Never thought I would be able to use such a heading.
An exceptional week in terms of results. With 4 trades (out of the 22 I took) still open, it does indeed look as if the net profit for the week is going be a bit above 10 units of risk. Quickly going over what I did this week, and what might have helped me get this results.
It’s important to keep a weekly result like this in perspective. I took 22 trades. If I am expecting a win rate of 50% (i.e. tossing a coin) then it’s quite possible to have a significant variance in one direction over a sample size of 22 trades (or coin tosses). So randomness may well have its finger in the play here. Likewise, a couple of trades could have easily just been stopped out instead of kept open and a target could have just been missed. One also has to consider the randomness involved here.
[Edit: In the end, it was +13R profit. Several more targets were hit after the blog post was published.]
All that said, here are factors that would help towards trading well and achieving profitable results:
- The trading was very rigid and all in compliance with well laid-out trading strategies. In fact, there simple wasn’t enough time to do anything else.
- I continued relying heavily on the code I have written in TradeStation to help me pin-point setups, and then manually cross-checking code-based signals against my MT4 charts.
- New code written this week automated the setup-scanning to a large degree. Suddenly, I could also apply the setup methodology to the 1-hour timeframe across the 40 markets that I trade. I didn’t actually take many trades below the 4-hour timeframe (only 4 out of 17) but the functionality is now there if I want to do that. It’s more accurate, it’s efficient and it’s going to save me a lot of time, whilst allowing me to get into more trades.
- The EasyLanguage code has already helped me take 2-3 trades this week that I most likely would have missed otherwise. I discussed one of these in detail here.
- Stuck with some simple (un-tested) trade management rules – stops below recent swing points, calculating targets on basis of a simple stop-multiple, not moving stops until either target or stop is hit.
- Managed not to interfere with any of the other trades once they were open, except for making a couple of judgement calls prior to news announcements.
- Took full advantage of what the code was giving me and then made judgement as to whether or not to take the setup – most of the times I did. Most exceptions were when the setups occurred very close to scheduled news announcements.
- Basically developed some sort of routine for doing my trading, alongside some other non-trading work which I am currently involved with. This is also important as I basically didn’t trade at all from January through to the end of April.
- Made some good position sizing and risk management decisions with regard to trading strategy, timeframe, trade correlations and trades open simultaneously.
- Paid attention to discussions in the smartforexlearning trading room I joined 2-3 weeks ago. Here most of the trades are based on reversals, and it’s great to look at my charts and my trend-following setups from the opposite/devil’s advocate perspective. This was quite helpful.
- A lot of the rigidness and discipline was driven by the fact that I am splitting my working time 50/50 between trading and something else, so I have got to make things as efficient as possible.
- The trades were across several FX pairs – with some pairs getting more than 1 trade such as EURCHF, USDCHF, EURAUD and USDJPY. The only non-FX trade this week was on Gold – which I ironically hit 3 times.
For next week, I plan to do the same in terms of monitoring for setups, taking trades and using the trade management rules. Roll on the weekend!