Forex: Reflecting on My Q4 2015 Performance

After a little bit of time off to relax and enjoy the holidays, it’s time to kick it back into gear for 2016, starting off with a review and reflection of my Q4 2015 performance.

Basic Forex Trading Stats

DATE TRADE IDEA P/L in pips P/L in %
Oct 8 USD/CAD Uptrend -275 -1.00
Oct 19 USD/CAD Pullback Short Cancelled  Cancelled
Oct 24 EUR/USD Break-n-Retest +250 +0.56
Nov2 AUD/NZD Support Break-n-Retest Cancelled Cancelled
Nov 11 GBP/USD Breakout Short +46 +0.09
Nov 16 USD/CAD Pullback Long Cancelled Cancelled
Nov 16 GBP/NZD Retracement Short Cancelled Cancelled
Nov 30 GBP/USD Fibonacci Short +200 +0.57
Dec 11 EUR/NZD Downtrend Short +150 +0.29
Dec 21 NZD/CAD Long Breakout Cancelled Cancelled
Dec 28 GBP/USD Fibonacci Short Cancelled Cancelled

Total Number of Trades Ideas for Q4: 11
Wins: 4
Losses: 1
Breakeven/No Trade: 6
Win % (winning trades / triggered trades): 80.00%
Average Winning Trade in %: +0.38%
Average Losing Trade in %: -1.00%
Largest Drawdown: -1.00%
Return-on-Risk: 3.14
Total Q4 Blog Profit / Loss in %: -0.07%

Looking back at my fourth quarter, it was pretty clear that my big win percentage had a lot to do with my strong bias for going long the Greenback and shorting the euro. With expectations of a rate hike from the FOMC and the ECB starting its own quantitative easing program, it wasn’t difficult to pick the right direction for the majority of my trades.  Unfortunately, the “right direction” is only a part of the trading process.  Where I failed was my entry technique and trade/risk management decisions.  Here a few things I could have done better:

  1. Keep consistent with my risk per trade…again! This is something I had problems with in 2014, and I just couldn’t stick to it in 2015. I went on a bad run between the second and third quarter (losing 8 out of 13 trades), prompting me to drop my risk per trade from 1.00% to mostly 0.50% risk per trade, and sometimes even a puny 0.25%.  Fortunately AND unfortunately, I won the majority of my trades for the rest of the year starting in July (8 out of 12 trades), but winning on 0.25% risk or 0.50% risk doesn’t really catch me up on my earlier losses of -0.50% and more, especially since I couldn’t come out with big wins.
  2. Holding onto winners…also AGAIN. The U.S. dollar was once again the king thanks to FOMC rate hike expectations, and I got into plenty of USD long trades that turned out pretty well.  But besides not going big enough in those trades, I didn’t hold on to those massive moves. The best example of that are my GBP/USD short trades where I got in as high as 1.5200 (now trading around 1.4800), and my EUR/USD short where I got in around 1.1300 (now trading below 1.0900)
  3. Almost always waiting for a pullback.  While I didn’t have a couple of market entries, the majority of the time I was waiting to get in at a better price. Out of all the cancelled trades above, ALL of them had the correct directional bias, but not enough pullback.  Those were all missed pips that could have been really big winners.

2015 Summary

Total Number of Blog Trade Ideas in 2015: 43
Wins: 16
Losses: 12
Breakeven/No Trade: 15
Win % (winning trades / triggered trades): 57.14%
Average Winning Trade in %: +0.37%
Average Losing Trade in %: -0.61%
Largest Drawdown: -2.50%
Return-on-Risk: 2.90
Total 2015 Blog Profit / Loss in %: -1.23%

Overall, I’m glad that I have the correct directional bias the majority of the time thanks to both fundamental and technical analysis, but it was not sticking to the plan of maintaining consistent risk per trade that did me in in 2015. 3 of my biggest winners (1.00 R:R or more) were only on 0.25% risk!

After that, it was the missed trades that held me back from getting back in the green and then some for the year, even with a strong win percentage in the latter half of the year. Those were huge because if I had stuck with my 1% risk per trade plan, I would have ended up around +2.90% since my total R:R for the year was a positive 2.90! Grrrrrrrr!!!!!

This small loss for 2015 puts me well below my benchmarks that I like to measure my performance against: the Barclay Hedge Currency Traders Index (+4.54% YTD thru the end of Nov) and the Barclay Hedge Discretionary Traders Index (-0.11% YTD thru Nov).  I’m not down on my performance though because through this reflection, I’m confident I can make the adjustments of better entries and hold onto winners to get me back to profitability in 2016.  Looking forward to another year of trading and learning…Hope to see ya there!

That’s all I got for now forex friends…How did you do in 2015? Please share your thoughts in the comment box below.  Thanks for stopping by and good luck in 2016!

  • Kewin Roy

    nice update and really very good tip and helpful like equity profit.

    • Pipcrawler

      Thanks for the positive comments @kewinroy:disqus… good luck to ya in 2016!