It was a rough start to the quarter, but I was able to claw back to a net gain after adjusting to my overall bias to focus on the reopening theme rather than the broad economic outlook.
|DATE||TRADE IDEA||P/L in pips||P/L R:R|
|4/10||Long-term Short on AUD/JPY||-225||-0.44|
|4/21||GBP/USD Uptrend Play||-131||-0.60|
|4/27||CAD/JPY Range Resistance?||-53||-0.38|
|5/5||GBP/NZD Support Break||-240||-1.00|
|6/1||EUR/CAD Descending Channel||+195||+0.87|
|6/8||NZD/CHF Long Setup||+255||+1.82|
|6/15||AUD/USD Uptrend Play||+119||+0.54|
Total Number of Trades in Q2: 7
Average Gain R:R: 1.08
Average Loss R:R: -0.61
Largest Drawdown: -1.51%
Win % (winning trades / triggered trades): 42.86%
Average % risk per trade: 0.64%
Total Q2 Blog Profit / Loss in %: +0.53% on 4.50% total risk taken
At the end of the first quarter, I mentioned in my Q1 2020 review that while the worst of the market fallout was likely over, the economic pain was likely ahead. With that mindset, I kept a global risk-off bias going into Q2, favoring safe havens over higher-yielders to start the new quarter.
Looking back, we did get the economic pain (Global economy to shrink 6% in 2020 on coronavirus pandemic: OECD) and bad coronavirus numbers (Pandemic Tops 10 Million Cases, 500,000 Deaths as Momentum Grows) that a lot of people expected, but that did not translate into the market favoring safe haven assets over riskier ones throughout Q2. This didn’t fare well for my AUD/JPY short trade and my CAD/JPY short.
I did manage to recognize the broad focus to the “reopening” theme by the end of April, starting with a short trade on GBP/NZD. This was probably my best idea of the quarter but poorly executed as I let the market shake me out with choppiness before the eventual drop. Not only did I take a -0.50% hit, but I missed out on the following near -7.00%, one-way move in the pair lower over the next two months. Doh!
Fortunately, I was able to recover with winners on my remaining three trades of the quarter, not only making back what I lost earlier in April but even squeaked out a small gain for the three months through the end of June.
Overall, I think I did okay, flipping my market bias despite the terrible economic numbers, and especially with how my winners were much larger than my losers (1.08 R:R win avg. vs. -0.61 R:R loss avg.). This allowed me to be profitable despite losing more trades than winning.
Actually, with how the market kept flipping focus between the bad data, government/central bank stimulus, and “reopening themes”, it was a miracle I didn’t spend the quarter getting chopped up.
Going forward, I think we’ll see a lot of the same themes as Q2, potentially more stimulus ahead, especially now that COVID cases are starting to rise and re-openings are starting to reverse/postpone.
The re-opening theme and improving economic data will likely continue to dominate over all other likely market drivers for now, but if death rates massively increase and/or hospitalization rates get out of control, we could be in for another risk-off ride later in the quarter. We’ll see and until we do, trade safely!
What do you think of my review and how did you do in Q2 2020? Please share your thoughts in the comment box below. Thanks for checking out my blog…good luck and good trading!
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