Not a bad run in Q4 as the winners outweighed the one losing trade for the quarter. Here’s a quick recap and thoughts on how I could have done better.
Basic Forex Trading Stats
|DATE||TRADE IDEA||P/L in pips||P/L in %|
|Oct 9||Downtrend Momentum In AUD/CAD||+35||+0.20|
|Nov 1||Downtrend Pullback in NZD/CAD||-153||-0.50|
|Nov 23||130.00 Still Resistance on EUR/JPY?||+186||+0.23|
|Nov 27||Rising Channel Holds In USD/CAD||+100||+0.30|
|Dec 18||AUD/USD Short at Consolidation||+132.5||+0.17|
|Dec 18||EUR/USD Short at Resistance Area||+30||+0.10|
Total Number of Trade Ideas in Q4: 6
Average Gain R:R: 0.56
Average Loss R:R: -1.00
Largest Drawdown: -0.50%
Win % (winning trades / triggered trades): 83.3%
Average % risk per trade: 0.42%
Total Q4 Blog Profit / Loss in %: +0.50% on 2.50% total risk taken or 20% R:R
Looking back and once again armed with a little hindsight, there’s probably one major theme that stands out among my trades this quarter: I should have held on longer!
Five out of my six trades were correct in terms of directional bias, but it was my trade management style (closing down trades ahead of or in reaction to big events) that held me back from a better performance on four of those five trades. Here’s a quick rundown of the moves missed:
- AUD/CAD closed too early and missed a roughly 3.00% or 350 pip downside move (hit adjusted stop)
- EUR/JPY closed too early and missed a roughly 1.76% or 225 pip downside move
- USD/CAD closed too early and missed a roughly 2.60% or 345 pip upside move
- AUD/USD closed too early and missed a roughly 2.48% or 178 pip downside move
Once again in hindsight, I probably could kick myself for letting these types of moves slip through my fingers, but in an environment where global risk sentiment was pushed around often due to developments in geopolitical risk (e.g., Brexit, U.S.-China trade war, etc.) and shifts in financial markets (slowing economic growth, rising interest rates, etc.), it made sense to be a little more cautious with my trade management moves.
So, I don’t feel too bad for the moves missed, but I can honestly say it was a mistake to close a couple of trades when I did: 1. the EUR/JPY trade which I think I could have kept on because of the weak European PMIs that were released the same day I closed and 2. the USD/CAD long was a mistake because price momentum was still strong while it was yet to be seen if OPEC would cut oil production and if it would have an impact on oil prices.
Besides that, I’m happy with how I traded this quarter overall, but one other criticism for myself would be that I could have been more aggressive given the pickup in volatility and global sentiment shifting towards risk aversion moves. Again, the uncertainty that recent geopolitical events have brought to the market has made it difficult to have high conviction beyond short-term time frames, but I could have leaned more on more active risk/trade management to help me improve performance.
Looking forward to 2019, I think we’ll continue to see elevated volatility and uncertainty for sometime, so I’ll try to be more active and aggressive as the environment now favors traders who can be both flexible with their biases and those who can hold on to their high conviction ideas.
What do you think of my review and how did you do in Q4 2018? Please share your thoughts in the comment box below. Thanks for checking out my blog…good luck and good trading!
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