Checklist Trading: How To Make Money Trading, September 2018
Posted on September 28, 2018
It’s great to be back and writing this from my office today rather than an airport terminal given my all too frequent travels in recent months! Although my frequent flyer membership may be in a bull market, I am far more interested to be in front of the screen making money in the numerous other bull markets in financial assets. Here I’ll summarise just a few of the highlights from the trading review that I published in this week’s Trading Club video
in which we analysed the quality of the many ideas generated from our monthly Checklist Report. Let's jump right in…
First up, currencies. There has been a lot of action here in the past couple of months, and perhaps not surprisingly, given the preparation afforded by our Currency Checklists process, we have been positioned correctly and realised some excellent returns. Here you can see the ranking coming into the beginning of the month (the September report was prepared during the last week of August) showing the top and bottom rated currencies that we track.
As you can see from the theoretical currency basket below mirroring this ranking, we absolutely nailed it with our Checklist. Buying the top-ranked pairs against the bottom-ranked pairs would have seen a passive return (buy and hold) of +2% from the time the Checklist Report was released. You would also have had two or three more opportunities to trade the 60 minute RSI during the month where more active traders could have theoretically made closer to +5% before leverage.
You can see how focusing in on individual pairs like EURJPY really paid off (+3.4% in September, with a couple of RSI signals on an hourly interval)...
And also in GBPJPY, which after a reversal in the Checklist score for GBP this month (negative to positive flip) came as no surprise. Up over +4%!!!
So there was a great deal to play for in currencies. But having opened today talking about bull markets, I feel the need to share an update on 'the one that you love to hate’ taking place in stocks. This month our US Equities Checklist remained positive, but was weaker in the prior period. This indicated that equities should continue their ascent, albeit with less momentum than last month (where we anticipated and caught a +3% gain in the S&P 500).
As you can see, there was some profit taking off a technically overbought RSI (>70), but on the month the market drifted higher as expected for a 1% gain.
Continuing on the theme of markets people love to hate
, lets conclude with Gold
(we look at the rest of the markets we cover, in full detail, in this week's Trading Club
video). I haven’t been keen on gold for as long as our Checklist has been floundering around zero, and again this month saw a small 'sell’ signal at -1. As I explain in the video, this isn’t a particularly ‘strong’ score (like say a -4), but warrants further investigation particularly when price attempts to stage a rally.
And here you can see why… When you have a fundamental view on a given market in advance of price moving in the opposite direction, you have a high probability opportunity to profit. This is exactly what you could have done below, looking to sell the top of the range or an overbought RSI back to oversold levels on a 60 minute interval during the month. This in fact would have netted you more than +4% in just 3 trades throughout September (see, you don’t have to be trading every second with 10 screens and a super computer algorithm to be a profitable 'day trader’!).
I’ll leave it there for this week, but I would encourage you all to check out the full video that members get access to FIRST and exclusively at the Trading Club
. If you would like more information about our Trading Club membership options
, or are interested in learning Lex’s methods in our comprehensive Million Dollar Traders
course, then feel free to send our team a message at [email protected]
who are here and happy to help.
Have a great weekend,
James Helliwell | Chief Investment Strategist
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