Unfortunately, after three years, it has finally happened. The 20% drawdown triggered the 20% stop loss as part of our software management strategy. The software has been paused, and we will discuss how to proceed this weekend.

It started in July, a period when the market is very quiet due to the summer, with low volume, making it difficult for the software to anticipate. On August 5th, there was a crash on the Japanese stock market, leading to an unprecedented rise in the dollar within minutes, followed by an equally rapid weakening as the market recovered. At that moment, the software experienced a 5% drawdown, which seemed relatively manageable, although trades were opened at unfavorable positions due to the extreme market movements.

After that, days of uncertainty followed regarding the interest rate cut announced by the FED. There was much speculation about a rate cut in September, partly due to the ongoing bad news from the US concerning unemployment, employment, and inflation. Today, the Jackson Hole conference took place, where FED Chairman Jerome Powell spoke about the situation and was expected to provide clarity on the rate cut. However, this did not happen, leading to increased uncertainty and a sell-off of the USD.

In a period of two weeks, more than 10 events occurred, each with news that worked against the software. Additionally, the software mainly suffered losses on USD/CAD. While the previously mentioned negative developments surrounding the dollar played a role, there was also positive news about the CAD, with clarity on a rate cut that resulted in a very strong Canadian dollar. All in all, this was an exceptional situation, and adjustments will be made to the software.

Despite the recent setbacks, the software’s return for this year is currently at 14%, and last year, it achieved an impressive return of 118%.