Q4 2013 Trading Performance Review

Happy New Year Forex traders!  Before I kick off my 2014 trading, here’s a quick review on my Q4 trading performance!

As always, I’ll start with some raw numbers:

Total Number of Trades: 6
Wins: 4
Losses: 2
Win % (winning trades / triggered trades): 66.67%
Average Winning Trade in %: +0.34%
Average Losing Trade in %: -0.34%
Largest Drawdown: -0.40%
Total Realized Profit / Loss in %: +0.67%

In terms of win%, it was a much better quarter for me, which I attribute to an increased focus and effort staying on top of the market.  I felt much more in tune with the market.  Also, I was less fearful to take trades and add to winning positions.  So, there was a bit of improvement in that aspect versus my Q3 trading performance.

But while there were positives, there were also negatives as well.  First, I wasn’t consistent with my risk/trade stat.  For most of the year, I stuck with a 0.50% risk per trade, but in my last two I reduced that down to about half on average because of the major market events in December.  This hurt me as my best trade for the quarter, my long GBP/JPY trade, had a return-on-risk of about 2.27:1, but only on 0.33% risk.  I also won on my last trade, shorting GBP/NZD, but only on 0.25% risk.  The lesson here is to stay consistent on your initial risk because you really don’t know when a trade will turn into a big winner, covering your small wins and losses.

The second thing I learned was that I was too aggressive adjusting my stops, and not aggressive enough with my winners.  Again, going back to my long GBP/JPY trade, I entered a second position much later than I probably should, and after about a few hundred pips, I started to tighten up my stops pretty close to market.  I eventually got taken out on a shallow pullback and missed the rest of the December rally that nearly reached 175.00.   A big, big opportunity missed to close out the year very strong.

So for the final quarter of 2013, I’m glad to have been more diligent with my market preparations, but I can always do better, especially with my trade management decisions.  For 2014, my goals are to do a better job of letting trades run and maximizing them, as well as continue to stay consistent with the real work of a trader: market preparations and reviews.

Overall, 2013 was challenging but definitely a step forward in my skill development .  Here are the final numbers:

Total Number of Trades Ideas: 38
Wins: 10
Losses: 23
No Trades/Break Even: 5
Win % (winning trades / triggered trades): 30.30%
Average Winning Trade in %: +0.71%
Average Losing Trade in %: -0.35%
Largest Drawdown: -3.04%
Total Realized Profit / Loss in %: -2.44%

So, a small hit to the account and when compared to my benchmark of Barclay Hedge Currency Index (+1.09% for 2013) I’m not too far from where I think I should be.

The second quarter was when I had the biggest drawdown, as I probably over traded from May – June. I was pretty aggressive in trying to get into the broad yen sell off at the beginning of the year, but it looks like I was too late and got chopped up for it. But on the bright side, my average winners were much larger than my average losers, which gives me a lot of hope for 2014. If I can continue to improve my win% as I did in Q4 and maintain the same (or better) avg. win/avg. loss ratio, I should have a pretty good year if we continue to see trends like we did in Q3 and Q4.

So, that’s it! Another year of practice and learning in the forex markets on the books, and it’s time to get ready for 2014! Good luck to you in your own trading endeavors!