Hi traders 👊 Trade review time! 🔥
Because I enjoyed sharing my trading review for the first week of the year, I decided I would just do the same this week! 😊 I believe it can help people get some insight into how I trade, how my trade management style is and how a solid trading process and execution can lead to consistently good results.
This post is an excerpt from the weekly Trade Advisor members outlook. I always do a review of the setups I discussed the week before since it’s useful to show my trading style and – more importantly – it’s a good way to keep myself accountable of what I do. Of course, our members got all of these setups a week earlier so they could trade and benefit from the same setups and trades as I did.
Please note that I only review the trades that triggered. All of the setups that didn’t cross the trigger levels I indicate in my outlook, are left out. Additionally, I don’t just review the winning trades. If the trade triggered but then ended up in a loss, I will also list them here.
AUDJPY 1H short
The first review of the week is AUDJPY 1H short. We saw Friday close with a strong bearish bar and even though we opened with a gap higher on Monday, the price kept moving down.
At some point, it broke the 88.75 level, which is when I got in. The price moved lower nicely but moved back up, which is when I decided to cut the trade. If the trade moves against me while I’m in a profit, I’m willing to give it a lot of room to develop but at some point, you need to realise that it’s better to protect your capital and cut the trade. That’s what I did when I closed it for a 0.25R profit.
AUDNZD 1H long
AUDNZD 1H long was a special one and I want to discuss this since some of the members took this trade. It actually gapped up on Monday morning, immediately covering the resistance level I indicated last week (1.097). However, one of the rules in my system is:
If the price gaps across a trigger level, it’s never a valid signal to enter
As we can see and as it often happens, the price “closed the gap” and then continued moving down. No trade for me.
AUDUSD 4H short
On Tuesday, we got a signal on AUDUSD in the form of a strong bearish bar. A good signal, but unfortunately, the price started moving sideways. My 4 candles rule (if the price is still around the entry after 4 candles, cut the trade) made sure that I reduced my loss before it got worse. I closed the trade for a 0.23R loss.
CHFJPY 1H short
On Monday with CHFJPY on the 1H charts, we got a good trigger signal, breaking the local support that was in place. The price initially moved lower, but then bounced up. We’re now 5 candles into the trade and very close to our original entry.
At this point, it’s close enough to my 4 candles rule for me to cut the trade. As you can see, the trade would’ve worked out regardless but I know that following my rules will protect my capital, regardless of a single outcome. Even though in this instance, it would’ve worked out fine, most of the times it might’ve not and those are the situations that really bite into your bottom line! Regardless, I closed this trade for a 0.09R profit.
As traders, we will sometimes miss trades that would’ve worked out. We might sometimes close trades that turn around and hit our target and keep trades open that suddenly spike into our stops. You can’t win all trades and if you try to, it will likely hurt your trading performance. You should be comfortable with cutting trades and having losing trades.
As with some of the other setups of this week, there was an incredible second entry opportunity on the 4H timeframe when this pair showed us a very strong bearish candle that moved well below the previous local support (black horizontal line). Whenever possible, I will always prefer the 4H to the 1H charts and that happened to be the case here. A logical target was a previous swing low and it resulted in a 2.05R profit.
EURNZD D short
EURNZD on the daily was an interesting one. I got in on Tuesday once the price broke the support level and the price moved lower initially, but unfortunately hit my stop loss in a violent bullish move on Friday caused by the ECB minutes release. Unfortunately, this can happen and while it can be a valid strategy to bank some profits along the way, losses like this will happen. I didn’t take any partial profits on this trade so it resulted in a 1R loss.
EURUSD 4H short
On to one of the nicer setups of the week! This pair broke the level on Monday, which is when I got in. We saw a nice follow-through down but then, the price started to drift sideways. This is often a signal that the momentum is gone and while this could also have been a bearish flag, I took half of my profits. If you notice, I’m using a similar approach to this as with my 4 candle rule around the entry, although I’m a little more flexible in this case since I’m in a good profit already. I closed 50% of my position at 1R, so a 0.5R profit.
Unfortunately, the price afterwards shot up and I closed the remaining position for a small loss of 0.1R, which on this 50% remaining position means a 0.05R loss.
In total, this trade resulted in a 0.45R profit.
GBPJPY 1H short
GBPJPY on the 1H is very similar to some of the other setups we’ve seen. Initially, the price broke our level and moved down but then moved up again. The price was very close to the entry after 5 candles, which means that at that point, the trade should be cut. I made a small loss of 0.09R.
As with some other pairs, there was a second attempt at trading this. On the 4H, we could see a strong rejection of the previous highs and a break of the low (see black horizontal level), which was an excellent signal to get in. This resulted in a massive 4.28R profit!
NZDJPY 1H short
NZDJPY was a similar setup to the previous JPY pairs. It broke the level I indicated and this was an excellent moment to go short. However, our 4 candle rule got us out of the trade for a small loss of 0.25R.
But the same scenario happened here too and in this case, I noticed a nice example of one of my favourite patterns as well: the pin and drive entry trigger! I entered the trade again and it went my way without too many issues for a neat 3R profit. I mentioned this one on Twitter to show that these setups work:
Example of a pin and drive entry trigger. Rejection of the highs and then a strong push down. Happened at the retest of previous supply zone.
— (@smartfxlearning) January 9, 2018
NZDUSD 1H short
NZDUSD is one of those setups that looked good, but didn’t give us a result we were hoping for! Basically, from the moment I got in this trade went the other way. Since both of the first two candles were bullish, I closed this trade after the second candle for a 0.44R loss.
USDSEK 4H long
USDSEK was one of those trades that didn’t require any trade management. Once I got in, the trade just went towards my target with little interruptions, giving me a clean 2R profit.
XAGUSD 4H short
And finally, XAGUSD. Silver seemed like a good setup initially. However, it didn’t show us any high-momentum candle to break our level and the trade quickly died out afterwards. After four candles, the trade was in the red, so I decided to close it for a 0.27R loss.
What a week! It required keeping track of a good number of setups and needed good execution but if you kept note, you’d see the following results of my trading week:
- AUDJPY: 0.25R
- AUDUSD: -0.23R
- CHFJPY: 0.09R + 2.05R
- EURNZD: -1R
- EURUSD: 0.5R – 0.05R
- GBPJPY: -0.09R + 4.28R
- NZDJPY: -0.25R + 3R
- NZDUSD: -0.44R
- USDSEK: 2R
- XAGUSD: -0.27R
Which gives me a total of 9.84R profit for this week (yes, I exaggerated a tiny bit in the post title)! There were many trades that triggered this week and only because of my rules of cutting trades fast, I got a nice result.
Als note that even though I have 7 losses out of a total of 14 trades, my losses have mostly been small compared to my wins. Only once, I had a trade that hit my stop loss for -1R before I could intervene and close the trade. This is critical if you want to have a positive expectancy; your losses need to be smaller than your wins if you have a win-rate of around 50%.