Month 1, Day 23 - 36-month forex trading challenge - end of month 1 and FOMC.
Well today is officially the last day of month 1 of the 36-month forex trading challenge. On the cruise I'm currently on it's pretty blowy outside today, so I've battened down the hatches and retreated to the comfort of the coffee bar.
Battening down the hatches is exactly what I did earlier this morning too. You see, it's FOMC tonight where anything can happen and I don't want to get caught in the storm. The Federal Reserve has been in dovish mode lately, but how dovish nobody really knows. As commentators, market analysts and traders wait with bated breath for the rate announcement, and then hang on the Fed's every word in the press conference afterwards, the market can literally do anything.
I don't trade the news, but instead protect myself from it, and now have all positions fully protected (stop loss at entry or better), some with locked-in profit.
Here's where I am:
EURJPY (T20S) and EURCHF (T18S) were manually closed out this morning. With both attracting bids and trading above the 240-chart's 50 SMA, in line with my rules it was time to cut my losses. My sentiment indicator had also weakened (another reason to exit), but I may still have an opportunity to get back in if a signal presents itself on a close under the 50 SMA.
I now have four trades on, which will form part of the first month's results once closed (even if they close after today).
GBPUSD (T13S) >
I've trailed my stop to 20 points above the intermediate consolidation level due to FOMC, and also because we're approaching the 1.2000 even handle (grey line) and 10-year low (black line). Whatever happens now this trade is profitable.
USDJPY (T17S) >
Although T has not been hit, my stop is now at entry – FOMC and a rising 50 SMA are the reasons for this.
AUDJPY (T19S) >
AUDCHF (T16S) >
Although playing out under different strategies, both AUDJPY and AUDCHF have seen AUD strength overnight. Both trades are trending down in the right direction and holding between the 10 and 30 EMAs. However, on AUD strength both printed XY candles near potential reversal levels.
I've no idea what caused these bids and I don't really care. What's more important is that price has given me a clue that things might be changing, and my primary job is to protect my trading capital at all times.
So, I'm all set for FOMC and fully protected. What the market does the market will do – all I can do is manage my own actions and maintain my psychology to follow my rules. Emotions (fear and greed) are what finish many a trader and it's these that my rules and trading psychology are designed to guard against.
I now know I won't hit my target return of 10% on opening capital for this month, and am very likely to finish in a position of drawdown. I won't know for sure until my four open trades close. As they were placed in the month they count towards the month whenever they are exited. If I do experience a drawdown it won't be large and at c.2% will be well within acceptable risk parameters.
[Once the four trades above have closed I will publish month 1's results, and provide a detailed overview of key statistics and takeaways.]
Don't get me wrong, it's not where I wanted to be, but I've learnt a huge amount this month and used this knowledge, not to change, but instead fine-tune my approach.
Tomorrow is a new day and I'm all set for month 2.
By the way, to watch a summary of last week's activity on the STG FOREX TV channel on YouTube, please click here.
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.]
Battening down the hatches is exactly what I did earlier this morning too. You see, it's FOMC tonight where anything can happen and I don't want to get caught in the storm. The Federal Reserve has been in dovish mode lately, but how dovish nobody really knows. As commentators, market analysts and traders wait with bated breath for the rate announcement, and then hang on the Fed's every word in the press conference afterwards, the market can literally do anything.
I don't trade the news, but instead protect myself from it, and now have all positions fully protected (stop loss at entry or better), some with locked-in profit.
Here's where I am:
EURJPY (T20S) and EURCHF (T18S) were manually closed out this morning. With both attracting bids and trading above the 240-chart's 50 SMA, in line with my rules it was time to cut my losses. My sentiment indicator had also weakened (another reason to exit), but I may still have an opportunity to get back in if a signal presents itself on a close under the 50 SMA.
I now have four trades on, which will form part of the first month's results once closed (even if they close after today).
GBPUSD (T13S) >
USDJPY (T17S) >
AUDJPY (T19S) >
I've no idea what caused these bids and I don't really care. What's more important is that price has given me a clue that things might be changing, and my primary job is to protect my trading capital at all times.
So, I'm all set for FOMC and fully protected. What the market does the market will do – all I can do is manage my own actions and maintain my psychology to follow my rules. Emotions (fear and greed) are what finish many a trader and it's these that my rules and trading psychology are designed to guard against.
I now know I won't hit my target return of 10% on opening capital for this month, and am very likely to finish in a position of drawdown. I won't know for sure until my four open trades close. As they were placed in the month they count towards the month whenever they are exited. If I do experience a drawdown it won't be large and at c.2% will be well within acceptable risk parameters.
[Once the four trades above have closed I will publish month 1's results, and provide a detailed overview of key statistics and takeaways.]
Don't get me wrong, it's not where I wanted to be, but I've learnt a huge amount this month and used this knowledge, not to change, but instead fine-tune my approach.
Tomorrow is a new day and I'm all set for month 2.
By the way, to watch a summary of last week's activity on the STG FOREX TV channel on YouTube, please click here.
*********
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.]
Comments
Post a Comment