Weekly Review #42

Equity Curve
Annual Gain: +3.47% | Drawdown: -19.53%

Forex Trading Review – Week 42

What’s up traders! As always, I hope your week went well.

This week was pretty average for me. I took 4 trades – 2 lost and 2 won, making this the first profitable week in quite some time.

My drawdown is still significant and is still unpleasant to endure, but I’m staying focused on the process over outcome and ignoring my emotional reactions completely. Emotional responses are not helpful during situations like this.

The only thing that will help me right now is continued self-discipline, consistency and systematic improvements to my trading plan. And that’s all I’m focused on right now!


14th October – 18th October

Trade #212

MarketAUD/JPY
Date & Time14/10/19 1:00 PM
Daily TrendConsolidation
Timeframe1HR
StrategyPullback
Result-1.02%
VerdictGood Trade


Reflection:

This was a very nice looking setup on this pair after a bullish trend had been established on this timeframe.

Unfortunately, price did play around with the 50-EMA for a while before continuing higher, making this a losing trade. I don’t regret taking it however – this particular setup with the pinbar engulfing reversal pattern is usually an extremely accurate opportunity to jump on the trend.

Good Trade.


Trade #213

MarketGBP/USD
Date & Time14/10/19 2:00 PM
Daily TrendBullish
Timeframe1HR
StrategyPullback
Result-1.01%
VerdictGood Trade


Reflection:

This trade was another close call.

Price had developed clear strong bullish momentum even on the Daily chart. But after entering this trend-continuation opportunity, price retraced to stop me out and consolidate for a few hours before rocketing higher and hitting what would’ve been multiple targets.

This is an experience I have gotten very accustomed to and it doesn’t really bother me anymore. There’s nothing I could have done about this particular setup given my current trading rules, which makes this a Good Trade.


Trade #214

MarketUSD/CAD
Date & Time15/10/19 9:00 AM
Daily TrendConsolidation
Timeframe1HR
StrategyPullback
Result+0.52%
VerdictGood Trade


Reflection:

This was a great trend-continuation trade for this pair.

Price had just dropped like a stone below the 50-EMA, breaking several major support levels and indicating to me that price might want to continue to move lower.

So I went short, and managed to capture a small amount of profit out of this move before price retraced to stop me out for break-even on my second position. Good Trade.


Trade #215

MarketUSD/CAD
Date & Time17/10/19 9:45 PM
Daily TrendConsolidation
Timeframe15M
StrategyPullback X
Result+2.80%
VerdictGood Trade


Reflection:

Hallelujah! Finally, a god damned winning trade.

This was a great intraday setup. The Daily chart was looking very bearish despite being in a period of consolidation, and price was in free-fall making lower-highs and lower-lows on multiple timeframes.

I took this trade at 9:45PM and was able to roll my stop loss to break-even at around 11PM before I went to bed. I woke up at around 2AM to check on the trade and happened to open my charts just as price printed my exit reason.

So I executed this trade 100% perfectly. Good Trade, and a nice reminder that this intraday pullback strategy can capture nice swings in the market and if I stay disciplined and consistent, it’s only a matter of time before it starts performing well again.


Weekly Reflection

Equity Curve

Annual Return: +3.47% | Drawdown: -19.53%

Last Week’s Goal: Backtest At Least 1 Pair Per Day.

Overall Grade: B

This week was a little better than last week. I found it a little bit easier to focus on my work and backtesting this week without it feeling like a chore, which is great.

It’s a good feeling to be motivated and energized whenever you start a difficult or monotonous task. It makes it much easier to stay focused and excited about the process.

I just bought a new training course from my trading mentor Steven Hart. This course covers Advanced Patterns in the forex markets (ie. butterflies, gartleys, bat patterns – but apparently we can’t call them that for legal reasons because some egg trademarked all his trading terms).

Anyway, this particular style of trading is specifically designed for consolidation and counter-trend markets (although they can be used for trend-continuation purposes with a little bit of creativity).

The reason why I’m excited to learn this new strategy and style of trading is because I believe that it is the polar opposite to the way that I’m currently trading. Which means that if I can find a way to profitably add Advanced Patterns to my existing trading plan, I should theoretically be able to decrease my max drawdown while positively affecting my expected returns.

Obviously this is a win/win situation. If I can get my strategy to lose less money during its losing streaks while retaining more of the money it makes during winning streaks, it makes the whole process of extracting consistent profits out of the forex markets just that little bit easier.

So we’ll see how this plays out. I literally have more things to backtest now than I have time in my day to get done. So I have to start prioritizing what I test, and once I finish optimizing my Pullback Strategy I think I’m going to begin with Advanced Patterns. Once I master them, I will move on to Structure trading and adding structure-based trading setups to my trading plan.

Once I achieve that – I’ll be trading trend-continuation pullbacks, advanced patterns in consolidation and structure trades when price is at key levels. I would also like to experiment with simple pattern trading such as flags, pennants, wedges, heads and shoulders and other classical chart patterns.

But of course it’s extremely important that I master one thing at a time and do not overwhelm myself with trading strategies. It’s better to trade one strategy really well than it is to trade five strategies poorly.

This year has not gone as well as I hoped it would. But I am still on track as a developing trader to become consistently profitable, so I’m not letting this setback discourage me.

Anyway, that’s the update for this week. I hope you have a great trading week, speak soon!

– Matt


Next Week’s Goal

Backtest For At Least 2 Hours Per Day.

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