Review of March 2016 Campaign

March has been profitable. I've managed to beat my performance in February (4.27% vs 3.96%).

Myfxbook

Trades opened: 16

Account growth: 4.27%

More trades

Because of my decision to go back to trading the minor crosses late last month, I've traded more in March than I did in Feb (16 trades vs 10 trades). I believe this would explain my higher return in March.

Steady as she goes

Nothing major happened in March. My trading has become quite routine and ordinary, which is where you want it to be. There was no major drawdown to report. However, as March ended, I sensed a minor psychological fear of turning a positive month into a negative month, and manually closed a few trades early to pocket the profit. Most of those trades would've hit my original profit target, so I've left money on the table.

Next month

I've ended the first quarter of this year in profit. I think I'll press my foot on the gas a little bit harder and increase my maximum risk to 2% for April. 

I'll also endeavour to become less obsessed with Myfxbook metrics. It messed me up a little in the end. I'll reduce my time looking at Myfxbook and live charts (every time I looked at a live chart, there's a small chance of messing around with a trade. Look at a chart enough times, and those chances accumulate. Ditto with Myfxbook, where every glance increases the obsession with Myfxbook metrics). 

Review of February 2016 Campaign

February has been good. I managed to recover from my losses in January, and made a bit of profit above that.

Myfxbook

Trades opened: 10

Account growth: 3.96%

Back to the Crosses

After January's loss, I reduced my position size to a maximum of 1.5%, and became more selective with my trades. Because I was more cautious, I only opened three trades in the first half of February. Psychologically, I found that much too little. With so few trades put on, I found myself becoming more attached to the outcome of those few trades. That's definitely not a good thing. A trader should be objective and detached.

Halfway through the month, I revisited my backtests and research, and decided to trade the minors again (but not the exotics). I expanded my backtests to make sure I was doing the right thing (all the systems I currently trade have been tested on 25+ currency pairs).

I was reluctant to go back to the minor crosses, as changing your trading plan is usually bad. My systems and risk management are still the same. But trading more often has cured that psychological itch, and I found myself much more objective again. A win here and a loss there doesn't matter so much, as there'll likely be a new trade tomorrow.

Next month

Because I'm finding more trades more often, my plan is to continue limiting each position size to 1.5%, and let compounding do the heavy lifting. 

Bad dream

I woke up from a horrible trading dream this morning. I was daytrading (something I don't normally do), and opening positions via market execution. After I opened a position, I'd enter my stop loss a few seconds later.

I was trading on the 5M AUDUSD chart, and opened a long position. As I tried to type in my stop loss and enter it, MT4 (my trading software) began to freeze and become unresponsive. The AUDUSD suddenly started to crash, and I remember desperately trying to close the trade. But because MT4 had froze, I couldn't do anything. 

In my dream, I had an $8,000 account. After about 10 seconds of frantically clicking on my screen, MT4 finally began to respond again and I closed my trade. My account's balance had fallen to $2,900 in a matter of seconds.

Lessons:

- trade small so a catastrophic move won't wipe you out (my position size was obviously excessive if I lost $5k in a few seconds)

- enter your stop loss WITH your order, not AFTER 

- don't trade short-term (longer-term trades give you more time to respond)

Review of January Campaign

I finally opened a myfxbook account (found here), and will be basing my monthly reviews on its statistics.

January hasn't been great. The majors became choppy, particularly the EURUSD, and I finished in the red, with a monthly drawdown of -3.42%.

Trades opened: 9

Profit factor: 0.74
Account growth: -3.42%

The 4H Timeframe

I tried to forward-test a system that I had developed on the 4H timeframe, and often found myself trading with or against positions I had already opened on the daily timeframe. Basically, I was hedging or adding to my swing trades on the daily timeframe, so there wasn't much point in trading the 4H. I think signals on the 4H and daily timeframe might be too correlated, so I've shelved research on the 4H timeframe for the moment. If you are a swing-trader and want to trade a shorter timeframe, then the 1H or 30M is probably better. 

Next month

In February, I'm planning to reduce my maximum position size to 1.5% until I'm back at breakeven.

Thoughts on Myfxbook

The psychological pressure from opening a myfxbook has been less than I predicted. It's actually forced me to be more accountable for my trades. If I open a trade, there better be a good reason, as it will turn up on my results. This has reduced the temptation to do anything stupid. 

Myfxbook account

Just putting it out there. Feel free to follow my trading results! 

http://www.myfxbook.com/members/kevin_lacoste/chain-breaker/1466627

Trading rules:

Timeframe: Daily

Pairs: USD Majors

Method: Technical Discretion

Position size: 1%-3%

Drawdown killswitch: 50%

I intend to keep my positions between 1% and 3% of my equity, which is pretty aggressive. If I hit 50% drawdown, then I'm killing the account and halting trading. Last year's drawdown was 10.55% after 112 trades. Hitting 50% drawdown is unlikely, especially since I tend to use 1:1 R:R ratios. 

NFP reaction

US non-farm payroll was released last Friday, and job creation had beaten expectations by nearly 50%. Looks like greenshoots in the US economy, right? Unfortunately, wage growth remained stagnant, and much of this job growth was in temporary jobs. Overall, the NFP figures were good, but not good enough to push the EURUSD down (I am currently short EURUSD). 

The importance of discipline

I missed out on taking a signal this morning, simply because I'd forgotten one of my trading systems that I had recently developed. This was due to me taking two weeks off over Christmas and becoming disconnected with trading. That mistake cost me $300 in lost profit today. Very expensive.

Sitting out of the market for an extended time might cause a trader to become rusty. If you do decide to take time off, try to maintain the same trading routine, but without actually taking the trade. You want to remain as sharp as possible, so when you do return to live trading, nothing has changed.