Cowabunga System Week 4 Results
This trading week started with a bang!
Over the weekend the Mayor of London, Boris Johnson, expressed his support for the Brexit camp which unleashed a wave of GBP selling across the board.
Virtually each and every GBP pair opened with a gap and volatility shot through the roof.
Thankfully, the Cowabunga System protects against such situations by having a clear (and small) stop loss, so these kind of events should have little negative impact on the trading account... or so I thought!
This week turned out to be the most exciting week of testing so far, so read on to find out what happened!
Monday continued on with the same bearish trend on the 4h time frame, so I began looking out for sell trades.
I didn’t have to wait long, as at 05:45 GMT a short signal was issued at 1.4276 with a stop at 1.4297 and the take profit at the next round number.
A few candles later the target was reached, giving me a positive start for the week.
This trade yielded a capital gain of +0.92%.
The rest of the day was rather dull with no more trades being issued.
The 4h bearish trend continued, as I prepared to take more sell trades.
At 09:45 GMT, a sell signal was issued at 1.4104.
The stop loss was set at 1.41532, and since the next round number price level was too close to the entry point, I stuck to the usual 1:1 risk reward ratio which meant that the take profit level would be 49 pips away.
As you can see, the profit on this trade came quite painlessly as the pound was being sold upon each and every bounce.
So far so good! It seems like this might be another good week for the Cowabunga System.
As you'd surely have guessed, the GBPUSD continued to be bearish on Wednesday so you can guess what I did... yes, I continued to look out for sell trades (hey if it's working don't fix it!)
The first sell signal came at 08:45 GMT with an entry at 1.3975, a stop loss at 1.4017 and with the target profit at 25 pips below entry.
As you can see, the profit target was reached almost immediately, booking me a nice +25 pips.
At this time, I thought that since 1.4000 psychological level had been broken, the downward pressure on the GBPUSD might ease up a bit… but I was wrong.
Later on at 17:15 GMT, there came another short signal.
I sold at 1.3930 with the stop loss at 1.3959 and the take profit at 1.3900.
This trade turned out to be the first in a series of “bad luck” trades as market barely missed the profit target and quickly reversed.
At 21:00 GMT, I had to close the trade according to the rules of the Cowabunga System, which resulted in a loss of -1.9 pips.
Although the trade was closed almost at break even, a loss is still a loss.
Thursday turned out to be a busy day, with three trades being issued.
The first trade was stopped quite fast after entering the market at 1.3931 at 05:45 GMT and the outcome was -23.2 pips:
The second trade of the day came at 08:45 GMT. The 4h trend was extremely bearish and the sell entry was 1.3916 with a stop loss at 1.39633.
This was not a good trade from a risk-reward point of view but since there was no such trade restriction in the Cowabunga System, I went ahead and took it.
As it turned out, the 1.3900 target was missed by a few pips (due to the spread). The GBPUSD then prompted reversed and went on to trigger the stop loss order.
This trade resulted in a -47.8 pip loss, the biggest loss so far.
I just knew it. My string of wins were too good to be true...
Then at 13:45 GMT there came another sell signal.
I took the short trade at 1.3955 with the stop loss at 1.3996 and the take profit at 1.3913, according to a 1:1 risk-reward ratio.
Is this to be yet another losing trade ?
Thankfully, the answer was no.
This trade was a beauty as it reached the take profit relatively quickly, almost completely erasing the previous loss.
This trade gained a profit of +41.5 pips, or a +1.43% gain on capital.
The Cowabunga System was back in business.
The week suddenly didn't look so bad anymore. With one trading day left, the system generated almost 70 pips of profit.
And considering the market conditions I experienced during the week, I would say this is quite an encouraging performance!
On Friday the main trend turned bullish I started to look for long trades.
But alas, the U.S. GDP data release surprised everyone, printing 1% vs expectations of 0.4%.
Consequently, the USD was bought aggressively throughout the day and once again pushed the GBPUSD trend back down again.
Thus, no new trades were taken that day.
Cowabunga System Week 5 Performance
This is the fourth profitable week in a row for the Cowabunga System, which yielded a 2.41% capital gain.
My test account has now almost grown to $3,000 (from $2,500) in 4 weeks.
At this rate, I really tempted to increase the trading lot size. But before I do that, more forward-testing is required!
Next: Week 5 results