Weekly Review #32

Equity Curve 2019
Annual Gain: +12.60% | Drawdown: -12.43%

Forex Trading Review – Week 32

So… I survived another week in life and the markets, and it was an interesting one.

The Chinese government escalated the trade war in response to Trump escalating the trade war… so it seems we’re now deep into trade war inception, and it doesn’t look like it’s going to end any time soon.

China’s Central Bank Weakened Their Currency In Retaliation to Trump

This means that currency wars are potentially now on the table, which means that things could get interesting for us forex trader over the next few years. I only have about three years experience under my belt as a trader, so I have no idea what to expect. But I suspect that we might see an increase in forex volatility and multi-year levels being tested and perhaps even broken if this feud continues to escalate.

As a systematic technical trader who exclusively trades chart patterns, I’m not very concerned about this in terms of my personal trading business. It ought not to affect it very much, and if it does affect it negatively, then I have the necessary skills to adjust and adapt my strategies should the need arise. But as an individual, I must admit I’m not very pleased with the situation.

I’ll leave my political opinions out of my trading journal because they’re completely irrelevant, but let’s just say that I’m not a big fan of politicians and representatives of the elite who throw the middle-class and the lower-class under the bus whenever they play their stupid power games.

But I digress! My trading this week went okay. I ended the week with a +1% gain which is obviously not particularly exciting, but also certainly not a bad outcome considering the drawdown I’m in. Every trading day that doesn’t make it worse is a good trading day as far as I’m concerned!

5th August – 9th August

Trade #151

MarketEUR/USD
Date & Time2/8/19 10:00 PM
Daily TrendBearish
Timeframe1HR
StrategyPullback
Result+1.94%
VerdictGood Trade


Reflection:

This was a trade from last Friday. Although the Daily chart was in a bearish trend, I saw this 1-2-3 move as a potential trend reversal on this timeframe.

Price had reclaimed the 50-EMA, made a higher low after a classic momentum reversal pattern and gave me an entry reason. This turned out to be a good opportunity to capture a nice sharp retracement out of this pair.


Trade #152

MarketEUR/JPY
Date & Time6/8/19 5:00 PM
Daily TrendBearish
Timeframe15M
StrategyPullback X
Result-1.04%
VerdictGood Trade


Reflection:

My first trade of this week was an intraday trade on EUR/JPY. My intraday trading strategy has been under-performing lately which always frustrating.

This trade pushed up within 2 pips of my break-even target (which is not quite close enough for me to move my stop), and unfortunately price reversed to test the EMA and stopped me out.


Trade #153

MarketEUR/JPY
Date & Time6/8/19 7:30 PM
Daily TrendBearish
Timeframe15M
StrategyPullback X
Result-1.03%
VerdictGood Trade


Reflection:

My trading plan allows me to re-enter this setup if I get a valid entry reason at the 50-EMA, which I did in this case on EUR/JPY.

But yet again, price pushed up towards my break-even target and then reversed to stop me out. Good Trade nonetheless, as it met my rules which I know give me a positive expectancy.


Trade #154

MarketUSD/CAD
Date & Time7/8/19 7:00 PM
Daily TrendBullish
Timeframe15M
StrategyPullback X
Result+2.82%
VerdictGood Trade


Reflection:

This was a nice intraday trend-continuation play on USD/CAD.

Price had just pushed up and broken out of a range near a major support level at 1.32 which made me confident that we might see more bullish action out of this pair before the momentum reversed.

Sure enough price found support at previous resistance in trend (on this timeframe) and pushed up even further, making this a nice winning trade.


Trade #155

MarketEUR/JPY
Date & Time8/8/19 3:00 PM
Daily TrendBearish
Timeframe15M
StrategyPullback X
Result-1.02%
VerdictGood Trade


Reflection:

This was another potential trend reversal play after this 1-2-3 move up and out of consolidation.

Unfortunately, price pushed up within a few pips of my break-even target and then reversed to stop me out yet again. EUR/JPY is not cooperating with me very well these past few weeks! Which is a shame, because it is usually my best-performing intraday pair.

In any case, this was a Good Trade that met my rules, so no complaints.


Trade #156

MarketUSD/CAD
Date & Time8/8/19 3:00 PM
Daily TrendBullish
Timeframe15M
StrategyPullback X
Result-1.01%
VerdictGood Trade


Reflection:

Another simple pullback trade. Price had broken down out of a range of consolidation at a key daily resistance zone, so I anticipated a reversal on this timeframe.

We eventually got the reversal I was expecting, but not before retracing to stop me out, making this a losing trade.


Trade #157

MarketEUR/JPY
Date & Time9/8/19 11:30 AM
Daily TrendBearish
Timeframe15M
StrategyPullback X
Result+1.57%
VerdictGood Trade


Reflection:

It’s never easy to sit through trades that put you through this kind of pain. Price was flirting with my stop loss for most of the morning after entering this trade.

After the past few trades on EUR/JPY I was convinced this was going to lose. But this is a great example of why I choose to trade systematic rules-based strategies instead of what I ‘think’ is going to happen.

Despite my confidence that this trade was going to lose, I stayed in it, because it met my rules and I know that these setups give me a long-term positive edge. And this is a great example of why it is so important to the have the discipline to sit through painful trades.

Thanks to this trade, despite the fact that my next trade lost, I ended the week with a +1% gain instead of a negative or break-even week. So I am very proud of myself for allowing the confidence in my trading plan to supersede my lack of confidence in this particular trading setup.

That is a sign that good trading practices are becoming a habit for me which is far more important to me than making lots of money quickly.


Trade #158

MarketUSD/CAD
Date & Time9/8/19 3:45 PM
Daily TrendBullish
Timeframe15M
StrategyPullback X
Result-1.01%
VerdictGood Trade


Reflection:

This was a very aggressive trend-continuation play on this pair. I don’t normally take trades with such tight stop losses, but given the fact that the ATR had shrunk dramatically during the hours leading up to this setup, I felt comfortable taking this trade.

If price had rolled over then it would have been very easy to capture a large profit out of this pair. As it happened, price continued to consolidate and expand its candle ranges until I was stopped out at the EMA.


Trade #159

MarketUSD/CAD
Date & Time9/8/19 7:00 PM
Daily TrendBullish
Timeframe15M
StrategyPullback X
ResultB/E
VerdictGood Trade


Reflection:

After being stopped out at the 50-EMA, price gave me a second entry reason with a swing-high bearish engulfing candle that touches the EMA.

Price then rolled over to touch my break-even target before some economic data released that sent USD flying against CAD. This move was short-lived however, and by the next day had been entirely undone, which is a great example of why I never trade the news. It’s a crap shoot.

You never know how the market will react, and once it reacts, you never know whether the reaction will hold or fail over the next few days. Anyway, this ended up being a break-even trade, so no damage done.


Weekly Reflection

Equity Curve 2019

Annual Return: +12.60% | Drawdown: -12.43%

Last Week’s Goal: Execute my plan flawlessly.

Overall Grade: A

This week was another slow grind towards recovering my drawdown. I took several trades, and the final outcome was a +1% gain to my equity, which is nothing to get excited about but certainly better than losing.

I do like the look of my equity curve at the moment – I’ve seen this pattern unfold many times and it typically means that my drawdown is nearing its end. But of course I can’t know that for certain and there are many things I could do either by accident or intentionally that could make my drawdown much worse yet.

So I need to stay focused on executing my plan with as much objectivity as possible, and I need to make sure that I am analyzing patterns in my trading statistics that might lead me to discover new filters or conditions to add to my trading plan to enhance my edge (and thus maximize my profit while minimizing my drawdown).

I’ve begun testing multiple ideas on how to improve my strategies, but it is going to take many weeks to complete this process. So until then I will continue to trade my existing trading plan as best as I can, and we’ll have to wait and see what happens over the rest of the year.

I’m actually really excited to show you guys this experience. This is a rite of passage for all traders, and I have never met a single trader who was successful who didn’t experience long, painful and frustrating drawdowns at some point in their career.

The day that I get out of this drawdown will be an exciting day for us all – because not only will I prove to myself that my strategies can endure the turbulence of the markets, but I will also prove to you guys who might be new to trading that it’s certainly possible to “beat” the markets despite what all the critics say – and all it takes is simplicity, consistency, discipline and a good trading plan with an edge.

Best of luck with your own trading. See you next week!


Next Week’s Goal

Execute my plan flawlessly.

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