Ed Mamula.com

Results since last update (2 weeks): 

Cable Glider — 1 win , 0 losses

Euro Ranger — 0 wins, 0 losses

Over the past two weeks, the account had a net gain.

This month, the Cable Glider is showing a net gain.

This month, the Euro Ranger is showing a net loss.

This month, Cable Glider has been more profitable.

More gut wrenching volatility and unbelievable range expansion occurred this week.  The British Pound moved in a range of just under 23 cents against the Dollar this week.  It wasn’t too many months ago that I instituted a volatility filter in the Cable Glider that shut it off after the market moves in a range greater than 3 cents! 

From open to close, the British pound lost over 1400 pips against the Dollar…and the only trade entered by the Cable Glider was a long trade that profited 7 pips.  Then the floor absolutely fell out of the market, but the Cable Glider was on the sidelines due to the volatility filter.

It is worth noting that the version of the Cable Glider system that I was running last year, which doesn’t have volatility filters in place, captured gigantic pieces of this downward move (over 1300 pips) and is now sitting at a new equity peak (when traded on a one – contract per trade basis).

Volatility filters also kept the Euro Ranger sidelined for all of the last two weeks.  Instituting this filter has been a net losing proposition so far, as the Euro Ranger (unfiltered) would have been a perfect 4 and 0 this week, netting over 250 pips.

So, on one hand, I missed out on a big opportunity.  On the other hand, I acted prudently to protect my trading capital (recall that I cannot cut my position size without switching trading instruments).

Surely it’s possible to make a killing in this environment, but surely it’s just as easy to get killed.

Results since last update (2 weeks): 

Cable Glider — 1 win , 0 losses

Euro Ranger — 2 wins, 1 losses

Over the past two weeks, the account had a net loss.

This month, the Cable Glider is showing a net gain.

This month, the Euro Ranger is showing a net loss.

This month, Cable Glider has been more profitable.

Again, I am having difficulties getting a clean chart presentation, but I did publish an update to the DESword results chart.  The systems are showing a combined gain of 4.2% since I formally launched the program in mid-August, and the systems are down a mere 0.6% so far in the month of October.  In the context of an absolutely brutal time for equity markets around the world (18% drow in the Dow30 this week, I believe), I’m absolutely thrilled that the DESword combination of systems managed to post a respectable gain.

However, the markets high level of volatility makes it very difficult to take trades confidently.  As such, I am installing a new filter in the Euro Ranger system that will shut it down in the event of excessive market volatility.  This measure is necessary because I am currently trading one contract per trade, so it is impossible to cut my position size without exiting the market entirely (or moving to a different instrument, such as the mini Euro Future or a mini account at a cash Forex dealer).

As for the play by play, the Cable Glider managed to enter and exit one trade profitably, and stand aside the rest of the time. No fuss, no muss.  The Euro Ranger, on the other hand, has had some bad luck followed by some good luck.  Late last week, my trading platform and / or connection malfunctioned, and the system exited a trade at a disaster stop level rather than taking a smaller loss as it *should* have under ideal conditons. 

Then, on Tuesday night of this week, the system entered a short trade.  I took note of the extreme volatility ( greater than 40 pips ATR on a 30 minute chart), and decided to exit the trade with a small profit.  Had I not exited at that time, I would have experienced the biggest losing trade in the Euro Ranger’s history, again owing only to the fact that the ATR is so high and that I cannot cut my position size.  The newly instituted volatility filter would have prevented the trade from triggering in the first place.  So when it’s all said and done, that one good but lucky decision to stand aside on Tuesday night has put my actual trading results since August 22 on par with the Walkforward (ideal) results.  Click the chart below for a detailed view.