I’ve uploaded my April 2007 $100 Experiment Forex trading results and despite the rough patch I had in the middle of the month, I saw a 5.15% growth in trading equity. My expectancy recovered as well but it’s still reeling from my disastrous position sizing debacle! My expectancy for April came in at $0.15.
In April I took 35 trades, 25 of them were winners and 10 losers. My average win was $0.48 vs my average loss of $0.68.
I’m holding a total of four positions going into May, 2 in EURUSD and 2 in AUDUSD. When I close them out, I’ll detail them in May’s results sheet. I must make an effort, as part of my neural net analysis for May, to pinpoint the price where I must exit a trade in the event the trend reverses. This will hopefully allow me to truly quantify my Reward vs Risk ratios.
[tags] Currencies, Euro, Dollar, Forex, Trading [/tags]
Well done tom.
Just out of curiosity , how do you justify your risk while you keep averaging down your losing position? I am interested in understanding the risk management of average-down style of trading strategy.
Have a good day.
Gav,
What I’m doing is completely counterintuitive. I control my risk by taking multiple small positions where I can sit out 150 pip price swings. I scale into the positions as long as I believe the fundamentals of the trend are still intact. This includes averaging down in a loser. Believe me, this takes balls of steel because you have to have confidence in what you’re doing and what your analysis tells you.
The one thing I learned from these currency markets is that they over react and over shoot constantly, you get stopped out too quick only to have the trend resume a short while later. I thought, why not get rid of the stops all together and go with smaller positions based on a % of ,my trading equity. Currently I use no more than 15% of my trading equity per position, which is awfully high but with such a small acct I need to take larger risks.
My ultimate goal is to use a 3% of trading equity position size.