Ok, I’ve been singing the praises of the Trade on Track program as a Forex Trading Log for a while now, in addition to many other things it can do to help your trading. I’ve raved on about how it can shed light on areas of strength and weakness in your trading. Every once in a while though, I use the program to take a different look at my trading history, analyzing things in a different way.
This morning I did that and fair dinkum (that’s aussie for “no joke” or sometimes: “for real / genuine”) my jaw dropped with the realization of something extremely important and valuable in my trading performance. I looked back at my trading history for the last 4 months or so (Year To Date). I knew that one particular trading strategy I was using was out-performing many of the others. Pulling up a trading log in Trade on Track quickly confirmed that – I was making nearly 500 pips a month, fairly consistently from this particular strategy.
Ok, that’s cool. Let’s break that one strategy down a bit further. So, I did some more tweaking of the Trading Log filter and looked at individual currencies that I traded during that time. I had taken 76 trades with this particular strategy, over 7 or 8 different currency pairs. Here’s where it got really interesting. The currency pair you would expect to perform fairly well in most circumstances, the EUR/USD, only returned me a net of 3 pips over those 4 months. What? Yes, that good old EUR/USD which is a favorite for just about every trader – was pretty much breaking even with this particular strategy. 12 trades, 8 were winners, 4 were losers, but the losers obviously lost bad.
Wow, so if the profits aren’t coming from the EUR/USD, where are they coming from? I dug further. NO WAY!! (or, “Fair Dinkum” again). I had taken 11 USD/JPY trades with this particular strategy in the last 4 months, and I had 11 winners. Yep, 11 out of 11 – returning me a total of 883 pips profit. The EUR/JPY was the next best performing one, with 8 out of 9 winners, returning 819 pips profit. The GBP/USD was the next in line with 8 winners out of 11 trades .. returning a net of 381 pips profit. It dropped off pretty badly from there – nothing really worth reporting at least.
I had similar realizations the other day when I looked at my trading performance on different days of the week. Entering trades on Monday or Wednesday is far more profitable for me than any other day of the week.
I was able to perform this analysis and gather this information in just a few minutes using Trade on Track. Of course, I’ve been using it diligently over many months now to keep a very comprehensive trading log, which includes pre and post trade notes as well as chart screen captures. But, the effort to keep a good forex trading log (which is actually pretty simple using this program) consistently pays off as I go back and analyze my trading history.
Trade on Track turns my historical trading data into extremely useful Performance Information. How will I use this information in future? I’m not a brain surgeon, but I’m smart enough to figure out I should now be raising my lot size on the USD/JPY and EUR/JPY when trading this particular trading strategy in future, and I should be lowering the lot size when trading other strategies or currency pairs.
You’ve probably heard plenty from me and just about every forex educator out there about the need to maintain a good forex trading log. But, I think the above example shows just how important and valuable that can be. You could use a spreadsheet to log all your trades, but it’s cumbersome to maintain and hard to analyze properly. Using Trade on Track is easy and if it can shed light on your trading in the same way as it has mine, how much is that worth to you?
Good luck and Trade Seriously,
Mark Thomas
Tags: analyzing trades, forex profits, forex trading log, trade analysis
May 11, 2009 at 4:12 am |
By the way, the trading strategy I talk about in this post is called a 240FX trade. It was devised and is taught by Steve DeWitt and the other good people at ForexConfidential.com. Go check them out. As with any good trading strategy – make sure you give it a good fair trial before making any decisions to continue with it, or not. Not all methods suit all traders, but this one’s pretty simple to follow and you only need to look at your charts a few times a day to pick up good trades.
May 11, 2009 at 5:20 pm |
Good stuff. See my email to you.
November 13, 2009 at 8:27 am |
nice post..thanks for this info..
November 29, 2009 at 10:09 pm |
I use a spreadsheet myself for tracking forex trades and market swings, etc. It’s really great after I have a bit of history which reveals distinct patterns.
Thanks for the post, good stuff.
Miles