Feedback Request: Carry Trade System

Hi All,

I am new to trading. Started demo trading in July 2014 and live trading in August 2014. Initially did very well, but got closed out by margin calls this month (October 2014). That's trading, I guess.

Warning: I have crashed and burned two live accounts with these systems. Use them at your own risk. The systems were developed primarily from the Super Carry Trade system in the links shown below. However, they also use the chart indicators discussed in the Amazing Crossover System posts for currency pair direction confirmation. The systems were developed while I was live trading (not smart, I know). From what I can figure out at this stage, the final version of the system is the one that killed my accounts. The earlier versions (more closely related to the forum posts below) seemed to work quite well although they were quite labour intensive.

So, what I am looking for is feedback. Can any of the wise minds out there help me figure out where I went wrong? I am also looking for ideas to improve and refine the system/s discussed. I have a few ideas (lot sizes too big, too many trades/pairs/accounts happening at once), but would appreciate any comments or guidance you can offer.

Apologies if there is too much detail. I'm a details person.

Super Carry Trade System
https://fxtrade.oanda.com/community/forex-forum/topic/15006264/?page=1
https://www.forexfactory.com/showthread.php?t=70480

Amazing Crossover System (used for chart analysis indicators)
https://www.babypips.com/blogs/art-of-automation/forex-crossover-20140822.html


Climb The Ladder System
The final system (which caused me all the pain) was as follows:

Parameters
• Use only currencies with a positive interest rate carry either short or long.
   o I initially limited my live trades to AUDCHF, AUDJPY, NZDCHF & NZDJPY, although I did branch out a little bit later on.
• Keep available margin to approximately 20%.
   o For example: On a $5,000 my account I tried to keep available margin around $2,000 at all times. I did this by increasing lot sizes. Ended up favouring AUDJPY and increased lot sizes to more than double the size of my other trades.
• Use very low leverage of 20:1
   o While this is not a requirement, I thought it lowered some of the risk on the trades, given that I was not using any stop losses.
• Traders will need to have nerves of steel to trade this system for two reasons:
   o One: The system does not use Stop Losses
   o Two: Watching your trades go several hundred pips negative is a scary experience no matter how confident you are as a trader.

Trading
• Select preferred currency pair and determine if the currency is moving in a direction that will give a positive interest carry.
   o For example: Going long on AUD/JPY while the pair is moving up or sideways
• Start by opening trades at the current market price & setting a 25 pip take profit.
• Do not set a stop loss
• Then set a limit order at the previous trade take profit level plus an allowance for spread (i.e. 5-7 pips over the previous trade TP) and again set a 25 pip TP.
• Do this until there are 4 or 5 limit orders set up above the opening trade price.
• Then sit back and wait. If the market moves in my favour the system will start automatically taking profits and opening new trades.
• Keep adding trades at the top (never have less than 4 trades set up above the current market price if I can help it.
• If the market moves against me, then continue to add trades between the current market price and my other limit orders or trades using the same rules as above.
• The basic theory here is that what goes down must come up (hopefully). But the system also derives a reasonable amount of profit from the interest for holding the trades overnight or even several days.
 

Super Carry Trade System (Modified)
The earlier system (which was actually fairly effective) was as follows:

Parameters
• Use only currencies with a positive interest rate carry either short or long.
• Keep trade size to 1-2% of NAV (although I did go as high as 5%) and only have one active trade for each currency pair
• Use very low leverage of 20:1

Trading
• Select preferred currency pair and determine if the currency is moving in a direction that will give a positive interest carry.
• Start by opening trades at the current market price and setting a 25 pip take profit.
• Do not set a stop loss
• Then sit back and wait. If the market moves in my favour the trade will close and I will make some money.
• If the market sits or moves against me, then I make money from the positive interest paid overnight for as long as I hold the trade.
• Once a trade hits its take profit, open a new trade with the same conditions as above.
• I traded this system two ways
   o Trading only once a day, usually at night after work (worked quite well)
   o Opening a new trade straight after the previous one closed (Bit challenging during work hours, but worked very well)

For some reason I decided to try to trade two accounts at once (overconfidence maybe?). One with $50 my broker gave me for placing my first live trade and the other with my own funds. But, for those who want to see the good and the bad, you can have a look at my trade records here:
https://www.myfxbook.com/members/GrantGvanH/super-carry-trade-live/981692
https://www.myfxbook.com/members/GrantGvanH/super-carry-trade-inactive/981691

Thanks in advance for your comments and ideas.

Grant.