Forexchain Forex Trading Diary

This is the first time that I am tracking all my monthly trades with results issue. The date that I began to do that wasn't a monthly rounded day, therefore my first tracked month started from 26 October and will be 5 days longer than calendar month. I suppose this is not the last shift from the strict methodologies that I'll be trying to pursue during my tading career. I was initially intended to trade GBP/USD but I fail to validate this happy marching of GBP relative to USD based on my understanding of fundamentals. GBP seems to me to be no less involved in all this credit crisis and housing meltdown mess than dollar. Nevertheless it marched from 2.05 five hundred pips in a couple of days so that I hardly managed to shift my grid. Finally I lost all the entry opportunities without any firm inclination on the happening. I excused this opportunity loss by that "if you are not sure, you for sure don't want to be in".
So I traded mainly 2 pairs: EUR/USD and GBP/JPY. There are still some other very rare adventures to not to say that my second pair of choice is by great degree essentially "adventurous" by itself. And to the matter of the fact:
<u>EUR/USD:</u>
My most traded pair. I am generally bullish on the Euro because of all the known reasons, which are periodically being discussed by many researchers. The first buy was Q4 at 1.4374. After that I promptly shifted my grid to that with bottom at my first trade and up at 1.4816. It was mostly one way trip with dollar failing battle with all the Chinese revaluation, bad industry and banks performance, housing fears, which let little hope for dollar. Two trades were my bread and butter trade with 30-40 pips profit , while 3 others were manually closed with 100-115 pips profit. All took no more than 3-4 days. It appeared that with 350 pips move in a week I was too fearful and should better use moving stop-loss. At 6 November I opened one Q3 and one Q4 trade with firm intention to squeeze the maximum from them but here came 3 days with about 6% loss at the Stock Exchange, which triggered carry trade unwind with consequitive appreciation of dollar thus partially compensating the bad news influence. Everybody say dollar is lined towards 1.5 in a couple of months. It looks so, but when all are bearish I become to worry. I need to watch dollar carefully. If come back begins it willl be a long way back. At 9 November during 3rd consequitive heavy stocks decline I heavily downgraded my stop losses on EUR/USD much further than my grid suggests- kind of thing, which might be blamed of by each disciplined trader with strategy, which I am pretending to be. But why should I loss my position during momentarily return to dollar safe haven if I am sure in the general up trend? I really don't know and allow to myself. Will I be punished? "You never know until you bet".
<u>GBP/JPY:</u>

This is my "adventurous" pair. I has a long history with it and very upset one, but from the other side I pretend to feel familiar with this wild beast, the only key word in which is "carry trade". When everything is smooth the pair steps up steadily, when something unusual (China decline, housing slump, stock deep underperformance, funding crisis fears, big banks or hedge fund losses) happens it may fall like guillotine. Even at plain times day moves of 3 hundred pips aren't uncommon. It need to be played extremely carefully. In fact I use something different from my flagman 4x1 strategy. 2 upside trades initiated in late October on the wave of US interest decrease and growing hope of global credit release gave me some decent (relative to the pair proportions) pips. The downside play at stocks fall at 7 October gave some 180 pips and the next day there was first loss during 10 trading days and some douzen trades. I was pretty right on that the carry trade unwind will follow the stock going down but I was mistaken in timing and placed a close stop loss which is simply childish in this pair. As a result I not only missed a wild plunge of 470 pips but also took a loss of 41 pips.

The rest of the month was mostly spent under survival mode, because carry trade unwind was longer than I expected and I managed to enter some trades up. With new bank or mortgage issue company reporting billion losses each and every day I was only trying to exit at each small positive profit opportunity and there were days when I was at 20% draw-down. It was very unpleasant experience but as my favourite <a target="_blank" href="

And to results:
1) Number of trades entered: 56.
2) Number of trades closed: 44.
3) Maximum profit: 324 pips.
4) Maximum loss: -193 pips.
5) Number of profitable trades: 40.
6) Profit: 23.13%
7) Detailed track: 2007 November results

How simple it was to start the diary to only realise that I hadn’t had previously any clear picture of my trading activity. Montly results issue and each and every trade tracking after about a year of trading and it is first time that I see consistent profit at my account. Is it the influence of this discipline or is it that the diary start was at the moment when I was already prepared to become profitable and was actually the result of my contemporary shape? What is the reason and what is the consequence?
I begin to think of myself as a “profitable”. There is some catch here. I look at my Excell where all the trades are recorded and see about 90% profitable trades rate and I feel that this pretty view begins to influence my judgement. And this is purely bad without any single sign of some advantage. If I beleive completely in any trader wisdom this is that I shouldn’t take my results into consideration during trade decision. If I am at 15% monthly profit in the middle of the month this shouldn’t make me less willing to trade because some montly goal is already achieved. This is true in the same sense as is true to not to try fight back when in loss. The result bad or good has absolutely nothing to do with trading. What has everything to do with trading is strategy following and that means fundamental analysis, price action learning, etc.
Another catch is that to declare myself profitable after a month and a half profitable trading may be slightly erroneous. It is still may be a matter of luck. And another catch is that I am now trading with super small money values. Theoretically, moving to bigger values with same strategy keeping shouldn’t change the results, but who knows? I give for myself another month and a half before I add to my account and start to trade with 10 fold sums relative to now.

December was spent under the sign of dollar correction on the wave of surprisingly strong economic data from US. If I was a conspirological fan it would look like concerted action. Besides of it dollar looked like overstretched and with all the excited press exposure any slight sign of pro-dollar stability was able to cause the snowfall. With all my plays against dollar (EUR/USD, NZD/USD, AUD/USD) I sinked but not very deeply, because of the light leverage. Towards the end of the month I swimmed out and even was able to get a decent profit. I play super conservatively, with very low leverage, multiple entries and selecting entries very carefully and fully concious of that many respected trader would consider such an approach in polite words an under-use of Forex advantages. This puts a pressure on me to increase the risk. Therefore I was surprised to see that this covard strategy brings me to my current goal - about 5% a months profit. I picked up medium profits here and there. My carry trade GBP/JPY played only in the direction of the trend which I still consider the continuation of the carry trade was a perpetuum generator of pips.
And to results:
1) Number of trades entered: 36.
2) Number of trades closed: 27.
3) Number of trades closed from previous months: 8.
3) Maximum profit: 202 pips.
4) Maximum loss: -256 pips.
5) Number of profitable trades: 24.
6) Profit: 4.24%
7) Detailed track: 2007 December results

In some very first days of the new year I lost all my last 2 months achievemnts and many more. There are two main reasons that I may number - one immanent to my trading strategy and one is personnal.
My trading strategy accounts on trend. My stop-losses are in fact located in the zone where the trend should be considered to be violated, i.e. my stop-losses are quite far away from the price action. If the trend is really broken the built-in loss is quite big. That what have happened on the year change. The carry trade was finally broken which led to significant losses. The second reason is personnal. I shifted my carry trade stop-losses not beleiving that after permanent revival during the last year from any bottom it will be really broken. That enlarged my losses.
Inspite of the new approach of Colin McGinley to take constatnt 100 pips stop-losses I still am trying to work with the previous approach, where loss is accepted only in the case of trend reversal suspicion, leaving no room for error. It applies that I need to be 100% correct in my bets. I recognise that it might be not successfull approach but still can’t imagine something better. Continue working on that.
And to results:
1) Number of trades entered: 33.
2) Number of trades closed: 33.
3) Maximum profit: 316 pips.
4) Maximum loss: -739 pips.
5) Number of profitable trades: 23.
6) Loss: -51.74%
7) Detailed track: 2008 January results

I still continue the previous trends: dollar down, carry trade down. I catch the move on pull-backs. The dollar counterparts are EUR, AUD and NZD - the first because of great everlasting pro-EUR sentiment, 2 last because they are commodity currencies and we have a commodity boom in inflationary times. The same AUD is the carry trade counterpart of JPY playing now on down side. I almost didn’t follow closely the news during this months, relying solely on my favorite analysts resumes post factum to only keep at myself with the big picture. Precise entry and exit points were of almost no value. I utilised my comfortability grid to enter 1:1, 2:1, 3:1 and 4:1 lots.
My trading temper was very calm and the important thing was the growing ability not to enter the trade when only approaching the trading desk but rather waiting for the price reach the grid hubs. Therefore multiple limit orders were of great use and most of the trades were triggered by them.
1) Number of trades entered: 44.
2) Number of trades closed: 36.
3) Maximum profit: 251 pips.
4) Maximum loss: -145 pips.
5) Number of profitable trades: 35.
6) Profit: 28.74%
7) Detailed track: 2008 March results