Thursday: I didn’t want to trade prior to the huge amounts of news in the noon-2pm window with BOE and ECB rate decisions, ECB press conference, US Trade data, US ADP employment data and some Tier-1 CAD data – that is just an insane amount of data.
So I just sat and watched EURUSD’s 200 pip decline from the sidelines on the unexpected interest rate cut as well as more detailed QE announcements.
Further there were no setups beyond 2pm, so I had no trades on Thursday.
Friday (NFP day): played racquetball in the morning – was great to get in some exercise – plus I always get inspiration from hanging out with my incredibly successful racquetball opponent. Arrived in the office a little after NFP, turned on my computer and it abruptly caught on fire – so took it to my IT guy down the road who promises he can sort it out for me and prevented me from having any kind of data loss.
Thus no trades on Friday either.
On Thursday I was able to spend quite some time reviewing my trades over the last 2-3 weeks (35 in total) and this was incredibly helpful – the main points to come out were:
- Trading with the short-sentiment (using 15M timeframe over last 3-4 trading sessions) yielded much better results than trading against it. I had assumed that it would be sufficient to trade with the trend from the higher timeframes (4H, D and W) even if the recent sentiment had been counter-trend. It seems when a decent retracement from the bigger trend is in place, I need to wait for signs that the retracement is running out of steam.
- Trading in the same direction as the EMA100 rather than against the direction of the EMA100 yielded much better results. This is related to the point above.
- Across all the setups I took, I predicted the price direction correctly about 50% of the time – this is much higher than I had anticipated given that I had lost quite a bit of R over this pool of trades. However sometimes the level at which I entered was such that I was stopped out by a retracement before price ended going in the anticipated direction.
- The trades that were winners continued moving in the anticipated direction significantly further (two to three times of the initial target of more) on a regular basis. Thus it seems that my target setting is limiting the benefit I get from the winning trades.
I will use these insights to tweak/adjust my trading style going forward.