"All becomes FX" Friday-to-Friday Trades That No One Can Say Vol.008
This "Investment Navigator+" is a report delivered every Sunday by those who consider fund management—"Everything becomes FX."
It covers matters about money that aren’t limited to FX markets, and I would like to share my actual weekly-position holdings with a limited audience.
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▼Table of Contents
―1. Recent Developments
―2. Global Finance
―3. Weekly Trades You Can’t Tell Anyone About
―4. Next Week’s Positions
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【PR】Turn FX losses into profits using money management
A trading approach that emphasizes money management, which is often neglected in FX trading.
It enables trades that aren’t swayed by win rates or particular methods.
▼1. Recent Developments
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The lead article, "Everything Becomes FX," moves between domestic and overseas locations about half of each month. I’d like to share where I am now, what I’m seeing, and who I’ve been meeting and working with domestically.
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This week I’m in Tokyo. I’ll be moving around the Kanto region from the start of the week, so it’s a brief stay in Tokyo. Still, with a typhoon coming, I’m not sure how things will unfold…
Last week I mentioned that I don’t publish flashy photos online that show “I earned so much in FX” or “look how much money I’m making.”
One reason is “birds of a feather flock together.”
In this era, I don’t know how many people would be drawn to such displays (though perhaps there are those who are drawn to it, hence the supply), but even if such things occur once in a while, I don’t think I could manage them well.
And another reason is that I don’t live a flashy lifestyle in the first place.
I may stay in Japan or overseas, but simply being abroad doesn’t mean I host nightly parties, stay in luxury hotels (though sometimes the hotels can be relatively large), or anything like that.
I live a modest life, visiting supermarkets frequented by locals, wandering street stalls, and occasionally going to places where I can have a drink.
You might think, “He has no dreams,” but that’s how it is, and I accept it.
However, I don’t commute to a company daily or exhaust myself in relationships, so I feel that aligns with me. The key may be living within one’s means.
▼2. Global Finance
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Many who trade FX spend substantial time researching fundamentals and technical analysis.
Yet, ironically, about 90% of FX participants incur losses, and many end up exiting the market.
In this section, I plan to think about global finance while keeping a distance from those trends.
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This week, stock prices continued their rise to the point that it became a topic in general news, and the USD/JPY pair has returned to the 113 range.
Bitcoin also rose above 6,000 dollars, continuing a favorable outlook.
After these headlines, there are so-called “new moneyed” individuals, but of course the rise won’t continue forever, so I think one should be careful about information that highlights profits from rising markets.
Now, this week I’d like to write about the main content of this Investment Navigator+: “Weekly Trades You Can’t Tell Anyone About.”
For the past three weeks, the positions I held have lost each week. Given the base win rate of 48.6%, losses are more common, which is natural.
A win rate of 48.6% does not mean you win 4–5 times out of 10. Sometimes you win 8 out of 10, sometimes you win only 2 out of 10.
On average, however, you win with a 48.6% probability.
A common trait of people who give up on a method is “they seek a new holy grail after a small loss.” They abandon the method after a loss and miss future profits, which is exactly being swayed by win rates.
I’m sure the prudent readers who used money management have recovered their prior drawdowns with this trade. This is what it means to trade calmly and the power of money management.
However, what we must be careful about is that this time I merely recovered from drawdown by chance, and it is quite possible that a longer losing streak could follow (you can see this in the graph in Vol.001).
Additionally, year-to-date there has been a +10,000 pips gain, but since beginning the Investment Navigator+ series, it’s likely around -1,500 pips (this is something I can’t know for sure, so long-term thinking is needed).
Even if things went well this time, do not get cocky and increase position sizes recklessly. It’s important to continue for a year with the same position size.
Conversely, whether you win or lose, if you don’t feel anything, your trading ability will have risen dramatically. Surely, even using other methods won’t break your resolve.
▼3. Weekly Trades You Can’t Tell Anyone About
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A “Weekly Trades You Can’t Tell Anyone About” that fully utilizes position sizing for both trend-following and counter-trend portfolios.
Since 2012, it has claimed no annual losses and total profits of over +30,000 pips.
What is the secret to making profits with a 48% win rate? Here we present this week’s trade results.
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・This week’s result: +960 pips
・Total results: +30,634 pips
(decimals omitted)
【Weekly Trade Results】
・Win rate: 48.6%
・Average win: +839.6 pips
・Average loss: -580.1 pips
・Maximum win: +13,491 pips
・Maximum loss: -2,932 pips
・PF: 1.37
・PR: 1.45
“Weekly Trades You Can’t Tell Anyone About” takes positions with an edge from the 1-hour, daily, and weekly charts, using trend signals. Yet its essence lies more in money management than in trading itself.
This method’s win rate is 48%. Because the felt probability is around 40%, it cannot be recommended to those who won’t accept “less than 80% win rate.” It targets readers who can consider long-term profits.
