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The Weekly Wrap – Live day trading results – Week ending 31st March, 2012

OK! Who stole my nice cool, calm and collected day trading system and replaced it with the world of crazy roller coaster ride?

Remember last week, when I started the week of with 8 straight losing trades?

Bummer huh?

Well, it was until I started this week with another 8 losing trades! Bummer to the power of two. Let’s review.

Day trading summary

Result: +2.16%

Trading summary graphs for week ending March 31, 2012

This week was something different in many aspects. Monday and Tuesday were days of mid-term trades off the hourly charts as I had a lot going on offline (you know, in the real world).

I just didn’t have the attention span to do day trading and monitor those trades properly. Plus, Monday was such a fun Twitter day.

So back to the old days and the hourly charts I went.

One thing is clear, as an hourly swing trader, I make a fantastic day trader.

There were both positives and negatives this week.

First the positives:

  • Despite 8 losses in a row to start, I still finished up on the week (a miracle two weeks running).
  • Of those 8 losses, most of those were closed inside of my maximum loss amount, most around 1%.
  • I learned some fantastic lessons, and in the end, the market paid me for it (miracle again).

The negative:

  • I made 8 losses in a row to start the week. Again.
  • I was so out of tune with the AUDUSD, yet it took me until Friday to recognize that and look elsewhere.
  • I let two losers go over my threshold of 2%, one was 2.3%, the other 3.4%. Smack on the bum for me.
  • Minus break even trades, I had a win/loss percentage of 39%.

Loss of the week

There were so many ordinary entries on the AUDUSD this week it is hard to narrow it down to one.

There is a 24 hour period however where clearly I had stolen way too many of my son's lollipops the night before.

The trading period is Wednesday to Thursday, here is a snap shot of the activity during that time. Arrows are entries and manual exits. Squares are limit orders.

Circles are stops being hit.

Trading activity for March 29-30, 2012

Am I serious? Look at that chart.

It looks like a pubescent teenagers face. Spots everywhere. A classic case of complete confusion, over trading and a sugar high.

Thankfully some discipline on stops prevented any serious damage to the account, but the potential for disaster in just 24 hours is quite clear.

Without my daily reviews, I would not have recognized this period for me to gain some perspective on my mental state.

Clearly, I was not trading with a clear mind. In hindsight the reasons were clear. I had slept around 8 hours in three days around that time, with that comes bad eating, dehydration, poor mind function and shocking trading.

The lesson to be learned was clear.

You can’t separate your offline world with your day trading. What happens outside of trading can directly affect trading itself. I was distracted, tired and malnourished. No wonder the mind was hyperactive.

Gain of the week

So after schizophrenic Thursday, I woke up Friday realizing what had happened and dedicated myself to toning things right back.

I dropped my risk back to 1% as I have had a nice streak over the last 6 weeks and get nervous when that happens.

My history tells me disaster is about to strike as my confidence rises to silly levels. As soon as you start to think you have things figured out, you usually get proven wrong.

The next thing I did was labor over a post on the somewhat mundane topic of exit strategies.

That kept me distracted for hours. The other was to realize that clearly I have no idea when it comes to the AUDUSD this week, and it was about time I looked around.

This brought me to the USDJPY, which dropped quicker than the titanic on supposed end of financial Tokyo flows, or so the Twittersphere informed me.

Short trade on the USDJPY

After a sharp drop of close to 60 pips on the Tokyo open, price retraced sharply.

Most were standing aside from what I could see, but if we were going to see this drop start up again, it was going to be from the last area where buyers and sellers agreed.

This is the area marked with the red box, a congestion area that halted the drop momentarily on the open.

If I wanted to sell, this was the only area of known buyers to sell to. The arrow marks the entry, a little early, but good enough, and a slow declined followed.

The concern was the slow speed of the drop compared to the previous action. This is usually a sign of an unconvinced market and inevitably resulted in a wedge form near the end of the day.

This was decision time for this pair.

It was either going to break do the downside and use that stored energy to run through the mornings low, or I was out of there.

Price did break to the downside but stalled around 10 pips above support. This was not a part of my if/then equation, and after no sign of a quick drop followed, I jumped ship and saved the week just as price shot up.

You can see in the list below this banked 2.8%, but the trade only risked 1%, so a 2.8:1 reward to risk. Take this trade out, and I finish behind for the week.

In reality, that is probably what the weeks trading deserved, but I’ll take this bonus.

Time vs Return

You can see the group of trades closing at 20 hours plus, the majority of these were the early week hourly chart trades mentioned above.

Time vs Return graph for week ending March 31, 2012

Full trade list

Here is the full run down of all trades taken on my live account this week.

All times are GMT+11 (Sydney, Australia).

Full trade list for week ending March 31, 2012

  • Total trades: 24
  • Winners: 7
  • Losers: 11
  • Break even: 6
  • Net result: +2.16%

Personal statistics are calculated as follows: A winner is a trade that gains 1% or more. A loser is a trade that loses 0.5% or more. All other trades are break even.

Happy trading.