Weekly Review #47

Annual Gain: +6.58% | Drawdown: -17.12%

Forex Trading Review – Week 47

This week was the quietest trading week I’ve had all year.

I only had 1 valid trading setup occur for the week, so this journal entry is gonna be a short one!


18th November – 22nd November

Trade #236

MarketGBP/USD
Date & Time20/11/2019 11:00AM
Daily Cond.Consolidation @ Resistance
Timeframe1HR
StrategyPullback
Result+0.54%
VerdictGood Trade


Reflection:

This was the only trading setup that occurred this week in the forex markets that met my trading plan’s rules.

Price had just tested a major Daily resistance zone for the third time and failed to get above it. When the 1-hour price action began making lower-highs and lower-lows and held below the 50-EMA I decided to pull the trigger on this trade.

Unfortunately, because GBP/USD is technically in a bullish HTF trend, price did not continue to the downside after my first target was hit and instead retraced to take a fourth shot at that resistance zone.

After this fourth rejection, GBP/USD rolled over by about 130 pips which is always frustrating. Sometimes you catch the big move, sometimes you get stopped out for break-even on your second position right before the big move.

This is trading, and I’m used to it by now!


Weekly Reflection

Annual Return: +6.58% | Drawdown: -17.12%

Last Week’s Goal: Backtest For At Least 2 Hours Per Day.

Overall Grade: A

As we approach the end of the year I am beginning the process of winding down my trading year. I will be taking less trading opportunities over the next few weeks, and about 1 week before Christmas I will stop trading and take my annual break.

I like to try to take a few weeks off trading at least once per year, but preferably twice per year. I don’t typically trade between Christmas week and the 2nd week of January – unless a fantastic opportunity appears in that time, which is rare, because most traders take a break around this time of year too.

The second best time to take a break is in the middle of the year during the American summer period. Forex markets tend to slow down and consolidate a little more during these times of year as the bigger players all fly out to the Bahamas to hang out on their million-dollar yachts.

But instead of flying out to a tropical island to hang out on my yacht (which I can’t afford yet), during this year’s break I will be backtesting a new trading plan for next year and preparing myself for the next 12 months of chipping away at this drawdown and getting back to new equity highs.

I would really love to start 2020 strong with a fleshed-out trading plan that I feel confident in. This year I’ve spent most of my time focused on mastering a single strategy (momentum pullbacks) just so that I could be consistent and disciplined.

Now that I’ve achieved those two good habits, I’m ready to take things to the next level and expand my playbook. As I’ve mentioned several times before in this journal, my plan is to continue trading the way I have been (but with more refined rules designed to eliminate my lowest-probability setups) and slowly introduce Advanced Patterns into my trading.

Advanced Patterns compliment trend-continuation and momentum strategies extremely well because they are designed to be traded profitably during consolidation – which is a trend strategy’s only weakness.

By combining Advanced Patterns in consolidation with trend-continuation and momentum setups (and eventually structure-based strategies) I will pretty much have myself covered in terms of opportunities in the market.

Once you have a trading plan that both accounts for all market conditions and plays to your psychological strengths, then you’re really in the running to be a dangerous trader.

I’m not currently very happy with my annual return vs. max drawdown (6% vs 23%). I need to dramatically improve my trading performance.

Fortunately I’ve kept detailed records of each and every single trade I’ve taken for the year (236 so far), and this gives me plenty of data to analyze to search for patterns in my trading that will give me clues about what I should change in order to improve my expectancy.

So that’s what I’ll be doing for the next month or two. I’ll be in touch about how my backtesting and end-of-year review pan out. Be safe, trade green, and I’ll chat with you next week.

Good luck out there!

– Matt.


Next Week’s Goal

Backtest Advanced Patterns & Avoid RSI Swing Signal PB Setups.

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