The past two months have been a hectic time for me – continuing my trading efforts whilst having another, non-trading project, on the go. However most of the time I have been able to monitor the market for setups and to manage any open trades properly, with good trading results.
First and foremost – big congratulations to France on winning the 2018 World Cup, and to Novak Djokovic on winning the men’s singles Wimbledon title!!!
During this period, I executed 100 live trades on FX as well as your typical mix of other popular instruments. 75% of those were trend-following trades on 4-hour timeframe, for which I am using my own EasyLanguage code to identify trading setups. The rest were reversal setups discussed and spotted by an independent trader in a subscription-based online trading room, smartforexlearning.com.
The gain of 11R (units of risk) result from this batch of trade was encouraging, particularly as this includes losing 5R in my first week in the trading room, when I wasn’t quite sure what i was doing.
For the next 4-5 weeks I should be able to allocate 80% of my working day to the trading activities. I’m planning to use this time wisely and effectively for both ‘the actual trading’ each day as well as working ‘on’ my trading.
In regard to the actual trading, it has become very process and routine based – when I check for setups, how I decide whether to trade or not, what position size I choose, how trades are reviewed and documented. In regard to the latter, most of the work will revolve around figuring out whether the encouraging results from this batch of trades was just a bit of luck or randomness or whether it reflects that the strategies have positive edge.
Jody Samuels, in her book Traders Pendulum, repeats the well-known principle that achievement of goals increases significantly as an individual writes down, plans tactics and shares the goals with others. Here we go then…..
The objectives for the next 4-5 weeks, obviously aside from trading properly in each trading session, I’d like to achieve are:
- Analysis of historical price data to assess sensitivity of various instruments to scheduled economic releases – this will impact skipping of potential setups and management of open positions
- Practice of code-generated signals in simulated environment – I will use ForexTester3 for this
- Collection of data re trade signals from live and simulated trading to determine false positive rate and false negative rates
- Estimation of trading frequency and returns – does the strategy really have edge? – using practice results, live results and back-testing functionalities in TradeStation
- Price data comparison – checking quality of historical price data between TradeStation (whose platform I use for coding and back-testing) and FXCM (the broker I principally use for execution)
Am looking forward to the day when TraderDi can rejoin this project as she is currently unfortunately able to do so. We have already spent a lot of time working on this together over the past year. Best wishes to TraderDi – keep well!
Happy trading all (and hope to write again before another whole month passes).