May 25, 2008
Weekly Trading Update - May 19-23
Well it had to happen. After many weeks of excellent profits I was due a losing week and this one was a real stinker. Overall I was down 125 points this week and to top it all off my favourite football team, Bristol City, lost in the play-off final yesterday, so it was definitely a week to forget.
To break down that loss, 45 points were lost trying out a new 5 minute strategy using numerous EMA's. Unfortunately I think this is one of those strategies that look amazing on paper, but when you actually trade them for real, they go belly up, so I will probably abandon this short-term trading strategy for now.
My main trading strategy is so much more reliable and profitable. Although it was responsible for an 80 point loss this week, I can't blame the strategy as I entered the position too early before the EMA crossover actually happened (which actually didn't end up happening as it turned out), so I only have myself to blame for this one.
I always tell people how important discipline is if you want to be a successful trader, but I had a momentary lapse myself this week. I was looking to go short on the EUR/USD and on Monday night the EMA (5) looked like it was about to cross downwards on the 4 hour chart. However instead of waiting for it to happen, I entered prematurely after seeing that the MACD had just crossed downwards and the TRIX looked like it was just about to, so I entered early, going short at 1.5515 in an attempt to grab some extra points.
As it turned out the EMA crossover didn't actually happen and it broke upwards. Normally I would have closed as soon as the EMA reversed the other way, which usually results in a small loss of around 20-40 points. However because it was my bedtime, I left it open overnight and was certain my target price of 1.5450 would be reached, so gave the position chance to breathe with an 80 point stop loss. This of course was triggered overnight much to my annoyance when I woke up the next morning.
Elsewhere out of the three main pairs that I trade there was only one real EMA crossover (in the direction of the overall daily trend) and that was on the USD/JPY. However I didn't end up trading this as it didn't pullback enough for me to get a good value entry point.
So overall it was a very poor and frustrating week. If I'd applied my strategy rigidly as I normally do, I would have avoided entering a position at all never mind making an 80 point loss.
Overall though I'm confident I will return to winning ways next week. If you would like full details of my main 4 hour trading strategy, please subscribe to my newsletter by filling in the short form above.