As mentioned before, I've just recently put together this simplified system.
I entered into a long USD/CAD on 2/28 before I finialized version 0.1 of my system. My current system indicated that I should have entered long on 2/26 (1.1606 close).
Ehh
So, I entered long USD/CAD at 1.1681 with a trailing stop of 1.1546 (potential loss of $135 on a full reversal). Moved the stop to 1.1539 on 3/2, 1.1562 on 3/5, 1.1617 on 3/6, and 1.1621 on 3/8.
Note: on the forex day charts a new "day" starts at 5pm. For example, at 5pm on 3/5 the 3/6 period starts.
The CMO indicates I should think about offsetting my position now (1.1781 as of this writing) as it has come back down to touch 50. But, the TSI (decent gap and still moving upward) and TCF (still at a very large gap but starting to move inward) indicate the trend is still stong.
Waiting for 5pm to see how things lie.
Update:
After 5pm and have moved my stop to 1.1643
CMO, TSI, and TCF are pretty much the same from this morning.
Update 3/9, morning:
Here is a good test of my system. Or, rather, a chance to fine tune.
TSI has gone horizontal. So, two indicators to exit my position.
However, in the past, CAD/USD's TSI has gone horizontal but maintained a decent gap. Along with the TCF's very large (though shrinking) gap, this long trend may just be consolidating. Something that strengthens this line of thought is that the TSI's signal line is still pointing up.
To hedge my bet I've moved my stop up to my entry price of 1.1681.
That may or may not be foolish. Because, if the trend is continuing and there is a drawdown, I'll be knocked out. Also, if the price is reversing, I've lost the profit my signal just told me to take.
Question: Is it better to take profits when there are signs of a reversal? Or, seek to try to ride the whole trend?
In the first case, some profit will be lost on leaving the trend early. In the second, there may be no profit and even a loss when early signs of a trend's reversal are ignored.
Update 3/9, weekend market close:
Ahh, a TSI signal line that continues up is not a sign that the long is continuing. The TSI has turned down while its signal line continues up. Considering the CMO is nearing the zero line I'd say a short signal will be showing itself on Monday or Tuesday.
So, moral of this story: If I'm holding a long and the CMO hits the 50 line from above and the TSI goes horizontal, offset the position.
It looks like the horizontal TSI holds true on shorts as well.
Anyhow, I've offset my position at market halt (1.1722) giving a $34.96 profit.
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