GBP USD- 07:11ET

Good trade. In and out according to plan with a 14.5 pip gain using a 10 pip stop....

USD CAD...just before the close.

EUR CAD- Friday 1st May, afternoon.

Another trade influenced by my current issues with liquidating/initiating positions. 1 pip gain....15 pip stop on 30k.

Looking to moderately increase size soon.

GBP AUD- 10:03ET & AUD CHF 10:49ET

GBP AUD- 27 pip loss on 20K...AUD CHF 17 pip gain on 17K Good execution of the plan from my side on both, but some serious liquidity issues. First trade had 7 pip slippage, second 3 pips on the exit. The commission is killing the edge too....

But this isn't any exercise of profitability right now. It's about limiting the damage while trying to regain trust (if warranted of course...we'll see) in my methodology and, most importantly, in myself.

With that in mind, I'll happily pay for relative safety with the negative effects of commissions and slippage by continuing to trade this way until I can really trust myself again.

EUR CHF- 07:45ET

Good trade....followed all the rules. Took the 3rd entry that the setup offered, which was riskier as the 3rd try is the one with the highest probability of breaking the S/R.

7 pip gain with a 7 pip max stop (ie the one on the books to catch me in the worse case scenario of denial, hope etc taking control! Should be out sooner than that though...)

....And The Award For "Worst Trade Of The Year" Goes To....

CHF.JPY-14:27ET....16 pip loss- But that's not the problem...

The problem was the emotional trip I allowed myself to go on. All the classic emotions: Revenge with a dose of greed (wanted to squeeze every last drop out of a move that had already met my objectives due to wanting to "catch up"...get back what was mine), desire to be proven right (about the exact low of the sell off...), stubborness in insisting that it should get down there (kept my greed-limit on the books) when price had clearly established the end of the move, greed/fear on the way back up. After all, I just couldn't give back too much of the move, could I?? (LOL!) and, finally, surrendering to the market after arriving to the breakeven area and hoping that the market would sell off again and give me another shot at booking profits.

It didn't. Instead, it blasted through my stop (which wasn't on the books as I was focusing on an exit. Should have been there to cover my back anyway). I panic-covered at what must have been the highest ask in that flush before price continued down to, and past, my target zone.

Yep. Definately the worst trade of the year!

First time I can remember reaching my target and then taking a larger stop than intended....

EUR GBP- 11:47ET

Pretty happy with this one...took a 9.5pip loss but entered with fair accuracy and exited within my maximum stop.

Could have covered sooner but good trade.

EUR USD- 05:01ET

Routine trade. Details on the 1min chart...

This very interesting post, along with the links within it, got me questioning how much I really know about probabilities and, most importantly, to what degree I believe in probabilities. Two crucial ingredients needed to take advantage of any edge in the markets.

Required reading for anyone who has passed the grail hunt phase of the learning curve and wants to move from choosing trades to trading an edge.

Seen This Before...

Can't quantify it yet, so can't trade it.

But I'll be watching out for setups like this to see if I build a strategy around it. Kinda reminds me of this trade here...

GBP JKY 09:38ET- botched trade.

The right thing to do long term often means taking some pain short term. I compounded my mistakes in this trade and almost wanted to lose after giving up control to the market.

Got in early (one of the reasons for that is my effort to keep risk constant- explained below) and price just continued to move against me, taking out the stop I had ready but not on the books (first mistake) couldn't accept the trade being over before it barely begun. Was aware that my stop area was where I should have actually entered and so held into profit. The move stalled at some support but, rather than exit as I would have with the correct entry I based my exit on my entry rather than the pattern's entry...one of my demons (second mistake) I had a stop above the prior pivot high (14 pips from my entry...4 pips more than intended stop)which, as luck would have it, got taken out with slippage for a 17.3 pip loss on 29K.

Entry 141.290 Exit 141.463

Although useful to eliminate the effect luck has on trading, trying to keep risk exactly the same isn't going to work with my way of trading. It puts too much pressure on achieving a certain price and adhering to a given stop. Catching momentum reversals is waaay too dynamic for that to work consistently. Entry and exit zones are the way to go....this is probably why I only found profitability with contracts. I didn't have to do as many on-the-fly calculations.

Will keep risk within a ballpark figure but got to do away with the idea of a fixed amount.

EUR AUD, 09:55ET- Liquidity And Currency Confusion.

Still haven't quite figured out the ins and outs of currency calculation when it comes to the spot forex market...especially when the trade involves two currencies other than the base currency of the account (USD).

This causes some risk management issues as I'd like to know I need to know my exposure in the base currency. This allows me to proactively manage my risk in every trade (for me, this means always keeping it the same...others might choose to augment risk with higher probability setups) So IB will soon have me pestering them for a full explanation!

Aside from that, there is also different minimum sizes for the various currency pairs that I need to know BEFORE I pull the trigger. Otherwise I end up missing my often fleeting ideal entry. Couple that with a large spread relative to my "playing field" (distance between my stop and target) and liquidity problems, making it difficult to enter and exit the market (probably due to small size...will play with that to confirm) and I feel lucky to have got out of this trade with an 14 tick gain on 18K.

GBP USD- Sunday 26th, 10:17ET

Continuing to trade the spot forex market as it enables me to control my risk (of course, you can control your risk with contracts in the futures market too but the minimum, 1 contract, size is already large for my appetite for risk) whilst still participating in trade.

The downside is, whilst trading smaller size, my risk vs reward ratio is being drastically skewed. Commissions are fixed, irrespective of trade size. Using this trade as an example....

11 tick gain with a 9 tick stop= 1.22R (gross)
11 tick gain(-comm) with a 9 tick stop(+comm)=0.56R (net)!

The system needs to either run winners longer relative to losers (which effectively destroys the statistical viability of the system) or be used with larger size to reduce the effect of the fixed commission on risk to reward

The latter is the direction I'll be going in once I'm satisfied I'm trading objectively again.

AUD/USD, Just After 10:00ET

Routine trade (or at least how the routine was and must go back to being). Defined the entry, stop and target...something I feel I've become complacent with. Congestion resistance and equal move highlighted on the 30min chart...14 tick gain with a 6 tick stop.

Smaller size for now until I can get myself back on my feet.

GBP/JKY-23rd April, before the close.

Nice setup here on larger timeframes with the equal move finishing off the breakout and pullback to the trendline that served as support for the daily uptrend.

Got stopped for 20 ticks...the bias played out nicely however.

EUR/USD- 05:10ET

12 Tick loss...nothing wrong with trade management on this particular trade but the fact that my equity curve is dropping away (somewhere in the region of 56% off the years high) is a cause for concern.

The problem is absolutely emotional...the strategy/method has waxed and waned in terms of profitability over time, but my results don't reflect the overall potential of the edge....at least I'm still profitable- for now.

Will continue to limit my exposure to the more volatile, higher risk, contracts such as EUR/USD to limit damage. Once I'm able to divide risk with the new account, I'll trade them all.