The first quarter has ended, and I find myself in an unusual, but very happy position vis-à-vis the number of net pips added so far in 2019. By writing “unusual” let me be clear, I do not mean that I am not grateful or believe that I do not deserve to be in such a good position at this stage this year, it is just a little surprising overall considering the very range bound market conditions and secondly considering that I am now a longer-term position trader.
Looking a little deeper into the numbers, let’s be honest and not fool ourselves, the BREXIT related trades have been my backbone of success this year so far. Non-BREXIT trades have been nothing more than a severe pain in the ass, for most the time (If one could apply the “Mulligan” principle to whether certain trades should have been taken or not, for my non-BREXIT trades, I think I would have taken a "Mulligan" on more than 50% of them this year).
Why a severe pain in the ass? Quite simply, the FX market is not just range bound, it is at the moment both dull and boring. The fact that Central Banks are now in what appears to be a competitive race to the bottom to cut rates and flood their respective economies with support through lower interest rates hasn’t really helped matters, more or less we are levelling the field.
If I look at my current batch of Non-BREXIT trades I am holding. It’s not that good, I am holding an overall loss position into next week for the month so far. I believe with the trades that I still have open that I am trading in the correct direction.
I still have my trading conviction and my mindset is in a great spot, but, being “canny” is also an important trading attribute. Knowing when to cover trades is important, I made the following key decisions last Friday 12thApril 2019.
- I was holding 4 x AUD short trades (AUD/USD, AUD/JPY, AUD/CAD and AUD/CHF). Rather annoyingly my entry levels at good two-way places of interest were not holding and the AUD was looking to squeeze higher. It had started to break the “two-way” previous resistance levels and trend lines across several charts, which had held in the past.Even as a position trader, taking a longer-term view the upside risks were such, I covered all four short trades for a combined loss of 187 pips. My overall risk tolerance on these trades was over 600 pips. However, I decided to cut at less than 33% of my tolerance.From my perspective this was a big call. It could come back and “bite me”, but at the time I called it I believed it to be the correct decision.
- My trade plan with the AUD was to be short on the back of the CHINA / U.S. trade deal. I was just short way too early. My error, I should have waited.
- I will now revert to a revised strategy on when to enter short the AUD across the board from higher levels, which should yield a better RISK / REWARD potential.
Even with my performance being so damn good this year so far, with FX you simply cannot afford to take your eye off the ball for a moment, regardless of what type of trader you are. As a longer-term trader the market can be more forgiving at times but make no mistake be under no illusion, the market does not give a shit about you. You are on your own.
I have been away in Phuket, Hong Kong and Macau on business over the past three weeks hence the delay in posting the March and Q1 2019 numbers.
During my break, I have been presenting and listening to traders of all kinds; scalpers, day, swing and position traders with levels of experience from new thru intermediate to experienced and both technical and fundamental traders. All meetings were longer than anticipated but were so enjoyable I could do this every week…
What were the commons themes?
- The FX market being range bound for most of Q1, especially with the USD majors.
- Trading this year so far has been difficult and challenging.
- Opportunities to make $$$ very limited.
- To keep one’s head above water in the markets should be considered a success!
- FX Market liquidity, especially in the Asian session very low.
- Difficulties for Asian area traders from a time zone perspective being able to be active in the New York / Europe session challenging.
- Algorithms / EA’s distorting moves.
- More discipline required to trade. Strategic trades more important than impulse trades.
I have my peer group and we discuss these issues on a regular basis. It was interesting to hear the same from all types of different traders, with different goals, styles and market expectations. In some ways I found it comforting writing these bullet points on white boards, especially as across three meetings most of the same points were raised without prompts.
My point for raising this in this blog is that as retail traders we ride on the coat tails of the major banks, we “bend the knee” and follow their moves.
So, upon completion of Q1 if you still have your head above water and made some pips, congratulations. Q2 is bound to free up at some point as the geopolitical news events get sorted. This uncertainty cannot go on for the whole year... surely not.
Moving on once more...
As mentioned last month: -
“This year at the end of every trading month and quarter, my DRIVE THRU blog will have a different format for both the FREE NEWSLETTER and WEEKLY FX PREMIUM subscribers’ variations of the blog.
The FREE NEWSLETTER will review the previous months performance and contain all the relevant data supporting that month’s performance.
The WEEKLY FX PREMIUM subscribers’ version, will in addition, have a review of the months trades, together with an update on my future ideas together with any updates to the excel spreadsheets containing my FUNDAMENTAL views that are contained inside the website under the supporting information tab”.
1. MARCH 2019:
MY OVERVIEW OF THE MONTH:
A bit more of a challenge when compared to January and February. Nevertheless, a month with over 1,000 pips generated should NOT be sniffed at.
As mentioned already in my introduction, BREXIT related trades counted for most of the pips generated.
My overall TRADE PLAN remains in place: -
BREXIT trades are mostly a 50-100 pip “grab ‘n go” approach.
NON – BREXIT trades are intended to be more in line with a “SWING TRADER” approach.
1.1: THE PERFORMANCE STATISTICS:
MONTH NET PIPS = 1,193
YTD = 5,703
ANNUAL TARGET = 10,000
% ANNUALTARGET ACHIEVED = 57%
MONTH COMPLETED TRADES = 41
POSITIVE TRADES = 33 (80%)
LOSS MAKING TRADES = 8 (20%)
MONTHLY TARGET P & L RATIO = 80% - 20%
MONTH ACTUAL P & L RATIO = 80% - 20%
YTD COMPLETED TRADES = 125
POSITIVE TRADES = 106 (85%)
LOSS MAKING TRADES = 19 (15%)
YTD ACTUAL P & L RATIO = 85% - 15%
AVERAGE PIPS PER TRADE GOAL = 50 pips per trade
THIS MONTH ACHIEVED = 29.09 pips per trade
YTD ACHIEVED = 45.62 pips per trade
This month as I suspected given the range bound trading conditions and the fact, I exited several trades, when spooked by the headline news, way too soon the “pips per completed trade” performance suffered on the monthly performance and this has dragged down the year to date statistic as well.... argh!
Apart from that area the rest looks OK.
I am aware that my projected number of completed trades in 2019 was targeted at 200 and that this number will be exceeded. This is due to the BREXIT related trades that I have in my TRADE PLAN. Like many, I had allowed for the fact that this should have been done and dusted by now.
1.2: MONTHLY PERFORMANCE SUMMARIES:
1.3: THE TRADES:
1.5: 2019 - TRADING PROJECTION:
1.6: THE WEEKLY FX PREMIUM – BENEFITS OF SUBSCRIBING:
1.7: WEEKLY FX PREMIUM - THE TRADING HISTORY:
1.8: SUBSCRIPTION OPTIONS:
SILVER: 3 months (10 weeks) = CAD350.00
GOLD: 6 months (20 weeks) = CAD$600.00
PLATINUM: 12 months (40 weeks) = CAD$900.00
(Platinum renewal = CAD$750.00)
Go to my website www.weeklyfxdrivethru.comfor more details of all the subscription options under the “SUBSCRIBE TAB.
To subscribe to the WEEKLY FX PREMIUM, you will require a valid credit card.
SECTIONS 2, 3, 4 and 5
WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
2. MARCH TRADING REVIEW and OVERVIEW:
3. LOOKING AHEAD... WHAT TRADES ARE NEXT:
4. LONGER-TERM FUNDAMENTAL VIEWS:
5. LOOKING BACK AT Q1 and FORWARD INTO Q2:
I am still extremely positive looking forward thru Q2 to the end of 2019.
Assuming that BREXIT moves to the next stage and that TRUMP / XI get a trade deal agreed, these two geopolitical events being moved forward should be the catalyst to get the FX market free from its chains!
I am ready to increase my RISK TOLERANCES in the market, especially as once we clear the trade deal, I believe Central Bank policy will once again start to dominate the news flows. This is a more secure foundation for trading in my opinion and gives a greater confidence in placing trades and achieving trade objectives.
Whilst one still needs to have one’s wits about them, I still feel that there is huge trading abundance in both pips and $$$ available during the remainder of this year. However, in order to achieve this goal, the 2019 FX trader requires both patience and the ability to wait for trades to come to his or her entry levels regardless of whether you are a scalper 5-15 minute charts trader or a swing / position trader using 240 minute thru weekly charts.
The Pip Accumulator
BLOG VERSION: #317 FREE NEWSLETTER
DATE: 13thApril 2019