Following the Italian Referendum on Sunday there were some good sized moves in the Euro currency pairs and also in the European stockmarkets on Monday. 4 out of my 5 trades yesterday were mean-reversion trades in which I was betting on the Euro reversing its climb which didn’t happen!
In any case, I thought I share my notes from my review of yesterday’s trading session. My review notes are not as thorough as those of Adey or auh-trader – but do check out their reviews – they are quite something!
I make notes like this on a daily basis and then, at the end of each week, convert them into a small list of action points for the next week.
As I have mentioned on the blog, I am currently trading two different strategies – a trend-following one based on the 1-hour charts, and a mean-reversion strategy mainly based on 5-minute and 15-minute charts.
- One winning trade on DAX (using reduced position size), losing trades on three EUR crosses
- Clearly this wasn’t the greatest daily performance – I am just going to try to spot one obvious mistake rather than analyse everything to the n-th degree (80/20 approach). The most obvious issue was the first trade – the short on EURGBP – why?
- there was no clear level and congruence across relevant markets (i.e. other EUR crosses) did not look supportive. At the time the actual reversal pattern itself looked reasonable.
- I could have avoided this by sticking to my checklist more strictly. In other words, there is a fairly ‘easy’ solution.
- I did try to short the Euro two more times, once at 9am (EURJPY) and once at 10am (EURUD) – both times it didn’t work – but managed to keep the total loss from these two trades to 1.1R (rather than 2R) – which was good trade management
- On both those trades there were key levels at play, and I had checked for congruence across the EUR rates, and the reversal patterns were better than on EURGBP – thus the odds for the trades were better
- Loss of 1.47R
- One losing trade on Oil but was able to tighten the stop
- The good thing here was the stop tightening which shaved the loss from 1R to 0.5R.
- The downside here was my anxiousness to put on a trade. The setup was actually ok – it was not the best one because it was not a standard setup in that price had not bounced right from the EMA10/20. And there was good technical justification for doing that – $52 handle turning from resistance into support. However, all in all, I think the trade shows that I was keen to trade and ‘forced’ a setup to some degree.
- Still reasonable trading overall, but could have been better still.
- Loss of 0.5R