Dealing with my biggest drawdown (trading)

Fuck it, I guess I should admit to it…

My last 8 trades in a row were either a break-even or a loss

Can you imagine that?

8…

It hurts to just mention it, my ego took a serious beating…

But wait, instead of running away from losses let’s dive into them

Let’s put some music on (I like Worakls) on and talk about them, since I can’t out run them

This made me (re)backtest my strategy for 2020

I had recently adjusted it based of new knowledge and new testing.

The refinement I just mentioned took place without me backtesting the new trading plan, instead I truly believed they were worthwhile tweaks and additions so I just blindly added them to my plan.

It made my trading more mechanical, fuck yeah, that’s what I’m about!

So I just went through all the backtesting and applied those refinements, this lead to this:


In 2020:

42 positions up from 33

A strike rate (including BE) of 42.86% and only 28.55% of winning instead of 66.65% (including BE) and 54.44% of winning

An average return of 0.33% it used to be 1.31%

A total return of 14% instead of 43%

Eh fuck. Why did I adjust my plan

What the FUCK happened?????

That’s a good question..

II tweaked my trading strategy based on what I thought, on a logical basis would work better than what I used to do. And since it was only slight refinements I didn’t dive deep enough in my backtesting to make sure it was good changes.

So that made me deal with a 28% strike rate (of winning trades) instead of 55% which was the result of my previous plan

I tried to improve my plan, but instead I made it a hell of a lot worse.

It hurts, I thought everything I had done was good, smart and the right choice, well, it may have been in past years, but in 2020 it wasn’t the case…

Anyway, that’s the story about how that losing strike happened.

Even with a 28% winning rate the probability of having 8 trades in a row that aren’t winners is of 7.22%

Which is actually quite high knowing how many trades we shall take over our life time.

Let’s do an exercise to know the probability of having trades going “bad”

It’ll be fun I swear! The most important part is to know the probability of your winning trades (only winning trades, don’t include your break-even in this strike rate for this exercise)

So what is the probability you’ve got?

P= __%

So for me, according to my older plan, that P is equal to 55%

Now let’s do a tiny winy bit of maths (I recommend using http://www.wolframalpha.com if you don’t love maths and don’t have a calculator next to you :D, that’s how I passed my maths exams at uni!)

To get the probability of having X losses OR breakeven in a row we’re going to do:

(1-P)^X

Eheh, never thought I’d be talking maths on my own blog, what happened to me…

So for me that is (1-0.55)^X

Let’s have a look at the probability of having 5 losses OR breakeven in a row

(1-0.55)^5=1.85%

Okay that’s already WAY MORE REASONABLE!!! So in that case, with my previous strike rate, the probability of having 5 losses in a row is only of 1.85%

Over a lifetime of trading you’ll definitely take more than 100 trades, well at least I will that’s for sure so the probability of having 5 losses in a row within the next 5 years is actually pretty high…

Okay so that’s good to know I guess? I mean I understand the maths behind the probability of having a drawdown, I didn’t fail Math 202 at uni Max… I know you did!! Is there anything else you can talk about?

ABSOLUTELY!!! Well maybe 🙂

Use a deck of cards to represent probabilities

Oooohhhhh, finally a useful idea Max you were kinda wasting my time up to now..

adityachinchure on IG took this photo

(I really should say, thank you so much for reading this far, it means the world to me <3)

Okay so now unto the exercise I started talking about..

So with my 55% winning rate how can I represent that?

Well I’ll be lazy and say that it represents half the deck of cards because it makes life easier

So every single black card within the deck is a winning trade that represents 50% of the cards

I also had 11% chance of my trade being breakeven

In that case I’ll take 6 cards and turn them to breakeven trades

The RED 1, 2, 3, will represent breakeven trades to represent around 10%

The RED 4, 5, 6, 7, 8, 9, 10, J, Q, K will represent losing trades (20) out of the 56 card deck to represent 35%

So I delt myself 5 cards (avoid dealing more than 5 cards since with cards the cards that are already present influence the probability of what’s coming afterwards when it’s not the case in trading)

Pretty cards eh

So here’s the result:

8R = L

2B = W

2R= BE

10R= L

3B= W

That’s perfectly normal distribution for me, I have no issue with it I wouldn’t be surprised if it happened in real live trading to me. Just another day at the office.

This morning before having the courage to write this blog post I did the same exercise, I had 7 red cards in a row (I delt myself 3 hands of 5) the probability of having a R card that is always (more or less) the same.

But that surprise this morning made me realize, even with a 55% winning rate, the possibility of having 7 losses or BE in a row was there and I saw it in the cards.

That kinda sucks I’ll admit, but there’s nothing we can do about it

So I’m going to be dealing myself cards every single day from now on to represent the probability of having a negative streak of trades.

That being said, I’m also going to revert back to my previous trading plan and ignore all the changes I had applied to it because well… Yep it ain’t working.

Thank you for reading this post, I hope it was helpful!!

You don’t really trade the market

Everyone thinks that we trade the market we’re invested in, would that be FX, commodities, stocks etc etc

But is that the case? I mean a market is a market, it’s nothing at all.

It’s not as if you go to a counter and ask for two dozens oysters and some nice smelly cheese, that’s something we can eat and enjoy.

No, we only trade our beliefs.

Currencies are only worth X because of the belief/trust we have that they are worth that much, because someone told us it was the case.

Trading is only a matter of showing our belief that a currency is going to become more valuable / trustworthy for others

Don’t focus on trying to understand how a market moves, it’s only the sum of all the beliefs of the participants.

Instead, try to understand how you come to believe something, and how others change their minds.

If you’re able to understand a change in the mind of the other traders/investors before it takes place you’ll be well off.

You don’t really trade the market. You trade your beliefs about the market. 

~ Van Tharp

Reading habits

The highlight of being self employed and having a large amount of “free” time is the ability to read.

I love reading.

A lot of very successful people recommending reading too, so I’m sticking to it, and would highly recommend you to do so!

But if you don’t currently have a reading habit… Here are a few recommendations I would give myself

Don’t force yourself to read “smart” books

Read to enjoy yourself, don’t force it, you’ll get to a point where picking up a book becomes a habit and you’ll want to learn something new!

Start reading for the fun of it – don’t start reading complicated investment / psychology books if that’s not your cup to tea.

You’ll get to a point where that’s what you want to do,

don’t force it!

However, if you like reading here are a few of my favorite books as a trader

Meditations by Marcus Aurelius

Mental Game of Poker (1&2) by Jared Tendler

The way to Love by Anthony de Mello

Seeking Wisdom from Munger to Darwin by Peter Bevelin

Inside the House of Money / The Alpha Masters / Market Wizards (great collection about hedge fund managers)

There’s no need to read thousands of books

Instead find books that open your mind and read them, make sure you assimilate, take notes, go back, re-read them etc

Don’t rush the process

Don’t read to show off and be the smart ass that tells everyone he speeds read a book a day but doesn’t apply shit

You don’t even need to read books, there’s loads of great blogs

A few blogs I like to follow:

Macro-ops

Collaborative Fund

Paul Graham is a legend

Farnam Street

Does twitter count? There’s a few amazing accounts there!

P.S. Currently reading: The Invisible Hands top hedge fund traders… Steven Drobny

The four pillars for trading success

The four pillars for trading success

We all wish trading came naturally to us; after all that would’ve meant saving countless hours, (a lot of) money, friendships that were broken after having a shitty day in the market

Oh and these reflect my personal views and experiences, I am sure you could argue for something different

What are those four pillars?

(Wish their was like a way to drop a curtain or something)

  1. Persistence
  2. Risk Management
  3. Psychology
  4. Trading Edge
Image

Let’s break these four pillars into a section each:

Persistence

Trading is difficult. Like any other skill it will take time to master, the only way to through the deep water is to preserver, if you haven’t given up you haven’t failed.

As long as you get back up after being pushed back down there is still hope.

That being said, having fallen off (many) horses it does take persistence to get back up on the horse, the same goes with trading, there will be losses, there will be mistakes, but there is a need to continually get back up and get ready for another try.

There is also an undeniable need to spend countless hours in front of charts in order to develop and test an edge and persist until we feel comfortable with our own strategy

Trading is all about survival, protecting the assets we have, making them grow, without getting killed. Keep that in mind.

Image result for persistence quote paramahansa yoga

This point is rather straight forward so there’s no real value spending too much time dealing with it, we are left with

  1. Risk Management
  2. Psychology
  3. Trading Edge

Risk Management

Risk management is probably the first subject new trades should look into, we can break it down into two topics: protecting the initial capital and an understanding of probabilities.

Protecting the initial capital

One of the best ways to screw up your psychology and give up is by taking huge losses that will destroy the size of the trading account

In order to protect the initial capital, it is key for traders to understand how to size their positions and (ideally) maintain a constant risk profile.

Why is it so important to avoid large losses?

If a single trade isn’t properly sized, it is possible for a trading account to be blown – by that I do mean, it is possible with one trade to lose all the money (and potentially more) you have in the trading account…

Let’s dive into “smaller losses”:

Image

A 10% loss requires you to make 11% back in order to get back to the starting point, which when we think about it, isn’t that bad, it could be worse… However, if you take a 50% loss then you will need to double your account in order to bring it back up to the starting size…

Yep…. Here’s the example:

10,000+10,000*(-0.5) = 5,000

5,000*X=10,000

X= 2

(Mainly wanted to show the benefits of getting a university degree, I can do maths now 😊)

The key lesson here is:

 MAKE SURE YOU DON’T SCREW UP THE POSITION SIZE

The likelihood of you preserving and not screwing up your mental game after such a loss is extremely low so… If you want to have a career in trading, make sure you size your positions correctly.

Image result for it's not about being right or wrong soros

Understanding probabilities

Now this one may seem a bit more obvious, but over many discussions I’ve realized it may not be the case

There will be winning trades, but there will also be losing trades, this is a given, anyone that promises you a 100% strike rate is either into high frequency trading (and works at a huge fund) or is trying to get your money, and the likelihood of the second far outweighs the first…

Now it’s let’s dig into why I think it is key to understand your trading edge and your numbers (more on that afterwards)

If you are a trader you may have a 45% strike rate (it is possible to be profitable with a lower strike rate, as it is possible to be a consistently bankrupt trader with a higher strike rate)

As you can see on the following image, you have a 72% likelihood of taking 6 losses in a row over 50 trades taken, yep a 72% likelihood, that’s freaking surprising eh

The likelihood of taking 7 losses in a row is at a “more acceptable” probability of 49% (which is still super high!?)

Image

Knowing the probability of taking 7 losses in a row is close to 50%, no better than flipping a coin, how much should you risk?

If you risk 5% per trade, you shall be down 30.2% (assuming you adjust your $ risk after each trade) that means you’ll have to make back 43% to get to the level you were before this losing strike… A rather big number if you ask me – however if you only risk 1% then you’re only down 6.8%

Let’s say you’re trading a 100,000$ account, I would highly prefer being down 6,800$ instead of 30,200$… Can you imagine the impact on your psychology? I would be devasted with a 30.2% loss

Image

Don’t forget, trading is a survival game, and you can only survive if you protect your initial capital and risk the right amount… Don’t show off… Now onto

Psychology

Probably the less fun part of trading for most of us (I’ll admit, I actually love it!) but you’ve probably heard it from many people psychology is key for traders, it may even represent 80% of the work you need to do to become a profitable trader

Now what are common traps we can fall into

  1. Sticking to our bias
  2. Trying to prove we know better
  3. I can’t lose so risking more
  4. I just need to get even
  5. I’m just one trade away from being profitable this month

I always used to get told off for doing more than five bullet points but there’s so many other examples!

So how can we have a profitable psychology?

  1. Focus on the process – they do not care about being right or wrong
  2. Understanding the numbers linked to your trading strategy
  3. Having strong opinions weekly held and being willing to flip sides
Image result for psychology trading quote

The most important part of trading is understanding that the market doesn’t care about you, and you shouldn’t really care about it. Instead focus on the process, be willing to jump ship and understand nothing is guaranteed in the market.

Instead, focus on yourself, spend time off the charts, recharge, meditate, empty your mind, and execute your trading plan

The worst enemy you have is yourself – and sadly you’ll never really get to beat him to the ground, even the famous Greek philosophers sometimes had urges (some were also doing the exact opposite from what they preached…)

Image result for conquer yourself zeno of citium

Truly believe I can’t make a better point than Yvan:

Confidence is not “I will profit on this trade.” Confidence is “I will be fine if I don’t profit from this trade.”

Yvan Byeajee, The essence of trading psychology in one skill

Try calming your mind, ideally empty your mind from all greed hesitation and passion, instead remain neutral and in control. The best way to do that is to meditate, and if you refuse to do that, go for a thirty minutes walk without your phone, just paying attentions to your thoughts, it should help you drop all those negative charges.

Tihbo puts it beautifully

Now I could spend an entire day ranting about the importance of psychology but I believe this is a journey you alone can take since it is deep inside you and no matter how many quotes I put in front of you the decision to let go and become present is yours.

Having a trading edge

Yep, this is the last point… Not necessarily because I believe it’s the less important, but you can make money with so many different markets and in so many different ways, you can skin the cat yourself.

However, it is extremely important to have identified your trading edge and be able to prove it exist in the historical market without having to adjust it, that’s one of the main problems quants are faced with, they adjust their strategy so it provides great returns in the past but does not work when the market conditions change

So what do you have to do?

Back test your strategy over several years and several pairs, forecast possible moves, use your trading plan with a reduced risk for the first few months in order to make sure the edge is there

Understand that even a profitable strategy will have losses

Here’s an example of my go-to set-ups after having backtested it over a few pairs for 2019

I have come to realize, that two of my favorite set-ups are not very profitable for me (the 3rd rejection and the hover) therefore I will have to adapt, another key point is understanding that my strike rate (without including BE) is of 34% however as you can see the returns are profitable, because my average win is a lot bigger than average loss.

Keep on working, keep on testing your strategy and never become over confident, because that will be your end.

The end 😊

Before I ask you to like this post and share, I would like to thank both Tiho Brkan and Yvan Byeajee I most of the data I used came from their tweets!

What do you think are the key pillars for success in the FX market?

Hope you enjoyed this article!


Onwards,

-Max

Building a Trading Plan

Having your own trading plan, is (probably) the most important part to become a successful trader, would that be stocks, FX, commodities or whatever you want to trade.


Why is a trading plan so important?

It gives you the opportunity to write down exactly what you can do and how you should do it.

It’s like a cooking book, the only way to really improve a receipe is to know what ingredients to use, the amounts and how long you should cook it for.

I’m awful at cooking (Really bad, my old roommates refused to eat anything I cooked)

I know how to make salads tho, that’s the only thing I’m decent at!

Why do you think I spend so much time in cheap countries where I can eat out three times a day?? (Maybe it’s because I don’t need to cook)

Anyway, back to the subject at hand…

Becoming a good cook is relatively easy, you just follow instructions, it’s the “chef” that makes up the dish and writes down how to do it properly.

You can work in a great restaurant and make a lot of money if you’re a really good cook, especially if you work well with a famous chef.

Trading, is rather similar to working in a restaurant (not talking about the insane hours, but sometimes…)

The only way to become a chef (a really really good trader) is to become a cook (someone that can implement a trading plan), it will take time, but the more practice you get as a cook the easier it will be for you to become a chef.


Ask for help building your first trading plan

You become a good cook by learning from others how to cook, would it be your parents, siblings, a cooking book, youtube videos, an online course, a bootcamp etc etc

It’s the same with trading.

Learn from someone else

Find yourself a mentor, whoever that is (not me) and ask them if they can explain to you their trading style and share trades they took.

Once you know how they look at the market, the trades they took you can break it down.

Bring a bottle of coke to a lab and they can reverse engineer it.

You could know the exact ingredients Coca Cola use for their famous drink.

Do the same with a trading plan.

Create your first trading plan based on someone else, even better, if you can copy it. My mentor shared his to all his students, that’s what I used at first.

I knew:

  • The entry types
  • What he wants to see in order to take a position
  • How he manages trades
  • How he records them
  • His risk profile

That’s all I needed, I more or less copy pasted it at first.


Once you have a trading plan, backtest it

Now it’s time for you to work, you can’t let someone else do all the work for you…

You know what set-ups your mentor looks for so go and backtest.

Try them out, figure out their results and ask yourself

  • Do they have a good strike rate?
  • What is their average return?
  • Do I like trading them?

Based on those questions and the answers you have for them you can quite easily make your mind up, should you keep those set-ups in your trading plan? It’s up to you.

Those are my results with a backtesting exercise I did earlier this year.

I was able to figure out which trade set-ups I prefer and how I wanted to manage them.

It also gave me a lot more confidence in my trading, I saw what was possible, and it became way easier for me to execute on my trading plan.

Once you’ve backtested your plan you can then decide what to edit, what to change, what to ignore, what you want to focus on etc…


Make it your own.

Make sure it becomes your own, don’t copy the exact same trades if they don’t fit you, adjust the trading plan to your own personality – and backtest it once again – it’s all about refinement,

To go back to the cooking comparison, a chef will try out so many variations of the same dish just to make sure he has the perfect mix of flavors, smells and texture.

It’s the same with trading, just keep trying it out.

Tweak it until it becomes your own, your precious, your trading plan.

Now, you can easily argue that you don’t need to write it down, it’s in your mind, or you can easily draw it.

But…

The best way to learn is to teach someone else.

But you don’t need to teach someone else, you just need to be able to explain it on a word document.

Take screenshots of your favorite set-ups

Write down what you want to see before being able to take a position

Explain how you are going to manage your position once in the trade

What are your rules in term of taking a second trade once you got tagged out of a position, are you allowed to re-enter? Once? Twice? Three times?… Create rules and put it in your trading plan.

If you want a video about creating a trading plan, check-out this interview on Chat with Traders, I’ll admit, I have only watched it once, but Chat with Traders is hands down one of the best podcasts out there for anyone interested in trading.

Now I feel like I’m probably rambling… but…

GET YOURSELF A TRADING PLAN.

Honestly, I truly believe it’s the best way to improve your results if you’re in the FX market.

Copy someone else trading plan, (or spend countless hours trying to build one)

Backtest it (it’s worth doing the work!)

Refine it

Make it more personal, something that fits your personality

Backtest it again, keep updating it

Write down your rules

Stick to it.


The only way you can improve your trading is to have a process, otherwise you may just be lucky or unlucky but you wouldn’t know because your trading is not consistent.

Being consistent with your process, will turn you into a consistently profitable trader.

Anyway, I hope you enjoyed this article, if you did it would mean the world to me if you could share it! Or let me know in the comments what you would do!

Tuesday 13th of April

Good morning folks! Hope you’re well!

Let’s dive straight into my watch? It’s the exact same as yesterday so it’ll be a chart dump morning

FX Watchlist

CAD/JPY

EUR/JPY

NZD/CHF

Short one for today 🙂

Monday 12th of April

Good morning folks! I trust everone is well!

Hope you enjoyed your weekend and spent it in a good fashion! I did a 5k for time, took me 24min and 9 seconds, I usually don’t time myself and only go slow so it was the first time I tried to up my pace.

Keeping the right pace is bloody complicated without a running watch I’ll tell you that much 🙂

Anyway, you’re not here because of my amazing good looks or my running (or are you?)

FX Watchlist

CAD/JPY

Canadian Dollar Yen is on my watch for a potential short – if the price just reached the zone before dropping we’d also see a clear head and shoulder pattern which would be cool, it always adds some edge to our position.

The thing about C/J is that we have a zone at the high it just made but we also have a zone just slightly above it, both of them coming from a gorgeous weekly stack, so all in all, we’ll just have to wait and see what happens

EUR/JPY

Are you guys bored of seeing Euro Yen on my watchlist? It’s been there for nearly two weeks now and we haven’t really move, I’m sorry, I don’t control it, all I have control over are my actions, including my watchlist 🙂

NZD/CHF

Kiwi Swiss is on my watchlist, it’s the last one that could see some action for today I believe, we’re getting closer to the zone of interet!

Little amount of “wisdom” before I leave you folks!

Oh and my friend and coach Jared Tendler book – the Mental Game of Trading is out now!

I’m waiting to receive my copy! Do yourself a favour and get a copy for yourself too!

Friday 9th of April

Good morning folks, I hope you’re well! Looking forward to getting shit done today 🙂

Let’s dive straight into the trade update:

Trade Update

I took a loss on GBP/USD (I took the position yesterday) – it’s okay, I believe the trade set-up was there, the only problem was in my execution, i was late in the trade and that’s my own fault.

The edge was there, so I have no issues trading it.

FX Watchlist

GBP/CHF

Pound Swiss is also getting close to its area of supply, it’ll be interesting to see how the price reacts from this area. There’s also a clear weekly supply in that area so we’re covered on that side of things.

Let’s wait and see what happens & what opportunity we get (if we get any)

NZD/CHF

Kiwi Swiss is also approaching an area of supply, another counter-zone level that has a lovely weekly stack and a clear area of interest.

We’ve just broken below the previous low so we’ll get some liquidity from this area, let’s see if we reach the area of interest before the price moves!

Let’s go get it folks 🙂

Thursday 8th of April

Good morning folks! I hope you’re well and feeling good!

Let’s dive straight into it!

Trade Update:

I just took GBP/USD long, however I messed up, I wasn’t feeling great this morning so stayed in bed. The only problem was that GBP/USD gave a clear entry that I executed over an hour and half late.

This drops my RR from 3:1 to 2.5:1 which is a rather big difference.

Daily FX Watchlist.

EUR/JPY

Euro Yen is on my watchlist for a potential set-up for a short:

GBP/CHF

There’s a clear set-up for both a long and a short opportunity which I’ll be interested in both.

NZD/CHF

Clear set-up for a potential long, however we need to break below the double bottom it has formed before we’re able to do that.

That’s it for today folks!

That being said, I definitely have to recommend Jared’s book coming out April 12th!

Wednesday 7th of April

Good morning folks! I hope you’re well and enjoying a cup of coffee!

It’s always a struggle for me, to finish my cup of coffee or start writing up this blog post. That is the question eh

Anyway, did I update you folks on the 4hour scale ins I took?

Trade Update:

I took EUR/USD long as a 4hour scale in yesterday I’ve had the opportunity to reduce my risk on it now so I’m happy about it

I also took a scale in on AUD/NZD, another 4hour scale in, I’m just waiting to see what happens next. Ideally we’d see it drop 🙂 It’s currently resting on the 1h 50EMA which has been rather well respected in the past, so only time will tell.

(It will drop, time just hasn’t caught up with that fact yet)

Anyway, enough talking about my positions, let’s have a look at my watchlist

FX Watchlist

EUR/JPY

Euro Yen is on my watch for a potential short – however I’d like to see the price reach a zone that’s slightly above the previous high, we’ll see how that happens. To break the previous high we’ll need quite a strong push higher, however a lot of stops are probably around that level so we’ll have some liquidity being created for a potential short from there (or a bigger push)

GBP/USD

Pound Dollar is also on my watch for a potential long play – we broke out of a descending phase line and are now headed back into the zone it had created.

This level is aligned with a previous area of supply and demand however I’m happy with it. There is a weekly stack, however it starts from around the middle of that level (hence why my zone looks strange, I have adjusted it)

I hope you guys enjoyed this breakdown!

Oh and, I have a question for you:

Would you enjoy it if I made a weekly video about my watch, what I’m looking at ahead, what I’m currently testing? I was thinking of doing it with another trader to be able to showcase different styles of trading.

It’s not your strategy that’s holding you back if it’s profitable in your backtest, the problem is likely coming from you sadly

You can reach me by email or through IG!

Tuesday 6th of April

Good morning folks, I hope you’re well!

To keep you folks updated in everything – I closed EUR/NZD yesterday for profit

Trade Update:

EUR/NZD is a trade I took back in March, it was a clear 4 hour set-up in my books so I executed it without any hesitation

I manually closed the position for 2.8R since the price had reached my profit target on tradingview and more or less instantaneously reversed, without my broker tagging me out.

I have come to realise it’s better to be happy with 2.8R rather than wait and see if the price goes back down for 3% or see it turn itself into a BE trade.

There is one problem with my position, I did not take a scale in. I cannot tell you why not, I do not recall, however that was a mistake on my part, I did not execute my trading plan as I should’ve have

It’s possible that it was due to some fear I had knowing USD/CHF and AUD/NZD were both running in the red at the time? Maybe because I wanted to see a 1hour scale in bank some profit for the first time this year? I do not know. However, that’s a big mistake I should’ve executed.

Anyway, enough talk about the past, let’s have a look forward

I’ll keep this watch short of commentary since I’ve been eyeing up these pairs for quite a while now, it’s becoming rather repetitive for you I’m sure!

FX Watchlist

CAD/JPY

EUR/JPY

GBP/CHF

GBP/USD

NZD/CHF

NZD/JPY

USD/JPY

That’s it for my watch for today at least.

I hope you enjoyed this chart dump & trade review!

Monday 5th of April

Good morning folks! I hope you had a lovely weekend!

I survived, I didn’t overdose on chocolate, I’m rather proud of that 🙂

Before we dive into the watchlist, I wanted to bring up the fact that this is the first week in Q2, so think about your goals / objectives for the next three months!

That’s not something I can do for you – you have to do it for yourself!

FX Watchlist

CAD/JPY

I’ll be looking for a potential short trade on CAD/JPY – the price action has been going sideways for a couple of days, but we have to take in account that both Friday and Today will be low volume days.

Let’s be patient, I don’t expect today to mean much.

GBP/CHF

Pound Swiss is also quite interesting, rather similar to what CAD/JPY is showing to us , we have a clear move higher and some clear deceleration around this high – once again we see little move over today.

USD/JPY

Dollar Yen is the third pair on my watchlist, it’s been rather bullish / impulsive over the last few weeks – so we’ll see what happens next. It’ll be nice!

That’s it for today, it’ll probably be a chill day, I don’t expect to see a lot of volatility / volume

Have a lovely one.

Friday 2nd of April

Good morning folks, I hope you are well!

I’ll admit, I wrote March instead of April… But hey, it’s good friday! (It is right?) that means looaaaaddd of chocolate over the weekend 😀

Anyway, enough joking around!

To keep you folks updated, I still have a scale in order (for a 4hour scale in) on AUD/NZD, I’ll be waiting to see if it gets triggered. I have just added a scale in order on EUR/USD as well but this time on the 1hour. I’ll obviously cancel both of them before the daily close.

One thing that is worth noting is that back in 2020 the 1hour scale in didn’t perform great, however, I know over the 6 previous years it’s actually been rather good. So I’ll keep executing them.

But that brings up a question, should you trust more the more recent results or trust more the overall results?

Short term results are more representative of market conditions while overall results give you a better idea of what to expect in the long term – if nothing has really changed…. It’s a tough one.

In terms of my funded account with 5ers, I have come to a decision.

I’ll risk 0.5% per trade at this stage (where I trade a 40k account) but will decrease the risk every stage I pass by 20%

The reasoning behind it is that the growth in funded programs is rather slow at first. That being said, I also want to get the long term benefits of compounding so I do not want to be dropped form the program once I have passed a few stages. Losing a 320k account would be a lot more impactful than loosing a 40k account if that makes sense.

Anyway, enough talk

Daily Watchlist

Going to keep it short since I’m guessing it’ll be quiet today (bank holiday in the UK I believe)

CAD/JPY

Canadian Yen is on my watch as previously mentioned

GBP/CHF

USD/JPY

That’s it for today folks!

I’m mainly going to be waiting to see if AN and EU give me a scale in position.

Cheers,

Have a lovely easter!

Thursday 1st of April

Good morning folks! I hope you’re well!

I won’t play any tricks on you today 🙂 Well maybe, who knows eh.

Trade update:

EUR/USD presented itself as a potential long as per my watch yesterday, I executed it as an SF (small sideways action) quite happy with it, the fact that the DXY seemed to fit fit the trade would be rather gorgeous.

If you wonder how I feel about having the trade in the red at first, I don’t really mind, I know more than 50% of my winning trades have at least one candle close in the red.

FX Watchlist

CAD/JPY

Canadian Yen is quite interesting we’re approaching an area of interest and we’ve been in an incredible bullish move that will probably need a bigger drawback.

GBP/CHF

Pound Swiss is on my watchlist for a potential short, a clear zone, that being said, it’s also worth noting that the zone could’ve been a lot bigger. I had decided to draw a smaller zone – to wait for the set-up to be of higher probability.

USD/JPY

Dollar Yen is worth noting as well, it’s quite interesting as well, we are approaching a level I’ll want to short from knowing how extended the move currently is.

That’s it for today on my side of things 🙂

I came across quite a nice quote from Derek Sivers interview with Tim Ferris yesterday

https://tim.blog/derek-sivers-reloaded-on-the-tim-ferriss-show-transcript/

“If I want to learn a language, it’s probably not going to be by doing it 2 hours a day, but just total immersion.”

It’s a great conversation, it’s worth listening to / reading it!

What I mean about the quote above is that if you want to master something you’ll probably have to give it all your time otherwise you’ll never become one hundred percent fluent in a language.

Time immersion is key.

Wednesday 31st of March

Good morning folks! I hope you’re well!

I have to update you, sadly USD/CHF reached my stop loss. As I mentioned back when I took it – it wasn’t a valid trade according to my trading plan but I decided to keep the position due to a gut feeling – could’ve been greed but I’m happy I allowed myself some wiggle room.

But that’s the only trade that’s close, I am still short on AUD/NZD and EUR/NZD

FX Watchlist

EUR/USD

Euro Dollar is on my watchlist for a potential long, the price action isn’t gorgeous, it’s rather slow at the moment, but I guess we’ll see 🙂

GBP/JPY

Pound Yen is also on my watchlist, the only problem I have with it is that it’s rather ascending and slanted. It could be a valid short tho so it’s worth keeping an eye out!

USD/JPY

Dollar Yen is also worth watching, we are approaching an area of supply so let’s see what happens, let’s be patient 🙂

Wishing you to have a good week 🙂