Good morning everyone.
Hope you guys enjoyed your weekend; enjoyed mine with a friend’s birthday party, continuing to work on the ice rink on our yard for the kids (that’s a fun learning experience and already tons of improvements planned for next year) and putting up our christmas decoration and christmas tree : the end of the year is right around the corner and very little time left to trade this year before 2017 will be history !
Week 48 results
Last week was tough : 2 winners out of 8 trades (and 1 BE) yet managed to limit the losses with total -42,8 pips for the week & -1,98% in terms of equity. The pips curve continues its sideways move while the equity curve continues its move down in my longest drawdown for the year, started 5 weeks ago when I reached the highest equity on the account so far. That would have been nice to end the year above the $10000 watermark on the account (started tracking equity when the account was around $9200); so it will take 2 incredible coming weeks to make it back up and out of the drawdown. Not impossible as you never know what the markets will give us, yet not probable as we’re approaching the end of the year and markets will be slowing down. Only thing I can do is wait and see while sticking to my trading plan!
Here are the stats for last week before jumping to November review
What about November ?
As for November it’s a negative month. After 7 positive months in a row it was only a matter of time until I’d hit the drawdown, and November was the drawdown month. Reviewing my trading, there isn’t much I could have done as no mistakes were done and the trade plan was properly followed. It’s about continuing to be consistent and trading myself out of the drawdown.
Inspite of the negative results, it’s a big step forward anyway, or I should say 2 steps forward. First step is that I have been working a bunch of hours to add a strategy to my arsenal. I wanted a strategy with more “predictable” results than the advanced patterns Iäm already trading : the tricky part with patterns is that, based on how I backtested them, targets are adjusted with price action, so it occurs, really often, than final targets are smaller than original one on pattern completion. So you never really know how much pips/money you’re gonna get (even if based on the backtesting results, you have an calculated an average expectancy).
So based on this 2 factors, I have backtested and added a double bottom/top strategy with specific rules that should add a bit more stability in terms of expectations and easier trade management (no need to adjuste target, I just need to set stop and target and let market do its thing). For all details on the strategy stats see last week’s review.
That new strategy already provided me 2 trades this past/current week : a losing one on GBPJPY (-47,3 pips) and a winning this morning after market opening on GBPUSD (+108,5 pips).
Second step forward is that I also put a bunch of hours programming an EA to manage for me my advanced patterns trading. After lots of testing and buggs discovered the hard way (the last 2 ones messed up 2 live trades), the EA is operational, working fine (even if will continue to improve it and add features one after the other), and will help me reverse my avg win/loss figures which wasn’t looking good so far this year (avg loss was much bigger than my avg win).
Well results of the hard work paid off directly and the figures reversed already for November:
Whatever steps are needed to improve your trading, you got to put the hard work into it, improving one area at a time. Just be aware it will be a never ending story as there will always be something that can be improved here and there.
So inspite of the drawdown and the negative month, I’m pretty happy and satisfied that hard work pays off. Sometimes right away, sometimes later on down the road, but it does pay off.
What’s next ?
Well, we’re now quickly approaching the end of the year so markets are gonna slow down. I will then be able to focus on some others things like adding features to my trade management EA, preparing the work for my yearly review, start setting some ground goals for next year, and doing some BACKTESTING ! I got an arm-long list of things I want to test but what’s been catching most of my attention this past weeks is a pattern I see happening often based on RSI divergence : price would make a higher high (or lower low), but RSI will go the other way. Likewise my double top/bottom strategy, I will be looking for this pattern to occur at specific levels and not just wherever. I have figured out the ground rules for that, now it’s about getting down to getting the backtesting done.
Well, that’s it for today. Wish you guys a great week in the markets!