The Way of Investment (Series 32)

The Path to Investment Mastery (Part32)

Year-End Special Edition　（part2）

In the previous issue of “The Path to Investment Mastery,”we examined what would have happened if we had been trading on the daily chart. This time, we’ll delve a little deeper.

1.   How large is the drawdown?

Because these are daily trades, the concern was that the stop loss width might need to be wider. We pulled actual drawdown values from the charts.

First, daily trades.

Trade entry date        Settlement date          Currency pair          Maximum drawdownpips

3Month21Day421DayAUDJPY          0

4Month26Day5Month18DayZNDUSD         28.8

5Month19Day5Month30DayUSDJPY          51.7

6Month9Day7Month15AUDUSD         40.9

7Month18Day8Month17DayAUDUSD         7.6

8Month18Day9Month28DayGBPUSD         9.1

9Month29Day11Month1DayGBPCHF         29.2

11Month3Day12Month23DayUSDJPY          24.2

Average22.7 pips

Next, the 4-hour chart.4Time frame

Trade entry timestamp                     Settlement timestamp          Currency pair          Drawdownpips

1Month3Day0:00             1Month6Day4:00             GBPJPY          84.9

1Month6Day8:00             1Month12Day12:00         CHFJPY           28.8

1Month12Day20:00         1Month25Day0:00           GBPJPY          8.6

1Month25Day0:00           1Month31Day8:00           NZDUSD         34.0

1Month31Day12:00         2Month10Day20:00         AUDUSD         54.9

2Month10Day20:00         3Month7Day20:00           EURNZD         2.20

3Month8Day20:00           3Month16Day20:00         EURJPY            0

3Month16Day20:00         3Month28Day16:00         AUDJPY          39.6

                                                          Average31.6 pips

                                                          All Average27.2 pips