Let’s Pound In June

We first stated seasonal strategy to trade British Pound in 2012. We have further refined it by applying our proprietary algorithm for entry & exit signals, improving the already impressive returns.

Since 2000, our strategy has produced 63 trades – for both Forex spot contracts and ETF – with a winning rate of 71.4%. The trade has been successful nine out of last 14 years. The annual average gain has been 2.1% for a 38-day holding period giving an annualized rate of 20.4%. The cumulative return was 52.9% compared to 17% for S&P 500 over the same time-span.

For Forex spot trades, we used four different entry/exit setups for an average gain of 118 PIPs per lot for average annual gain of 2.4% and annualized return of 23.6%. The money management used $50,000 equity for each lot or 2:1 margin ratio, which makes it a very conservative strategy. A more aggressive strategy – $20,000 equity for each lot – will increase the average to 6.1% for the annualized return of 59.1%, albeit with significant risk.

The results for the ETF are a bit more modest. The average annual gain was  2.0% for an annualized rate of 19.8%..

Seq. Instrument # of Trades Win % Annualized Return
1 GBP/USD 56 71% 23.6%
2 FXB 7 71% 19.8%

We will start looking for entry signals in early June. Once our entry signals are triggered we will send out trading alerts.

At the moment, GBP/USD is trading at the highest level since October 2008. The May 2014 high of 1.6996 came close to testing the August 1st, 2009 high of 1.7043. So there is no doubt that there are some strong resistance levels looming so it will be interesting to see how our trade shapes up this year. The pair has already broken above the upper-limit of a symmetrical triangle, which is bullish. A break above the horizontal resistance line will be even more bullish.


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