As you can readily see from my trading records, my performance for the last 3 weeks has been quite stellar with a 99-1 ratio…. that is, 99 losers to 1 winner ha ha 
So … yeah … I gotta take a couple of weeks off the live account, if I don’t want it to go bust, and think about what went wrong. I will, in all likelihood, take a few paper trades in the next 2-3 weeks.
Have a great week, guys.
It is 09:18am GMT Monday, and I still haven’t taken any trade. Why should I? I’m not a trigger-happy loser, right? I’m not trigger-happy, yeah, but I am a loser so far, that is.
After Friday’s egregious move in NZD/JPY (and the other Yen crosses), the market is wondering what’s next? Will the yen keep weakening, or was it just a one off – a freakish Friday NFP kind of trading day? I’ve read somewhere that Japanese corporations are required by law to convert all their assets into yen by the end of March for taxation purposes. Logically, that would mean there’s still quite some time for the yen to maneuver back into positions of strength, as all those companies would be buying yen. But for now, it looks like JPY will be weak for at least a couple of days. I’ll be on the sidelines at least for a few more hours.
The number 1 goal of successful forex traders is to preserve their capital. It is said that the first loss is the better loss. That is because if you wait and hope, the loss might very well become biger and bigger. Usually the best trades work right away.
What happens then, if you see yourself losing money? A good partial solution would be to scale out of the losing trade by unloading half of it immediately. That way you would have been proactive and taken action. That works wonders to your psychology. If you lose, you will lose twice as little; and if you win, you will still have won something. Of course, the best course of action would have been for you to cut the loss, all of it, but how many of us do it?
February total P/L: -95 pips (unweighted), or -516 pips (weighted). One word: Pathetic.
I believe it’s an absolute must for a serious forex trader (even if that be an unprofessional trader, a fan like myself) to look back and evaluate his performance over certain periods of times. A good way to measure my performance, I figured out, is in both weighted and unweighted pip terms.
The weighted score shows my skills (or lack thereof) at managing my account in terms of how many lots to enter a trade with. My weighted score for last month (or rather, for the last 3 days of last month) is -516 which is a disaster, and looking at my trades more meticulously I can see I’ve been trying to climb out of a hole I got in by overleveraging (even if within the risk management rules of my forex trading plan). This is definitely a loser’s behavior, and I need to address it most urgently. It takes slow and steady gains, applied with discipline, to become a successful forex trader. That has somehow not been on my mind last Friday. Now that I mention it, why did I trade on Friday, the last day of the month?!
The unweighted score measures purely the performance of my strategy. Since it is -95, I can safely say there’s something wrong with my strategy, too. My strategy (or methodology) last month has shown certain defects such as “placing stops at the wrong levels”, “bad timing”, “some overtrading”, and lack of flexibility (unwillingness to open a position in the other direction when in all probability that would have been the most sensible course of action).
