Forex Trading Journal – Week 20

Another week down.

I made one major trading error which is disappointing, but overall this was another profitable trading week.

There were only 4 opportunities for me to get involved with the market so it was a bit of a slow one.

Trade #82

Trade #82Before

Trade #82After

Before:

Daily trend was bullish but in consolidation. I was anticipating a breakout of the Daily range to the upside so I decided to get long after this 1-2-3 move which broke minor structure, hinting that buyers were gaining control.

After:

This was a weird moment for me. I haven’t had a situation like this occur for many months.

I had grown nervous about this trade taking so long to play out. It had been over 24 hours since I entered it and I was beginning to doubt whether or not my thesis was correct.

I started to second-guess myself and worry that I’d made the wrong decision by entering this setup. I started to believe that price wasn’t ready to breakout yet and was going to continue to consolidate.

Then in the heat of the moment, right as U.S. retail sales data and Canadian CPI data released and USD/CAD began to move against me, I exited my positions in a moment of spontaneous fear before I even checked the numbers. It was a pure impulse decision.

Immediately I felt terrible. I knew I fucked up. And sure enough, less than a minute later, price began to reverse and head in my favor… hitting my target in the next couple of minutes… without me.

This is an unacceptable error. I really let myself down here, and I feel like shit about it. I thought I had outgrown this sort of impulsive behavior but it appears that I haven’t.

The problem was that I had my phone on me with my Oanda app open at the time. I was at the back of my house relaxing and not in a professional mindset, and I was not sitting at my computer. So it’s pretty obvious to me what I need to do to prevent this from happening again.

Starting from now I am no longer allowed to make trading decisions using my phone. I will be removing the app from my home screen to make it harder to access.

I still need the app on my phone so that I know when my take-profit is hit on certain trades, but it is very important that I nip this in the bud and make sure it never happens again.

Verdict:

It’s fine to try to protect yourself from adverse reactions to news events if it’s in your rules to do so, but it’s not in mine yet (as I haven’t found that it enhances my edge to close trades early).

Therefore this was a Bad Trade.

Trade #83

Trade #83Before

Trade #83After

Before:

Immediately after the previous trade USD/CAD tanked to the downside after a false breakout (which made me feel a little better about screwing up that trade – I only missed out on a +0.5% gain which I’ll survive).

Because price broke through the 50-EMA and the lows of that consolidation range like a hot knife through butter I figured I had momentum on my side for this setup.

I wasn’t expecting a 2-target winner from this trade but I was confident enough that my first target could be hit. That justified the risk of taking this trade despite being within consolidation and against the Daily trend.

After:

Price did pretty much exactly what I expected. It put me through a tiny bit of pain before going into profit, but it rolled over fairly easily.

It did not continue through to the downside which is fine – I was just happy to make up for the previous mistake by riding this one out to the finish line without interference.

A nice little confidence booster. The only way to make up for a bad trade is to immediately follow it up with a Good Trade.

Verdict:

Good Trade.

Trade #84

Trade #84Before

Trade #84After

Before:

Great pullback setup here.

Price was clearly trending to the downside on this 1-hour timeframe, and although we were technically within Daily consolidation, the Daily trend is also bearish.

This really is a great setup. As I improve my strategy and increase the setups that I use over time I suspect this type of setup will always have a place in my toolkit. I love it.

The trading timeframe trend was firmly in place with lower lows and lower highs, Higher timeframe trend was in confluence, there’s a recent support level to rest my stop against, price is below the 50-EMA with no resistance to my first target and plenty of room down to Daily support – what’s not to love?

After:

I was not surprised that this trade played out profitably. Unfortunately price retraced to stop me out for break-even on my second position before continuing lower.

But that happens sometimes with my strategy, I’m used to it. It’s no big deal. That rule is there to protect me from prolonged and deep drawdowns, and until I think of a better way to do that, I must accept that this is inevitable.

Verdict:

Good Trade.

Trade #85

Trade #85Before

Trade #85After

Before:

I was looking for any excuse to get short EUR/JPY when it began to hold below that Daily support level at 122.663, so when I got a valid pullback setup I was ready to pounce.

That support level is the closest support level for miles, so if it had failed, there was a high probability that price would move significantly lower.

The low at 122 was a giant wick on the Daily candle hinting that the level would act as support again, so I did have my reservations about this trade succeeding.

But the reward potential was well worth the risk.

After:

Unfortunately there was no follow-through and the buyers regained control. No big deal – break-even trade.

Was worth a shot.

Verdict:

Good Trade.

Weekly Reflection

Monthly Return: +6.37% | Annual Return: +12.69%

Last Week’s Goal: Don’t get cocky and give back too much profit on sub-par trades.

Overall Grade: C

This week was a quiet one. I didn’t get too many opportunities to trade, but I think I did reasonably well to protect my profit from last week by not over-trading this week.

I often give back profits after a good run so it’s important that I stop doing that, and so despite the fact that I messed up my first trade of the week, I didn’t take any unnecessary losses so I consider my performance this week acceptable overall.

I’m getting very comfortable executing this strategy now and I’m preparing to begin the process of expanding my repertoire. It will take a lot of time to backtest and optimize a secondary strategy but I look forward to the challenge.

I will take my time and make sure to do it properly. In the meantime, I’ll keep doing what I’m doing – executing this simple pullback strategy and doing my best to improve incrementally each week.

Happy trading and thanks for reading! See you next week.

Next Week’s Goal

Don’t make any trading errors. Execute my plan flawlessly.

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This Week’s Review
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