Thanks @baemax023! I hope to be able to share some useful insights.
So… this trade absolutely did not go as planned. The dollar rallied hard post-FOMC announcement against pretty much everything. My trade stopped out for about a 50 pip loss.
I followed up this losing trade with another loser on USDJPY…
I saw what I hoped was an outside bar at an area of prior resistance and the dollar just blew right through it. That was about a 40 pip loser.
On the positive, I set my stops and I lived with them by resisting the urge to push them further into a loss or even cut the trades early (which could save a few pips, but reinforces the misguided idea that I can predict what the market will do and undermines confidence in my decision to set the stops where I did).
I don’t feel too bad about the loss on the USDCHF trade as I traded with the trend. Perhaps the only thing I could have done differently was refrain from trading with the knowledge that the Fed would be making an announcement. Of course the challenge there is that there is often economic or monetary policy news. The news is what generates volatility that provides opportunity for traders; to not trade around news is to almost not trade at all.
To trade is to accept that there will be losses, so I accept this.
On the other hand, the USDJPY trade was a bit of an unforced error. Given that the longer term trend had been up, it may not have been a wise decision to short. By the same token price encountered previous resistance and hesitated. Perhaps waiting another candle for follow through on the potential reversal would have helped. Again, to trade is to accept that there will be losses, so I accept this.
For the month of September 2018 I had a loss of 3.2% on my account against a goal of gaining 5%. I had 9 trades, 6 of which were losses for about 216 pips against 3 gains for 128 pips. This is a part of the process. Losses will come but I will learn from them and use them to get better.
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Can’t say I haven’t done this! Need to break this horrible habit.
The important thing is you’re taking the time to reflect and do a retrospective! It’s inspiring how you’re not being emotional about this, you sound pretty level-headed. Good stuff.
Thank you @purtle, that’s about the best encouragement I could receive. It was an emotionally challenging month; 3 of the first 4 trades were winners that were quickly followed by losses that erased gains and put me in the red for the month.
I just have to believe that I will get better the more I do this and that these losses are lessons for the journey.
With that mindset, no doubt you will!
@purtle I’m just doing my best to love the process. There is no destination, only a journey.
The last week wasn’t as I’d hoped. I had 2 trades, both of which resulted in losses of a combined 123 pips. The second trade was a short of GBPUSD that actually went my way to the tune of 55 pips before reversing and hitting my stop. While I’m disappointed in this I think I did a good job of following the longer term daily trend. What hurt me in this instance was the US payrolls which I could have easily avoided trading in front of. I think the value of patience in the face of important news events is what the market is teaching me with this loss.
So, now we’re on to this week. Yesterday I shorted USDCAD as it pulled back from the 1.30 level. Today price reached near that level again and pulled back, so I feel a bit more confident about this one. Its in the direction of the longer term trend, the risk:reward ratio is in the neighborhood of 1:2.5, and @bigpippin called out this setup.
I’ll keep you posted!
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I’ve heard it said that “the best laid plans of mice and men often go astray.” My trades of late are the embodiment of that idiom.
USDCAD ran through the 1.30 level today and through my stop at 1.3020 as well. I honestly don’t think this trade was a poor one. I’m sure there’s a lesson in this; I just need some time to find it.
So I think I’ve had 8 losing trades in a row at this point. A break from trading is probably in order here. 
No more trades this week while I do some research into price action approaches and get ideas on implementation.
I know I’ll get better at this, so I’m just going to enjoy the learning process. 
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I saw an interview with Stanley Druckenmiller recently and he said that when he’s trading and he’s “hot” (keeps winning), he keeps trading but when he’s “cold”, he avoids it and takes a break. So maybe you’re on to something here.
Enjoy your break! Looking forward to new posts when you return.
This is also my mindset. I’m treating everything as just part of the process of learning and my trading journey. 
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Right… if you’re losing a bunch I figure it must mean that you are out of sync with the market, so you should probably figure out if your approach is wrong for the market conditions, just plain ol’ wrong, or if you are revenge trading. I’m thinking I was in the 2nd category, just plain ol’ wrong. I was trading against the trend and not waiting for price to react in relation to support/resistance areas. Hopefully I’ve learned my lessons
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We’re all on a journey through life… the best thing we can do is enjoy the lessons we learn along the way and find a means to help someone else with our experience.
That’s all we can bank on but it’s not the end of the world if we have to learn the same lesson multiple times - at least in trading!
I’m back! I didn’t realize how long its been since I last posted, almost 3 months!
Since then I’ve signed up for a trade coaching/system, found it to be too time-consuming, quit that, and did a little soul-searching.
I’m ready to start again in the new year. A couple of improvements I’m making:
- Using correct position-sizing
- Following trends
- Using proper risk-to-reward ratios
- Using a journal to capture what I saw at the time I took the trade
I was taking losses that were way too large (i.e. 5% of the account) which is a surefire way to take myself out of the game before I learn anything. So I’m going to correctly size positions by maintaining a maximum risk of 1%. My goal is to keep things as simple as possible by only taking trades off 4 hr charts in the direction of the prevailing trend or within bounds of a range (keeping in mind support/resistance levels as identified on the daily charts and looking for consolidation on the 1 hour charts). I will only take trades where at least a 2:1 risk/reward is feasible.
I intend to “paper trade” this week and see what it looks like before going “live” next week. I know a week isn’t much (particularly a holiday week), but this new approach is restrictive enough that I’m not worried about overtrading.
I’ve been reading “Market Wizards”, a classic book on investing wherein successful professional investors are interviewed and their trading and investment principles are shared. Many of them employ a trend-following approach, albeit on much longer time frames than I will be working in. The concept is the same though: reduce risk by going along with where the market already seems to be going and winning enough along the way to pay for the inevitable losers when the trend changes or doesn’t continue as expected.
I’ve had one paper trade work out so far, a short on USDCHF that gave a 3:1 winner.
So, that’s my plan. We’ll see how it goes in 2019. Until then, Happy Holidays!
An update on a paper trade I made in AUD/NZD… it closed for a 1 R loss:
I don’t see a great deal that I did wrong here; I traded in the direction of the trend (in fact it went 68% in my favor before reversing), went for a 2.5:1 R, and waited for price to show signs of falling before jumping in.
Its possible that I was too early or that the downtrend has been broken. There’s also the support level below, although price never went that low. Time will tell.
So I made my first real trade of 2019, I’m long EUR/CAD @ 1.54507:
I’m looking for a roughly 2:1 reward-to-risk here by following the uptrend that has been in place on this pair. The EUR was weak today and pulled back to what I hope is trendline support. I actually wanted to jump into EUR/AUD, but some crazy “flash crash” caused this spike that scared me off.
I feel good about the trade as I’m trading with the trend, with a proper position size (0.5%) of the account, and with a seemingly attainable reward-to-risk ratio. I’m looking forward to seeing this one turn out 
So this one didn’t quite work out as planned. The trade went in the direction intended before reversing around the 1.5500 level. It appears the uptrend that had been in place is in jeopardy of being broken so perhaps this was a case of being too late to the party.
Not to be deterred, I’m moving on to the next trade… NZD/JPY has been in a downtrend for all of December. On the 4 hour chart it closed below a level that has held since August, so I’m betting on that support becoming resistance.
Same rules apply, 0.5% risk and a 2:1 reward-to-risk ratio that I now realize would be below the recent lows… that may have been a mistake. We’ll see what happens
Welcome back!
How long were you on it and was it expensive? How did you discover them?
Classic!
So that last NZD/JPY trade didn’t work out… price went higher and took me out at my stop, resulting in a 0.5% loss. Thems the breaks!
So I’m trying it again… shorting NZD/USD as it approaches a resistant trendline going back to late November.
I like that price was up today but seemed to pull back and closed at the 20 day EMA.
We’ll see how this goes!
Annnnnnnnd another loser! NZD/USD was actually the best performing currency of the week so it wasn’t meant to be. Price did pull back, but not far enough to hit my TP at 0.6675. Looking back at the trade, there probably wasn’t enough there to substantiate a move: price didn’t hit a meaningful resistance level, nor was there a good signal in terms of the candlesticks themselves.
In the wake of that disappointment, I spotted a pin bar in EUR/GBP. The pair seemed to have established a range between roughly 0.9060 and 0.8970. I was feeling gunshy and apprehensive given that GDP was due out for Great Britain later, so I made a “mental trade”, shorting halfway up the pin bar with a SL at 0.9070 and TP at 0.8937 for a 3 R. The GDP print was stronger than expected and of course this trade would have been profitable 
All laughs aside, one of the things I can’t seem to reconcile is if or when one should trade around news. I’m pretty sure the best way for me to trade is off the daily charts, meaning trades could go on long enough to be exposed to news. If I attempted to avoid news events I’d probably almost never be able to trade.
Obviously big events like central bank announcements should be avoided. Should I do the same for others like GDP, CPI, etc.? Gotta figure this out…
So the week saw only one trade for a loser, which I’m ok with, actually. I learned I probably need to see more obvious signs of what price might do, a greater “confluence” of factors. I also restricted my viewing of charts to just once a day in the evening looking back at the daily. I think that takes a bit of the “FOMO” out for me. I didn’t even compulsively check charts while this weeks trade was on. Only checking once a day is definitely good for the peace of mind.
So that’s it for the week… the journey continues…
Looking at NZD/USD this week also. Going long though, based off the weekly chart!