Please below the net returns for August 2024.
What a month. This one had everything happen with large drops in forex pairs and the share market for it to only come back again 2 weeks or so later and go back to record highs.
Some of the items that happened this month. Japan raised interest rates for the first time in 17 years. US inflation is reducing and discussions of reducing interest rates. EUR rose sharply due to US showing signs of weakness. EUR now reporting weakness in some of its economies so yearly highs have quickly dropped whilst US recovers.
The Japan interest rate increase and the chance of US reducing their interest rate had the largest impact within one week of August (even one day). The situation was like an arbitrage as sorts. Borrow from a low interest country and invest it in a country with higher interest rates – easy money to be made.
This method has been working well until the JPY increased interest rates unexpectedly and talk of US interest rates going down in same week. As a result, JPY currency went up and US currency went down. This resulted in many borrowers at the same time trying to exit large positions and you suddenly see large falls in currency pairs and the share markets. There were 10% drops occurring within 1 day.
Since then, recoveries have occurred to record highs in share markets again whilst currencies bounce around on news cycles.
Some of our strategies were able to profit very well from the overactions whilst others had larger draw downs and had stop losses hit. We also have some strategies still holding positions to still be exited since this occurred.
All Tassie HR strategy had a loss again for this month as the exit all positions setting was triggered again for the 2nd month in a row. The currency pairs held dropped 10% and share market dropped 10% in one day so it began exiting positions as soon as possible due to both risk parameters being met. With 10 years of back testing never had it happen 2 months in a row. We have turned this setting off for the meantime but will look to turn back on as it is there to protect the capital if the real occurrence was to occur.
Whilst the Red Centre and Great Barrier Reef strategies had excellent months with large monthly returns due to quick drops and recoveries occurring.
The forex market continues to have periods of busy activity and then periods of very little to no activity. The market is still very much a day traders paradise with quick ins and outs based mostly around interest rate projections.
In summary at the end of each month our equity continues to rise when we tally all our strategies together which is our main aim.
Any queries, please do not hesitate to reach out.
