Tag Archives: losing trade

USDCAD loser

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So, this trade is my third losing trade in a row in a pretty bad month. When I first joined with Tom, perhaps it was beginner’s luck or I was just in a really good frame of mind, or the markets were responding to levels well, I’m not 100% sure, but October has not been great. I will give a full performance review on 31st when the month is over, but it’s not looking good right now. I’m actually down on the month.

Anyway, I went long the USDCAD at a level I had been watching for a good  couple of weeks. This trade should not have been taken simply because it was heavily inversely correlated with the NZDUSD trade. At the very least I should have gone in half-size. What a lot of lessons I have learned this month. I went long at 0.9950 with a stop at 0.9927 – very tight. I was looking for a move up to 0.9985 and risked 4.7% of the account on it. Very shortly after taking the trade, into a US news release I got spiked out and puked the lows. Tom took the same trade and I don’t feel quite so bad, but it’s not feeling great after two previous hefty losers.

-4.7%

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Parabolic kiwi account drainer

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Since a session with Tom last week when I decided to up my risk to grow the account much faster, I have done the opposite and depleted it much faster. I went short the NZDUSD today after the Greek debt crisis announcement. We were at a level I had been watching in the kiwi for some time so was glad when I got filled at 0.8116 short. I risked 8.3% of the account on this trade.

When the trade was filled, we were at the upper ATR for the day at a solid resistance level and I was ready to watch it tank. It did come off the level and formed a pin bar on the hourly chart which was exactly what I wanted to see. The next candle though closed above the pin bar and closed above the level. This was a significant warning sign that this market was going to go one way, and it wasn’t down. I stubbornly held onto the trade though as I had a wide stop. The S&P went parabolic upwards and dragged all the currency pairs with it with the Kiwi leading the way. After six hours of relentless agonising move upwards, I got stopped out for a 8.3% account loss at 0.8185. I feel like I’ve lost my way a little bit and to be frank, I feel like a bit of a twat holding this position in the face of obvious signs to dump it. Anyway, here it is in all it’s ugly glory. Note that I managed to puke the highs yet again.

-8.3%

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S&P 500 loss

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I offered December S&P at 1242 yesterday at a decent support/resistance flip zone and at the top of the recent range we’ve been having. I guess on hindsight this was high risk because the talks to resolve the European debt problems were still ongoing. My order was filled late in the evening as the S&P became very choppy on each news release from the meeting. My order was filled late and I went to bed. When I awoke this morning I had been stopped out for  a 13 handle loss with. As I had risked 9.4% of my account on this trade, I took the 9.4% loss.

-9.4%

This announcement had pushed the S&P to levels I thought to be way overpriced:

SYDNEY (MarketWatch) — U.S. stock-index futures gained after French President Nicolas Sarkozy revealed that private investors will take a 50% writedown on their Greek government debt holdings. Dow Jones Industrial Average futures DJ1Z +1.33% were up 116 points at 11,918, Nasdaq 100 futures ND1Z +1.50% were up 27.25 at 2,353.75, and S&P 500 futures SP1Z +1.57% were up 14.30 at 1,251.70.

More info on this announcement from MarketWatch.

So my account is not looking that great this month, I’m still up for the month but only by a smidge. Some more lessons need to be learnt by this new trader.

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2nd Loser in a row

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This is the first time since trading with Tom that I have had two losers in a row. It’s going to happen and it has happened. In fact I explored this mathematically last year in this post where I work out how many losers I should expect in a row over a sample trade number and the strike rate. The formula is

WinRate% to the power of [numLosersInARow] multiplied by NumberOfTrades.

Anyway, even with a 95% strike rate, over 1000 trades you should expect to get 2 losers in a row 3 times! I’m not saying I have a 95% strike rate, all I’m saying is consecutive losses should be expected and not something to get emotional about (can you see how I’m talking to myself here?). My strike rate currently is 65%, which isn’t great and something I am going to work hard to improve, so assuming my strike rate doesn’t improve, then over 1000 trades I should expect 2 losers in a row 123 times! With my current strike rate over 1000 trades I should expect to have one losing streak of seven losers in a row! I’ve only taken 24 trades so far. So plugging in those numbers, I should have had 2 losers in a row 3 times by now, and it’s only happened once. So I am due another couple of losers in a row given my current strike rate. I should have had 3 losers in a row according to the formula, but that hasn’t happened yet, but it WILL HAPPEN. And I should expect it.

Anyway, onto my trade. I shorted cable not long before my crude oil trade was filled. Unfortunately I was exposed to the same USD weakness in both trades. The GBP and Crude Oil both moved higher not because of inherent strength in those instruments but a temporary collapse in value of the USD, possibly caused by the USD/JPY moving to all-time record lows. Anyway, I’m not going to concern myself too much with the fundamentals as I’m a technical trader. Here’s my cable trade entry:

Entry

I went in profit by 21 ticks, and I thought to myself, “Here we go off to the target for yet another winner.” And that’s when the USD collapsed and cable moved higher and at the same time filling my Crude Oil offer. This trade cost me 4.7% of the account, which combined with the 11% crude oil loss is quite a hefty loss to take. I’m still up 3% on the month, but my performance is not as impressive as last month. Well, we’ve still got another week to go yet, so let’s see what next week brings. Here’s the exit:

Exit -4.7%

Even though I’ve taken a loss on it, I feel a bit more comfortable than leaving it open over the weekend (it’s Friday today). If this market gaps up past the stop loss, then the account could lose a lot more than I would have intended.

 

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Crude oil, dollar weakness

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The USD currency weakened signifcantly this afternoon pushing the major FX pairs and precious metals up and USDCHF, USDJPY down. It was a big move with USDJPY seeing record all-time lows despite posturing from the Bank of Japan to intervene. This didn’t bode well for a short trade I had in December Crude Oil. Here’s my entry:

Entry

The trade did go 34 ticks in my favour and then suddenly went up and didn’t stop until it hit my stop loss level. Of course after it hit my stop with me “puking the highs”, price retraced downward. I risked 11% of the account on this trade, and lost it all which pretty much undoes the 13% gain I made in EURCHF this morning.

I need to get used to taking big losses like this if I’m going to trade my account with a high level of risk. It does seem a lot to lose in one trade and looking back at the trade, I think it was handled well. The move was a surprise due to the weakness of the dollar, and price did react off the level quite well. I’m now wondering if I should have exited the trade before the stop was hit. But then we start getting into the realm of double guessing yourself and getting in and out of trades on a whim. It’s better to plan the trade ahead of time and let it play out than try and manage it under emotion, so in that respect my discipline was good.

Looking at the chart a couple of hours later though is infuriating when you consider that I stopped out 2 ticks below the high. Trying to put it out of my mind now…

UPDATE 22nd Oct

I really must stop looking at this chart, but my target WAS hit after I literally puked the high of the move. Well, I’m glad it’s a weekend and I can get this one off my chest.

Crude oil market into the close

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EURUSD loser

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This trade was a little hasty I think on hindsight. The level was not the best and there was not enough space for a rounded retest of the level. Price did react to it, but it was short lived before the bulls pushed it higher on some EUR rumour from the rumour-mill.

EURUSD Loser

I risked 6.25% of my account on this trade and lost the 6.25%. The level was not strong enough to support the move I was looking for, so a lesson learnt here again. Be patient and only trade the very best levels. I don’t want to be in and out of the market every 5 minutes because I have a day job, I just want to cherry pick the best 3-5 trades a week and grow the account with that. This trade was a B grade level. Oh well, next trade…

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Trading on Rumour (Part 2)

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Well this second trade on rumour just proves that to me loud and clear, to stick with the technicals. It’s good to have a general ear on the fundamentals, but quite often the market will do the opposite of what you expect it to do. There were rumours that the BoJ were going to do something significant to weaken the Yen to help exporters today. So I went long the USDJPY at 77.20. This did not happen, and as the market realised nothing was happening, the USDJPY sank and stopped me out at the lows. I don’t like “puking the lows” as I feel like a complete idiot, but it had to be done this time to get out of this trade.

This trade was taken with very low risk – I only risked 2.4% of the account on this so the damage was very limited. A good lesson though.

 

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Frisky EURJPY

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I’ve had my first losing trade in a while. I took the EURJPY short at a fairly decent resistance level and price bounced off it as planned and moved in my favour. However I could not check the charts enough but I wasn’t worried because I had a carefully placed stop. The trade lasted 4 hours and the stop got hit for a 6% loss on the account. In case you’re wondering the account is small and I’m in an aggressive account-building phase and currently risking 6% per trade – this has been slowly increased as my winning streak has got longer. I’ve had 9 winning trades in a row and I guess a losing trade was due sooner or later.

Losing EURJPY trade

Looking on the brighter side my competition account has nearly doubled. I’m not documenting my competition trades, some of them are in parallel with my main account and some of them are competition account trades only. This losing trade doesn’t bother me in the slightest, it’s part of trading. Having said that it is slightly irksome that I seem to have “puked the highs” as Tom would put it. Only time will tell…

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Gold mug

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This blog post was put up here on 26th September – a couple of weeks after I should have put it up. In my efforts to be completely transparent and honest I did omit to post this one up in the first place and I dropped my guard. I am therefore posting it up now so that the trading record is full and complete.

I took a trade on 16 Sep on Gold and the reason I took I think is because I missed a really nice EURJPY trade by 0.7 pips. I was therefore looking for ANY excuse to get in the market and I took this trade. It was a poor trade taken with negative trading psychology and it cost me 2% of my account. Stupid mistakes like this are getting less and less frequent for me, but I want to post this up because although I knew I was making the mistake I took it anyway. My attitude was, “Well this one is worth a punt. I missed the EURJPY trade but I’m not missing this juicy Gold trade.” On hindsight it’s not a high probability trade at all and should not have been taken. Tom didn’t take it.

Not too clever

What you can’t see from the chart is that the entry candle retraced all the way down to the bottom and almost hit my target. I left the trade and didn’t move my stop and I took the loss at the level marked XXX. Not very clever and a mistake I will not make again.

 

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Revenge trade on the Spooz

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This is revenge trade part 2. When I missed my EURJPY trade by 0.7 pips I placed two trades, this one and one on Gold. Both revenge trades were losers and cost me 4.5% of my account balance in total. This trade cost me 2.5%.

I wrote this post on 26th September and am putting it up here with the original date on because I want the blog to be a full and complete record, warts and all. Moral: don’t revenge trade.

ESU1 trade on the hourly chart

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