I have backtested 10 pairs using MSN historical data and found the valuable information for those of you who trade targeting % of average daily range completion.
It seems that at current market cycle, JPY pairs have a more limited potential to achieve above average ADR percentage. USDJPY and AUDJPY, for example, had above average (above 50%) performance at no more than 78-82% of ADR completion.
In other pairs, the % of ADR coverage seem to perform better than the JPY crosses.
EURCHF seem to be the overall champ. This pair has above average potential to achieve above 100% ADR completion. With an aprox. 136 pip average daily range, this pair seems to be a good choice for trading at a first glance. Of course, one has other things to consider (trend, SL placement and R:R) just to name a few.
Therefore, there is no point trying to set unachievable goals for a intra-day trade. The distance between your entry and your TP level has to be a very important component of trading tactics. Boarding a fast car (trend), going for an achievable distance (ADR % completion) will give a trader statistic advantage of price reaching the Take Profit level before it reaches the proposed Stop Loss level.
Here is the graph.
Cheers.
PS: Special Thanks for Sorin (AKA SOSO) for helping me compile this valuable data. You can find Sorin Chiorean at his website: www.codeworks.ro
Setting a reasonable TP level has to be a very important part of one traders tactics.
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