Why do I do monthly review, and only monthly?
I don’t have to write another post to tell you why do you need to keep a trading journal. I assume you should know if you are taking trading seriously. But, I guess, most of the traders might have the same problem which I used to have, ‘over review’ your trading result.
No doubt, we have to review our trading results or the accounting book of your business. Do not try to hide the losses and mistakes to yourself. After all, this is our own business, isn’t it?
But just how frequent should we do that?
After trading for a little while, I figure out, doing a monthly review is pretty much enough for day trader, like myself.
Why monthly and not weekly? Well, this is not a rule, but an observation.
I used to do a weekly review of my trading. It is useful. But, it does not really tell me my overall performance. In other words, the weekly review is kinda ‘short-sighted’.
Why is it so? Let’s take an example, during the FOMC meeting week, the market might be a little bit choppy, most likely traders are waiting for the interest rate decision. I might be trading extremely well during this kinda week, or I might be chopped to pieces. Does the result of the week itself tell me a little about my over performance as a trader? Nah, I don’t think so.
So, why do we spend time to analyse the result of the week, and feel ‘happy’ or even ‘devastated’ about it? And subsequently thinking about ‘maybe I should not trail my stops’, ‘maybe I should wait when the candle closes above yesterday’s high’ , blah, blah , blah. Maybe I should change the system rules! again?!? I don’t see a point.
In fact, it is similar to trading. Do not trap yourself in the 5-minute charts and forget about the hourly chart or even daily chart. Why? Over the long run, the big picture tells you more about the ‘truth’.
I would think a monthly, quarterly, and yearly review of the overall trading performance is pretty adequate. Tracking monthly cost of trading, reviewing mistakes, analyzing the system performance over different weeks, or even seasons. That’s more effective, well, to me.
Tuesday’s Currency trade
I made two trades on Tuesday. Long CAD/JPY and AUD/USD. Pretty nice day. I end the day with +5.85 R.
I am not trading Aussie pairs today. Waiting for the interest rate statement. Well, most of people are expecting 6.75%. I have no idea, let’s see.
Here is the …….CHART!
[photopress:AUDUSD1hour07Nov07.JPG,full,alignleft]
[photopress:CADJPY1hour07Nov07.JPG,full,alignleft]
Some trading updates
Non of my orders were triggered yesterday. I am still looking at long side of Aussie dollar. (well, I am still thinking parity is coming 🙂 ).
I have been looking around for Australian brokers for Forex and CFD. I feel more comfortable dealing with broker that operates here. This should be settled within this week. Something that caught my attention is the launching of ASX CFDs. Basically it is a exchange-traded CFD (in Sydney Futures Exchange), and it is regulated by ASX. I see this as a positive move in CFD industry. Let’s see how it works out. I am looking forward to trade ASX/200 index CFD and some FX CFDs. 😀
A CFD (Contract for Difference) is an agreement between a buyer and a seller to exchange the difference in value of a contract between when the contract is opened and when it is closed. The difference is determined by reference to an ‘underlying’ instrument – a share, index, FX rate or commodity and reflected in the transparent ASX CFD order book.
ASX CFDs are fundamentally different to the current Over-the-Counter (OTC) CFD because they are the only CFDs traded on ASX. They also offer price transparency, exchange independence and greater investor protection.
ASX CFDs include:
- The top 50 stocks listed on ASX
- Key global equity indices
- A range of major foreign currency exchange rates
- Selected commodities
ASX CFDs listed on the market operated by the Sydney Futures Exchange (SFE). Access to this market is possible through a large network of both full service and discount brokers.
links for 2007-11-04
My own Trading Challenge
I have an idea. I am pretty much getting bored of trading <-> blogging routine, though I really love these two activities. So, I decide to start a trading challenge , for myself. Basically, I am pulling in a small A$15,000 (around US$13,777, well who loves USD nowadays? :p ) and start managing it. The money will be used in trading Forex, Australian stocks and indices(until my futures account get set up, I will use CFD for the time being). By the way, I am talking about real money, live account.
The target is to achieve a couple of milestones. First milestone is to double the account , monetary target is A$30,000. Second milestone is to achieve A$60,000, and the third one is A$100,000. I think this is enough at the moment. It is pointless to set a 1 million dollar target before I can even achieve $100 k milestone. 🙂 . No fixed time line, no adding pressure. Just to measure my own performance at end of each month with a defined goal to work on.
So, maximum risk amount is hard cold 2% per trade, with weekly stop point is 10% loss. More details of how I am going to utilize this fund is coming later.
This is not to create another hoo-ha in the blogsphere. I am not showing you ‘how-to’ make million in trading. Instead, just to test my own skills in trading and fund management.
Fund allocation and my portfolio will be updated at Track Records page. Let’s get the game started.
Update: Oops, It seems like Timothy Sykes is doing something bigger. He is going to show people how to turn $12,415 to $1.65 million. uhm… interesting.. I am the copy cat here 😆
