Choice not Chance

Update for 20110712

2011-07-12T06:53:00.004-04:00

Still no pair divergence system trades in July so far. All the Euro zone fears are causing people to dump euros and move money into "safe" currencies, one of which being the swiss franc. EUR/CHF is down 700 pips so far this month. EUR vs. CHF daily correlation over the past 50 days (~beginning of May) is only -45. It's usually much closer to -100 and a reason why I've been able to trade the way I do.

As an alternative for pair divergence, I've been looking at AUD/USD and USD/CAD, but I haven't done anything with them yet.

I'm trying some new trade ideas in the mean time. Some supply/demand price level analysis as well as simple Murrey Math price level trades. No big money on the new ideas so far, but that'll come within the month I hope.

Update for 20110706

2011-07-06T12:30:00.003-04:00

Three trades since the last update, with two losses and one win. No trades in July yet.

For the month of June I lost 13.1%. I'm frustrated, but determined.

No change MTD
Up 3% YTD
Up 19% Since inception (4/19/2010)

Update for 20110624

2011-06-24T16:09:00.008-04:00

Whoa! I'm still alive!

All kidding aside, it's obvious that I have been slacking with blog updates, and honestly that only hurts myself in the long run. I guess it's hard to tell the world "Hey! I'm not doing as great as I used to be doing!" sometimes, but here goes:

For my one year trading anniversary (4/19/2011), I returned +27% since inception with a theoretical return (no missed entries, all perfectly entered on time) of +43%. My maximum actual drawdown for the first year was 20%, resulting in a CALMAR ratio of 1.35:1.

To catch up on monthly returns since the one year mark, I lost 1% in the month of April whereas I could have had a theoretical gain of +8%. The difference comes from two winning trades that I did not take: one was during a bank holiday, and I was asleep for the other one.

I lost 3.7% in the month of May, with a theoretical loss of 9.3%. I lucked out here with more of the same reasons for discrepancy as in April.

So far for June, I'm down 11.3%! Rough quarter. Theoretical return for June so far is -8.9%. This puts me in my biggest drawdown yet, at 25%.

I'm feeling that opportunity factor of a trading system is pretty important. I'm averaging between 20-30 trades per month, but months like this current June are pretty frustrating in that there have only been 14 system trades, with 6 trading days of no trades popping up at all!

I would love to trade a system with more consistency overall; my current system feels like a coinflip, and I don't even get to flip the coin that often. Hah! Here's the latest equity curve:

The big differences in actual vs. theoretical come mainly from trades where I lost when I should have won. I never mean this in a bitter way, it's just the facts of the case had I entered the setup on time. I've setup my money management so that I lose 3% on losing trades and win 4% on winning trades, so when I mess up, it really shows against the benchmark.

E.g. when I enter late by 5-7 pips for whatever reason, the market bounces off my (closer) stop without hitting what would have been the original, on time trade's stop. Then the market goes on to hit what would have been my original trade's take profit level. The usual cause of distraction is either falling asleep early in the AM (working 1AM-Noon is rough sometimes, no matter the coffee supply!) or simply missing the setup forming while doing something else. I have made adjustments to my sleeping arrangements to help rectify the first, and I have improved my system's alert mechanism for the second.

Down 11.3% MTD

Up 1.5% YTD

Up 20.8% since inception (4/19/2010)

Update for 20110412

2011-04-12T11:30:00.004-04:00

Finally had some trades pop up! Bad news was that they were all losers.

Going to bed with one still open, no big deal as SL and TP are set.

Up 1.8% month-to-date

Up 38.4% since inception (4/19/2010)

Update for 20110408

2011-04-08T11:13:00.001-04:00

No new trades the last four days! ZzZzZzZ....

Stats unchanged from last update.

Update for 20110404

2011-04-05T07:43:00.003-04:00

So I closed out March up 3.5% for my personal trading, and that's a big bummer, because I should have returned closer to 14.7%. I missed 2 winning trades, 1 losing trade, and entered 1 trade a few seconds late, giving me a bad fill, ending up being stopped out to the pip.

Anyway, April is looking good so far with two wins under my belt. Sort of anxious to see what my one year return will come in at in a few weeks!

Up 8.2% month-to-date

Up 44.9% since inception (4/19/2010)

Update for 20110328

2011-03-28T11:50:00.001-04:00

Had two losses today, with the first one hitting my stop to the exact pipette! Ouch!

Up 1.8% month-to-date

Up 34.6% since inception (4/19/2010)

Update for 20110323

2011-03-23T12:12:00.004-04:00

A few trades later, a new equity high appears! (by 0.1% for the actual account, 0.9% for theoretical)

Up 7.3% month-to-date

Up 40.7% since inception (4/19/2010)

Update for 20110311

2011-03-11T12:02:00.005-05:00

So I went ahead and increased my fixed fractional position sizing money management to 3% lost and 4% won, per trade. This will increase drawdowns, but I believe it will benefit me in the long run. I was going to wait until I was exactly a year in, but that would be just in the interest of easier reporting on what my first year would have been, and at the end of the day my account balance matters more than doing a few more calculations in Excel.

Didn't have any trades today, but a few closed from yesterday.

Link for bigger chart here.

Up 0.9% month-to-date

Up 33.5% since inception (4/19/2010)

Update for 20110308

2011-03-08T12:01:00.005-05:00

ZzZzZzZ...

Oh, wait, you mean to tell me I finally stay up during my trading hours and it's boring as all hell?! Of course. Successful trading is supposed to be boring, they say.

Had one win, one loss back on the 4th. One trade today for a loss. Market blew through my SL and never looked back!

Up 4.3% month-to-date

Up 37.4% since inception (4/19/2010)

Update for 20110303

2011-03-03T12:24:00.002-05:00

Finally had some trades to begin March with. I missed one due to being asleep (ugggh), but caught the other two. All three were wins, and I think it would have been my most profitable day (by raw $) so far had I caught the first trade. It marks a new equity high on the theoretical equity curve (+51.2%), and increases the gap between my actual results and theoretical ones :\

Up 6% month-to-date

Up 39.4% since inception (4/19/2010)

Update for 20110225

2011-02-25T10:41:00.005-05:00

Should have had two wins today, but I fell asleep and missed the second one. I blame lack of coffee (and the lacking self discipline to always make sure I'm "ready to go" for work) and this new allergy medication. Here's what the equity curve is looking like though, sitting behind my theoretical gain.

Up 10.3% month-to-date

Up 34.3% since inception (4/19/2010)

Update for 20110214

2011-02-14T12:04:00.003-05:00

Happy Valentines Day! Or Forever Alone Day. Or Anna Howard Shaw Day. Or Monday.

Anyway, one win today to push me to a new equity high, so that's exciting. Still trying to think of a way to squeeze more profit out of this system. I want to pyramid as I go into profit, such as is mentioned in Reminiscences... and by Dennis Gartman -- we'll see.

Up 9.7% month-to-date

Up 33.6% since inception (4/19/2010)

Update for 20110211

2011-02-11T11:01:00.004-05:00

Ending the week on a high note! My theoretical return (taking every trade the system throws at me, even when on vacation) is currently ahead of my actual return by about 2 full wins worth. Here's why:

Yesterday I entered a few minutes late on a setup, and my stop loss was closer than it would have been had I entered at the correct time. Wouldn't you know it, price retraced to my actual stop loss before going on to what would have been the take profit level, but it wouldn't have touched the stop loss if I had entered on time! Shit happens, no big deal. This scenario has worked in my favor in the past, and I'm sure the theoretical/actual lines on the equity curve will continue to oscillate back and forth as long as I trade this system.

Up 6.4% month-to-date

Up 30.3% since inception (4/19/2010)

Update for 20110201

2011-02-01T12:07:00.003-05:00

Starting February strong with a new equity high! Two wins today. Almost a third?

I have been feeling sick the last day or so, and it's thrown my sleep schedule off. I woke up late today and noticed that a trade setup had formed and already passed by, with profit being hit at first glance. I looked at the news forecast though, and noticed that the entry time would have coincided with Swiss retail sales numbers. Oanda being a stickler for hiking spreads around news releases, and squeaking a profit out on that trade by only 5 pips as indicated anyway, there's no telling what would have actually happened. If I had received an unfavorable spread/fill upon entry, price might have never reached my new target.

I guess I can check tomorrow at http://fxtrade.oanda.com/why/spreads/recent

Up 6.1% month-to-date

Up 30% since inception (4/19/2010)

Update for 20110131

2011-02-01T04:25:00.004-05:00

Closing off January with a gain of 7.4%. The gain puts me right up next to my previous equity high, so here's hoping for a winning trade to start off February!

Up 7.4% month-to-date

Up 23.6% since inception (4/19/2010)

Update for 20110125

2011-01-25T11:51:00.003-05:00

New equity high today! Just by a bit, though (1% higher than the last). I feel like I'm finally getting back into the groove after my Christmas break, and I'm looking forward to staying active in the gym and at the trading desk.

Up 7.6% month-to-date

Up 23.8% since inception (4/19/2010)

Update for 2010 End

2011-01-20T02:51:00.004-05:00

My apologies for lack of updates if anyone is out there following! I took my Christmas vacation starting December 17th, and at that point I was up 1.5% on the month and 16.4% since inception.

I was beating my theoretical return by 3% due to entering late on a trade, getting a better price, and avoiding a dip to what should have been the SL level had I been on time.

So far in January, I'm up 3% month-to-date and up 19.3% since inception. I took vacation for MLK Jr. day and missed a winning trade; c'est la vie.

Update for 20101203

2010-12-03T10:27:00.002-05:00

Two losers today to end the week after a win and loss yesterday. I'm taking the last two weeks of the year off due to the market usually slowing down at that time, so there are only 10 more trading days in 2010 for me!

Down 3.8% month-to-date

Up 11.3% since inception

Update for 20101130

2010-11-30T14:53:00.008-05:00

November closed out great for me, even though I missed another winning trade since last post! The difference between what my return should have been, had I taken every trade setup this month, and what it currently is came to 7.2% lower than it should be. Put another way, I would have basically made up all of my losses from October.

But what's done is done, and I can only move on, trying my best to stay awake at the desk. It's not like I had problems staying awake at my day job before this, so I suspect it is a combination of third shift hours, lack of social interaction, proximity to my bed, and overall lack of continuous activity.

I've included the "theoretical %" line again on the equity curve, because it's now taken back over the actual % return. The theoretical return is calculated from assuming I had taken every trade setup I have identified since inception. When the actual return was greater than the theoretical return in the past, it was due to my dozing off and morning runs missing more losers than winners ;)

I will need a similar stellar return in the two-and-a-half weeks of December that I'll be trading if I want to be able to pay myself off of trading income this quarter. Sucks that I'm in a hole like that!

Up 16.7% month-to-date

Up 15% since inception (4/19/2010)

Update for 20101119

2010-11-19T10:43:00.002-05:00

I'm getting over a cold, taking lots of naps! Means I missed a few trades, 3 wins 2 losses since the month started, but I'm still positive on the month! I need it after October...

Up 8.4% month-to-date

Up 8.3% since inception (4/19/2010)

Update for 20101111

2010-11-12T01:27:00.001-05:00

Took veterans day off and didn't miss anything! Woohoo! That's after sleeping through a win the other day >:o

Up 8.3% month-to-date

Up 8.2% since inception (4/19/2010)

Update for 20101102

2010-11-02T12:07:00.002-04:00

4-2 so far in November! A comeback after October is certainly welcome...

Go vote!

Up 9.9% month-to-date

Up 9.5% since inception (4/19/2010)

Update for 20101031

2010-11-01T03:40:00.005-04:00

Unfortunately after a brief equity uptick since the last blog update, I ended October with the largest monthly loss I've encountered so far. It was also the largest monthly loss encountered through all of the backtesting I performed prior to going live.

I did screw up on one trade and accidentally buy USD/CHF when I meant to buy EUR/USD. I closed the trade as soon as I realized the error and entered a limit order for the correct trade I should have taken, after I confirmed that had I taken the correct trade to begin with it would still have been "alive" (not hit TP or SL levels).

Down 17.3% month-to-date

Up 1.4% since inception (4/19/2010)

Update for 20101015

2010-10-15T12:18:00.003-04:00

Ugggggh. Times like these when this job isn't very fun at all. No trades today (a few close setups but nothing fit exactly like I like it). Half-way through October, only thing for certain is that I'll take more trades as they show up!

Down 15.2% month-to-date

Up 4% since inception (4/19/2010)

Update for 20101014

2010-10-15T02:44:00.005-04:00

Lady (un)luck isn't letting up! More losses, and I missed a winner (away from my desk). Just watched an almost-valid trade setup hit what would have been profit, so that stings a little too, but I just have to remember all of the almost-valid trade setups that I've seen throughout live trading and back testing that were just flat out awful.

Still have half the month to go and two more quarters to dig myself out of this hole!

Down 15.2% month-to-date

Up 4% since inception (4/19/2010)

Update for 20101012

2010-10-12T12:04:00.002-04:00

I just got back from vacation (which was excellent), and I have been getting KILLED since October started! Only 1 winner with 10 losses so far, and I missed the winner and 3 of the losers (vacation and away from the screen). It's pretty depressing, but I'm obviously still in the game and have the future to look forward to.

Down 12.4% month-to-date

Up 7.4% since inception (4/19/2010)

Update for 2010 Q3

2010-09-30T12:33:00.003-04:00

I closed out the month and quarter at an all-time equity high! I will be distributing the planned allowance (to live off of during next quarter) for myself from the trading account, because my gains this quarter (including estimated taxes) less the allowance still have me above my starting equity. Feels good man.

Up 11.7% month-to-date

Up 22.8% since inception (4/19/2010)

Update for 20100928

2010-09-28T11:47:00.004-04:00

New equity high today, but I'm scared that it'll all be thrown away in the last two days of the trading month. I don't know, and neither does the market. Take everything it gives you.

Up 11% month-to-date

Up 21.8% since inception (4/19/2010)

Update for 20100924

2010-09-24T10:40:00.002-04:00

What a boring week! Sure, there were new record lows in USD/CHF and EUR/USD made some new swing highs, but I didn't make any money off of them, due to how this trading system takes "pot shots" at the market and exits quickly. I only had two trades this week, both losers.

September will wrap up next Thursday, bringing a close to another quarter. I'm very close to being able to pay myself this quarter, so here's hoping!

Up 1.5% month-to-date

Up 11.4% since inception (4/19/2010)

Update for 20100917

2010-09-17T11:35:00.005-04:00

Slightly up week brings me close to another equity high! One discouraging thing appears in the chart below. This is Oanda's "min/max" chart which I guess shows the min/max prices that trades were executed at for that bar. The bid broke above my TP level (748 and 747 with TP at 744) on a long position twice without the trade closing out. The trade eventually hit profit, but not without a little extra drawdown. This happened in my favor previously with a trade's bid not executing at its SL level, then going on to hit take profit.

Up 6.3% month-to-date

Up 16.6% since inception (4/19/2010)

Update for 20100910

2010-09-10T17:04:00.004-04:00

One win to start the week, a loser, and a missed a losing trade entry today (sleep schedule is off) gave me a new equity high and then bumped me back down to the old equity high! I'm stoked about that; however, I still worry about the system's performance. I've added a theoretical return curve along with my actual equity curve in the graph below. Theoretical = every trade setup taken and executed as it would have been live (this counts all missed entries, all entries on vacation days, etc.) I won't post the curve with that line every time.

Up 4.7% month-to-date

Up 15% since inception (4/19/2010)

Update for 20100903

2010-09-03T09:54:00.004-04:00

Two winners today going into a long weekend of rock climbing. Dangerously close to a new equity high ;) Feels good.

One of my profits today was hit during NFP/unemployment news. It was my first major slippage (> 1pip) with OANDA, and it was 3 pips in my favor. Contract size was a little over 5 standard lots. Some might think that I should have closed the position before the news hit, but I told myself I would only exit open trades without a reversal signal ahead of interest rate decisions.

Up 4% month-to-date

Up 14.2% since inception

Update for 20100831

2010-08-31T12:35:00.002-04:00

Today closes out August, and thankfully due to a mistake yesterday by me, I can say that I gained 5.1% on the month.

Yesterday was a GBP bank holiday, and I told myself I would not trade on USD or GBP bank holidays. Well, I was already up two wins after I realized it, and I stopped there. No trades today. I won't count my chickens, but hopes are high for September!

Up 5.1% month-to-date

Up 9.8% since inception (4/19/2010)

Update for 20100817

2010-08-17T12:10:00.002-04:00

One trade today for a win! No trades yesterday. Researching pairs trading E/U and U/C continues, but must stop for bed time.

Up 5.5% month-to-date

Up 10.2% since inception

Update for 2010WK33

2010-08-16T12:15:00.003-04:00

Ending the week with a mistake, not realizing that it was Friday and opening a trade after my cut-off time. Ended up being half of a normal loss, so not terrible, but I still shouldn't have done it! I've set an alarm on my mobile so that it doesn't happen again. A humorous page-a-day calender couldn't hurt either...

Can't wait for a new equity high...

Up 2.4% month-to-date

Up 7% since inception (4/19/2010)

Update for 20100811

2010-08-12T02:27:00.005-04:00

No trades today, had one loss yesterday, and one loss on Monday that I missed because I was on vacation. Thanks, lady luck.

I guess I've just been in a bad mood lately? I feel like I should be returning more percentage-wise than I actually am right now. I just gotta keep reminding myself that during the backtesting for this system, there were many times of a few low-return months in a row before a real blockbuster month or two. "Sleeper" system? Hah.

I'm working on something new to me, but probably not new in general: classical pairs trading of EUR/USD and USD/CHF. I would call what I'm doing right now "pair divergence" -- not exactly the same.

Up 2.8% month-to-date

Up 7.4% since inception (4/19/2010)

Update for 20100803

2010-08-03T12:21:00.002-04:00

One trade today, and I screwed it up. I had a late entry by 6 pips, and after going to what would have been profit to the pip, price skyrocketed against me. So it's a loss that should have been a win, so long as I would have been filled at the TP price (low was 1.6 pips lower, with a 0.9p spread, and Oanda is pretty good about fills, so I would imagine I would have been filled.)

Down 2.3% month-to-date

Up 2.1% since inception (4/19/2010)

Update for 2010WK31

2010-07-30T11:39:00.004-04:00

As you may have guessed, making updates is nowhere near as fun when you're losing money.

I closed out July with a loss of 1% on the month, still up 4.5% since inception. Had a loser today and yesterday, and they really pissed me off for some reason. I guess I just really wanted a winning month.

As far as how I performed vs. the system benchmark, I missed two losers this month as well as closing out a trade for a break-even that instead ended at a loss, so in reality the system performed at a loss of 4% with my money management, or a raw expectancy of -0.036.

Looking forward to August.

Update for 2010WK29

2010-07-16T09:59:00.002-04:00

Break-even week this week, which is pretty depressing. I'm slipping out of my daily updates routine, mostly because I've been really tired when the day is over. There are still 10 trading days left in July, and anything could happen!

Down 2.5% month-to-date

Up 2.8% since inception (4/19/2010)

Update for 20100712

2010-07-12T12:01:00.001-04:00

I dozed off and slept through a trade that would have been a loser. It's great, but it sucks, knowing that I'd be in an even bigger draw down.

Down 2.4% month-to-date

Up 3% since inception (4/19/2010)

Update for 20100709

2010-07-12T12:00:00.001-04:00

Two losses today to bring the streak to 4! No trades on the 8th...

Down 2.4% month-to-date

Up 3% since inception (4/19/2010)

Update for 20100707

2010-07-08T20:09:00.001-04:00

Two losses today! They looked so promising :( Oh well!

Update for 20100706

2010-07-07T00:01:00.002-04:00

Starting off July with a bang (no 4th of July puns intended...) of two wins and one loss today. I ran out of vitamins and could definitely notice it affecting me. I stocked back up and hopefully I'll feel better; the gym kicked my ass.

Up 3.8% month-to-date

Up 9.5% since inception (4/19/2010)

Update for 2010 Q2

2010-07-02T01:43:00.004-04:00

For my first quarter trading, I returned 5.5% to the account. Monthly gain/(loss) breakdown was:

April (beginning 4/19): (4.8%)

May: 16.4%

June: (4.9%)

I needed 16.4% return on my starting capital over the three months in order to hit my target. Since I did not hit my target, I will be pulling from savings in order to pay myself my lump-sum quarterly wages.

Update for 20100630

2010-07-02T01:41:00.002-04:00

Unfortunately had two losses today, one of which got within a pip of my TP before hitting my SL. It's extra frustrating on this loss, because the same thing happened just two days ago. Gotta get over it!

That finishes up June, with a total loss of 4.9% on the month.

I'm still up 5.5% since inception on 4/19/2010.

Update for 20100629

2010-07-02T01:40:00.002-04:00

One win today which hit my TP to the pip! A relief after yesterday's loss of missing it by a pip!

Down 0.4% month-to-date

Up 10.4% since inception (4/19/2010)

Update for 20100628

2010-06-29T09:03:00.004-04:00

Took one trade today for a loss after it got within a pip of my TP level! Hate that, but c'est la vie.

Euro and franc were positively correlated today for a while, not sure why. Went back to normal inverse correlation around noon.

Down 3.4% month-to-date

Up 7.2% since inception (4/19/2010)

Update for 20100623-25

2010-06-25T11:51:00.006-04:00

So many trades this week! I was just entering trades when they popped up and barely even paying attention to the account balance. I think that made me feel good overall, but maybe only because I noticed I wasn't losing too much money ;) I did accidentally miss two trades, both losers; this is a big deal because it puts me up relative to where I should be. I doze off a lot, and I think proper caffeination will help. I can't keep hoping to be lucky regarding missed trades forever.

Even with the losers, I would have ended positive for the week. Itching for a new equity high!

Down 1.1% month-to-date

Up 9.6% since inception (4/19/2010)

Update for 20100622

2010-06-23T04:07:00.002-04:00

Best day today in a while! Felt really good having two more wins and 1 loss, then another trade popped up at the last minute, resulting in another win. Again, feeling a high on this, but trying to keep myself in check about it.

Down 1% month-to-date

Up 9.8% since inception (4/19/2010)

Update for 20100621

2010-06-23T04:06:00.003-04:00

Speaking of roller coasters...

Hitting back today with two wins and one loss. I actually dozed off and missed an entry on a loser. Lucky me!

Down 7.2% month-to-date

Up 2.9% since inception (4/19/2010)

Update for 20100618

2010-06-23T04:05:00.002-04:00

Two losses today, feeling pretty blue. Realizing that this is more of an emotional roller coaster than I had originally thought!

Down 10.6% month-to-date

Down 0.9% since inception (4/19/2010)

Update for 20100614-17

2010-06-17T11:26:00.003-04:00

Started the week out with two losses and one win, taking me down to a little above my starting equity. Sometimes I try to force out-of-body moments and take a look at how I feel (psychoanalyze myself?), and I can definitely notice a difference in my morale between equity highs and lows. I haven't been learning that much about literal trading lately, as in new ideas and testing systems, but all of this self-analysis has not been wasted.

I had my first dream of my account blowing up, which was very scary particularly because I tried to wake myself up from the dream and couldn't ("this must be a dream...wake up! wake up!") The cause of the margin call was some hundreds-of-pips gap in the euro, but I never found out its cause. Thankfully it was just a dream... but the possibility remains real, albeit very, very small.

As for this morning, the Swiss LIBOR rate sent the euro and franc spinning, and I was not in the markets at all. It doesn't look like I'll be in any trades for the rest of the day, so I'm knocking off a few minutes early.

Down 7.6% month-to-date

Up 2.5% since inception (4/19/2010)

Update for 20100611

2010-06-11T11:45:00.003-04:00

Closed out the week with one win and one loss today. Was nice to see the win after a 4 loss streak! The last little bit of the equity curve looks like it did back when I started. It's only a matter of time for a new high!

Down 6.2% month-to-date

Up 4.1% since inception (4/19/2010)

Update for 20100610

2010-06-10T18:38:00.002-04:00

Two more losses today, unfortunately.

Down 6.8% month-to-date

Up 3.4% since inception (4/19/2010)

Update for 20100609

2010-06-09T11:52:00.003-04:00

Unfortunately the win streak has to end some time! Had two losers today that I didn't feel bad taking at all.

Down 2.4% month-to-date

Up 8.2% since inception (4/19/2010)

Update for 20100608

2010-06-08T11:58:00.001-04:00

One trade reversed today for a break-even. Swiss national bank started acting up, and glad I was out of the market! 100 pip pinbar on the U/C.

Up 2.2% month-to-date

Up 13.3% since inception (4/19/2010)

Update for 20100607

2010-06-07T12:39:00.001-04:00

No trades today! ZzZzZ....

Update for 20100604

2010-06-07T12:38:00.000-04:00

Placeholder!

Update for 20100603

2010-06-03T11:49:00.002-04:00

One loss today and two entries I made that I shouldn't have due to careless error. Oops! Both quickly exited at break even after realizing my mistake, thankfully.

Up 1.4% month-to-date

Up 12.5% since inception (4/19/2010)

Update for 20100602

2010-06-02T12:09:00.004-04:00

Had kind of a strange day today. Ran into a repaint issue with a metatrader indicator that I use, but I knew it could happen and is not a game changer at all. The indicator is the overlay indicator I use for inversing the franc onto my euro chart. Anyway, before going live with this method, I did all of my backtesting with the charts fullscreen, and I'm doing all of my trading with the charts much smaller, so that I can fit 6 on a 1920x1080 display. The overlay was flat (not a peak) when fullscreen, yet 1 pip off (forming a definite peak) when smaller, so I didn't take the trade. It was a large pattern, which is why I had to make the window full screen to see the whole thing anyway.

The trade would have been a quick win, but that's ok. I had two trades that I DID take, one loser and one winner for a small bump in equity, and yet another new equity high :)

Up 3.7% month-to-date

Up 15% since inception (4/19/2010)

Update for 20100601

2010-06-01T12:11:00.002-04:00

One trade, one win, one new equity high! Took a divergence off of the open today and it screamed towards profit and easily hit it.

Up 3% month-to-date

Up 14.2% since inception (4/19/2010)

Update for 20100528

2010-05-28T16:51:00.005-04:00

I took four trades today for two wins and two losses. I had mixed feelings about a couple of them, but at the end of the day my equity curve is indeed higher! This closes out the month of May (the 31st is a US and UK bank holiday, so I won't be trading), and locks in a 16.4% return for the month! My trading for the last half of April resulted in a 4.8% loss.

Up 16.4% month-to-date

Up 10.9% since inception (4/19/2010)

Update for 20100527

2010-05-27T12:58:00.003-04:00

One trade today, one win! New equity high!

One trade I didn't take: it ever-so-slightly clipped the MA on an E/U 60m long setup that would have been a winner. I didn't count these in my back tests, so I didn't take it live.

Up 14.9% month-to-date

Up 9.4% since inception (4/19/2010)

Update for 20100526

2010-05-27T01:19:00.004-04:00

I got lucky today. I missed an entry on a trade that would have been a loser, and then I had correct entries on two trades that were winners, making it the best day yet, and resulting in a NEW EQUITY HIGH!!!

Up 11.5% month-to-date

Up 6.2% since inception (4/19/2010)

Update for 20100525

2010-05-25T11:49:00.000-04:00

No trades today!

Up 5.2% month-to-date

Up 0.1% since inception (4/29/2010)

Update for 20100524

2010-05-24T12:15:00.002-04:00

Today was a Swiss, German, and French bank holiday, but I traded anyway. I think I'll only take off if one or both of the US/UK has a bank holiday. Two wins and Two losses put me back over my starting capital amount! It's been almost a month in drawdown from that point, with even longer since my last equity high. I'll get back there, just might take a little bit, and I'm prepared to wait if I have to!

Up 5.2% month-to-date

Up (!!!) 0.1% since inception (4/29/2010)

Update for 20100521

2010-05-24T10:43:00.002-04:00

I took a vacation day today, but had I been trading, there would have been one win and one loss for a small gain. I'm only going to report my actual gains/losses in the numbers, so I will repost them from Thursday.

Up (!!!) 3.8% month-to-date

Down 1.2% since inception (4/19/2010)

Update for 20100520

2010-05-24T10:41:00.002-04:00

Today was the best single day yet. 3 wins, 1 full loss, and one 1/3 loss. All of the setups looked great!

Up (!!!) 3.8% month-to-date

Down 1.2% since inception (4/19/2010)

Update for 20100519

2010-05-24T10:39:00.003-04:00

One euro long today for a win! It was a pretty wacky setup that occurred on the last bar that I would have taken a trade off of. Again, I'm sticking to the rules. It's paying off! Pretty sure I would be around 6% lower return if I had not been so stringent so far.

Down 2% month-to-date

Down 6.7% since inception (4/19/2010)

Update for 20100518

2010-05-24T10:30:00.002-04:00

Couple of back-dated updates!

Two losses today, with one late entry due to me not paying attention. I tried to make up for it with the SL sizes but after I committed to a position size all it did was end up making me lose a little more on the trade than normal. From now on, if I miss an entry, I'll be placing limit orders.

Down 4.9% month-to-date

Down 9.4% since inception (4/19/2010)

Update for 20100517

2010-05-17T11:43:00.003-04:00

Had an early trade on the euro today, and it was a winner. It was a buy, and I was hesitant because of the euro at new lows recently, but it turned right around after I bought and went on to 120 pips after some drawdown (my target was half that). There was another trade that popped up, but since the pattern was so big that it encompassed some of last week, I didn't trade it. I guess that's a new rule!

I think it makes sense, even if the action over the weekend didn't lead to any gaps/strange behavior. I'm sure it's just one of those "well it doesn't really matter" things, because it won't happen that often.

Up (!!!) 0.3% month-to-date

Down 4.5% since inception (4/19/2010)

Update for 20100514

2010-05-14T13:35:00.004-04:00

I had one trade today that was a win. Markets really went on a run after that, and it makes me want to find a way to trade and capitalize big on these large daily runs. I guess with all the euro selling recently it makes it look great, and I don't know how it would perform in a ranging market. Stuff to put on the list to think about!

Down 2.6% month-to-date

Down 7.3% since inception (4/19/2010)

Here's the latest equity curve:

Update for 20100513

2010-05-14T13:31:00.004-04:00

Had two trades today, and both were losers. It wasn't a new equity low though! Anyway, it looked like one would win and one would lose (both long on E/U and U/C) but they whipped around a lot and my stops were hit on both.

Down 5.5% month-to-date

Down 10% since inception (4/19/2010)

Update for 20100512

2010-05-12T12:05:00.004-04:00

Opened a euro short late in the day, and it rocketed towards my TP level before slowing down. TP is at 1.2613 and it's hovering around 1.2643 right now after getting as low as 1.2626. Time for bed though! Hoping this follows through as another win!

Edit: Trade was a win, so updated totals are below.

Down 1.1% month-to-date

Down 5.7% since inception (4/19/2010)

Update for 20100511

2010-05-11T12:01:00.003-04:00

One trade today for a win! Nice to break that losing streak.

Down 3.9% month-to-date

Down 8.5% since inception (4/19/2010)

Update for 20100510

2010-05-11T06:03:00.001-04:00

Late update, but I didn't have any trades today! ZzZzZ...

Down 6.7% month-to-date

Down 11.1% since inception (4/19/2010)

Update for 20100507

2010-05-07T10:29:00.006-04:00

FYI, I didn't get caught up in any of that S&P crap yesterday afternoon.

I had another losing trade today, and then I dozed off (oops!) and missed the entry on another trade that's currently in positive territory. I would be closing it at 12pm per my rules, no matter where it was. Since I'm not taking any new trades after 10am on Fridays, it's time to go to bed.

Down 6.7% month-to-date

Down 11.1% since inception (4/19/2010)

PS: According to this risk-of-ruin equation, I will spend at least 38% of my time below my current 11.1% drawdown, and I have a 28% chance of losing 1 standard deviation of my average return/month from any point on the equity curve. While the numbers look bad, and a 4 loss streak (current) following a 5 loss streak (last week) is a shitty way to start a career, it seems to be Business As Usual. (Numbers used in calculations: 10% average return/month with a standard deviation of 15%)

On the bright side, by those same equations, there's only a 1.1% chance that I will ever reach a 50% drawdown, where I would then need a 100% return to get back to where I was. Pretty volatile possibilities, really.

Update for 20100506

2010-05-06T11:36:00.005-04:00

Took a trade early on today for a loss. The Euro has been plummeting lately (500p in three days), and the trade signaled a buy. I didn't want to, but I took the trade, sticking to the system.

The Swiss National Bank pulled some tomfoolery this morning too, jacking USD/CHF and EUR/CHF around big time. I wasn't in the market though.

Down 4.5% month-to-date

Down 9% since inception for another new equity low!

Update for 20100504 and 20100505

2010-05-06T03:45:00.004-04:00

Forgot to update for the 4th and 5th, but nothing happened on those days anyway. The euro and franc were practically perfectly inversely correlated!

Down 2.25% month-to-date

Down 6.9% since inception (new equity low? oh no!)

Update for 20100503

2010-05-03T11:33:00.003-04:00

Had one trade today, and the setup wasn't really that good. It was a large pattern on the 60m chart, and stagnated for a long time until a big move against me took out my stop.

Down 2.25% month-to-date

Down 6.9% since inception (new equity low? oh no!)

April Results

2010-04-30T10:15:00.003-04:00

Closing out April with a boring day without any new trades. At today's open, yesterday's trade was still alive, and later closed for a loss. I am down 4.7% since inception, but if I had started trading April 1, I would be up 2.6%. So a lackluster month following the results of Jan-March, but it's well within the expected results of the system.

Update for 20100429

2010-04-29T12:25:00.007-04:00

Took a trade after 12pm because it popped up on the 15m while waiting for confirmation of a trade on the last bar of the 30m that didn't end up confirming. Maybe it was a bad idea, but really, in all my back testing, I tested taking trades until 1pm, and they were even mostly winners...

I dunno. Going to bed with an open trade for the first time though! Will update this post with status. It's still at break-even right now.

Otherwise, down 2.6% since inception (4/19/2010) without counting the open trade.

Edit: it was a loss.

Update for 20100428

2010-04-28T11:58:00.005-04:00

Exciting day! I had three trades, comprised of 1 full win, 1 full loss, and 1 partial win because of a reversal signal (I was short E/U and an E/U buy came up). HOWEVER, at second glance, the reversal signal was not actually valid (what looked like a peak on the chart was not a peak when you checked the overlay levels which I hurriedly forgot to do), and the trade continued to profit that I was not a part of.

Here's the detail on that reversal: I had plans to meet up with a guy at Starbucks to swap a wired apple keyboard for a wireless one (a deal for me), and I had a tough time getting wireless setup once I was at sbux. I finally did, and by the time I logged in, it was already a few minutes past the time when I should have closed the trade. Price was in my favor at that point, so I moved my SL on the trade to where I would have closed it out had I been at the screen at the time. Price retraced, hit the moved up SL by a pip, and I was out with 1/3 the profit. With nothing else I could do, I closed the laptop and waited for the guy I was meeting.

I came back to my apartment to see the E/U had blown through my original TP level. Now, I can play what-ifs all day long, but I imagine if I had just called the guy I was meeting and said I was running 15 minutes late, I might have caught that the reversal was not a real reversal, held on to the trade like I should have, and ended up with full profit. Who knows.

At the end of the day, I thought I got a $30 break on a computer accessory, but I (arguably) ended up with a $570 opportunity cost. Lesson learned: most people are forgiving, and if you KNOW something is coming up, politely ask them to wait while you deal with it.

Down 2.6% since inception (4/19/2010)

Update for 20100427

2010-04-27T11:37:00.006-04:00

What a wild ride this shit is. Two trades this morning, both losers (putting the loss streak to 5!), and then the mother of all shitty setups comes along and is a winner! Probably sounds worse than it really is, but I literally had to force myself to take that trade. My head was definitely in the dumps thinking about what could be 6 losses in a row, which never popped up in two years of backtesting.

I've been trying to look at a member suggestion of combining stochastic divergence with the pair divergence as a confluence, and so far it hasn't really tipped the hand of any short-term trades yet, as there usually isn't any stochastic divergence with them. I'm only 10 trades in though, so I'll keep an eye on it.

Down 4.2% since inception (4/19/2010).

Update for 20100426

2010-04-26T11:55:00.004-04:00

The drawdown begins! Haha. Had two losses in a row this morning. The trade setups were very much alike, but the first retraced almost immediately and the second almost hit TP but then shot down to the SL. Loss streak is currently 3!

On a brighter note, if I had been trading since the beginning of April, I would be up 4.9%.

Down 2.6% since inception (4/19/2010).

Update for 20100423

2010-04-23T10:07:00.004-04:00

I had one trade today for a loss; it wasn't a very good setup. Price went down to my exact SL level and shot back up! It would have still been in play if I wasn't using the 75% SL method, so I don't know yet whether or not it would have been a win without that SL modification.

Up 1.9% since inception (4/19/2010).

edit: it would have been a loss even at the 2X ATR full SL amount.

Update for 20100422

2010-04-22T11:35:00.001-04:00

No trades today, as the E/U and U/C were very correlated all day. In the future I hope to spend more time working on other trading ideas on days like today.

Up 4.3% since inception (4/19/2010).

Update for 20100421

2010-04-21T11:46:00.006-04:00

I was pretty sleepy today between 3-6, but thankfully bedtime has arrived! Had one trade today, and it was a win. Found the following a little disconcerting:

I'm not one to cry over bank intervention, but it just seems weird that it would bounce back so quickly and happen twice in a row, you know? Those are 5 second bars. It appeared on my Alpari US data feed and the market tab over at forexfactory.com as well, although the range on the Oanda 15m bar is wider than the market tab.

Anyway, up 4.3% since inception (4/19/2010).

Update for 20100420

2010-04-20T11:28:00.004-04:00

I took two trades today, and they were very similar setups around the same price levels. The first won, the second loss. I fatfingered a calculation and lost an extra 0.1% than I planned. C'est la vie!

Up 1.2% since inception (4/19/2010).

I'm Live!

2010-04-20T04:20:00.006-04:00

My last day at my day job was April 16th, and my first day trading was April 19th. I'm pretty happy that all the setup has gone mostly to plan! My account is with Oanda, and I filled it with a little more cash than I thought I would be able to.

Yesterday was pretty cool. I had one winner and one loser for a net gain of 0.6% on my account. I'm trading fixed fractional money management, with each win being 3% gain and each loser being 2.25% loss.

The only trading method I'm trading right now is the pair divergence method, previously linked to in this blog. I've had one trade today, and it was a winner.

I'll be using the "performance record" approach detailed in The Tax Guide for Traders to report performance (this will become increasingly relevant as I withdraw cash from the account to live off of):

Trading gains and losses = TP - PI + MIE

where

TP = ENA - A + W - BNA

where

TP = Total performance

ENA = Ending net assets

BNA = beginning net assets

A = Additions

W = Withdrawals

PI = Portfolio income

MIE = Margin interest expense

This blog will serve as my trading journal to post summaries and thoughts to, while my (private) trading log will keep all the gory details of my trades. I'm keeping the older posts that have little to do with my current situation for posterity's sake :)

No posts = Quiet before the storm

2010-03-01T21:37:00.001-05:00

Getting ready to go live...

Update on where I'm at

2009-11-20T13:34:00.006-05:00

I've been trading FirstStrike Plus since March 1st, and I've decided against continuing trading the method for now, because its returns over the past 8 months are not consistent enough. I am currently following a thread/method introduced at forexfactory.com under the name "Pair Divergence Method" which can be found here: http://www.forexfactory.com/showthread.php?t=160679

I've back tested it so far over 7 months and the returns are staggering. We're almost through November, and I'm almost done testing March, and the returns for those time periods are looking excellent as well.

I'm not giving up on FSP or DIBS, but I do not feel I can currently rely on them for my "bread and butter," so they will stay on the shelf while I get settled.

If anyone happens to read this and knows of a good CPA that prepares traders' taxes, shoot me an email or leave a comment. I just finished attending two webinars from www.tradersaccounting.com, which were very informative, but I don't necessarily want to decide to use them yet. Thanks!

Oops!

2009-03-15T14:15:00.002-04:00

Never wrote that trading plan...hmmm. Guess I should get on that.

Just for information's sake, I opened a $100 account at oanda, and I'm trading weekly based on the First Strike Plus method at http://infiniteyieldforex.blogspot.com. I'm also tracking DIBS trades, but unfortuntely I can't stay up and trade them at this point in time -- still trying to work it out though.

It's funny how much you learn

2008-10-02T10:07:00.002-04:00

I think blogging your progress is an awesome way to see how far you've come since you started. I look back on this after almost a year, and I'm looking at "ingot54" trades with a "james16" perspective, and some correlate, where others are like "there's no way I would take that trade now!"

I'm going to start a real account with some chump change soon (max risk $2/trade), but before I do that, I will for sure write up a trading plan and post it here.

Adding new strats to trading toolbox

2008-03-02T17:32:00.003-05:00

I've been researching the James16 chart thread at www.forexfactory.com recently, and I really like what I see. I won't be providing daily updates for the ingot54 system anymore unless I get in on a trade.

I might try to post the other trades here still though, just depends how much time I have :)

Update for an update

2008-02-13T22:58:00.004-05:00

Update

EURUSD: (short 3 lots) Closed +70 pips profit due to fishnetting on the daily. There will be more opportunities to trade, so I'm not too worried. Our system said to get out, so instead of not leaving the trade much room to move about (i.e. moving stops to BE and letting it ride), I took my profits. I'll keep an eye on it and see if taking profit with one or two lots and keeping the stop at BE would have been a better idea.

Update for 20080213

2008-02-13T18:48:00.002-05:00

Current positions

EURUSD: (short 3 lots) profit at +72. Daily stochs are starting to fishnet, and my profit is less than 100 pips, so I might exit the position later tonight. I can't remember what I told myself I would do so I'm just going to look it up when I get home.

New positions

None

Pairs to watch

Nothing looking that great

Update for 20080212

2008-02-12T15:25:00.000-05:00

Preface

Intraday update because I've been busy lately!

Current positions

EURUSD: (short 3 lots) profit at a measly +47, but stops are at breakeven. Might see a bounce off of the weekly pivot in my favor.

New positions

None recently, but maybe tonight.

Pairs to watch

Nothing really, the weekly either is conflicting with the daily or fishnets still everywhere.

Update for 20080208

2008-02-08T17:05:00.000-05:00

Current positions

EURUSD: (short 3 lots) profit at +130. Had a pullback to 50% of the previous bar today, but closed lower. Also an inside bar, so hopefully we'll see a breakout to the downside sunday/monday. Gonna go ahead and move my stops to BE on Sunday, and follow the mantra "never let a winner turn into a loser"

New positions

Waiting for sunday, but I don't think there will be any.

Pairs to watch

Still watching for that double bottom on the cable.