23/2/10 Cable & Eurusd – A profitable +60 day but…. what a shocker!

Yes Ladies and Gentlemen, whilst I have had a successful day today it’s fair to say I am somewhat grumpy and annoyed with myself.  I have made a litany of mistakes today and was lucky to get away with them. 

 Whilst I felt somewhat tired this morning at my 0530 start it wasn’t any worse than normal.  I was soon to be proved wrong.  Let’s start with GBPUSD.

 Mistake Number 1 – I was looking at the wrong timescale chart and so I didn’t see the set-up.  It was only when my colleague (thank-you FXTrader Sandy) pointed out my schoolboy error that I was able to switch to the proper time scale, set the set-up and place the trade.

 Trade triggers at 1.5543 and heads north strongly. Trade hits my +25 point and my stop is moved to Break-even.  Ok I’m cool with this.

 Mistake Number 2 – I then look back at my platform to see the my position is no longer open.  When I check my account history I see that my trade has been closed at +30 points profitable.  Now I’m annoyed as surely I wouldn’t do something as foolish as to put in the wrong target for my trade?  Surely not?  Oh yes Paul it’s very possible to make such errors!

 So this trade ended up being a profitable 2:1 trade for +30 points. Admittedly I kind of picked the top in GBPUSD before the huge drop and I made profit whereby I would have been break–even.  However that’s not the point.  It’s not about outcomes it’s about execution and my execution on this trade has been poor. It’s been graded as 0 / 5 in my execution scoring (Do you traders grade your trades for performance and execution?  If not, why not? Hmmm I feel another blog post coming up.)

But it gets worse, let’s take a look at EURUSD….

Trade sets- up as per normal and I have a trade opportunity.

Mistake Number 3 – My entry order for 1.3642…..so why do I put in 1.3647?  That’s 5 points further away than I should be entering?  Why would I do that?  I still have no answer to that.

Anyway price heads up strongly and hits my break-even point.  As you can see at point 3 it gets to within 1 point of my target but it merely tickles the soft-underbelly of my target at 1.3692.  I decide that price is about to reverse so I tacked my stop loss in tight to 1.3677 where it is hit for +30 before the massive drop in EURUSD.

 Mistake Number 4 – Why was my target at 1.3692?  That was 45 points from my entry…..but my entry was in the wrong place.  It was sloppy of me to place my target at my entry level as opposed to the supposed correct one.  Once I’d realised that I had entered 5 points late I should have adjusted my target to 1.3687.  This is a back-tested and forward tested target so I know it works.  Yes I would have made less than target but would have still made +40 points as opposed to +30 (which actually should have been Break-Even.)

So I’ve made a litany of mistakes and been lucky to walk away with +60 points of profit when at best I should have been +40/45 or more likely two more Break-even trades.  As I mentioned earlier in the post it’s not so much about the outcomes but about focusing on flawless execution.  There was none of that on show today!

 What’s the mottos of the Special Air Service?  Anyone know?  It’s ‘Who Dares Wins’.  However the unofficial motto, used by the actual members of the regiment is ‘Check and Test – Check and Test’ which has become a mantra of my own.  Today I let myself down.  I shall be giving myself a good talking to.

 When I de-briefed my performance the only point that stood out was that I engaged in a 4 hour coaching session with a client yesterday.  That may well have left me mentally and emotionally tired which showed up in my mistakes today.  A useful point for my trading journal.

So there you go, even professionals have their off days.  I’ve been immensely lucky that the outcome was in the positive, on another day I may not have been so lucky.