I am testing a system in demo for a combination of fundamental analysis and technical analysis based on mean reversion and a few other trend direction indicators including retail trader sentiment. The first two weeks have worked well. Paper trading only the first week and placed trades on a demo account this week just gone.
Early days but the results are going well so far.
4 hour charts - only trade when fundamentals are opposite to the retail trader sentiment
Determine watch list on the weekend after fundamental updates are complete
Trade 1 - enter at start of week with a small position in direction of fundament trend. 0.2% risk per pair. Catches the big move weeks that do not retrace - small trade risk.
Trade 2 - enter with limit orders on retracements against the overarching fundamental trend direction. 0.8% risk per pair. Catches the retracement for better entries when there is a retracement back to a bank/institutional order level - larger trade risk.
Results are as follows:
Week 1 - paper trading +7.9%
Week 2 - demo trading on live markets £1005 profit on £35000 demo account +2.8%
Closed trades
Open trades
Away for the week last week so no watchlist but positions were still in place from the week before.
Performance as follows. 918 pips gain for the two weeks. 3:1 and 5:1 targets hit on NZDJPY longs.