Sunday, May 22, 2016

Week in Review: 16 May to 22 May 2016

I finished this week at a slight loss. I lost one trade, and won another.


I opened this short the previous week, just after the BOE released its monetary statement. I saw no real reason for the GBP to rise, and a bearish setup that I'd identified earlier was still valid, so I went short. Price fell halfway towards my profit target before reversing and stopping me out. 

Profit: -1R


This was an "after-weekend continuation" setup. On Monday, I went short at the previous week's Friday high. Price came within 4 pips of my profit target before reversing, and I decided to take profit at 0.4R. I didn't manage this trade well, and I think my emotions got the better of me (my trade would still be open if I had left it).

One thing I noticed was that the overnight swap was very expensive. After leaving the trade open for four days, the overnight swap had cost me over 5% of my position size. New rule: avoid shorting X/CHF pairs.

Profit: +0.4R


Be more mindful of negative overnight swap as it can consume your edge. Conversely, favour trades with positive overnight swap. 

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