027: Inside Out -- FOMC Meeting and Yes, I Can Damn Trade Beyond 10:30 AM EST
Nothing really new about the FOMC meeting minutes-- all as expected. I actually like their stance (for personal reasons, one of them is this: stocks rallying up again). I don't play stocks now like I used to since I've eventually learned how to invest lol, but I do love to try raising my risk appetite 5-10 years from now in IPO's and mining. Since I need to earn somewhere without risking my health in endless overtime doing something I don't love and feeling like working in a sweatshop, let's go back to forex trading.
I've decided to scrap the graduated straddle idea I've mentioned in the previous post and do a simple straddle on multiple currency pairs instead on medium and high impact news.
Since image is quite huge, here's the link to the charts right after the FOMC meeting news.
Nothing really unusual, I just love to observe correlations visually. Most USD pairs including emerging markets reacted as expected, while non-USD pairs were mostly not affected.
It isn't as interesting as the NFP news release charts, wherein pairs from the emerging markets (2nd column) moved opposite of what I consider normal--probably because of the US outsourcing its businesses in emerging markets, hence NFP made emerging markets move the same way as USD index. What I can't figure out until now though (because I didn't research yet anyway) is why non-USD pairs with EUR strengthened while non-USD pairs with GBP weakened. I'll observe the next NFP news (and even probably backtest) to see if this happens regularly and might actually be part of some fundamentals I don't know about. For now, I'll just assume it had something to do with other news prior to NFP release.
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Speaking of news, I'm happy about my current improvement:
Because of the obvious, I'll scrap scalping/price action trading in 1 min and 15 min charts because aside from not having enough stamina to chase minute pips even for just 2 hours (I often found myself in the revenge trading trap everytime I felt tired), I haven't reached my $10/day average minimum target gain ever since I tested price action trading 2 weeks ago. Lost $30/day instead and that ate away both my equity and emotional capital (good thing I've done this experiment on a new demo account--imagine if this happened live, it could have been 10x worse).
I know I should be true to myself. I've done this personality quiz again in Babypips.com and still got this trading style:
Eventually decided to revert back to that old style, but fine tune it a bit--be more conservative with my SL's by not entering less than A-class setups in trend trading and patiently waiting for the right time (remember rule #6 from Investopedia).
Also followed this advice about overcoming burnout: remembering the time when I got excited about learing forex the first time. So I went back to my old notes the other night and ended up reviewing the undergrad part in Babypips and I JUST CAN'T BELIEVE I'M NOT FOLLOWING THIS RULE: Set SL first before position sizing, NOT THE OTHER WAY AROUND. My boyfriend, who is also my trading buddy, had been constantly reminding me this especially during my large drawdown days, but I didn't really understand how to do it in the first place until my review (dumb I know lol).
Aside from that, I will be filling in the (huge) waiting time in between swings with news straddle trading. Since I don't have huge enough capital in surviving large drawdowns on the extreme end of position trading though I'm pretty much ok with macroeconomic analysis, while I don't have the stamina and psychological resilience for scalping (and EA and technology for high frequency trading), I'll do my best in surviving at the middle, swinging along the tides.
I just made that up, both technical and fundamental analysis are important in any trading style. However, each has more benefit on whichever end of the spectrum it's in (i.e. technicals to avoid impulsive trades, fundamentals to see the big picture).
Insightful and timely episode 464 in Traderspodcast about gaining competitive advantage in this unforgiving world by finding ways to reduce anxiety, sticking to what basically works and just tweaking it a bit.
