Hey Edge Traders! 

Here are the action steps : 

1. Consider lowering risk setting on G27 to compensate for abnormal volatility

Titan G27 August 2020 Recap

We have had some significant drawdown during the last 2 weeks of trading as market reverses to sideways, choppy mode again.

Thursday’s Jackson Hole news event produced some dirty price action movements. USD was weakened at first but reversed very quickly.

This type of price action didn’t give time for G27 to move SL to breakeven or get out with minimal loss. Instead, the quick reversal move hit full stop loss for some positions. Of course this isn't ideal in the short term, but it’s just how the market discourages the herd to trade a trend following system.

So stay strong in this period and keep disciplined and patient, maintain a long term outlook, follow the trend.

Let’s see what September will give us.

Looking forward with Titan G27

You can think of Titan G27 like a mutual index fund of SP500. The SP500 has a long bias, although the timing of its bearish and bullish phase is unknown, it is an uptrend long term product.  So the best action for stock investors is to keep investing with spare cash periodically and without care about specific timing.

Similarly, we expect the Titan G27 equity curve to have the same upward trend with its own "bullish and bearish phases". And if things go well, it can outperform the stock index by a good margin. So focusing on periodical deposits with compounding power on our side can be the best bet for long term growth, without getting too bothered by short term performance (unknown).

You'll notice that the equity curve of G27 is fluctuating much more now and that the max drawdown is likely to be higher than the backtests. This market is equal to the most volatile market over the last 15 years!  In fact, the market is now 3 times more volatile than the backtest, which you can clearly see by comparing the ATR values on Gold now versus the past 15 years. 

Therefore, we believe the most logical decision right now is to keep trading with the rules that have been very carefully tested for the longterm, and trade with a smaller than normal lot size because drawdown can be higher than the backtest. 

Therefore, you may consider budgeting for more drawdown. To do this, you can adjust your risk settings by $500. 

For example, if you are using 0.01/$1500 lots, you can change it to 0.01/$2000. Or if you are using 0.01/$1000 lots, you can change it to 0.01/$1500 etc.

The backtest alone cannot guarantee that the maximum expected drawdown of XAU alone won't be exceeded. XAU can generate a lot of profit, but also cause a lot of emotional stress if we don't prepare for it. We always want our psychology to be stable and trade according to the market characteristics. Which, in this case, higher volatility = possible higher DD. 

The downside of lowering risk settings is that it will take longer to recover losses. So as always, these decisions are entirely up to you.  However, it's better to be safe than sorry. When market volatility becomes normal again we can increase lot size back safely. 

Titan X Tool Update

We will be releasing a Titan X Tool Update with the Weekly Goal function fixed (finally!) before market opens tomorrow. 

ALSO! 

Next week, we are planning on revealing how you can use the Titan X Tool to pass the FTMO challenge! This means you can get your trading account funded up to $100,000 ASAP if you pass the challenge! More details coming soon! ????

Have a great weekend everyone! 

- The Blue Edge Financial Team

Monday, August 31, 2020

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