When you sit down at your computer to invest or trade the markets, do you follow a certain strategy? Yes, no, maybe? I’d wager to guess that most would answer that they just want to maximize their returns. If you have been a passive trader/investor that would not have yielded much over the last decade, seeing that the S&P 500 is up 13% over the last 12 years. Even the euro is only just a few big figures above where it started back in 1999.
Trading currencies or equities demands a strategy, simple as that. Currensee, home of the individual currency trader, now shows that their members have accounted for 1.37 million trades since inception. In order to make that many trades, more than a few people are doing something right.
One such strategy is the “S/R Strategy” as seen on the Currensee Strategy page. I believe the S/R refers to ‘stop and reverse’ which is a very much underutilized strategy in the markets in my view, as most traders will adjust their stop-loss levels when they are about to get knocked out of a trade. If volatility is high and you can picture future volatility continuing to be high, then the smart trade would be to get stopped out and reverse direction (would be even better if that was a take-profit level instead of a stop-loss).
A trader using the “S/R Strategy” would have done quite well, producing a 93.3% cumulative return on 72 trades. It should be mentioned that their draw-downs range from 0% to 61%, so it may not be for the faint of heart. Still, this trader’s win rate with this strategy exceeds 90% over the last 6 months. For more information please, visit the details section on the Strategy page where the author even lists some contact information for those interested.
Not all of us have the ability to withstand such draw-downs, and if that’s the case then a different trading strategy may be for you. If you go to the Community page and view the Leaderboard on Currensee, you can find traders and filter them by their performance and/or risk characteristics. I filtered by AUD/USD and sorted by low volatility. The trader who appeared 6th on the list currently resides in China. Dare I say that this will not be the last trader from China trading the foreign exchange market. As anyone that has visited China knows, the options to invest in that country for individuals is usually limited to their stock market, condos and cash. If you think none of those options are particularly appealing, it begs how many individual currency traders will appear in the future.
This particular trader currently only has a 36% win percentage, but his returns have been impressive, far out-performing anything that an equity index would have produced as of late. Remember, before you place a trade, have a strategy. For strategy ideas visit Currensee.com.
This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.
Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.