Short update

Alright, learning how to program does take longer than expected, especially when I'm also learning Romanian, working full time and preparing a dissertation... Therefore I used some of my old data and a few new trials to semi-test a simple 3-month break out system on currencies. Performance is decent but should be pretty good using the proper risk management system. After a bit more thorough research in that area, I laid out the following:

• Initial risk per trade: 2% of free equity
• Max risk per trade before reducing position size: 3% of free equity
• No more than 22.5% of capital at risk at any time
• No more than 2 positions in 1 direction per currency (e.g. no more than 2 positions betting on a stronger euro, however opposite positions do cancel each other)
• When adjusting the stop-loss AND simultaneously favorable currency movement, lots might be added to increase exposure to 3% of free equity again
• Obviously number of contracts will always be rounded down
• positions will be adjusted daily at a set time once US markets have quiet down, so it should be early night in Europe, but I will see how well that works

I hope those rules should keep me from overexpusore and overtrading. The 22.5% of capital at risk might be a bit high as it is more than 80% of the Kelly formula's suggestion but at the same time gives enough room to hold varies positions. The no more than 2 position per direction rule should prevent any overexposure to any specific currency. I did look at some other ways to tackle this, for example geographic region, interest rate setting central bank or major industry types of the economy but in the end this solution seems to be the easiest to implement.  Maybe the rules seem a bit confusing and or weird right now,but I think they do provide a good framework to start with (again) and I will bring them to live with some cool trades :)

I wish I could try this system on futures but my account is obviously not big enough to  do so in a manner that money management actually exists (trading only 1 contract each timeis no good money management...) and stocks have astronomical trasnaction cost. Therefore I will soley focus on FX microlots (1k lot size) for now and hopefully will be able to move up  to standard lot and maybe CFDs (so I get stock and commodity exposure) next year.

The account is set up, the money on its way and I should be starting to trade again by the end of this week! Until then...