trading trends end of week post

What a difference a week makes! 

This time last week I was up about 10%, I could have, should have, taken profits and stopped for the rest of the month (wonderful concept of hindsight eh?). The strategies that I were using were doing really well, every signal was producing the desired effect and I was locking in small gains.

The strategy that I am using bascially calls for wide stops and small exposure and generally, I can maintain an equilibrium to open p/l and banked money. I didn’t however foresee the effects of two pieces of news that were pending for this week.

Domestic UK news on Wednesday turned the GBP and related pairs upside down and then Thursdays shock ECB statement rocked the EUR and related pairs the opposite ways.

My USD pairs that I were trading completely reversed when the news came out in favour of the EUR and I got pretty much wiped out for the 6% a month limit.

Eurusd cross – 5 day

In earlier posts, I said that I wouldn’t trade too many pairs. Unfortunately when you risk even 2% of your pot on a trade you don’t have to trade that many pairs to lose.

Looking at the equity charts, we have been in a very choppy corrective phase and one would hope that this is coming to an end. Though with Greece, Spain and the rest of the world completely messed up I must admit that this is proving to be a really tricky time for me to trade.

August is around the corner and I am going to cut right back on the amount of trading I attempt. I am also going to carry on back testing and forward testing the automated strategies as this has proven to be very successful so far for July.

I really need to get to a point where I am doing very few discretionary trades and so remove myself emotionally from the charts. I basically still don’t trust myself enough to trade a larger account. Prime example – Thursday I attempted to make up some of the losses by trading the S&P 500 future, which then led to further losses…

As no doubt most readers of this blog will relate, chasing & compounding losses can really effect you. Emotionally I was really gambling rather than trading. Fortunately, my entries and exits were based on a strategy that has worked (as proven) by the forward testing. Though unfortunately I chose a day where the S&P 500 didn’t move with any conviction and I got whipsawed all day.

So my plans for August are as follows:

1) Trade a lot less
2) Trade only the Daily strategy but a maximum of 2 at any time , reducing my exposure to 4%
3) Should I make enough gains to cover the losses of July, I will stop trading altogether and enjoy the end of summer.
4) Back test the automated strategy on a smaller account size
5) Carry on forward testing the automated strategy results which are in this link – http://www.myfxbook.com/members/iamnev/fxcm-1247255/339999/4pw2fDWtXBPo3JhG5wi6

Trading Trends