Some may say that 1,056 pips over 100 trades in 15.83 weeks is "not much"...but I say, are you in profits after 100 trades? I am!
First the results:
trades = 100
wins = 39 #pips won = 2,630 avg pips/winning trade =67.43
b/evens = 19
losses = 42 #pips lost = 1,574 avg pips/losing trade =37.47
Max # of losing trades =3
Max # of winning trades (excl. b/e) = 5
Now let's do some maths: the value of each pip is relative to how many lots or units one can buy. And on average I believe a pip works out to be worth from $0.10 - $0.13 per 1,000 units therefore the value per pip can vary from as little as say $0.10 I(micro) to $1 (mini) to $10 (standard) and so forth
Now 1,056 pips of profits in 15.83 weeks equates to
Little guy = $126.72 in profits
Not so little guy = $1,267.20 in profits
Medium size guy = $12,672 in profits or a nice $800 per week...a week's wage for most
Just for simplicity, using the above mentioned averages a trade would cost:
38 pips x $0.12 = $4.50 for 1000 units requiring $225 bank at 2% or $90 bank at 5% (*not including the extra funds that one must have still left in the account so we don't get closed out etc)
38 pips x $1.2 = $45 for 10,000 units requiring $2,220 bank at 2% or $900 bank at 5%
38 pips x $12 = $450 for 100K units requiring $22,200 bank at 2% or $9,000 bank at 5%
I am comfortable with a 5% risk per trade since I do not trade more than 20% of my bank at any one time. I usually manage my lot sizes to maintain this maximum if I happen to trade more crosses (like I just did this week because I wanted to reach the 100th trade soon since I am quite busy outside trading at the moment!)
Anyway, I did learnt a lot over the past 100 trades, as I have previously mentioned I started with a "2-group" or "2-types" of trades that I should be trading, I also started applying those 2-types of trades to only 2-crosses (AU, GJ) but in the way, I "deviated from my strategy" in a big way and after a nice first week, things turned sower for a bit. After reaching a high of +180 pips by trade #3 we went to a maximum draw down of -201 pips by trade #19 (which in fact means that I lost 381 pips!) after such time I got my self a little back on track and never looked back!
Having a nice 5-winning trades in a row with 1 b/e in between (on top of the 5 wins) was a nice boost of confidence (t29 eu +137, t30 au +128, t31 gj 0, t32 eu +105, t33 au +34, t34 gj +67) those trades taught me a lot, however, I was still making mistakes....
It took Tomas Edison 1000 attempts to come up with the light bulb...I do remember this a lot, with my trading: "I just learnt another way how not to trade".
So the ways I will NOT trade in the future are these:
1. Trading against the trade based purely on Candle Signal + RSI Divergence:
This is by far the most costly group of the 5-groups I ended up trading at some point during the challenge.
As I may have mentioned in some of my posts, I started in my rules with 2 types of trades I would be trading. Then these expanded to 5 groups!... After a few losing trades I finally realised that one of these five types was too weak and was losing more than not. It is quite obvious though, isn't it? "The trend is your friend"! Counter-trend trading can be left for the super-skill traders! It ain't for me.
This group was the RSI Div + Candle signal with no other signal like the Fibonnacci ratio or a break of a trend line. This I will never trade again.
I can now say that I am "detox" from this silly counter trend trading group. As example, last night before going to my weekly poker game, I noticed that the t98 and t99 had counter trend signals, so I closed these two trades at b/e (although I didn't have the time to report it in my posts hence I recorded those trades as losing trades). In the past I would've "exit and reverse" in a rush, even though this time both would have made some pips, these group of trades are not worth it! pure and simple!
2. Inconsistency in the $ amount risk:
The second highest losing pattern is that I some times "increased my risk on a trade which would turned out to be the losing one!", At the very beginning, I got "over confident" or "greedy" one of the two, or perhaps both!. So instead of investing my usual 2% say, I would invest 5% and lose most of my profits. When I looked back and updated my personal spreadsheet to calculate the number of units "I should've bought" had I been "consistent throughout" I would show far more profits! when I further analysed what had happened, it was simple, I invested more in the losing trades and less in the winning trades.
You see the pattern was: Greed bet more lose more that i should, Fear bet less win less than I should...
This happened for the first few weeks, I then got a grip back!
I do have however, great experience applying what I call "A milestone approach" to my 2% or 5% rule (whichever the case might be). In horse racing, I use the 2% of bank risk rule based on past statistics, and I do apply it however to "the maximum bank achieved" in this way my betting amount will growth exponentially.
But with trading I didn't have the statistics required so I moved from 2% to 5% back to 2% and i wasn't following this fix % of latest "milestone bank achieved" consistently.
For the past 30 trades at least, I have and I hope to continue to do so. I settled for the 5% (given my results) and continue moving my milestone figure as my bank grows.
3. Moving my stop to "break even" too soon:
This is not as costly lesson as such, since all it cost me was "the opportunity to make profits". Contrary to the #1 and #2 lessons, breaking even is a lot better than losing! And there are always many more trades available soon after! This lesson only made me become more disciplined and I am now becoming more consistent at it.
4. Exiting a trade too soon:
Oh boy, not letting my profits run it is costly! but not in the way of "missing in more profits" but in the way of "I regret getting out of this trade, I get back in, then it moved against me, then get out locking in losses, then get back in..." When I finally started to get a grip of this lesson, Whenever I got out too early, I decided to focus on my profits! An example of having overcome this was in trade #90 short g/j I took 200 pips, I got out "without any counter candle signal" except just "fear of giving back $$", anyway, I got out only to see the g/j moved a further 100 pips ! in the next 4h candle!! But I kept my cool, I talked to my lovely wife and she reminded me: "Did you made profits? How many pips did you pick up?" "200 I replied" "there you go! celebrate that!"....
So I have solved "half the problem" turning a nice winning trade into following "bleeding pips process". but I am yet to let my profits run until such time that the market gives me a clear counter signal to shorten my position, close it all or tighten my stops. Like I did with EU and AU mentioned above, which turned out to be a good decision. In the case of t90 gj however, I should still be in this trade since the gj is just starting to show signs of an upcoming retracement but it hasn't yet broken the down inner trend line. I could say that it is perhaps now to get out at 142.50 which is only 50 pips more...still ...!
anyway, fellow traders, I hope this makes sense...I am not that good in translate my thoughts into paper...
I thank you all of you who have been following my live trades and hope you benefit of them as much as I have
But I enjoy doing the analysis and projections, so the 100 live trades challenge will continue but as "forecasting, tech analysis" type only. It is less "pressure" on me. I hope that I get better at showing my analysis and if you have any ideas on how my analysis can be presented clearly or what format works or doesn't let me know.