Geoff's FX Journal

[esuperbo]

Intent of this jounal:

1. Provide a record of mental states/intentions that can be later reconciled with real world actions.
2. Keep track of my trading performance.

Description of trading approach:

Medium term trend following system, 100% mechanical. Worst case drawdowns (all markets fully pyramided) are limited to 5% of equity per week, with any subsequent (ie nonpyramided) drawdowns limited to 2.5% of equity per week. Markets traded include the most liquid crosses, with spread relative to daily/weekly range the prime criterion for selection.

Initial goals:

Trade the system without discretionary or systematic modifications until Jan 1, 2006. Record trade statistics. Observe my psychological responses to winning/losing/treading water streaks. Once these goals have been reached on Jan 1, 2006, reevaluation of goals will be undertaken.

Background:

I'm 22 years old, a Civil Engineering student from Canada. I've chosen Oanda as my broker due to the ability to implement my chosen money management strategies with limited capital.

 

[esuperbo]

November 13, 2005

All numbers normalized to a hypothetical $100,000 account. My intent is some degree of privacy, but I'm unsure if this is really relevant. Regardless.

Current Closed Equity: $100,030
Current Open Equity: $0

No trades currently open. Waiting for signals.

 

[esuperbo]

November 14, 2005

Account Balance: $100,048
Unrealized P&L: $90
Net Asset Value: $100,138

Active in 4 of 8 markets. Here's to hoping that slow and steady wins the race. Trading real money wasn't as bad as I expected... I checked my account far too frequently, but there was no impulse to override the system - likely because I was in the black. We'll see how it goes when the numbers turn red.

 

[esuperbo]

November 15, 2005

Account Balance: $99,724
Unrealized P&L: $480
Net Asset Value: $100,204

Active in 4 of 8 markets from signals taken Monday. Signal taken in fifth market today, whipsawed to a loss of 0.3125% of equity (2.5% divided by 8 markets).

I've found that signals taken Mondays tend to outperform those taken later in the week when trading a game account. Will this continue in live trading?

 

[esuperbo]

November 16, 2005

Account Balance: $99,484
Unrealized P&L: $880
Net Asset Value: $100,364

Active in 3 of 8 markets. GBP weakness kicked me out of another trade, just like yesterday.

 

[esuperbo]

November 17, 2005

Account Equity: $99,506
Unrealized P&L: $484
Net Asset Value: $99,990

Gave back a lot of gains, but still active in 3 of 8 markets. Time to see if resistance will hold for CHF and JPY crosses.

 

[esuperbo]

November 18, 2005

Account Balance: $99,530
Unrealized P&L: $464
Net Asset Value: $99,994

Still active in 3 of 8 markets. Net interest positive, holding over the weekend. Boring week to start, but that's better than a massively losing one!

 

[esuperbo]

November 21, 2005

Account Balance: $98,986
Unrealized P&L: $808
Net Asset Value: $99,794

Units are volatility adjusted by market. Max of 1 unit added to a market per week.

AUD/JPY: Long 2 units.
EUR/AUD: Short 1 unit.
NZD/USD: Long 1 unit.
USD/JPY: Long 1 unit.

Most markets are treading water...

AUD/JPY could be promising if it breaks resistance at 87.70.
EUR/AUD needs a break below 1.592.
NZD/USD is hitting .69.
USD/JPY is just plain choppy.
USD/CHF is a technicians dream, but a whipsaw hit my stops and so I'm out after a week and a bit of riding the bounces.

 

[esuperbo]

November 22, 2005

Account Balance: $98,614
Unrealized P&L: $124
Net Asset Value: $98,738

AUD/JPY: Long 2 units.
EUR/AUD: Short 1 unit.

Today wasn't that fun.

NZD/USD long managed to just barely take out my stop, and then start climbing back. Currently the pair would have been profitable had I not been stopped out.

USD/JPY had a slow grind upward, tapped on 119.4 a bit, then FOMC hit. I watched the pair plunge, wanted to get out, but told myself I'm testing a mechanical system not my discretion. Stop was hit.

AUD/JPY is currently treading water just below 87.70. Thought there might be a break of resistance at 14:30 or so, but no dice.

EUR/AUD is slowly grinding toward my stop. If the trend continues I give this a few hours before I get booted out.

 

[esuperbo]

November 23, 2005

Account Equity: $98,326
Unrealized P&L: $400
Net Asset Value: $98,726

AUD/JPY: Long 2 units.

Got booted out of EUR/AUD like I thought.

Geoff's complimentary trading tip of the day, from watching AUD/JPY bounce off 86.7 remarkably consistently:

1. Wait until 2pm tomorrow, and see if AUD/JPY is at 86.70-75 trying to break through 86.7, just like yesterday and today.
2. Put a limit order to go long at 86.80, stop at 86.65-70ish, TP at your discretion. This would be the breakout trade.
3. Put a limit order to go short at 86.60-70ish, stop at 87.80, TP at 86.35-45ish. This would be the retracement trade.

Too bad im not running a discretionary system...