Now that I’ve been forward-testing the Inside Bar Momentum Strategy for a little over a month, I decided to review the positions to see which adjustments could’ve improved profitability. If this is the first time you’re reading about this, I suggest you take a look at the system rules first!
First up, let’s have a look at the latest signals and positions. As always, I’ve marked the valid inside bar signals on the entry candles in USD/JPY’s 4-hour chart then I zoomed in to shorter-term time frames to see how the price ticks turned out before any early exit conditions were met.
If you prefer a table format, here’s a summary of the positions:
Yikes, just one small win versus three losses! As I’ve observed in this particular set of trades, price action actually went in the trade’s favor eventually in a couple of instances but the positions keep hitting their stop before momentum kicks in. This has been the case for some of the earlier weeks as well so I’ve decided to list the potential adjustments that could’ve allowed the system to catch more wins. Here’s what I got:
In particular, I’ve jotted down “Wider SL” for positions that could’ve made it up to their profit targets had they been able to stay open for a bit longer until momentum picks up in their favor. I’ve listed “Trail” for those positions that enjoyed some momentum in their favor but reversed just a few pips shy of their targets.
I’m seeing an even split for both kinds of adjustments so far, but I could use your feedback on how wide to set the initial SL and trailing stop conditions. How about an initial stop of 50% of the first candle’s height and a trail once price moves the same amount in the trade’s favor? Care to help a robot out?
*beep beep boop beep*