Salve a tutti,
We can’t be happier about the great success of the DuettoFX indicator. Your emails and comment are enthusiastic.
We are also receiving a lot of ideas mainly about exit strategies. We are working on them and we’ll probably come out with the DuettoFX EA in 2/4 weeks.
We already have a version running but it was “for us” and we have to work on it and improve performances to exploit more of the fabulous profit potential of the DuettoFX strategy.
Today I want to suggest you a simple yet effective approach to trading with DuettoFX: one leg trading.
You know that when we got a signal from DuettoFX we enter long and short on two pairs. This is what I call a “two legs” trade. One leg is short and one is long.
By doing out statistical analysis (aka “backtests”) we’ve seen that there’s always a pair of the “duettos” that does perform better and is more “reliable” than the other.
One of the approaches that I’m using is to trade only one of the two legs… of course the best between the two That way I reduce risk and have a better profit factor (PF).
Take this table:
If we take only the best pairs:
- USDCHF (in EURUSD-USDCHF duetto) – PF 1.91
- USDCHF (in GBPUSD-USDCHF duetto) – PF 2.05
- AUDUSD (in AUDUSD-USDCHF duetto) – PF 2.05
- EURUSD (in EURUSD-USDCAD duetto) – PF 1.40
- AUDUSD (in AUDUSD-USDCAD duetto) – PF 1.43
We have an overall 1.71 PF instead of 1.55 with the two legs approach. We also reduce the spread to pay (we do only one trade and not two) and risk.
So the concept of this approch is: take the signal from two pairs to trade just one. Doing so we take a signal that is also confirmed by an opposite signal on an inverserly correlated pair. That makes the signal “stronger” and so more reliable.
Fundamentally indicators should help you have the odds in your favour 😉
That’s all for today. I go back to coding and testing.