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Lessons Learned

One of the reasons why we compile our trading stats is to reflect on which strategies worked and which ones need working on. Here are a couple of things that I noticed with my trades in Q1 2013.

1. I should consider exiting early

As many of you have pointed out (thanks a lot for your opinions, by the way!), I need to work on my exit strategies. I noticed that a lot of times I was able to predict the correct direction and inflection points for the pairs but somehow I get stopped out because my stop losses are either too tight or are adjusted prematurely.

In my next trades I will focus on being flexible. More specifically, I would consider exiting my trades early when price isn’t reacting to inflection levels or economic reports as I initially thought they would. I would also give more room in my initial stop losses especially for swing trade setups.

2. My trades shouldn’t depend so much on economic reports

Unlike in the previous quarters, a lot of my trades in Q1 2013 depended on the markets’ reaction to an economic report. The problem with that is that a lot of factors have to play out perfectly in order for those kinds of trade ideas to work out. One miss and a trade idea is already invalidated. Never mind that it was a REALLY good setup at the time!

This quarter I will still look at economic reports, but only as support to a directional bias instead of a making them the main catalyst for my trades. Taking trade ideas early in the week as opposed to taking them on Thursdays might also help as technical setups tend to play out in the early days of the week when not much economic data has been released yet.

3. I should think about realistic time frames for my trades

Though I spotted some decent setups last quarter, some of them had entry and exit levels that were not compatible to the time frame that I was willing to allot to it. For example, I had correctly guessed the direction of AUD/USD for a swing trade but I placed a stop loss that was more appropriate for a day trade. I missed 400 pips from that move!

This time I would take time frames more seriously when considering how long I’m expecting the trade idea to play out.

How about you? What issues have you struggled with in the last few months? Once again, I appreciate your sharing your thoughts with me! They’ve helped me a lot in getting over some of the more painful losses. THANK YOU!

Trading Performance

Without further ado, here’s how my trading went for the first three months of 2013:

DATE TRADE IDEA P/L in pips P/L in %
Jan.9 First Trade for 2013: AUD/USD Swing Short
Jan.23 USD/CAD: BOC Rate Decision Setup
Jan.25 NZD/USD Breakout Trade
Feb.1 Upside Breakout on NZD/USD?
Feb.8 AUD/USD: Still Headed South?
Feb.15 NZD/USD: Shorting at a Range Top
Feb.22 EUR/CAD Long: Trying My Hand with Crosses
Mar.12 AUD/USD: To Buy or Not to Buy?
Mar.13 Short CAD/JPY: Head and Shoulders Forming
Mar.14 No RBNZ Rate Hike in 2013: Time to Short?
Mar.25 AUD/JPY: Waiting for Kuroda’s Speech

No. of Trade Ideas: 11
Trades Triggered: 8
No. of Wins: 2
No. of Losses: 5
No. of Break Even Trades: 1
Win %: 18%
Average Gain Per Winning Trade: 32.5 pips / 0.35%
Average Loss Per Losing Trade: 43.8 pips / 0.48%

Eeep! *runs and hides in shame*

It wasn’t such a bad start to the year but oh, those losing streaks over the last few weeks still hurt! What bugs me about my dismal performance in Q1 2013, aside from the red numbers, is that I was actually able to get the direction right a bunch of times yet I wasn’t able to book profits in time or manage my open trades properly.

In particular, I noticed that my stops didn’t seem to be appropriate with the time frames on my trades. At one point, I had a swing trade idea that had a stop fit for a day trade!

Also, while comdoll crosses present a lot of good trading opportunities, I think I still have a lot to learn when it comes to dealing with additional volatility.

I badly want to make a strong recovery this quarter. Got any tips to help me out?

Happy time

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