This was an awesome week for me! I was much more selective in my trades and this made a huge difference in profitability! I also adjusted my trading strategy to consider exiting trades that amost reach the target and then fade back to b/e, this was a decision after I took a loss on Monday and I think it is smart do so something like that.
Day-by-day review:
08/03: 2 trades, 1 win, 1 loss (-2.52% ROI)
08/04: 1 trade, 1 win (scratch) (+0.15% ROI)
08/05: 1 trade, 1 win (+3.04% ROI)
08/06: 2 trades, 2 wins (+8.46% ROI)
08/07: 1 trade, 1 loss (-1.46% ROI)
Totals for the week:
7 trades, 5 wins, 2 losses (+3.74% ROI - Not Compounded**)
Average Win: +3.04%
Average Loss: -2.56%
Risk to Reward Ratio: 1 : 1.2
Winning Percentage: 71%
Trading Performance Metrics:
1) Trade set-ups: A+ Waitted for the best trades, not rushing into sub-par trades
2) Managing Stops: A+ Managed properly, even with a change in the trading station
3) Capital Allocation: A- Need to adjust to the new capital level
4) Managing Exits: A+ Took all my trades to their targets
** I couldn't compound my capital this week because I was increasing my trading capital in the middle of the week. I started trading on a very small account on Monday, then increased on Wednesday and then again on Friday. Overall, I made good money for the week, the week P&L is based on the total capital available in the account by Friday.
Saturday, August 8, 2009
Friday, August 7, 2009
08/07 Day trading FOREX
Today was a great trading day. I have to admit I wasn't ready to take the Non-Farm Payroll, and ended up missing the action. The folks in the trading room called a great reversal and got well over 20 pips in the super-fast price action (see picture down bellow). Next time I'll have a pre-defined capial allocation and will be ready to move at a moments notice.
After missing this activity, I kept on looking for another entry opportunity, it didn't clearly materialize, and in fact, I may have jumped the gun on the only trade I took. As far as the technical analysis is concerned, I think it was a valid set-up, but there was a crucial factor missing: volume & speed.
1) Short GBP/USD: I took this trade as a 1-2-3 reversal. It had broken the support trend-line and the SMA 50, it retraced and then triggered my entry on the short side. Then.... it failed to keep on pushing lower. Price simply sat there oscilating. I managed the stop by moving it down, GBP/USD hit the stop and then resumed in the desired direction. -1.46% ROI
Here is the trade called in the teachmeforex trading room during the NFP announcement:
After missing this activity, I kept on looking for another entry opportunity, it didn't clearly materialize, and in fact, I may have jumped the gun on the only trade I took. As far as the technical analysis is concerned, I think it was a valid set-up, but there was a crucial factor missing: volume & speed.
1) Short GBP/USD: I took this trade as a 1-2-3 reversal. It had broken the support trend-line and the SMA 50, it retraced and then triggered my entry on the short side. Then.... it failed to keep on pushing lower. Price simply sat there oscilating. I managed the stop by moving it down, GBP/USD hit the stop and then resumed in the desired direction. -1.46% ROI
Thursday, August 6, 2009
08/06 Day Trading FOREX
Today was another great trading day. It started choppy for me, as my trading station lost all my charts. So it took me some time to reconfigure. If it wasn't for the chart mess I would likely to have entered on a retracement re-entry on the GBP/USD after the interest rate announcement.
One way or another, I had two trades Today, they both worked fine.
Capital Allocation: A+ Properly allocated for the trade
Keeping Limits: A+
Stop Management: A+ Managed to add the stop and link as OCO to the limit
Trade Set-up: A+ Took the best set-ups in my mind.
1) Long GBP/USD: After crashing down 100 pips in less than 5 minutes, I expected the GBP/USD to retrace, I got this entry signal above the SMA21 and breaking the trend-line. Got in there and rode it to the target. +3.9% ROI
2) Short AUD/USD: After the US markets opened, we all noticed weakness in the S&P 500 futures, that brought the currency pairs down as it strenghtened the USD. So, took this short set-up on the AUD/USD and rode it to the target again. +4.39% ROI
One way or another, I had two trades Today, they both worked fine.
Capital Allocation: A+ Properly allocated for the trade
Keeping Limits: A+
Stop Management: A+ Managed to add the stop and link as OCO to the limit
Trade Set-up: A+ Took the best set-ups in my mind.
1) Long GBP/USD: After crashing down 100 pips in less than 5 minutes, I expected the GBP/USD to retrace, I got this entry signal above the SMA21 and breaking the trend-line. Got in there and rode it to the target. +3.9% ROI
2) Short AUD/USD: After the US markets opened, we all noticed weakness in the S&P 500 futures, that brought the currency pairs down as it strenghtened the USD. So, took this short set-up on the AUD/USD and rode it to the target again. +4.39% ROI
Wednesday, August 5, 2009
08/05 Day Trading FOREX
Today was a great trading day, I had to excercise my patience well enough. There were several trades that didn't fit my trading criteria for one reason or another, some worked, some faded. I preffer to wait for the best set-ups than to try my luck at the sub-par ones. The reason is simple: losing is worse than winning in many levels, specially if you lose on a sub-par trade that you know you had reasons not to take. This can get you out of your game in a hurry.
So, long story short. there were a few set-ups that happened right at the announcement times, I avoid those as well, I used to trade announcements, but I no longer do, the stops are rarely honored and you may end up with a bigger than expected loss. Not to mention my broker "expands" the spread at the announcement times. So I wait for the dust to settle and if a set up is there, I then take it.
One more thing, I'm adjusting my trading capital and allocation targets for August, so the $ size of my trades are larger, but the % I risk per trade is smaller. I'm now trading 3% per trade.
1) Short AUD/USD: Took this trade after the 10:00 announcement, notice how we made it to the gap in no time. These set-ups are worth the wait! +3% ROI
So, long story short. there were a few set-ups that happened right at the announcement times, I avoid those as well, I used to trade announcements, but I no longer do, the stops are rarely honored and you may end up with a bigger than expected loss. Not to mention my broker "expands" the spread at the announcement times. So I wait for the dust to settle and if a set up is there, I then take it.
One more thing, I'm adjusting my trading capital and allocation targets for August, so the $ size of my trades are larger, but the % I risk per trade is smaller. I'm now trading 3% per trade.
1) Short AUD/USD: Took this trade after the 10:00 announcement, notice how we made it to the gap in no time. These set-ups are worth the wait! +3% ROI
Tuesday, August 4, 2009
08/04 Day Trading FOREX
Today I only had 1 hour and a half available to day trade. I took one trade on the GBP/USD, however, because I had to leave and could not observe the trade development, I scratched it and exited at B/E.
I can't honestly say if it would be a win or a scratch, as I saw that Price did reach the fibonacci gap (price target), but I can't say for sure if it would trigger the limit order or if it would end up bouncing back down to b/e.
1) Long GBP/USD: Took it as the price broke the trend-line, there was room to move to the target, had to close the position because I was leaving and could not manage it. +0.15% ROI
I can't honestly say if it would be a win or a scratch, as I saw that Price did reach the fibonacci gap (price target), but I can't say for sure if it would trigger the limit order or if it would end up bouncing back down to b/e.
1) Long GBP/USD: Took it as the price broke the trend-line, there was room to move to the target, had to close the position because I was leaving and could not manage it. +0.15% ROI
Monday, August 3, 2009
08/03 Day Trading FOREX
Today I had two trades, they both went my way, however, the first trade failed to reache the target at the limit and then reverted to hit my stop in a quick reversal move. It is the second time I have this scenario, and I believe they'll continue to happen, as the price target is not something set in stone, it is just a measured expectation based on some mathematical rules (Fibonacci calculations).
From now on, I'm adding a new rule to avoid similar scenarios: Whenever a position goes to about 80% of the target, I should move my stop to scratch the trade at a small profit if we revert back down without hitting the limit. It simply doesn't make sense to watch price revert and give up all the profits on a shor reversal.
1) Long GBP/USD: Took the trade, as I mentioned, it moved in the right direction but stopped a few pips from my limit. Ended up taking a loss on it. -3.65% ROI
2) Long AUD/USD: Took this trade after the breakout and retracement. I got slipped in my entry and got long several pips above my entry price. I rode the trade to the target and got out, notice I only got 1/3 of my expected profit because of the entry. +1.18% ROI
From now on, I'm adding a new rule to avoid similar scenarios: Whenever a position goes to about 80% of the target, I should move my stop to scratch the trade at a small profit if we revert back down without hitting the limit. It simply doesn't make sense to watch price revert and give up all the profits on a shor reversal.
1) Long GBP/USD: Took the trade, as I mentioned, it moved in the right direction but stopped a few pips from my limit. Ended up taking a loss on it. -3.65% ROI
2) Long AUD/USD: Took this trade after the breakout and retracement. I got slipped in my entry and got long several pips above my entry price. I rode the trade to the target and got out, notice I only got 1/3 of my expected profit because of the entry. +1.18% ROI
Sunday, August 2, 2009
08/02 Weekly Review
This was a short trading week for me, as I explained earlier, I just got started on a project management job and am working throught the initial training phase. For now, I'll be trading whenever I don't have training in the mornings, once training is over I will be back to trading every morning.
I thought at first this was a negative week, as it turns out, it was a positive one. Once again, this is all thanks to a good capital allocation and risk to reward strategy coupled with decent execution on trading ideas/patterns. I'd like to point out that the risk : reward was not quite the 1:1 that I aim to achieve. This happened because in one of my trades I did not properly manage my stops, I let the trade hit the initial stop instead of cutting it short when it started to fade and revert (see 07/30). This is still a very small inventory of trades, however, it gives me something to focus on next week: managing stops.
Day-by-day review:
07/27 - No trading
07/28 - 2 trades, 1 win, 1 loss (-0.98% ROI)
07/29 - 1h trading day - 1 trade, 1 win (+3.5% ROI)
07/30 - 2 trades, 1 win, 1 loss (-0.45% ROI)
07/31 - No trading
Totals for the week:
5 trades, 3 wins, 2 losses. +2.02% ROI (Compounded)
Average Win = +3.5%
Average Loss = -4.09%
Risk to Reward ratio = 1.16 : 1
Winning Percentage = 60%
Trading Performance Metrics:
1) Trade set-ups: A- Had one single trade where I jumped the gun, all the others were properly set-up.
2) Managing Stops: B Want to make sure this is executed without hesitation. Focus on it next week
3) Capital Allocation: A+
4) Managing Exits: A+ Took all my trades to their targets
I thought at first this was a negative week, as it turns out, it was a positive one. Once again, this is all thanks to a good capital allocation and risk to reward strategy coupled with decent execution on trading ideas/patterns. I'd like to point out that the risk : reward was not quite the 1:1 that I aim to achieve. This happened because in one of my trades I did not properly manage my stops, I let the trade hit the initial stop instead of cutting it short when it started to fade and revert (see 07/30). This is still a very small inventory of trades, however, it gives me something to focus on next week: managing stops.
Day-by-day review:
07/27 - No trading
07/28 - 2 trades, 1 win, 1 loss (-0.98% ROI)
07/29 - 1h trading day - 1 trade, 1 win (+3.5% ROI)
07/30 - 2 trades, 1 win, 1 loss (-0.45% ROI)
07/31 - No trading
Totals for the week:
5 trades, 3 wins, 2 losses. +2.02% ROI (Compounded)
Average Win = +3.5%
Average Loss = -4.09%
Risk to Reward ratio = 1.16 : 1
Winning Percentage = 60%
Trading Performance Metrics:
1) Trade set-ups: A- Had one single trade where I jumped the gun, all the others were properly set-up.
2) Managing Stops: B Want to make sure this is executed without hesitation. Focus on it next week
3) Capital Allocation: A+
4) Managing Exits: A+ Took all my trades to their targets
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