Hello Traders!
I hope you had a great week.
This week, things have been slower for me. Mainly due to there being high impact news events which dictate I must not trade for those days.
Let’s look into it.
(Tools I have used this week will be featured at the bottom of the blog – including discounts!)
Live Trading Info
EURUSD
London Session
FTMO Funded account start balance = $50,000
Risk per trade = 0.5% of account balance (x)
Take profit target = 3.3x risk per trade (y)
Risk:Reward ratio = x:y
Trading Performance
Monday – 1 break even, 1 missed win (potentially)
I thought I had a good mindset for this day but when it came to opportunities my mind was not in the right place.
Initially, I banned my phone from this session to limit distractions and instead, I went on YouTube on my computer. My justification for this was that at least YouTube can be on a tab next to my charts so it will be easier to monitor.
The problem with this is that because I was watching these videos and only occasionally flipping my eyes to the charts, my mind became more focused on the interesting video than the price action.
This meant that when the trade ideas came around, I panicked and was not in the right state of mind.
I still executed them but they were both contradicting one another (a sell and a buy). The sell was tagged in but the buy pending order was still waiting.
I was then monitoring MT4 (MetaTrader4) and panicked when I saw a large bullish candle come into the market, causing me to close my sell trade early.
This bullish candle should have been where I placed my buy order but I had it too refined and therefore I missed the win.
It’s arguable though if I can say I “missed the win” since I did place it as my mechanical rules dictate but then again if I had been concentrating on price then I would have used some subjectivity to widen the zone.
This could be hindsight bias, and very likely is, but at the end of the day I should have been concentrating on my charts and not YouTube videos!
Tuesday – High impact news day = no trading (USD Retail Sales)
This is one of the days that backtesting has helped me define a no-trade day.
The reason for this is that there have been a handful of losses and/or poor price action to work with. This results in no point wasting my time these days.
Wednesday – High impact news day = no trading (Non-Farm Payrolls [NFP])
Likewise to Tuesday, backtesting has helped me define a no-trade day.
NFP day price action prior to the event can move, but it’s often slow and doesn’t result in much. Better to spend time elsewhere on NFP release days.
Thursday – No trade day
After the big move from NFP, we were stuck within a huge range.
Some would argue to reset your structure and keep going but based on my data, it’s best to wait for the ‘dust to settle’ and see the true direction/intention of price after we break this range.
Friday – 1 missed loss, USD CPI later today
We were still within the NFP range and there was a solid trade idea but I opted out because of this.
I also then realised it was USD CPI later today so I was even less interested in taking a trade.
You will get weeks like this when there’s non-stop high impact news happening, but this is why gathering external data in backtesting can help you avoid wasting your time trading days like these.
It halts taking trades but protects your capital.
“The most important rule of trading is to play great defence, not great offence.” – Paul Tudor Jones in Market Wizards: Interviews With Top Traders
Key Takeaway for the Week
My lesson for this week is that high impact news days are okay to avoid trading.
Yes trade ideas will appear and you will likely miss some winners but on a scale of probabilities, over the long run, you are doing yourself a favour.
I could be rationalising my poor executions and justifying not taking the trades because they would have been losses, but at the end of the day the data supports not executing on these days.
I will thank myself in the long run.
NOTE: Conduct your own testing on these high impact news days to see how YOUR strategy performs before drawing the line based on my evidence.
Next week is pretty quiet in regards to high impact news events so I will show up and see what trade ideas get presented to me.
Update from last week:
I said I was going to let you know how my winddown routine is going and it’s working, but not by much.
Since there was so much news this week I justified going to bed later and waking up later which is not good for consistency.
However, as next week’s news is clearer, I will be back to it so I will keep you posted in next week’s blog!
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As promised, here are the tools I have used this week and a discount code for Magic Keys:
- Magic Keys (for 25% off, use code: MKMETEORTRADINGFX)
- TradingView
- FTMO (funded account challenge)
Check out the Tools page for more info
Thank you for taking the time to read this blog post, it means a lot to me.
See you next week and happy trading!
