Forex: Reflecting on My Q1 2016 Performance

Well that was fast! Q1 is done so it’s time to do a review and reflection of my first quarter 2016 forex blog performance to see what I can improve on.

Basic Forex Trading Stats

DATE TRADE IDEA P/L in pips P/L in %
Jan 19 NZD/USD Short-term Short +78 +0.27
Jan 21 AUD/USD Rising Wedge Breakout +202 +0.12
Feb 3 EUR/USD Range Resistance? -159 -0.50
Feb 9 GBP/CHF Retracement Short +709 +0.48
Feb 12 AUD/CAD Short +102 +0.25
Feb 15 NZD/CAD Long on Pullback -41 -0.05
Feb 16 EUR/NZD Short +155 +0.45
Feb 24 EUR/NZD Short +265 +0.50
Mar 3 EUR/CAD Double Top +238 +0.50
Mar 4 AUD/JPY Short -175 -0.55
Mar 11 EUR/CAD Short Again?  +200 +0.09
Mar 17 EUR/USD Range Short Cancelled Cancelled
Mar 17 AUD/JPY Trendline Break +122 +0.14
Apr 1 EUR/NZD Falling Trendline +25 +0.03
Apr 1 USD/JPY Range Play Cancelled Cancelled

Total Number of Trade Ideas in Q1: 15
Wins: 10
Losses: 3
Breakeven/No Trade: 2
Win % (winning trades / triggered trades): 76.92%
Average Winning Trade in %: +0.23%
Average Losing Trade in %: -0.37%
Largest Drawdown: -0.55%
Average % risk per trade: 0.55%
Total Return-on-Risk: 2.22
Total Q4 Blog Profit / Loss in %: +1.15%

Looking back at my first quarter trades, I think one of the things I’m most proud of is that I made a couple of the adjustments to my execution techniques at the end of 2015 and stuck with them for the most part: not varying up my risk per trade and improving my entries.

Most trades were structured with scale in entries and 1.00% max risk if both positions are triggered, but for the most part I normally got in with the nibbler entry, which was 0.50% risk each time. And going with my nibbler entries allowed me to catch moves and make pips off of my correct biases since I no longer missed trades waiting for a pullback. So in terms of trade execution, I think I’ve found my niche of going with scaled entries and wide stops to play my directional biases as it allows me to stay in engaged and gives me time to be right thanks to my fundamentally supported biases.  This reduces my average return-per-trade to less than 1:1, but winning more trades than losing is definitely more my style.

Now what I could have done better is play the major themes driving forex price action.  While I was able to play the positive risk-on sentiment sparked by easy money from central banks and the rebound in oil/Loonie prices, I didn’t catch the sell-off in the U.S. dollar on diminished rate hike expectations from the Fed or the sell-off on the British pound on Brexit fears. Both were among the top movers in Q1, but with the U.S. relatively strong economically and the massive uncertainty with the Brexit situation, I couldn’t bring myself to go with the flow in price action on those two currencies.  That’s definitely something I’ll work on going forward: balancing my fundamental ideas with market sentiment.

Overall, I think I made progress in Q1 and this gain for 2016 so far puts me in between my benchmarks that I like to measure my performance against: the Barclay Hedge Currency Traders Index (+1.90% YTD thru the end of March) and the Barclay Hedge Discretionary Traders Index (+0.31% YTD thru March).

With volatility tightening up and no major central bank moves expected at the moment, it may be a tough job pulling pips from the market.  I may have to slightly adjustment to my entry/exit strategies to account for what could be an early Summer (i.e., slow) environment if there are no new surprises.

That’s all I got for now forex friends…How did you do in Q1 2016? Please share your thoughts in the comment box below.  Thanks for stopping by and good luck on the rest 2016!