Year End Review
This post may be separated into two parts due to the technical issues I've been having. I've been meaning to write a year-end performance review because trading in 2022 was a significant milestone. Maybe not in the way one might think.
2022 marked a year where I consistently journaled every single trade in EdgeWonk. It was a year where I didn't take any punts and simply let any and all swings play out. I focused on finding and taking signals to the best of my ability while following consistent risk management even as my account fluctuated.
In the first half of 2022, I experienced some major swings, but I ended the 5th month with a return of just over 20%. In the second half of 2022, I felt that the markets became less "predictable." It moved in more chaotic fashion, which led me to slowly give back some of those returns. This is fine because my methodology for entries remained consistent so I was able to objectively evaluate how my setups were performing. By the end of 2022, I think I ended up with a return of just over 3% and a win rate of just under 50%. In other words, I was flat. I am simultaneously annoyed and happy about this.
Why am I annoyed?
In a leveraged market like FX, your returns should also be leveraged. It is very doable to target 3-5% a month or even a week depending on how actively you're trading. While I'm not a regular viewer, I take inspiration from Raja Bank's small account challenge. I think this 13-part series shows that it's certainly achievable. For me, sitting out of low quality signals and committing to cleaner setups remains one of the bigger hurdles I need to cross. I'll get there.
Why am I also happy at the same time?
Having a profitable first year with consistent decision making is the first step to turning things around. The next step I need to take is to focus on consistent trade journaling and execution so that I can then focus on scaling my account.
With that said, I wanted to post an equity curve to showcase the ups and downs I've had throughout 2022. Unfortunately, I can't. This is the technical issue I've been having. For the longest time, I've used EdgeWonk 2 as my journaling software. Each year, I create a new database to store and record my trading records. This is because I want to track annual returns and their time-based filters did not permit me to do so.
In January of this year, I created a new 2023 database. After dealing with and resolving a license code issue, I somehow lost access to my trading data in the 2022 database. As a result, I am unable to post my equity curve. Combined with some other considerations, I've migrated to a different journaling methodology and I'll break down why.
EdgeWonk 2 is a great journaling platform that resides on my desktop. I launch it, manually enter my trades, and it updates my equity curve along with some basic win rate stats. However, it is quite a time consuming process that involves copying execution numbers and timestamps across different windows. Also, it isn't completely problem-free on my Mac. But I think one of the biggest factors for switching was I didn't like the limitation of analyzing performance data over custom-set time periods.
For me, I want to see returns on 1-month, 1-year, and lifetime basis. Creating a new database each year allows me to get annual returns but I would need to do separate exports and merging of data to get lifetime returns. As a result, I find myself spending more time performing data entry and management as opposed to analysis.
Searching for other performance monitoring solutions, I came across TraderSync, which I have since migrated over to earlier this year. One reason I chose TraderSync was because they can read CSV exports from my broker (CMC Markets). Since this migration, I've been uploading exports on a recurring basis. I've quickly discovered some pros and cons to this.
Pros:
- It saves me time as I don't have to manually enter each trade.
- There is a lot more statistical analysis that can be performed.
- It has multi-asset and multi-broker support so I can consolidate my data as my trading scales.
Cons:
- CSV uploads are glitchy. There have been multiple occasions where TraderSync duplicates my trades, fails to recognize them as closed, and sometimes does not import trades at all.
- I also risk being lazy by not always thinking through the setup I'm following when I'm entering a trade. With EdgeWonk, I'm forced to select the pre-configured setup I'm following. Since I'm auto-importing, I'm not thinking about each trade, the reason for taking it, and how it should be classified.
This was detrimental to me in January as I found that there were some trades I shouldn't have been in at all. If I went through the process of manually inputting it into a journaling software, I would've realized that the signal quality of the setup was too long.