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Trade Journal USDJPY, EURJPY and GBPCHF June 19-20

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  • Trade Journal USDJPY, EURJPY and GBPCHF June 19-20

    Documenting your trades is a good way to make sure your "planning your trade and trading your plan". I was hoping to start this thread with a perfectly executed winning trade, but it just didn't work out that way. So here we go:

    The plan: Short EURJPY and USDJPY. Added GBPCHF later.
    Target: 75-200 pips total
    Stop: 10% account equity

    Result: stopped out -9.5%
    Trade according to plan: Yes, for the most part. Although in hindsight the GBPCHF was more of an impulsive entry.

    I went into the trade feeling that given JPY has been so strong and that typically the "news trades" overreact there was a very good chance that we would see a strong retracement of the earlier USD and EUR moves up. At the time it appeared that USDJPY and EURJPY both failed to make a new highs after the initial retrace and JPY was gaining momentum. I entered a bit late, but I wanted to see JPY hold above 50 on the strength meter, otherwise it was a good entry.

    My plan, if the trade went against me, was to add at the top of the daily ATR and add more if the position moved in my direction. At this point I would be in "recovery mode" and the plan there is just to recover as much as possible and if conditions permit close with profit. The mistake I had made in the past was to martingale losing trades every 50 pips or so which lead to unacceptable DD's.

    Here is what I was looking at:

    July 19 EJ UJ SM.jpg

    The trade went briefly in my direction and I was up about 20 pips at one point. Things chopped around a bit, but then things turned south on me (or north I should say). At this point I was -7% or so. However EURJPY had moved within just a few pips of the daily ATR and EUR strength meter was moving down sharply as JPY was moving up of extreme oversold so I added a recovery position:

    July EJ-2a.jpg

    Also notice JPY made a higher low on the Strength Meter and EUR made a lower high. This all points to a good probability of a reversal. However this did not last long:

    July EJ-2.jpg

    At this point USDJPY had also made a new high, breaking above 98.00. I exited USDJPY for a 3% loss. EURJPY (along with the GBPCHF trade which we will look at) continued against me and I decided to stop the bleeding at -9.5% total equity DD.

    One mistake that I did make was "overtrading". I probably should have not got into the GBPCHF. I kind of chased this one a bit as CHF was moving up sharply and GBP was moving down. Here are the "before and afters":

    Entry, the initial trade was -36 pips and I added a recovery position but got whipsawed while things were falling apart on the JPY trades:


    Exit: (-2.2%)


    While I am disappointed that the trades did not go my way, I am happy that I stuck with my trading plan. Losses are going to happen. Now typically after taking a hit like this, I will settle down and just take very high percentage trades for small profits until I feel ready to get more aggressive again. Obviously I have to reassess the markets and perhaps even change my bias as far as trend direction. USD may very well make a turn around although the verdict is still out on that IMO and the JPY run may have ended.

    As they say "The trend is your friend, until it bends at the end"....hehehehe.

    Now the key for me will be not to "force" anything to attempt to close the month positive. Just have to make good trades and let the chips fall where they will.
    Last edited by Turtle Forex; 07-04-2013, 06:32 PM.
    "The trend is your friend - until it bends at the end"

  • #2
    Trading Risk Events

    Well I have come to the conclusion that I am just not good at trading during risk events. The fact that I really don't follow fundamentals and moves just don't "make sense" to me means I should probably be on the sidelines when news that can potentially move the market significantly is being released and even well after.

    For the most part I have been trading very good, and following my trading plan. However the trades I have placed post FOMC and pre BOE have bit me for a total of almost -14%. While I am happy that from June 1 to date my account is +4%, I could be doing much better if I chose not to play in the middle of the street during rush hour...;-)

    Today I took a long position in GBPAUD before BOE rate decision. In my infinite wisdom I felt that if BOE news came out as expected that maybe the trade would go against me a bit, perhaps to daily ATR low, where I would go ahead and do my typical recovery trade. I also took the price action just prior to BOE as an indication that it would continue in my direction. Just prior to BOE the trade was +10 or so pips. Yes I regret not taking the 10 don't ask...;-)

    Needless to say if you were paying any attention today you know what happened. The market moved so sharp that I could not even put in a recovery position as there was no good entry on my charts...I rode it out for a bit and after it became apparent that there was not going to be an "overreaction bounce" I cut the trade for a 3.7% loss, deciding not to let it run the full 5%.

    I always try to take away something positive from these kinds of experiences. So here is what came of this:

    1) I decided I am not going to trade anymore around "big news". This would be events like NFP, BOE, ECB, FOMC, RBA, BOJ, etc...while there is plenty of opportunity, I have to be realistic and face the fact that its not my cup of tea. I'll stick with what I am good at.

    2) My belief that in the market, "anything can happen" is further reinforced. While I did plan my trade, I did not plan on this. I have to be more aware that things like this can happen, even with the most unassuming trades, and need to be prepared to take action if/when it does happen. In hindsight, setting a stop 75-100 pips below where it was trading pre BOE as a safety net would have been the correct thing to do. I got a 218 pip haircut instead. Lesson learned.

    3) I was able to cut this trade without emotion. This was huge for me. It was just a trade that didn't work out. I have every bit of confidence that I will close July positve if I keep trading the way I have been and avoid playing in traffic

    Have a great NFP tomorrow! I will be cheering from the sidelines for ya!

    Last edited by Turtle Forex; 07-04-2013, 07:35 PM.
    "The trend is your friend - until it bends at the end"