08/16 Weekly Review

This was by far one of my most challenging weeks! Not so much for the trading process itself, not even because of the markets.. All the challenges were in my head! Those are harder to spot and take care of, but it is my job, as my own trading coach, to figure them out and find a solution.

It all came together for me when I reduced my size and traded "in the zone" during the FMOC announcement! This gave back my swing and I was able to trade great for the rest of the week. It also helps to have good information to read, and I have to say that the "Daily Trading Coach" book and the Traderfeed blog are a must have for any trader! Thank you Dr. Steembarger!

Trading the FMOC with reduced capital was the only way I could get my head back in the game. Yes, it didn't help with my profitability, but HEY, it got me back in the game and YES it helped! On the longer run, getting myself confortable with my ability to trade is worth a lot more than a few percentage points of profits during one single week. So, one must always put things into perspective.

Increasing my focus by reducing the number of currency pairs I follow was another benefit this week! I now can really concentrate on what is going on in the GBP and EUR, instead of trying to chase set-ups here and there and everywhere. This makes a huge difference!

Day-by-day review:
08/10 - 2 trades, 2 losses (-2.18% ROI)
08/11 - 1 trade, 1 loss (-0.46% ROI)
08/12 - 4 trades, 3 losses (-2.85% ROI)
--- FIXED MY HEAD, got back in the game
08/12 FMOC - 3 trades, 3 wins (+2.16% ROI)** SMALLER SIZE
08/13 - 2 trades, 2 wins (+1.09% ROI)
08/14 - 3 trades, 3 wins (+1.37% ROI)

Totals for the week:
15 trades, 8 wins, 7 losses (-2.98% ROI ** Not compounded)
Average Win: 0.33%
Average Loss: -1%
Risk to Reward ratio: 3 : 1
Winning Percentage: 60%

The risk to reward is not good at all. This is a direct result from having too many trades "scratched", when they failed to reach the targets and fade back to their original entry. I will have to keep an eny on this to make sure it is worth scratching, or if it is better to simply take the risk of hitting the stop, but leaving the target alone.

Trading Performance Metrics
1) Trade set-up: B (Jumped the gun on the 08/12, manual entry errors)
2) Managing Stops: B (Did not manage stops well on 08/11, managed very well after the 12th)
3) Capital Allocation: A+ (Managed properly, reduced size on FMOC as planned)
4) Managing Exits: A+ (Kept a good grip on trades that faded the target)

** Results are not compounded because during the FMOC trades I traded close to nothing in terms of capital at risk. I was basically getting my self back in the game and didn't want any performance pressure. If I had traded those trades with the same level of risk, the results would have been a lot better (-0.98% ROI).

08/14 Day Trading FOREX

I had a great session Today, took 3 trades, they all worked, but more important than that is the fact I was trading "in the zone", completely focused in the markets, without concerns over performance (Win or lose, P&L, etc), and executing all my trades with a lot of certainty and precision.

That is the complete opposite as to how I was trading early in the week. What happened? I cleared my head about the recent increase in size, I freed myself from performance pressure, and I increased my FOCUS by reducing the ammount of currency pairs I'm trading. In this case, Less is More!

1) Long GBP/USD: This is a great lesson on plan the trade, and trade the plan, Look, I wasn't beeing greedy nor fearful. I simply entered a trade that took a while to make its target. Meanwhile, I kept managing my money by adjusting the stop exit. The GBP was moving without correlation with the EUR (nor the CHF), but it was going up and I did not want to chicken out of a trade just because it was taking its sweet time to resolve itself. It paid off, but if you read enough of my postings, you'll see that it could simply be a stopped out trade, one way or another, my goal was to manage the trade, the result is up to the market. +0.9% ROI

2) Short EUR/USD: Took the trade despite knowing there was a trend-line in the way. In a way, this was a mistake, but this was an old trend-line Wally showed us in the on-line chat room. Price DID oscilate around the trend-line, and I ended up scratching the trade when it approached 80% of the target and backed off. +0.33% ROI.
3) Short EUR/USD: After the consumer confidence announcement. The pressure was down, I entered when prices crossed a previous candle's low. I wanted to ride the trade for as much as it would give me, so I kept moving the stop. As it turns out, it bounced and hit my stop. Not a problem, it was already a win-win scenario. +0.14% ROI

08/13 Day Trading FOREX

I had a very short trading session Today. I wanted to take my trades and go enjoy the morning with my wife.. Take a break, relax a bit. It worked out perfectly, there were two trading opportunities and I'm glad they came up very early in the day.

Just in time: I'm glad I narrowed my focus to the GBP/USD and EUR/USD currency pairs. I was too spread out by watching 4 pairs at once and it led to a bunch of execution mistakes. By reducing the number of pairs I watch, I can expand my FOCUS in execution and maintaining good trading ideas. It is a lot easier to stay in the flow if you track only a few pairs, you get a sense for how they're moving.

Let's talk about Today's trades:

1) Short GBP/USD: Noticed this break-out and reversal forming, didn't hesitate to enter, got in with a contingent order. Price oscilated before going to the target. It actually came short of triggering my limit stop, so when it started to go against me, I exited the position with a small profit. As it turns out, the GBP did reverse after that, so exiting and taking profits saved me from a loss. +0.15% ROI

2) Long EUR/USD: Out of nowhere, prices started FIRING up.. It all happened way too fast, but there was a trend-line breakout and retracement on the 5-min charts. Since it happened inside a 5 min. candle, I'm posting here the 1-min chart. I took my entry once price retraced from the high, and rode it to the target. +0.94% ROI

08/12 Day Trading FOREX - FMOC

After a lousy morning session, I did some soul searching and came back much better focused and ready to tackle the FMOC trading opportunity. Due to my morning trades, the only way for me to get back in was by reducing my trading size. This way I could focus on price movement and not on the P&L performance.

This resulted in a much better trading session. All trades were taken in the 1 min chart, using a fixed 15 pips stop.

1) Short EUR/USD: Right after the announcement, we made a low, retraced and I got in as soon as we started on a new low. This entry was made with an ENTRY order, that made it a lot easier for me. Wanted to go to the Fibo gap, but price started to retrace back up so I exited around B/E. +0.16% ROI

2) Re-entry Short EUR/USD: We made a retracement, I got in as soon as we started on a new low, exited a bit beyond the Previous Low. +1.2% ROI

3) Last entry: Short EUR/USD: When we bounced up, I took a sell after it bounced from the EMA 5 and started heading lower again. +0.8% ROI

08/12 Day Trading FOREX

Took me a while to process the day, I think I might have a self-created performance issue. Whenever my trading starts to derail, it is a good time to re-evaluate and take a look at what may be causing it. I think it is my change in trading size, there were several execution errors Today that caused a lot of frustration.

I was able to regain control and traded beautifully during the FMOC meeting. Nothing like trading with a fresh mind-set and in the flow. But first, let's look at what I did this morning.. A word of warning, it wasn't pretty.

1) Short AUD/USD: Here I jumped the gun, the trade was not clear, I need things to happen in a certain sequence to validate an entry: 1) a break of the lower trend-line, 2) Retracement and 3) Continuation. This didn't happen here. -1% ROI

2) Long EUR/USD: Tried to get on this trade manually, jumped the gun again. Notice we never made a new high. I got in as price3 was approaching the entry. -1% ROI

3) Long EUR/USD: Good execution, this one I entered with an entry order. It got within 80% of the target, I exited as it faded back down to B/E. +0.15% ROI

4) Long AUD/USD: Last but not least, the worst mistake of all. I had the charts set for ASK instead of BID. This caused me to get stopped out during the retracement, it would not happen otherwise. After this trade I was pretty much fuming and no longer traded. -1% ROI

08/11 Day Trading FOREX

I was just about to tear myself down on the blog for having another negative day. But then, after reading another great chapter on the Day Trading Coach book, I realized it is my job, as my own coach, to emphasize the things I did right, and continue to improve upon whatever needs work. So, there were several great things during our trading session Today.

First off, I managed to stay focused for most of the day, even as there was a loud beating noise due to construction here in the apartment. I stayed engaged with the trading room and called attention to several engulfing candles. These trades don't fit my entry criteria, so I didn't take them, but others in the room did.

I was also aware that we were approaching high points on the EUR/USD, GBP/USD and AUD/USD, and mentioned I was looking to SELL if we started to break down on my trendlines.

As it turned out, the market did sell off, but I only had a clear entry on the EUR/USD, I didn't take the trade because the 4150 level was in the way. I later discussed in the room, and some of the folks have been placing less emphasis on these levels and more on the round 00's. So I'll review price behavior around the 50's levels.

Lastly, I avoided a few trades that would end up being scratched because they had important support points ahead of them.

Well, as it turns out, the one trade I entered failed. Even so, I managed to properly get out as soon as it triggered my exit strategy (stop), others in the room took a much larger loss by hanging around with the trade.

1) Short EUR/USD: Took as the path seemed clear, the 10 AM announcement was over and the futures were pushing to new low points. EUR/USD halted and bounced back up. Exit properly as price passed the previous candle's high. -0.46% ROI

08/10 Day Trading FOREX

Ok, Gustavo, you can trade better than that..

I took two losing trades Today, they ended up making to their original targets, but with a lot of hesitation and hitting my stops. I think the bottom line is that we did not have enough momentum in the markets this morning. I wanted to blog as soon as possible because I want to capture my thinking while it is hot..

There is still plenty of room for improvement in managing the stops. The new feature (or lack thereof) in the FXCM platform is making me trade a bit worse than before when it comes to managing to stop trades. My goal is to get out of the position once price breaches the previous candle's extreme (high if I'm selling, Low if I'm buying), however, with an entry order just a few pips above it, I hesitate and don't exit when price is hovering the exit. Before I could easily close the trade, now I have to close and cancel the stop entry order. I will keep on working on it this week...

a) Stop Management: C
b) Trade set-up: B

1) Short GBP/USD: We had a break with volume, a retracement and then the continuation. I took the continuation but prices went into a zig-zag consolidation.. Exit at the stop, not at the best level, but at the original stop. The best level to exit would have been right above the red candle that got me into the trade. -1.03% ROI

2) Short AUD/USD: This was really a sub-par trade, notice how the approach was full of hesitation.. Price was not moving with any force. Bad set up to begin with, and the stop was not properly managed. -1.15% ROI