Weekly Forex outlook 16 October 2016

The Australian Dollar has been strong in the last week, breaking through key support resistance levels on many pairs that I trade. These are the possible trading opportunities that I am watching for next week:

AUDJPY - Resistance at 78.90 has been tested many times last week and was broken on Friday. Price has made a significant higher close. If resistance turns into support, there could be an opportunity for me to go long if price retraces back to test this level again.

AUDNZD - The opportunity on this pair is very similar to AUDJPY. A break of resistance offers a possible long entry if a retracement occurs. I will be looking for evidence of 1.0730 acting as support together with strong buying power before I plan my trade.

EURAUD - This pair created a new yearly low on Friday which is also a sign of 1.4430 support breaking in my analysis. I will wait until the Monday's daily candle to close before reviewing this pair again. Depending on how price moves on Monday, I could be entering short or long. I need more confirmation to better assess the risks. Next Thursday will have interest rate decision for EUR and I will not trade EUR on that day.

GBPJPY - Since the big drop from 2 weeks ago, this pair has been slowly crawling up. Resistance at 128.70 could be in play next week if buyers continue to push up. I will be monitoring this pair on multiple time frames for opportunities to short if I can see signs of strong seller pressure below resistance.

Weekly Forex outlook 10 October 2016

Last week produced some big movement for GBP. Stories of traders and investors losing everything have been coming in from the online communities. Trading requires absolute discipline because just one moment of carelessness can undo months of profits or even wipe out all trading capital. I choose to be a survivor because I value the experience that the market gives me. I choose to stay alive so that I can take profits another day.

It has been more difficult for me to trade since Brexit because of uncertainty in support resistance levels. I am 3 months into my second year of prop trading and I have done 8 trades with only 1 winner. The Growth account is going through a new largest draw down, partly due to the losses and partly due to the increase in position size (as required by the firm I trade for). However, my performance statistic is still within the acceptable zone. Losses are kept small relative to winners. Both short term and long term expectancy are still positive.

Thursday last week provided 2 trading opportunities: EURYUSD H6 long at 1.1120 support and USDJPY H6 short at 104 resistance but I did not trade because it was too close to non farm payroll the following day. It hurts a little to find myself missing out on profits because I follow my trading rules. But then I also remember that my rules were created based on statistics and not emotions.

My focus for this week would be to identify new support resistance levels for GBP pairs. The only trading opportunity that I can see right now would be USDCAD on daily chart:

USDCAD - Buyers managed to break above 1.3250 long term resistance and closed above that. Today's open had a gap down so I will wait until Monday's daily candle to close before reviewing this pair again. I am looking for opportunities to go long above 1.3250 which could now be acting as support.

September 2016 performance summary

Here are my performances for September 2016. Account statements and performance summary pages have been updated.

-3.79% on Trend Following account
-0.43% on PAMM Growth account

There were 6 trades taken on the Growth account, 5 losses and 1 win. These are the trades summary expressed in unit of risk (R): -0.63R, -1R, -1R, -0.77R, +2R, -0.56R

My trading plan always set TP at +2R. Theoretically, I should be have lost -3R but in reality I am only down -1.96R . Despite making a loss this month, I have achieved my goal of losing less than what I should have. My actual performance have been better than what my trading plan allows. I cannot control the outcomes of my trades but I have complete control over how much I lose.

The Trend Following account posted a big loss for September. Reversals on the trends this month had put a string of losses on the account. There are 10 months to go before the 2 years forward test is completed. I will not be making any changes until I have 2 years of real statistics to analyse. Unlike other traders, back testing result does not mean anything to me. I only make trading decision based on live trading with real money.