDUSD until October 1
3. GBPUSD until December 5
4. USDJPY until December 5

Depending on the monthly analysis, the end dates can be extended.

It seems that the USD, GBP and JPY are well represented for the coming period.

The profit generated in the past from these 4 currency pairs is 8.10% since the start on October 18, 2021. See the chart below where you can also see the decline since the end of June.

 I wish you happy trading in the coming period.

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