Looking back trading phases: a graph of my trade performance past 3 months.

Now that I accumulated enough trading records, I wanted to take time to look at the trading performance in numbers, and compare with the change in risk exposure. Then interpret the phases I was in through out the profitable and unprofitable.

The blue graph is my trading performance from August 10 to November 11 of this year. As you can see, I made almost 20% in the first two months, and kept losing afterwards down to 12% before I decided to stop trading to wait for the profitable market.

The tri-color gauge indicates how agressively I was trading: the number roughtly tells how many percentage of my capital I was exposing to the risk for one trade. Risk exposure was between 0.5% to 4.5%. I was of course based on Rational Move Risk Control Spreadsheet to determine the risk exposure.

Past 3 months, I was almost entirely trading in EURUSD. So, I put EURUSD daily chart of the period for comparison. The market had a clear directionality up in September and it is no surprise that this period coincides the period of my best performance.

I had the first warning on September 29: it was the day I took loss for the first time in many trades. After this, my trade got hit and miss. I finally got a big win, but followed by a biggest loss in 3 months because of the increased betting size. As a retrospect, this is the time I should have stopped, and watch the market massaged out until it goes in to the next biggest trend called USD strength, which I think it’s finally coming in a few weeks.

Retrospective & My current speculation of the course $EURUSD might take

Let’s face it. I took almost 80 pip loss on today’s trade after hard-work-no-gain net +5 pip trade.

Three questions to ask when I start to lose in trade:

1. Was I keeping my rule?
80% positive. I constructed scenario, and defined the condition that would keep the position valid. The risk is clearly defined, and potential reward justified the risk taking. I did not move my stop order in the direction that increases the loss.I did not average loser. One thing I need to reflect on: Was the trading span (from entry to exit) too short? Probably yes, and it demanded too much attention during the day.

2. Am I reducing the bets?
Yes. I am keeping the max loss as small as 1% of the capital until I start to win again.

3. How much am I disturbed emotionally?
I would say 25%. The loss level is well under control. Not thing is threatening my capital. But I am a human, and of course feel bad when I had to take the loss.

I seem to be doing fine, and I can continue with a little caution.  am currently drawing EURUSD price course as in the labels of the chart, and keeping my short position from 1.4775. Stop is 1.4850.

I will close the chart and take a rest for tonight.

Have plans! – Gordon on discipline of trading

In this video, Todd Gordon talks on the discipline of trading.

I call it hypothesis driven trading. Always have a hypothesis. Then ask

  • What is the best action to take advantage of the scenario you have drawn?
  • On what condition your hypothesis get invalidated, and you should take the loss cut?
  • In the worst case scenario, how much loss would be realized, and can you take it?
  • When do you take profit?
  • What is the best scenario? Worst? Any other alternatives? What would you do to each scenario?

You have to be able to answer all these questions before exposing your valuable assets. Disciplined traders always have clear answers to those questions.  My trading recorded greatly improved after I became super strict on keeping hypothesis driven trading. Elliott wave principle helps me to construct the hypothesis, and make action plans to any scenario before I submit the orders.

Real time trading tweets

The plan in the article may get rejected any time, so please check out my tweets on Twitter.

Current risk exposure:

Rational Move always use stop loss orders, and this is the worse case potential loss over the capital for the currently open positions. This is unrealized loss is less or equal to the risk exposure.

Capital growth

From recent 100 trades (%) The growth right before the 1st trade is set to 0%.
About this graph


From recent 100 trades (%)
About this graph

Total returns

Since inception
(Aug 10, 2009)
Year-to-date Quarter-to-date
0% 0% 0%
This is a normalized value: the return on each trade is normalized against the capital just before the trade execution. This way, it is eliminating the effect by the capital change from deposits and withdrawals. The calculation thus reflects the trading performance of each trade. The value does not contain unrealized profits and losses. RM's trading strategy never risks more than 5% of the present capital. Not including subtraction by tax.

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