Forex Review: Reflecting on My Q3 2014 Performance

It’s time to quickly reflect on the opportunities the market presented, as well as both the good and bad decisions I made. Here’s my reflection on my Q3 forex performance.

Basic Forex Trading Stats

Total Number of Trades Ideas: 7

Wins: 3
Losses: 2
Breakeven/No Trade: 2
Win % (winning trades / triggered trades): 60.00%
Average Winning Trade in %: +0.82%
Average Losing Trade in %: -0.81%
Largest Drawdown: -1.00%
Total Realized Profit / Loss in %: +0.84%

I took it a bit easy during the third quarter with my forex blog, not only because it was time to hit the beach, but also due to the uncertainties with growth and monetary policy around the globe making the big picture a little blurry for me at the time.  Also, I pretty much stuck to my framework of buying/selling into trends using trendlines, Fibonacci and the moving averages, which in the record low volatility environment that we saw, didn’t create many solid opportunities in my opinion.

I also stay away from USD pairs, which in hindsight, was a silly mistake given the obvious drivers pushing the Greenback to its biggest gains in years between August and September.  The one time I did try to hop in early on the dollar train higher, I missed my long entry into USD/JPY at 103.50 by a few pips, only to see it hit 110.00 before the end of the September.  But the most painful thing for me in Q3 was missing the EUR/USD short from 1.3700 to its current levels around 1.2600.  For those who have been following me for a long time knows I was a perma-euro bear, but I let it beat me up so much and I was so early with my bias, I didn’t take the strong trend lower with obvious central bank and economic drivers fueling it.  That recency bias that I held on to really held me back from killing it this quarter.

Another missed opportunity was the sell-off in the Aussie and Kiwi, but because I have this bias against selling against a positive interest rate differential (or positive carry), I didn’t take some of those big comdoll moves, like the AUD/USD drop from .9500 to .8650.  This bias got me into a little bit of trouble with the Kiwi, trying to go long NZD/CHF but thankfully got out of quickly before getting beat up too much.

But overall, I think all of my ideas were solid idea given the information at the time, and I was able to pull out more winners than losers for the quarter (like my multiple short plays in EUR/AUD).  At the end of the day that’s all that matters, along with consistently doing the little things to improve.

With the +0.84% third quarter gain and my recent USD/JPY loss to begin the fourth quarter, this forex learning blog performance is up +1.29% for the year.   This puts me in the mix with my benchmarks: the Barclay Hedge Currency Traders Index (-0.29% YTD thru the end of Sept.) and the Barclay Hedge Discretionary Traders Index (+4.62% YTD thru Sept.). Besides consistent profitability, consistently outpacing the “pros” is a long-term goal, both of which I still have many, many, many years of practice to go (and hopefully a lot of luck) for me to achieve.

Going forward, I’ll continue to work on my entry techniques, stop turning a blind eye to the Greenback, and I’ll try to better manage my forex trades by not giving up too early on my winners, like my USD/CAD long that had further to go after I closed.

That’s all I got for now forex friends…How did you do in Q3 2014? Please share your thoughts in the comment box below.  Thanks for stopping by and good luck in Q4!