With 2019 all wrapped, it was time to do a quick review of my fourth quarter trades and see what lessons can be learned from them.
Basic Forex Trading Stats
|DATE||TRADE IDEA||P/L in pips||P/L R:R|
|10/3||Downtrend Bounce in AUD/CAD?||+92||+0.62|
|10/10||Support Break on EUR/USD?||+37||+0.17|
|10/10||Longer-term Downtrend in GBP/JPY?||-115||-0.28|
|10/25||EUR/CAD Resistance Retest and Hold?||+105||+0.54|
|10/31||Short-term Range Play on AUD/USD||-34||-0.34|
|11/20||Short-term Range Play on NZD/CAD||-87||-0.63|
|11/27||Resistance Confirmed on EUR/USD?||+57||+0.34|
|12/16||USD/JPY Returns to the Downtrend?||-105||-0.64|
|12/23||AUD/USD Pullback Opportunity?||-33||-0.36|
|12/23||Top of Range to Hold on USD/CAD?||+108||+0.68|
Total Number of Trades in Q4: 10
Average Gain R:R: 0.47
Average Loss R:R: -0.45
Largest Drawdown: -0.80%
Win % (winning trades / triggered trades): 50.0%
Average % risk per trade: 0.70%
Total Q4 Blog Profit / Loss in %: +0.26% on 7.16% total risk taken
Looking just at stats, I had a decent quarter in terms of win% and average R:R gain vs. average R:R loss, but my total return was a pretty small 3% return-on-risk taken. This was due to the wide variation of my risk per trade, which sometimes benefited me and sometimes it didn’t.
What I think also held back my gains was where I based my ideas more on macro economic drivers rather than the geopolitical ones, which was probably a mistake given that most of the price action we saw this year was mainly driven by geopolitical developments on the global trade front. Those conditions mostly improved, whether it was between the U.S.-China and/or the Brexit story, which meant not only a rally in currencies like the Aussie, New Zealand dollar and the British pound, but also a rise in positive global risk sentiment–typically a bearish environment for “safe havens” like yen and Swiss franc. While I did take advantage of this environment with trades like short USD/CAD and EUR/CAD, I probably should have not gone with the short AUD/USD ideas and I should have better managed the GBP/JPY trade as the story turned on Brexit.
Going forward, with central banks all likely to keep monetary policy moving in the same direction (i.e., easy money conditions to support their economies), I’ll look to build longer-term positions to play this huge market theme. But I’ll also look for shorter-term news plays, since volatility is likely to continue to decline in this central bank environment. Swing trades are just tough at the moment given how dynamic the geopolitical news headlines can be, so I’ll be play the far ends of the timeframe spectrum for now.
What do you think of my review and how did you do in Q4 2019? Please share your thoughts in the comment box below. Thanks for checking out my blog…good luck and good trading!
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