Expanding My Horizons

After performing backtesting and limited forward testing, I've decided to expand the currency pairs that I trade the H-SYSTEM with.  I've been searching for months now to find additional currency pairs where this strategy might work.  I will always take the GBP/USD H-SYSTEM signals because this has proven to be profitable.  In addition, I'll also look at taking signals on the GBP/JPY and GBP/CHF.  From my studies, the GBP/JPY may have more conducive moves for this strategy than the GBP/USD.  I've also found that in backtesting, if I lose on a GBP/USD trade, the GBP/JPY would often give me a win.  This would not totally cancel out the loss since a pip is worth less with the GBP/JPY than the GBP/USD.  I have thought about the lack of diversification considering trading any of these three pairs are all betting on the British Pound to strengthen or weaken.  I've determined that this doesn't matter to me at this point.  If it works, it works.  Another drawdown of using these additional currency pairs are their increased spreads, typically 7 pips at Oanda.

I've wasted no time in incorporating this into my trading plan, maybe a bit hastily. I had three short signals this morning on all three pairs, GBP/USD, GBP/JPY, and GBP/CHF.   Two of the three positions were profitable for a total of 180 pips.  The GBP/CHF lost.  So if I had only traded the GBP/USD, the results would have basically been the same, +90 pips.

I'll have to see how this goes in the upcoming weeks.  The point of this isn't to stretch myself thin but to give myself more options when trading this strategy.  My ultimate goal is to have multiple strategies but my time has been consumed with just the H-SYSTEM for 6 months now.  Some of you had great comments in the Carry Trade post and developing or reusing some Carry Trade strategy may be a future goal.

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