I’ve added a new section to the site that will display all different types of graphs of my performance. Currently I have:
- Monthly Profit/Loss in USD - This graph shows my profit/loss in USD for each individual month. A month is treated as a totally separate entity from every other month.
- My Equity Curve – a graph rebased to a starting level of $20,000 USD. This shows my rolling profit/loss in USD from month to month. The value of the last data point on the graph will show my most recent capital amount.
- Monthly Profit/Loss Percentage - This graph shows my percentage gain or loss for each individual month.
- Rolling 12-month Profit/Loss Percentage - This graph will show my rolling percentage profit or loss for a 12-month period. The value of the last data point on the graph will be my total profit/loss percentage for the year.
I don’t know how much I’m going to increase or decrease these numbers after this month. I’ve had an up and down month on the positive side. I currently sit at +3.0% for March with no open positions.
The link to the graphs will always be located under the "Trader Rich" menu and is titled, "My Forex Graphs."
I ended the month of February up 9.6%. This betters the previous month of January where I was up 6.8%. I consider it an achievement to be up 17% so far in 2008 but I’m not getting ahead of myself to think that the rest of the year will go like this.
What did I do right this month?
- I never risked more than 2% on any trade.
- I knew my stop loss before entering a trade, sized my position, and never moved my stop on a losing trade.
- My reward to risk was typically around 2:1.
- I traded one of my systems pretty consistently (missing some opportunities) and stopped trading two others when I found I was being too inconsistent with following my rules.
I think it was a good idea for me to stop trading two of my systems this month. I may have put them into the mix too quickly without fully trusting them. As I mention in #4 above, I was being inconsistent with my rules and found myself breaking them more times than not. Instead of sticking with them using real money, I moved them back into development and continued trading them in a demo account. I think that if you have any doubt in your trading method or system, it’s best to discontinue using it until you trust it.
What did I do wrong this month?
- I exited some positions before they hit their target. This was due to fear and fear only. There is a simple cure for this. I should just close my trading platform and open it again only once the position has closed.
- I’ll say it again but I started trading a couple of systems before I was ready. It could have turned out bad but it actually did not this time. They systems were profitable but I was still not comfortable with the methods I used in obtaining the results.
- I sometimes got lazy or forgetful this month with one of my trading systems. I failed to place an order when I should have, costing me profit.
If you had success or failure this month, I think it’s important for you to find out what you did right and what you did wrong. It’s imperative to evaluate your performance so that it can be improved upon.
Explore these other Forex related posts:
- Six Percent Loss This Week
- How Many Times Have You Exited a Position Early?
- Dooku Forex Trading System
- My Biggest Mistakes This Month
- 2 Percent Risk with 2R Multiple
I’ve rewritten my forex trading goal. It’s really very straight forward. For future reference, my current goal and 2008 equity curve graph is always located at http://www.forexproject.com/My_Forex_Goal/ or under the Trader Rich menu item, Goal & Performance.
My goal is simple in substance but will be difficult to achieve. I must be profitable over an 18 month to 2 year period. A 10% gain over this period is not sufficient, nor is 20%. I’m looking for at least a 50% gain or more over this period.
I’ve been trying to obtain consistent profitability over the last three years without success. Initially, I think I expected to have success after my first year of trading but that quickly changed when realism set it. Therefore, I have little doubt that I have only two years left trading forex if my goals aren’t realized. If I can’t show consistent profitability after trading for five years, I will assume that it will never happen. I don’t think my goal or intentions are unrealistic. I’ve heard countless times that in order to become proficient as a trader, you really need to give yourself three to five years.
I am still optimistic that I can achieve this goal. If I didn’t think I could, I would have given up already.
I lost about six percent of my account this week. So what! This is the only negative thing I can say about January.
The Positives of January 2008
I increased my account balance by 6.8% this month even though I suffered a minor losing streak this week. I obtained more satisfaction from other non-monetary accomplishments though.
- At no point did I feel like I took on too much risk. I set my maximum loss per trade to 2%. This was greatly assisted by using my new position size calculator. I sized my position before every trade.
- I had the potential for 2R on every trade. I realized this potential on all winning trades except for one which I exited based on discretion. It turned out to be the right move.
- I did not jump on a trade due to boredom, a recommendation, or because I was bored.
- I did not enter too many trades at once. In fact, I only had one position open at any given time.
- I only moved my stop loss once. This happened today when I moved the stop to breakeven. This was based on discretion also. It turned out to be the right move.
- At no time did I let emotion get the best of me. This is always a work in progress and I understand that not every month is going to be this easy. There will be months where my emotions are tested more than others.
- I followed my trading systems with no modifications. My entry rules and exit rules were followed.
January was a good month and it feels great to kick off the new year on positive ground. Nevertheless, I don’t feel overwhelmed with confidence or convinced that this is nothing more than short-term success. Therefore, I’ll continue to work diligently as I always have.
I hope everyone did well this month also. Feel free to comment on your successes or failures. We’re all going to have our ups and downs.