Cowabunga System Week 3 Results
A bearish week on the GBPUSD just ended, as the 4h chart trend remained down all the way into Friday’s market close.
According to the Cowabunga System, shorting this pair was the name of the game this week.
That being said, it wasn’t an easy week to be trading the Cowabunga System as there were quite a few false signals (close calls) due to either the RSI was not confirming an entry signal, or the difference between the two EMA’s being too small to signal a clear entry.
In the end, I had to double check the entry signals multiple times before taking these trades.
Monday started slow with the 4h chart moving in a downtrend.
At 14:45 GMT, short trade signal appeared in the second half of the trading day and I went short at 1.4450.
Since this trade was taken at a round number, I set the take profit level according to a 1:1 risk-reward ratio, with the stop loss at the previous swing high.
As you can see, this trade turned out well with a nice profit of +35 pips.
No other trade signal was issued that day.
On Tuesday, the 4h trend accelerated downwards.
Soon enough, a short entry signal was issued at 10:00 GMT at the price of 1.4459.
Since this second trade of the week was also entered close to a round number, the target profit was set according to the usual 1:1 risk-reward ratio.
This trade turned out to be a big winner, providing an impressive +47.8 pips profit, or almost a $50 increase on capital.
The wins keep on coming and I’m still waiting for the inevitable losses to show up. For now though, the Cowabunga System continues to perform well.
This was a range day, as the we approached the upcoming EU summit negotiations this weekend.
Some mixed employment data was released, further reinforcing the lack of direction of the GBPUSD for the day.
But later on at 13:15 GMT a short signal was issued at 1.4285.
A stop loss was set at 1.4339 and the take profit was set 35 pips away at 1.4250.
The target was reached quite quickly for a +35 pip profit.
At this point, I’m thinking of increasing my trading lot size next week as after three weeks of testing there was only one loss. Things are looking really good and the account is growing at a surprising rate.
Today I finally got what I was anticipating -- my first losing trade of the week.
First, note that the 4h downtrend remained intact.
Next, a short trade signal appeared at 05:30 GMT.
The short was taken at 1.4300 and it turned out to be a tricky one.
Since this trade was taken at a round number, I normally I would have gone for the usual 1:1 risk-reward ratio. But because the stop loss was so close (just 14 pips away), I decided to go with the 1.4250 take profit (at the next round number).
This turned out to be a losing decision, as the GBPUSD missed my take profit level and went on to trigger my stop loss.
If I had stuck to the 1:1 risk-reward ratio, this would have been another winning trade. Oh well, it's all part of the game I suppose!
So this trade netted a -12.5 pip loss. It's not a significant loss by any means, considering the profits I've already made this week. But still, this was a losing trade nonetheless.
Later on at 14:00 GMT, another short entry was taken at 1.4338 with a stop loss at 1.4394 and the take profit at 1.4300.
Due to the trade cut-off timing (according to the Cowabunga System), I closed this trade at 1.4330 for a +8 pips profit.
On hindsight, this trade would have reached the full take profit target (for +30 pips profit), but rules are rules.
Besides, I was happy enough that Thursday ended almost at break-even.
Despite a lot of fake moves, Friday’s proved to be yet another profitable day.
Firstly, the 4h trend stayed down:
Then right at 07:00 GMT, a short signal was issued at 1.4319. I took the trade a stop at 1.4337 and the take profit at the 1.4300 round number.
This turned out to be a simple and straight forward trade, which added another +19 pips of profit to the week.
Cowabunga System Week 3 Performance
This was another profitable Cowabunga System week with a +4.81% capital gain, which translates to $131.8 added to the account balance.
At the rate this is going, I’m thinking of increasing my trade exposure moving forward.
Needless to say, I’m quite excited to see what happens next week!
Next: Week 4 results