Weekly Review #50

Equity Curve
Annual Gain: +0.27% | Drawdown: -22.02%

Forex Trading Review – Week 50

“Well, hopefully my comeback from last month isn’t just a dead cat bounce.”

It looks like I jinxed myself with that statement in last week’s journal. Since saying that, I’ve lost every single trade I’ve taken lol. I’m not gonna lie guys, this last half of the year has really beaten me up!

I’m extremely frustrated that I’ve given back so much profit over such a long period of time. But I’ve also learned so much about myself and what it takes to be profitable in the markets, so I’m not entirely discouraged overall and I’m certain that I’m going to do much better next year.

But I need to do some very serious reflection on my trading results for the year and decide how I want to move forward next year. There are several things I don’t like about my current strategies, and yet several things I really love about them.

I also have a lot of brand new backtesting results accumulating for multiple variations of my strategies (including a new Advanced Pattern consolidation strategy), so now it’s just a matter of sorting through and optimizing all of this data and then continuing to expand my business as a trader in the most sensible way possible.

Next year I will be going back to the basics. I will probably focus on just a handful of pairs and only 2 strategies and 2 timeframes. I’m considering moving my 1HR trend-continuation strategy to the 4HR chart, and my 15M day trading strategy to the 1HR chart.

But of course I need to complete the backtesting process before I make any radical changes to my trading plan, so until the second week of January, that’s what I’ll be doing.

I will be trading my existing trading plan for the rest of this week, and then on the 20th of December I will be wrapping up my trading for the year and taking no more trades until after the holiday period.

So whatever happens this week will be the grand finale of my trading year for 2019. It’s not looking great I know, but to be honest, it’s looking much better than my previous years where I continuously blew accounts! So I still count this year as a win, no matter how small it is.

As long as I’m progressing and developing and improving as a trader then I’m not too concerned about the money just yet. I know it will come in time as I master the foundations of consistently profitable trading.


9th December – 13th December

Trade #244

MarketEUR/USD
Date & Time9/12/2019 10:00AM
Daily Cond.Sideways Range
Timeframe1HR
StrategyPullback
Result-1.02%
VerdictGood Trade


Reflection:

This was a disappointing outcome for this setup. Price had just failed from a major daily resistance zone and then put in a very impulsive move below the 50-EMA that broke previous support. A great clue that price may be about to reverse trend on this timeframe.

But it didn’t. Instead, the bullish trend continued, and this turned out to be just a complex pullback / stop loss hunt.

Still, this setup does have an edge over the long-term especially after a rejection from a major daily resistance zone. So I consider this a Good Trade.


Trade #245

MarketUSD/CAD
Date & Time9/12/2019 3:00PM
Daily Cond.Consolidation
Timeframe1HR
StrategyPullback
Result-1.01%
VerdictGood Trade


Reflection:

This was a momentum trade. I expected price to continue higher to at least the red line on my chart, but instead we rolled over immediately after testing previous support.

During my backtesting for the rest of the year I will be double-checking the efficacy of this particular pattern on this timeframe to see if there is anything I can do to improve its win rate (eg. not taking it so close to previous support).


Trade #246

MarketEUR/USD
Date & Time13/12/2019 7:00PM
Daily Cond.Bullish Breakout
Timeframe1HR
StrategyPullback
Result-1.00%
VerdictGood Trade


Reflection:

This was a frustrating trade. Everything on the charts was telling us that EUR/USD wanted to break out higher and continue higher, but instead we got a massive fakeout and false breakout.

The daily chart closed as a gigantic rejection wick:

EUR/USD Daily

This is rare. False breakouts are fairly common, in fact perhaps more common than sustained breakouts – but fakeouts of this magnitude are not so common.

The intraday timeframes closed well above the resistance zone, the 50 day EMA and even the 200 day EMA. But by the end of the U.S. trading session, price had retraced right back into the middle of the range, creating an 80-pip high fakeout and trapping a lot of traders long (including myself).

I still consider this a Good Trade in hindsight because it’s impossible to know ahead of time whether a breakout is going to succeed or not, and this particular setup would have been provided a very profitable R:R if it had played out successfully.

The British elections played a major role in this price move, I’m sure. Markets get very funky around serious macroeconomic events – which can provide for some extremely profitable opportunities, while also creating traps for the masses.

Anyway, it looks like this range is gonna hold on EUR/USD well into next year, so trend-continuation appears to be off the table for now and I would expect EUR/USD to consolidate at least into January of next year (providing no major news developments hit between now and then).


Weekly Reflection

Annual Return: +0.27% | Drawdown: -22.02%

Last Week’s Goal: Backtest Advanced Patterns & MAKE NO TRADING MISTAKES.

Overall Grade: A

In my end of year review which I will probably do next week, I will do a deep dive into my trading for the year and discuss every little thing that stands out to me about my performance this year.

I have noticed several patterns in the markets and in my own trading psychology that have forced me to adjust my sailing path as a trader, and I look forward to breaking them down in detail.

I feel far more confident about next year after these past few weeks of reflection. I’ve been thinking deeply about what types of strategies, timeframes and trading processes are best-suited to me as a trader and I really look forward to explaining my thoughts next week.

Until then, enjoy your final week or two of trading for the year, and I truly hope your year went better than mine did haha. And if not, then take note of how I’m handling my own shitty year.

I’m not dwelling on it, I’m not beating myself up over it, but I’m also not shrugging it off as nothing. I’m acknowledging that there’s a problem with my results that needs addressing, I’m systematically breaking down my trading data to identify weaknesses (and strengths!), and then I’m adapting my process and my strategies to suit my newfound knowledge.

It takes time and even more patience. So if you’re struggling with your own trading like I am, then don’t feel bad. It’s a rite of passage we all go through.

Just work harder, and do better. You’ll get there if you push through. I’ve seen many other traders do it, and I’m determined to do it myself.

All the negative emotion, all the money-focused frustration, all the ego-driven shame – it’s meaningless, and I ignore it all completely. All I care about is what went wrong – and how do I fix it? What went right – and how can I do more of it?

Have a great week, and I very much look forward to next week’s journal and especially next year.

– Matt.


Next Week’s Goal

Finish Backtesting Next Year’s Strategies & Trading Plan

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This Week’s Review
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