Tuesday, April 1, 2008

Monthly Trade Analysis March 2008

Because of the quantity of trades I take on a monthly basis I'm going to focus just on my Forex trades in this monthly analysis.

Date Pair Setup Timeframe R Target Result
3/5/08 USDCHF Hidden Divergence H1 26 84 +6R
3/10/08 USDJPY Divergence M5 9 42 +3.5
3/11/08 EURUSD ABC Reversal M5 14 39 -1R
3/12/08 USDCHF Hidden Divergence H4 60 132 +2.07
3/19/08 USDJPY Hidden Divergence M5 22 63 -1R
3/27/08 EURUSD Hidden Divergence H1 42 127 -1R

Monthly Net Results: +8.57 R

Now I want to point out a couple of things. First most people aren't that excited about this type of trading since it is longer term than most day traders like (typical holding time was 1-5 days). Secondly, with a winning percentage of only 50% it is hardly "glamorous" trading. However, it is quite profitable. This particular setup tends to average about 5-10R (i.e. percent per month) with no more than a 10-12% max drawdown and about a 40% win ratio. If only hedgefund managers could match results of 50-120% per year ROI with a 10-12% max drawdown.

Some of you might be thinking that this is based on some "awesome" entry perhaps a really complicated Neural Network or something of that nature. Actually, it has almost nothing to do with the setup (divergences of course) but all about the fact that I risk a very small amount to attempt to capture very large R multiples.

After all do you want to be "right" or be "profitable"? Good trading is boring.

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