JAS Fund Monthly Update for August 2018 - by Andrew

In this month’s video, Andrew walks you through what’s happened for the month of August:

Hi, it’s Andrew Mitchem here from JAS Funds with a report for September 2018.

Well, we came through August with a break-even month, and August is traditionally quite a difficult trading month with a lot of the Northern Hemisphere, European, and US markets on summer holidays.

Good News for August!

Now that it’s the end of their summer holidays, we’re now looking for the market to return to some more favorable conditions. The good news is that the algorithms combined to make a plus 1.2% gain for August.                                      

Now, speaking of the algorithms, you would have noticed that your account right now is in an abnormally large open drawdown, not closed positions, but on open positions, and there’s a reason for that. We’ve been running an algorithm on the British pound (GBP), US dollar (USD) on your account for the last six months and it’s been making some exceptional returns. It’s absolutely outstanding, and after a lot of testing, we decided to put that same logic live on 15 other currency pairs. Now, with the benefit of hindsight, unfortunately we picked out the worst possible day to put that algorithm live on those additional currency pairs. It was right at the end of strengthening of the US, just as it pulled back, around two weeks ago. Unfortunately what that has done is it’s led to some quite large drawdowns on open positions on your account right now.                                       

Now, of course this is not something that we want, and it’s something that we pride ourselves on having low drawdowns, so this is an abnormally large drawdown on those current open positions, but behind the scenes we’ve been working extremely hard to solve this issue. What we’ve done is a lot of testing over the last couple of weeks, and we’ve realized that the best way to treat this robot over multiple currency pairs is to have some manual intervention. Now, the way that the robot or the algorithm works is it takes lots of small positive gains out of the market, and it usually takes those gains within one to two days. Now, we’ve noticed a characteristic that if the profit is not hit within the one to two-day time period, then quite often the trade will stay open and go into negative territory for quite some considerable time. From time to time, the market will then reverse and the profit will then be hit on those trades, but it does have to endure some large drawdowns at the time, and right now that’s why you’re seeing those large open drawdowns on your account.                         

The Positive Benefits For You

However, once those trades close, from this point onwards we are going to be manually intervening and cutting short those trades that are in negative territory after three days. So this is going to have a couple of positive benefits for you.

One, it’s going to mean that we’re cutting the losses short. So rather than having a substantially big loss on a trade or open loss on a trade, we’re going to be cutting that loss short.

The other benefit means is that now the algorithm is going to be looking for new trades again, and so it has the opportunity to get back into the market and take multiple, multiple positions with small gains, which would then make back those losses plus more.    

So that is something that we’ve now put back into the overall strategy and will be implementing on your account.

Looking forward for more this September…

So I look forward to bringing you some great news for the month of September, and you’re going to see some great changes with this particular algorithm. The other algorithms remain exactly the same, doing their job, trading very, very nicely. So I hope that helps, and I hope that helps to understand why you are seeing those large open position drawdowns on your account right now. We’re working very hard behind the scenes, and if there’s anything that you need clarification on, feel free to contact myself, Andrew Mitchem, or Jamie or Stefan at JAS, and we’re here to help you.

So once again, this is Andrew Mitchem, look forward to talking to you in October with some great news about September’s trades.