Recently, we have taken closer look at AutoForexTrading with AUDNZD currency pair.
This time, we decided to take a look at what performance can AutomatedForexTrader offer trading for up to 12 months. AFT was applied with 1 currency pair, only. Later on, as more videos will be added, we will point out also how to combine more currency pairs into more complex portfolio management. Trading with one currency pair is mostly for those traders, who prefer less risky strategy with lower annual performance of up to 10% p.a..
If you are conservative-like trader, this video might be for you:
Let’s see a short summary:
- Applied AFT trading strategy: Super-conservative
- Period traded: 01.05.2014 – 31.5.2015
- Initial deposit: 10 000 USD
- Max. drawdown reached: 620.13 (6.20%)
- Profit after 12 months: 898.01 USD
- Volume of bought positions / Floating P/L after 12 months: -508.70 USD
- Net Profit: 389.31 USD*
*Net profit presents profit at the moment of a trading year ending by May 31, 2015 and closing all the positions. To do that, we do not have any rationally based reason, however. Thus, we would wait until the trading cycle closes in order to maximize our Net Profit. In this video, we were looking to present real life example, rather than making up results to look too good. To get there, however, one needs a bit more patience.
Who might prefer such trading strategy?
- traders who prefer to invest minimum time into looking after their investment
- traders, who want to minimize the risk which is inevitable part of forex trading
- traders who do not seek tens or hundreds of percent interest p.a.
- traders and investors who like to combine very simple and lower risk trading strategies in order to maximize potential profits while keeping the risk under sophisticated control (we’ll talk about this more in the future, it needs a trader to have certain level of skill)
What were the basic characteristics of this investment?
During the year we applied the latest version of Automated Forex Trader at AUDNZD currency pair between May 2014 and May 2015. Trading was performed via Metatrader 4 trading platform with initial investment of USD 10 000. AutoForexTrader has opened total of 174 trading positions, 88 out of which were SHORT and 86 LONG trades. The video presents three main parts of tested period – intro, middle and closing part.
AUDNZD Currency pair fits AFT trading strategy quite well. Both economies are quite tight connected with huge Chinese economy via export and import of goods and services. While Australia exports mainly mined raw products, New Zealand specializes at agricultural products export such as wool, meat and dairy products. From certain point of view, geographical position of both countries and dependency on Chinese economy might be neutralizing some market influences to both Aussie and Kiwi. Therefore, the currency pair offers certain portion of calm trading without huge one sided market moves. Also, we do see more stability in exchange rate, which is great for AutomatedForexTrader to perform its best. We still have volatility here present, so, the profit can be made and risk fully controlled.
What events have influenced the trading year?
During the trading year we could have seen several very important fundamental changes. The most important ones influencing exchange rate of AUDNZD were interest rates shifted by RBA and RBNZ. In New Zealand, the key central bank interest rate was raised from 3.00% to 3.50%. On the other side of Tasman Sea, Royal Bank of Australia dropped the key interest rate from 2.50% to 2.00%. These key factors have caused some larger market trends to begin. However, these were taken care of very well by Automated Forex Trader. In general, these changes in trends or swings suit AFT hedging strategy quite well. Especially, it is worth looking at the risk control and maximum drawdown of 6.20%, being reached while the currency pair experienced move by approximately 1000 pips. We are always more happy to show our risk control action rather than short-term higher profits made. In 8 years, we have often come to a conclusion where long-term risk control is more important to us. Although there is always profit to be made, it is better to mind the risk level first.
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