Blackwave Strategy - Basics
The strategy is a manual grid strategy and it follows my skeptical thinking so that I want to buy when markets get too emotionally downbeat about a currency pair and I want
to sell into optimisim about a currency pair. This is counter-intuituve and goes against any trading course I've seen which tells us to 'go with the trend'. While it has
traded exotic and EM pairs profitably in the past it only trades major and minor forex pairs now to reduce the cost of SWAPS and the inherent political/geographic/economic
uncertainty around many exotic/EM pairs.
When markets are overbought or close to overbought trades are opened counter-trend. When profit targets are hit trades are closed.If the market continues to move against the
initial position then a second trade is opened based on candlestick price action and how the market is trading/pending news etc. Up to 12 positions maybe opened for each of
two pairs so worst case scenario 24 trades though this has never happened the account is modelled to cope with this.
When markets are oversold or close to oversold trades are opened counter-trend. When profit targets are hit trades are closed. If the market continues to move against the
initial position then a second trade is opened based on candlestick price action and how the market is trading/pending news etc. Up to 12 positions may be opened again for up
to two pairs.
Risk control is achieved through position sizing. Position sizing MUST be the most important feature of the strategy because there is no hard stop loss and no hedging.
People will often happily accept extraordinary profits and only query the strategy when they experience a stressful drawdown in their own account even while the master account
remains quite safe. This is because they have failed to understand how crucial position sizing is for the strategy. Indeed when you have finished reading the strategy I suggest
you read this paragraph one more time because it is the most important.
Following on from position size there is NO HARD STOP LOSS. There is a SOFT one which is market dependent and as follows;
Blackwave California - Approx 15%
Blackwave Pacific - Approx 35%
Blackwave Alpine - Approx 50%
Blackwave California $3000 = 0.01 lots
Blackwave Pacific $1700 = 0.01 lots
Blackwave Alpine $1000 = 0.01 lots
This strategy has produced excellent profits since 2015 and is now one of the oldest strategies on most copy trading platforms. It is the inspiration for three MAM accounts
managing $3m of other peoples money. I never place trades in client accounts that I do not wish to place in my own accounts too and as at June 2019 my own commitment to this
strategy across all three risk levels is $190k.
These are the basics. To give any more information would be to reduce my flexibility and take away the major advantage of a manual strategy and make it effectively automated.
As a former stockbroker I like to watch all markets at once and get a sense of what's going on rather than put blind faith in back-testing which in the end only tests the past.
Links below to Blackwave Money Accounts which demonstrates my personal commitment to this strategy.https://www.myfxbook.com/members/Lazard/high-risk-blackwave-alpine/1302652https://www.myfxbook.com/members/Lazard/medium-risk-blackwave-pacific/1364641https://www.myfxbook.com/members/Lazard/low-risk-blackwave-california/1601589