Why did I do that?

Although I was making money, the way I was trading Zen involved carrying losses over a long period of time.  In addition I made a couple of mistakes and got caught on the wrong side of an NFP announcement.  I had a hedge in place, but I cut the winners short and let the losers run.

My hedging technique works and I could have traded my way out of it, but I found out an important thing about myself.  I do not like to trade this way.  Intellectually, I knew that I could come back and squeeze out some small daily profits while I unwound the big losers, but it was not fun to me.

A Matter of Personality

I felt very discouraged sitting down at the computer when I was riding even a couple losing positions.  If I had two losing trades and lost the same amount of money on each of them, but one where I had a stop loss and one where I had to carry a loss while I rolled off parts of the position at a time, I would prefer the one with the stop loss.

For me, there is a lot to be said of starting fresh every trading day.  It is just a matter of personality.  Some traders might like the challenge of trading out of a losing position.

Now What?

The good news however is that I ended up breaking even over the last three months that I have been trading Zen.  But now what?  Give it up altogether?

No way.

I did learn one thing that was huge though.  Rob Booker was right, I really got to know the EURUSD very well.

My New BFF

Because I have really learned how the EURUSD works from a ton of time in front of the screens, I can still put this to work.  So from now on, this isn’t going to be Zen Trading anymore but just plain old day trading.  Don’t get me wrong, in my opinion (whatever that is worth) Zen Trading works.

However, just like any other trading technique, it has to match the personality of the trader and from what I have learned, it does not match my personality.

What The EURUSD Does For A Living

So what I have I learned about the EURUSD so far?  Don’t take my word for it, but here is what I think:

• Levels – the EURUSD really seems to respect the 00 round numbers, the 80s and the 20s.
• The big moves usually happen during the US session.
• It moves slow enough to day trade.  It is a good pair to day trade because it will move enough to make some money, but not as much as the GBP pairs.
• I love the spread and execution on Oanda.
• I thought watching the 10 second chart was a little ridiculous, but it really does help me get a feel for price action.
• -20 pips seems like a good place to put a stop loss.

My Goals

So going forward, I am going to close out all my positions at the end of the trading day.  I still want to target a minimum of 10% a month growth in the account and I want to be net profitable every day.  I am still going to keep the long and short accounts because it does provide some advantages, in my opinion.

I am also going to start testing some simple indicators to see if I can time my entries and exits better.  I have been trading this new technique for the past few days and I have managed to make a small profit most of the time, so I think it is just a matter of fine tuning the technique.

That is it for now, see what happens next month!

Zen Trading in December was not as good as in November.  I made $106.92 on a beginning balance of $3,064.23, for a +3.4% gain on the account.

There were a couple of big lessons that I learned this past month.  First of all, it is not good to put limit orders on trades that are closest to the current price.  This leads to cutting profits short and letting losers run.  Initially, I did not want to lose out on small moves so I put in limit orders on all my orders.  You know how that goes.

Secondly, I would prefer to close all positions out every night, or at least have a target where all positions are closed out.  This prevents carrying losses for an extended period of time.  I am looking for techniques to exit initial losers with a profit using the hedging technique at Oanda.

In addition, sitting in front of the screens every night has really been wearing on me.  It can be fun at times, but when I get stuck, it is frustrating.  Again, I think I would prefer to have a hard stop and profit targets out there.

January Zen Trading to come!

Click here to see the November 2009 Report (PDF)

Final result was a +10.46% gain.*

*Trading currencies involves substantial risk, and there is always the potential for loss. Your trading results may vary. No representation is being made that any associated advice or training will guarantee profits, or not result in losses from trading.

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Before deciding to invest in foreign exchange, you should carefully consider your investment objectives, level of experience, and risk threshold. You could sustain a loss of some or all of your initial investment, and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent certified financial advisor if you have any doubts.

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I also had to build an Access database to create this report.  Initially in this post, I thought that I could get by with an Excel spreadsheet but because of the way I trade Zen, Access turned out to be the only way I could create the reports I wanted.  This report still isn’t where I would like it but it’s a work in progress.

Click here to see the trading results in PDF format.

I was actually doing better in October so I still have work to do, but this is the first time in my trading life that I am consistently profitable. I was also on vacation for a week so I wasn’t trading as much as I normally like.

If you don’t have a PDF reader, click here to download one from the Adobe website for free.

I was up $6.55 on a begining balance of $495.62 for a +1.3% gain on equity.  I’m actually very close to getting back to my original deposit balance when I started this account.  That doesn’t seem like much but is a major accomplishment for me.

I had a total net of +120 pips and 64% winning trades.

Here is my statement:  July 2009

For August I plan to do a lot more backtesting on a very aggressive system and continue trading short term GBPJPY trades.

Hope you are trading well!

Hugh

I am feeling more comfortable reading price levels and have been studying Chris Lori’s Pro Traders Club more intently as of late.

Here are my trades for June 2009:

Click above for larger image

Here are my results thus far for the year.  That blowup month in January is killing me.  Right now, my goals are to get back to breakeven and add money to my account so I can make more substantial sums.  Two winning months in a row, I want to make it three!

In looking at my results for June, I have realized that I don’t take enough risk on some trades.  When I am right on these trades they don’t pay enough to make up for the losers.  I have to make my risk per trade more consistent so I can pay for the losers.  I also have to find a way to maximize my winners.  This can be done by stacking positions or leaving a little of the position on.

• http://www.tradingheroes.com/losing-trades/05062009-gbpjpy-trade (-93 pips)
• http://www.tradingheroes.com/winning-trades/05182009-gbpjpy-trade (+108 pips)
• http://www.tradingheroes.com/winning-trades/05-20-2009-gbpjpy-trade (+285 pips)
• http://www.tradingheroes.com/winning-trades/05292009-gbpjpy-trade (+146 pips)

Grand Total: +446 pips up this month, which equaled a total of +1.2%.  It was the best month in awhile, but I can do better.

• http://www.tradingheroes.com/losing-trades/04082009-usdchf-trade-2 (-72 pips)
• http://www.tradingheroes.com/losing-trades/04132009-gbpjpy-trade (-216 pips)
• http://www.tradingheroes.com/losing-trades/04282009-gbpjpy-trade-2 (-380 pips)

Grand total: -668 pips

Not a good month and not nearly enough trades.  I need to figure out a way to do more trades (and improve the winning percentage of course).