I am going in circles in my head …any input appreciated.. I have been surprised several times in the last few months to see currency fluctuations swamping profits (or losses) from trading systems
the extremes (always hedged or never hedged) seem straight forward enough and a personal choice
to use the approach of sometimes being hedged in turn leads to a choice between a discretionary or systematic approach…not surprisingly I find myself wanting to use a systematic approach and to back-test it.
Working with channel breakout systems at moment…I was using a simple MA but then thought it strange that after all the many, many hours testing I had done constructing stock trading systems I hadn’t put similar thought and time into currency hedging when the impact on my portfolio could be equal to or even greater than these stock systems combined..
my questions is:
does the system have to be a “significantly ” profitable one (which I am struggling to do consistently across different pairs) or is it enough to simply be break even (which seems more achievable)…the logic here being that I just want to use it to avoid big losses when aud rises against usd rather than use it as a trading system as such…
Hope that was clear ? Be grateful to anyone who felt like sharing their thoughts
