Knocked Down but Never Out in 2010

The past year has been a cartwheel ride for my trades. With all the uncertainty in the markets, we saw a lot of choppy trading, especially in the latter part of the year. It was also difficult trading cross pairs, as I was unable to catch on any distinct trend. Lastly, I had several cancelled trades since I had gone for breakouts or simply didn’t get triggered.

2010 Cyclopip Trading Statistics

Total Number of Trade Ideas : 45
# of Wins: 9 wins
# of Losses: 14 losses
# of Breakeven trades: 3
# of Cancelled trades: 19
Win/Loss Percentage: .643
Total Profit/ Loss in Pips: -393 pips (-3.65%)
Largest winning trade: +290 pips (+2.41%)
Largest losing trade: -162 pips (-1.00%)
Largest drawdowns: -425 pips (-4.0%) and -424 pips (-4.0%)

Below is a chart which shows how a theoretical starting account balance of 100 would have fared throughout the year.

cyclopip.stats.png

The Good, Bad, and the Ugly

First, let’s start with the ugly.

Overall, I was down 393 pips in total, and my account took a 3.65% hit. Not that bad for a one-eyed dude, but there is definitely a lot of room for improvement.

As you can see from the chart, the biggest reason why I ended up down for the year was two large drawdowns that occurred in March and July to August earlier this year. In both those drawdowns, I saw my account drop 4% each time. Gaah!

This is probably why risk management is so important and why Dr. Pipslow keeps buggin’ me to keep risk at manageable levels. Imagine if I had been risking 5% per trade instead of just 1%. I would have had drawdowns of 20% each, and could easily be down more than a third of my account on the year! I can’t stress this enough – good risk management is crucial in trading!

After doing more stat digging, I saw that there was one pair that simply killed me this year – EUR/GBP. I took 5 EUR/GBP trades, and 4 of them ended up as losers. The total end result of those 5 trades? A loss of 247 pips and perhaps more telling, -3.60%. That’s basically my total loss for the whole year! If I didn’t trade that pair, I would have essentially been at breakeven for the year.

You’ll also notice that I had a high number of cancelled trades -19 to be exact. This means that more than 40% of the time, my trade did not get triggered. While this might be an area of concern, this doesn’t have me too worried. As I was going through all my trades, I found that there were some trades where I was unlucky and just barely missed getting triggered. Furthermore, a number of those cancelled trades were due to breakout setups that simply broke the opposite direction.

Now, this year’s trading wasn’t all disappointment, as there were some bright spots here and there. Remember, lessons can also be learned from both good and bad trading. Hopefully in the future, I can repeat these successes while minimizing my mistakes.

The first, as I mentioned earlier, was managing risk. Because I didn’t go crazy and bet the farm on any of my trades, I came away with a small loss but nothing to go home crying to Mama Cyclopip about.

Secondly, I should continue to look for high probability, good reward-to-risk ratio trades. The best example of this was that EUR/JPY channel trade that booked me an average of 290 pips. This was equivalent to a 2.4% gain, by far my best trade of the year. This highlights why it pays off to have profit targets that are larger than your stop losses. Despite the fact that I had 9 winning trades and 14 losses trades, I was able to eat into some of my losses because some of my wins were larger than the 1% that I usually risk.

That’s it for me this year ladies and gentlemen! It has been a rocky trading year for us all, but I hope that y’all have learned your lessons! I know I’ve learned mine, and I plan on coming back next year with bigger, better, and badder trading attitude! Rawr!

  • personalme

    Keep it up Cyclo. I’m watching you with my two eyes this year and for next many years. Does it sound good for a one eye cyclo eh? :)

  • personalme

    Keep it up Cyclo. I’m watching you with my two eyes this year and for next many years. Does it sound good for a one eye cyclo eh? :)