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The Weekly Wrap - Live day trading results - Week ending 7th April, 2012

Happy Easter! I write this weekly wrap of my day trading results with sticky fingers and a sore belly.

Damn you Easter eggs! This week was an interesting one. Positive results, a couple of sloppy mistakes, shortened week, a podcast.

Let’s get to it.

Weekly summary

Result: +8.31%

Results graphs for week ending 7th March, 2012

Well hoo-bloody-ray! I didn’t start the week with 8 losers in a row like last week, or the week before. That was a nice change and can make a huge difference to how you approach the rest of the week.

With the Easter holiday kicking in on Friday, and profits in the bag, I called it quits on Thursday and stuffed my face with copious amounts of Easter egg instead. Good (and bad) decision.

In my podcast with Hugh (@TradingHeroes) this week, I mentioned winding things back when you get that feeling in your gut you are pushing your limits.

March was a profitable month, with the account gaining 37.58%.

A result like this usually instils confidence and optimism in a trader. Which is fair enough. But in equal portion there needs to be humility and conscientiousness.

Overconfidence breeds sloppiness, one of the mortal enemies of a day trader where execution is so important to maximise intra-day profits.

Perhaps it has something to do with 9 years of struggle and set backs, but a month like that gets me nervous.

I know my tendencies that come from over-confidence through that time. It is when laziness can come into my trading, and the market can sniff that out like a blood hound.

With that in mind, for me it is time for extra vigilance. No one can ever master the markets and trading. Ever. How can you master something where the rules are changed every trade, and new ones made up without warning?

April will be all about ensuring I am mastering myself, and what I should be doing on a day to day basis. Some posts on that process will come through this month so keep a watch out for those.

Loss of the week

The loss of the week is actually technically a winner. While I didn’t lose money, I lost profits and sometimes that hurts just as much as a straight out losing trade.

Below is the chart for April 4, down arrows are entries, blue arrow is a manual exit, red circles are price hitting stop losses.

Short AUDUSD with a second leg addition

You can see my entries were fantastic, right at the top twice for short trades.

What made this feel like a losing trade was how far I let these go back against me, and the paralysis that accompanied that price action.

Day trading golden rule #2

Thankfully something was salvaged from a partial exit initially after some bad Aussie data was released.

From there I locked in break even and had the mindset to “let it run”. Only problem is, that goes against one of my day trading golden rules.

I am not a believer in holding for retracements as a day trader. To me, they are, literally, a waste of time. I would rather exit at a target, reset, and if I want to trade the retracement again, then a fresh trade can be initiated.

I know the theory on why you might want to hold through a retracement, but I also know the effect a retracement back to break even has my psych. It’s not pretty.

For me to be profitable, I can’t hold for retracements.

If I want to only day trade half of the day, I need to take profits at targets, else I am made to sit for hours through a retracement, with my margin tied up, hoping for another leg. I would rather be playing golf.

With all that in mind, you can see what happened, I hung around, for hours, all to no avail. My addition to the move stopped at break even, the main trade stopped with a small profit.

To rub salt into the wound, it (of course) subsequently turned and right after for another leg down.

I could have tried to trade that leg, instead I was “holding on”.

Sucko.

Gain of the week

I spent a good hour looking through this weeks 14 trades, and I can’t find a profitable trade that I felt I traded well. Perhaps this seems a little arrogant considering the weeks results, but so be it.

We must have high standards. Most entries were messy, and if they weren’t then the take profits were messy. Mop in aisle 4 please.

I can see now that the laziness I mentioned in the introduction is creeping in. Vigilance is needed. The closest to a nice trade was the last for the week. A short trade into congestion in a clear down trend. Pretty standard boring stuff.

The exit was a little early, with no real reason to exit other than nervousness of diminishing a good weeks results. Price had done nothing to hint it was time to get out. I should at least wait for a hint.

The entry was a good one, so it is the closest I have to a gain of the week trade.

Friday's short AUDUSD trade

Time vs Return

The time vs return graph below confirms my suspicion that the tendency to let bad trades drag on, more sloppiness.

Time vs Return

Full trade list

Here is the full run down of all trades taken on my live account this week. All times are GMT+10 (Sydney, Australia).

Full live trade list for week ending 7th April, 2012

Total trades: 14
Winners: 5
Losers: 5
Break even: 4

Net result: +8.31%

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 determined break even.

Happy trading.