Month 1, Day 10 - 36-month forex trading challenge - stay calm under pressure and trading update.
This morning I'm in London. My wife Samantha and I are having a rare couple of days away without the children. Don't worry we've not left them on their own, they're under the watchful eye of both sets of grandparents.
As a trader it's important to enjoy yourself. Tied to a 24-hour market as I am with currencies it's often difficult to switch off. This challenge is my primary focus, but 36 months is a long time and it's key I don't burn out!
The London experience, so far at least has been wonderful. We're staying at The Savoy on the Strand, one of London's iconic five-star hotels, and were lucky to have been upgraded to a suite.
We're just a short step from Covent Garden and last night dined at the The Ivy, a favourite celebrity hangout, which I wasn't surprised to hear – the food and customer service were incredible.
There's more stuff planned today, but for the moment (just before 7am), it's back to the business in hand.
GBPUSD (T2S) >
Yesterday I was stopped out of this trade on a trailing stop at almost exactly the same level I took off half my position at T. This means the reward-to-risk ratio on this trade was 1.01 and I only captured 40.5% of the potential in this trade (you never capture the full move, but it would have been nice to secure more). There is the delicate balance between locking in profit with a tight trailing stop and giving your trade room to breathe. This is yet another reason having trading rules is so important.
I'll need to monitor these two numbers on winning trades. I expect to lose at least 50% of the time, so for my system to be profitable I'm aiming to achieve at least a 2:1 reward-to-risk ratio. As time progresses and I record more data on my system, the average percentage of potential captured across my winning trades could help me fine-tune my rules to improve its overall performance.
AUDUSD (T7S) >
This trade is frustrating. Price has now closed back above the 50 SMA and normally I would be out. My GOLDEN GATE strategy is built around price relative to the 200 and 50 SMAs while the market is in range mode. In this case having closed below, but then crossed back negates the validity of this trade.
The reason I'm still in is because of the 0.7000 level. Even numbers in the forex market can form important psychological points and my weekly market analysis leans more to the offer side. Only time will tell if I'm right, but for the moment this trade still makes sense.
USDCAD (T9S) >
In trading you win some, you lose some and these tend to balance out over time. Then you have the big winner, which makes your month. Reading between the lines, in Pit Bull this was important advice given by Marty Schwartz. It's one of the reasons preserving your trading capital and continuing to execute your strategy even through a period of drawdown is critical to your success – you never know when this trade is going to show up.
While I hold no bias in any trade and am prepared to change my mind at any point, I think that my USDCAD trade could be 'the' one. I cut my own hand off in USDCAD earlier this week, but took a second opportunity to get in when the signals in line with my rules presented themselves.
On the monthly chart below price is currently trading below the 50 SMA.
On the weekly it's a similar story under the 200 SMA.
If we get a close below the 1.3000 level, I think there is a very good chance we could see 1.2000. Of course, I might be wrong, but when the higher time frames point in the same direction as my trading time frame, it's often a good sign.
GBPAUD (T10S) >
This is a similar story to my USDCAD short above. I was stopped out with a loss in this currency pair on an earlier trade, but had a second opportunity to get in. Both the monthly and weekly charts support the direction of my trade, which is tracking down towards T as we speak.
In summary, this week has been frustrating. Gains made in week 1 of the challenge have been given back, but there are still over two weeks to go. If I have locked into a big move in USDCAD and / or GBPAUD my monthly target of a 10% return on opening capital is still very much achievable.
Good trading is about staying calm under pressure and there's nothing to do now, but enjoy the day. I'll be monitoring my trades on the move, but won't be entering new ones. If T is hit on any open trade, in line with my rules I'll roll my stop loss to entry and then hold a risk-free trade for as long as possible.
Is it really possible to turn £50K into £1M? Over the next 36 months I'm going to find out by trading my personal account with full transparency.
Follow my 36-month challenge to turn £50K into £1M.
Read my blog here: https://stgforextvforexchallenge.blogspot.com
Subscribe on YouTube here: https://www.youtube.com/channel/UCyGySJ5IeDjq-DIJPU7nYvw
[Please note, the information presented is general educational material and does not constitute trading advice.
Trading foreign exchange (forex) on margin carries a high level of risk and may not be suitable for you or your circumstances.
Before trading forex you should investigate all of the risks, including the possibility that you could lose more than your initial investment.
It’s important to consider your investment objectives, level of experience and risk appetite. If in doubt seek advice from an independent financial advisor.]
As a trader it's important to enjoy yourself. Tied to a 24-hour market as I am with currencies it's often difficult to switch off. This challenge is my primary focus, but 36 months is a long time and it's key I don't burn out!
The London experience, so far at least has been wonderful. We're staying at The Savoy on the Strand, one of London's iconic five-star hotels, and were lucky to have been upgraded to a suite.
We're just a short step from Covent Garden and last night dined at the The Ivy, a favourite celebrity hangout, which I wasn't surprised to hear – the food and customer service were incredible.
There's more stuff planned today, but for the moment (just before 7am), it's back to the business in hand.
GBPUSD (T2S) >
Yesterday I was stopped out of this trade on a trailing stop at almost exactly the same level I took off half my position at T. This means the reward-to-risk ratio on this trade was 1.01 and I only captured 40.5% of the potential in this trade (you never capture the full move, but it would have been nice to secure more). There is the delicate balance between locking in profit with a tight trailing stop and giving your trade room to breathe. This is yet another reason having trading rules is so important.
I'll need to monitor these two numbers on winning trades. I expect to lose at least 50% of the time, so for my system to be profitable I'm aiming to achieve at least a 2:1 reward-to-risk ratio. As time progresses and I record more data on my system, the average percentage of potential captured across my winning trades could help me fine-tune my rules to improve its overall performance.
This trade is frustrating. Price has now closed back above the 50 SMA and normally I would be out. My GOLDEN GATE strategy is built around price relative to the 200 and 50 SMAs while the market is in range mode. In this case having closed below, but then crossed back negates the validity of this trade.
The reason I'm still in is because of the 0.7000 level. Even numbers in the forex market can form important psychological points and my weekly market analysis leans more to the offer side. Only time will tell if I'm right, but for the moment this trade still makes sense.
In trading you win some, you lose some and these tend to balance out over time. Then you have the big winner, which makes your month. Reading between the lines, in Pit Bull this was important advice given by Marty Schwartz. It's one of the reasons preserving your trading capital and continuing to execute your strategy even through a period of drawdown is critical to your success – you never know when this trade is going to show up.
While I hold no bias in any trade and am prepared to change my mind at any point, I think that my USDCAD trade could be 'the' one. I cut my own hand off in USDCAD earlier this week, but took a second opportunity to get in when the signals in line with my rules presented themselves.
On the monthly chart below price is currently trading below the 50 SMA.
And on the 240 we're now in profit and on the way to T where I'll take off half of my position.
GBPAUD (T10S) >
This is a similar story to my USDCAD short above. I was stopped out with a loss in this currency pair on an earlier trade, but had a second opportunity to get in. Both the monthly and weekly charts support the direction of my trade, which is tracking down towards T as we speak.
Good trading is about staying calm under pressure and there's nothing to do now, but enjoy the day. I'll be monitoring my trades on the move, but won't be entering new ones. If T is hit on any open trade, in line with my rules I'll roll my stop loss to entry and then hold a risk-free trade for as long as possible.
*********
Is it really possible to turn £50K into £1M? Over the next 36 months I'm going to find out by trading my personal account with full transparency.
Follow my 36-month challenge to turn £50K into £1M.
Read my blog here: https://stgforextvforexchallenge.blogspot.com
Subscribe on YouTube here: https://www.youtube.com/channel/UCyGySJ5IeDjq-DIJPU7nYvw
[Please note, the information presented is general educational material and does not constitute trading advice.
Trading foreign exchange (forex) on margin carries a high level of risk and may not be suitable for you or your circumstances.
Before trading forex you should investigate all of the risks, including the possibility that you could lose more than your initial investment.
It’s important to consider your investment objectives, level of experience and risk appetite. If in doubt seek advice from an independent financial advisor.]
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