Trend Following

Did some testing… Long term buy and hold is indeed highly profitable if you buy at the start of the trend… Even if you buy after the trend has started, you’ll still make a decent profit… However, if u happen to buy when the trend is experiencing a correction (before advancing further), you’ll in for some trouble….

From how I see it, GBP/USD is now consolidating… probably waiting for the 50 MA to catch up… if it does bounce up, I’ll follow it with a portion of my account….

Forex EA Revision

I’ve made some revision to my EA for forex.
I’ve decided that I’ll use only 5% of my funds for each trade, instead of the initial extremely aggressive 20%.

1. For GBP/USD, it effectively reduced my profit from 15k to 5k, but I think this is a risk level that I am more comfortable with. Moreover, the declie from the peak profit to the final profit is not so steep. Initially, the peak profit was 70k, then reduced to 15k. Now, the peak profit is about 9k, then reduced to 5k. So, even if I enter at the wrong time, I won’t suffer a steep loss.
2. For EUR/USD, the difference in profit was less than 1k, so the lower risk definitely makes more sense. In addition, if I stop trading on 1/1/08, using 20% actually results in a loss vs a profit of $400 with 5%. If I use a fixed lot of 0.3, I’ll end up with a loss of 700.

Anyway, here’s the parameters I’ll be using:

SL 100, TS 100, Percent 5.