09 July 2019

Second Quarter Review of System Alpha

As usual, this is a quarterly review of my personal FX trades. The numbers are for May 2019 with the broker Axitrader.

In the last 3 months, thanks to Trump, news of trade war has been flooding the market. EURUSD has been bullish,  and indexes were hitting year high. Much of the trading positions are actually not in positions. Hence the spike in drawdowns from the charts below.

In June, thanks to Trump again who commented on the suitability of Fed Chair mentioning the possibility of a rate cut to ensure a competitive USD. As a result, EURUSD took a turn and thus the market changed.

This is illustrated by the chart above, a huge spike in drawdown during 10th June which is a Monday. FOMC statement was on Friday night, SG time. Overall, the trade positions were closed in an orderly manner and turned things around.

Another point to note is, the current drawdown is 0%. Which also translates that the opened positions are running on the traded profits only. Perhaps we should open more position to leverage and absorb more risks in exchange for a higher return.

To have monthly returns of 10% is considered average and more positions should be opened in order to capture more market opportunities. However, Trump is a wild card still. A higher risk-taking behaviour will translate to a higher drawdown. And each drawdown is a test to our system, simply because if it fails, that will be the end of our trading method, System Alpha.

Overall, the full numbers are displayed above. Moving forward, there will be no change in our trading strategy for now. Being nimble and careful is the better way to go in this market.

This account has started in May 2019 with the new broker, Axitrader, after our previous broker left us. If you need a good FX broker, you may consider Axitrader. The spreads are reasonable and even though Axitrader is a market maker, the spread is still acceptable.

So that is a wrap for the last quarter. Will update again.