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.
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.
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.
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?
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.
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.
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!
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.
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.
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...