This mech system is off to a rocky start this quarter, as trending conditions are in play for both pairs.
Here’s the damage.
In this revised version of the Short-Term Bollinger Reversion Strategy, I’m waiting for RSI to cross above or below oversold or overbought levels to indicate a bit more momentum in the direction of the trade.
Make sure you review the tweaks here.
USD/CAD was trending lower throughout the first couple of weeks of this month, so the pair tested the bottom Bollinger Band several times.
Unfortunately, the strategy kept picking up on these bounces as RSI also reached the oversold region during some of those instances.
Luckily, the first position managed to reach the middle band to score some pips and adjust the stop loss at the same time, bagging 11.5 pips for USD/CAD.
However, the second one just dropped straight to its SL for a full 1% loss. Ouch!
The last position also scored some pips when it reached the middle band, but the gains weren’t enough to make up for the big loss.
This cost the pair 21 pips or a 0.42% loss for the first half of October.
Meanwhile, CAD/CHF was in an uptrend throughout the past couple of weeks, leading to multiple tests of the top band.
The first short position would’ve actually made it to the full target at the opposite band if it weren’t for the choppy price action!
The second short play fared worse since it barely bounced. Fortunately a new signal popped up that led to an early exit and trimmed losses.
This third position didn’t catch any gains either, as the first target at the middle band still snagged a loss.
With that, CAD/CHF is closing out with a 44-pip dent, erasing some of the previous week’s big gains.
All in all, the Short-Term Bollinger Reversion Strategy is down by 65 pips or 1.30% for the week. Ouch!
Not exactly the best of starts for this quarter, but I’m confident the strategy can make up for it later on.
