Last week I presented a strategy that was very profitable for us in our Asia Session trading room for several years. We went through several names before settling on calling it the Asia Mirror Strategy – since the theory upon which the strategy was based was that the Asia session mirrored the New York session. We changed the pairs we used periodically, when one stopped working often another pair could take its place. Once we had a working EA for the strategy, I ran the EA on all the pairs on a demo platform to keep track of performance. We would pick the top 6ish pairs to run the strategy live. If a pair stopped performing, we would drop it and pick up one that was performing better.
Then it suddenly stopped working across the board. I believe it was February of 2011. We gave it a week of successive losses until we stopped trading it live. I continued to run the demo pairs for quite a while and it consistently lost. Due to other considerations, I was unable to spend the time necessary to identify what happened to the market and what could be done to make the strategy profitable again. Which brings us up to now.
To give you an idea where we plan to go with the revival of this awesome strategy, I want to explain what was done in the past
One of the important elements of the strategy was to split our position into three pieces, placing them on successive Fibonacci retracement levels. We tried “doubling down” on the positions (splitting it into 9 pieces, placing 1 piece on the 38.2% level, 2 pieces on the 50% level and 6 pieces on the 61.8% level), which reduced our overall risk – allowing us to increase the overall position size. We found that many trades were only retracing to the 38.2% level and netting us only a small profit. Some of the room members used this strategy – which proved very successful them.
Another thing we tried was using the 100% retracement level as the stop loss, but that kept our trade size too small. We tried more positions in the middle Fibonacci levels (23%, 76%, etc.) with some success, but not as much profit as our final strategy.
As with any strategy, there are hundreds of variations, combinations and permutations of details that must be addressed.
We want to go over the details and see what it takes to make it work again.
How You Can Get Involved
Our plan is to try and revive this strategy and make it profitable again. I’m going to build a team of 10 Winner’s Edge subscribers who can help me with this project. The team will meet via Skype on a certain day and time that works for everyone and we’ll discuss improvements and ideas, etc.
- Study the strategy and understand it.
- Try it out on a demo account.
- Try it on different pairs.
- Understand what parts of the strategy are working and what parts aren’t.
- Decide what can be done to make the strategy great once again.
Each team member will receive a copy of the Asia Mirror EA from several years ago, with some modifications so it can be used for experimentation so we can figure out what works and what doesn’t work. It’s designed to run on the free MT4 platform and can be run on demo accounts. It didn’t work very well with MT4′s Strategy Tester, but maybe we can make modifications to it that will improve its performance.
When we finally get the proper strategy nailed down. I will be rewriting the EA and each team member will receive a copy of the newly written EA with free updates indefinitely.
Help us to work out the details of the great strategy and we can all profit from it.
Thanks for your time,
Update: We modified the plan a little. You can check it out in the 3rd part of this 2-part series.
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