This post should be subtitled “Dumb Luck and Confusion”. My manual override decision saved me 23 pips of loss on a 1.7MM position (With the manual override, my loss was $1020, without it, it would have been $4930), BUT ONLY because the system would have triggered a stop loss provision that had never been triggered at any time during the backtest (2005 September - 2007 April). Had this stop loss not been in the system at all, the short position from Tuesday 4/3 would still be open, and profitable (as of this writing). This discovery MAY lead me to release a new version of the Cable Glider, but as of right now I am unsure.
At any rate, the Bank of England left interest rates unchanged this morning, which caused a downward spike and upward retracement in the Cable, with the pair currently drifting lower. The Cable Glider is idle until after tomorrow’s US Employment number. Tomorrow is Good Friday…holiday week weirdness abounds!
As of right now, we’re still sitting on 1 win and 1 loss for April with a gain of 4.1%
My month to date results for April 2007:
# closed winning trades : 1
# closed losing trades : 1 <= Manually closed
Net monthly profit (loss)% : 4.1%
Okay, this is a “manual override” report. The system had entered a short yesterday afternoon; I closed it this morning at a small loss. The size of the order was abnormally high due to the constricted volatility in the cable over the past 48 hours. This post serves as a journal entry of the decision. My last major drawdown occurred during the 3rd full trading week of February, which was shortened in the US by the President’s day holiday. I’m very nervous ahead of the Bank of England rate decision tomorrow and the employment report in the US on Friday, which will, cursiously enough, be released on a day that the US stock market is closed. So perhaps I am just paranoid about this “holiday shortened” week as well.
Though I have attempted to continually remind myself not to tinker with the system’s signals, in this case I could not resist. I believe that the system was taking too much risk ahead of these events. By the end of the week, we will know whether this decision helped or hurt the results for April. My recent record of manual overrides has been quite good, but I’m keenly aware that watching the market like a hawk and obsessing over every little wiggle negates some of the benefit of having an automated system.