ForexSpirit

December has been a break even month, with just a 0.5% rise in my account equity. Out of 13 closed trades for the month, 11 were closed out in profit, while two were losses. There were no large profitable trades to cancel out the main losing trade of the month (my Q3 entry that was closed out at pretty much the lowest point of the month when I was concerned that a break of the 1.3050 level might be happening).

I did not initiate any new trades this past week or close out any of my open trades. Price on EUR-USD has just meandered around the 1.318 level all week.

Since today is also the last day of 2006 I have been examining all the live trading that i have done this year. Since I only started trading in my live account at the start of June that means I have a record of seven months worth of trades to glean information from.

During those seven months I initiated 88 trades; 64 of those trades were profitable, leaving 12 which were losers. That means that 72% of my trades to date ended up in the black. I would like to see this number closer to 80%, so that is something I can aim towards in the coming year.

The average gain from my profitable trades was 33.88% that of my average loser. In other words, my losers are on average 295% larger than my winners. Given the nature of my methodology the fact that my losers are so much bigger than my winners is to be expected.

The above chart shows my forex account balance as a percentage of my initial capital since I opened the live account at the start of June 2006.

There are a few interesting things I have noted from this chart that I hand a good inkling of but that can now be seen in much more black and white.

My gradual ‘an apple a day’ profit taking is clearly visible, as is the sharp decline that results when a loss is booked.

In one of my posts over the Thanksgiving holiday I expressed a concern that I don’t seem to be closing out any large profitable moves, or at least not as many as I did when I was demoing and in the early stages of my live account. The large profitable trades can be clearly seen in the first 100 transaction segment of the chart, but then do not seem to happen at all from then on. This is definitely something I need to work on, as the large profitable trades are the main counterbalance to the losing trades. The remaining small profit trades are then the main thing that keeps the account balance growing in the right direction.

Holding long euro positions over multiple days incurs daily interest payments. Periods when I have had to hold trades for days if not weeks can clearly be seen on the chart as the shallow downward sloping segments. While these daily interest payments can be small on a day to day basis it is important to keep in mind that they can build up over the medium term.

Here’s to getting better in 2007!