This week has been a difficult week for trend trading as well as other types of FX trading. We did not get the follow through on many of the moves. It was rather like my front loader washing machine, one way one minute, the other way the next! I stood aside towards the latter part of the week. I belong to a trading forum with people who trade a range of systems and all of them have struggled this week.
I’m not sure what was more bruised though...my ego or my account. I have hardly had a loss using TS to trade FX so it was hard to take this week. I have looked back at the trades I took and human error/judgement was probably more at fault than anything. I noticed that I jumped in too early on almost every trade without waiting for all the indicators to align together. Basically, I took trades when the signals had not formed fully. I was overly confident with TS after a lengthy run of success and, as a result, took trades too early without waiting for proper confirmation. That essentially is the ‘greed’ they talk about in trading when they discuss the ‘fear and greed’ concept.
I have also tweaked my ADX indicator a bit. I’ve raised it to 25 rather than 20, thus meaning I’m waiting for a stronger indication of trend. I'm thinking that this may help to protect from being drawn into the sideways choppy moves, like we had for a lot of last week. I'll trial it from next week and see how it goes. The ADX is only one component of my TS system though but an important one.