This trade was a mistake in calculation. The movement from 1.10865 down to 1.10836 is .00029. that's 2.9 pips, not 29 pips. My stop loss was set for approximately 30 pips. Because of that, I divided by 300.
Calculation: .02(105,000)/(10*30) = lot size = 2100/300 = 7 lots.
This mistake was a good one considering I lost the trade. Anyway, I also switched shifts this week, so my schedule is out of whack. I went to make a trade last night around 2300, and realized that the markets were already closed. Therefore, 3 trades to come next week.
My running interest rate is (the current)*(this week's return) = 1.04*.998 = 3.79%. If I started with 100,000 it would be 103,790 at this point.
P^1.0379 = P^(r^7)
r = 1.0379^(1/7) = 1.005 = .5% per trade, if they were all made consecutively.
If I make 2% a week, that's 1.02^(1/2) = .99% a trade if made one after the other.
If I make 1% a trade for 4 wks, that's 8 trades, 1.01^8 = 8.2%
2% a week for 4 weeks, 1.02^4 = 8.2%
Let's go to 52 weeks! 1% a trade for 52 weeks: 1.01^104 = 281% if trades are consecutive!
2% a week for 52 weeks: 1.02^52 = 280%.
Therefore, averaging 2% a week should work out just fine :)
The strategy for next week is the same as this prior week. Trades will be made at market openings. Here's the market clock (PST) image I'm using. I really want a physical clock just like this, but this is just as good. Ultimately, I'll know it by heart:
So, I'm entering at 1500-1600 for USDJPY, 2300 and 0530 for EURUSD and GBPUSD. I'm sticking to those because of their potential for volatility.
And here are the most important events coming:
- US New Home Sales - Monday 0700
- US Core Durable Goods Orders - Tuesday 0530
- US CB Consumer Confidence Index - Tuesday 0700
- US Pending Home Sales - Wed 0700
- US EIA Crude Oil Stocks Change - Wed 0730
- US Fed Interest Rate Decision - Wed 1100
- US FOMC Press Conference - Wed 1130
- UK - Bank of England (BoE) Interest Rate Decision - Thur 0400
- UK - BoE Governor Carney Speech - Thur 0430
- USD GDP - Thur 0530
- JPY Retail Sales - Thus 1550
- EUR GDP - Thur 2230
- EUR GDP - European Union GDP Fri 0200
From my reading, I hear both sides, "Avoid trading the news," and "Anticipate the movement." Basically, it's the old fundamental vs. technical analyzes arguments. I'm in the camp of mixing the two, hence my strategy in trading based on anticipated volatility (from technical analysis). Still, it's important to know what big news is coming.
The bold ones are ones that could effect me this week. So Tuesday and Thursday can be some interesting days. We'll see what happens, yes?
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