This is my forex day trading week in review. The weekly review is where I discuss things I need to work on, what I am doing well, my trading plan, and things I do each day and week to stay on top of my EURUSD day trading.
I follow a precise trading plan that includes a few reliable price patterns (there are typically one to three variations of each). I only day trade the EURUSD on the 1-minute chart, and I only trade between 830 and 11 AM EST.
In my weekly review this week I wrote down the trades I missed and how much profit I lost. I also wrote down how many trades I took that I shouldn’t have.
The trades I missed cost me 7.5R (10R if I took an optional “add-on” position). That is money I should have based on my plan, but missed out on because I either didn’t see the trade or opted not to take it. These are mistakes. If it is in the plan, I’m supposed to take the trade.
- “R” is a standardized risk amount. It could be 1% of the account, 0.5% of the account, or any amount you choose based on your position sizing method.
The trades I took, that were not part of the plan, cost me -2r (actually -1.71).
In my case, not wanting to lose cost me -7.5R, but my actual erroneous losing trades only cost me -2R. Skipping trades to avoid losses is a sure way to miss out on making big returns. Luckily, there were other opportunities out there this week, but I definitely have preferred to be up the extra 9.5R if I followed my plan completely. That said, missing the winners is the biggest issue.
Therefore, in my weekly review, I also noted that I was trading slightly more cautiously than I need to be. I also noted that I need to be more focused. Being distracted can often result in skipping a trade because the due diligence wasn’t put in before and as the trade was setting up. On January 4, had I measured out the consolidation and recent price waves, I would have found that I could take that second snap-back strategy trade and could have easily added another 2.5R to my day and week.
- One of the best ways I find to stay focused is to continually talk through the price action as it occurs. Note the direction of the trending waves, note possible rounded tops and bottoms and count the high/low points. Note overall movement amounts, note when the trend changes and what that means for the next trade. Note what would have to happen to change the trend or for the price to breakout.
- Therefore, my objective next week (in addition to my other written objectives) is to continually bring myself back to talking myself through the price action. If my mind wanders, come back to talking through the price action. Just like meditating, continually pull the attention back to the point of focus.
Each week, go through your trades and find ONE thing to focus on to improve your trading the next week. Each day before you start trading, re-affirm your focus for the day as part of your daily routine.
On the charts, RB is rounded bottom and RT is rounded top (not discussed on the site yet). DP is double pump (not discussed on the site yet) and SB is snap-back (linked above). I do have a couple other patterns I trade, these three are by far the most common.
Download the 2021 Forex Day Trading Log to stay on top of your trading and track your stats.
+12.86R Versus 22.07R Potential = 58% Efficiency. Less commissions.
Lots of room for improvement in terms of efficiency. Much of this came on one day from two missed trades. Using a new trading plan and still getting used to see all the trades.
Win rate: 47%. 8 out of 17 trades.
Win rate isn’t that important with a good reward:risk. Even a 40% win rate with that kind of R:R would net over 5R for the week (with the mistakes…and a lot more if based on Potential R.
By Cory Mitchell, CMT
I will have a new EURUSD day trading course out by June, but in the meantime, learn the fundamentals of trading the forex market with the Forex Trading Introduction Course.