Test Week 3 started on October 27 and ended on November 2. I placed 11 trades of which 6 were losers, so I traded with 45.45% accuracy. My goal was to make $23.00, which is 10.89% of the amount I started Test Week 3. Instead I lost $3.70, or 1.75%. I did a few things that departed from my strategy and it cost me dearly.
In the past few weeks, I noticed a recurring pattern in the price of the EurUsd. From about 2:00 p.m. to 7:00 p.m., the price ranges without much fluctuation. Sometime between 7:00 and 7:30 p.m., a clear trend starts emerging and you can ride it for good profit. However, in the first two days of Test Week 3, the trend started developing at about 6:00 p.m. On those two days, I didn't enter the trend at 6:00 p.m. believing it was the typical false signal. I didn't enter at 7:30 p.m. either believing that the trend had already been going for an hour so it had little upside left. Wrong on both counts. So, on the third day I act upon the 6:00 p.m. signal thinking today I am getting in early on the trend. Third count wrong. Add to that a few trades placed without initial stop losses while I tried some new ideas and its is a wonder that I only lost 1.75% this week.
Actually, it is not a wonder. I had three huge trades this week. They were the result of creative stop loss management after the trades were in the green and two of them lasted over 24 hours, which is remarkable when you consider that most of my trades last less than one hour.
In conclusion, I am not really sure why the price behaved this way this week. It might be tied to the FOM meeting and expected 100b to 200b quantitative easement expected. I did draw these lessons, though: no more trades without a set stop loss at the time the trade is entered; no more trying to predict trend direction; and no more deviations from my strategy.