As I sat down to reflect on my trading journey over the past month, I recalled a pivotal moment during a particularly volatile trading session. Watching the price swings, I felt the familiar rush of adrenaline but also a creeping doubt and anxiety.

Was I making the right decisions?

This experience underscored the importance of analyzing my trades—not just to celebrate wins but to understand my losses and the lessons learned. In this post, I will delve into the details of my trading performance from October 1 to October 31, 2024, and share valuable insights that emerged from this analysis.

P&L analysis

During the analysis period, my total Profit and Loss (P&L) stands at +$5,502.78, accompanied by a trading volume of +$872,716.40. These figures reflect a positive performance, suggesting that the month was profitable overall.

Examining the P&L ranking of my contracts, the standout performer was POPCATUSDT, which yielded a gain of +$898.93. Following closely were 1000000MOGUSDT with +$754.01 and MEWUSDT at +$436.50. However, the trading journey wasn’t without its challenges; BTCUSDT resulted in a loss of -$425.36. This loss serves as a reminder of the need for constant reassessment of my strategies and the market conditions affecting them. Notably, 1000APUUSDT closed with a profit of +$388.90, contributing positively to the overall P&L.

The overall win rate of my closed orders is 51%, indicating a slightly above-average success rate in my trading decisions. This win rate encompasses both long and short positions, suggesting a balanced approach to my trading strategy.

Personally speaking, that 51% win-rate is bad. It is just saying that my success is a mere luck than skills.

Closed orders overview

In this period, I executed a total of 292 closed orders, comprising 126 long positions and 166 short positions. This distribution illustrates a tendency to engage more frequently in short trading, which may reflect my market outlook or responsiveness to specific conditions.

The P&L of closed long orders amounts to +$1,691.43, achieving a win rate of 45%. This indicates that while my long positions were somewhat successful, there is room for improvement in my execution or selection of trades in this category. Conversely, my closed short orders generated a higher P&L of +$3,811.34, with a more favorable win rate of 54%.

This suggests that my short trading strategy has been more effective during this period, reinforcing the need for ongoing evaluation of my approaches.

In addition, I have made it a priority to consistently take profits with the goal of growing my cash balance. The rationale behind this strategy is straightforward: having a larger cash balance provides a thicker cushion to absorb any floating losses.

This cushion not only enhances my ability to manage risk but also allows me to open hedging positions, when necessary, size up profitable trades, and stay longer in the market without the pressure of realizing immediate losses.

Self-reflection

Reflecting on my trading journey over the past month, several key insights have emerged that will guide my future strategies:

Patience is Key: A significant observation is that prices tend to mean revert most of the time. Maintaining sufficient capital and exercising patience can be crucial to avoid liquidation. I learned the hard way that enduring short-term volatility is essential while keeping my focus on the long-term trends.

Quality Over Quantity: I’ve learned that executing more trades does not necessarily lead to increased profits. In fact, trading too frequently can dilute my focus and hinder my overall performance. Concentrating on higher-quality setups rather than simply increasing trade volume will be a more effective strategy going forward.

Implementing a Hedging Strategy: Moving forward, it’s clear that having a robust hedging strategy in place is vital, especially given my current doubts about a straightforward upward trend in 2024. By strategically hedging, I can manage risk more effectively during uncertain market conditions.

Balancing Hedging and Profit: While hedging can protect against losses, it can also reduce overall profits. I recognize that by hedging, I might avoid potential gains from a directional bet, which diminishes my trading edge. Navigating this balance between risk management and profit potential is a critical challenge that I need to address.

Future Changes in Strategy: As I look to improve my trading performance, my primary goal will be to identify and solidify my trading edge. Currently, it appears that my short positions have been more profitable than my longs, but I must acknowledge that this may be due to luck rather than skill. To enhance my trading strategy, I will:

• Avoid FOMO: The fear of missing out can lead to impulsive decisions, resulting in hasty long or short positions. This mindset creates an opportunity cost that can adversely affect my performance. By staying disciplined and avoiding emotional trading, I can better capitalize on genuine opportunities.

Challenges ahead

As I navigate the journey for the next month, several significant challenges loom on the horizon, which could impact market stability and my strategies at least for a month ahead:

1. Middle East War Uncertainty: The escalating tensions between Israel and Iran pose a significant geopolitical risk. Both nations continue to issue warnings and appear poised to engage in conflict, creating a climate of uncertainty that has made the global market cautious. This unpredictability can lead to increased volatility, affecting asset prices and potentially disrupting trading strategies. Pro tip: buy war-related assets as hedge, but I won’t take it. It just seems unethical for me.
2. Fed Fund Rate Decision: On November 7, the Federal Reserve will announce its latest decision regarding interest rates. With the previous rate at 5%, the consensus now leans towards a decrease to 4.75%, which is lower than earlier expectations. The latest Non-Farm Payroll (NFP) report, showing only 12k jobs added against a consensus of 113k, coupled with an employment rate matching the expectations, could play a crucial role in shaping the Fed’s decision this month. Any unexpected moves from the Fed could significantly impact market dynamics, necessitating a flexible trading strategy.
3. US Election Uncertainty: With the US elections scheduled for November 5, the market is rife with speculation. While betting markets seem to favor Donald Trump, traditional polls indicate a potential victory for Kamala Harris. Thus, the two might be closer than people think. Currently, the market appears overly optimistic about a Trump win, which could undermine the market reaction if Harris emerges victorious. Moreover, analysts suggest that regardless of the election outcome, there may be a significant sell-off after the elections, leading to a cautious approach in my trading strategies. In short, no one knows who will win.

Navigating these challenges will require vigilance and adaptability in my trading approach. Staying informed and prepared for sudden market shifts will be crucial in maintaining a balanced and profitable trading strategy.

Conclusion

As I reflect on my trading performance and the insights gained from analyzing my trade journal, several actionable goals emerge for my future trading endeavors:

Consistent Profit-Taking: Moving forward, I will prioritize the practice of consistently taking profits whenever they arise. This disciplined approach not only helps secure gains but also reinforces a mindset focused on long-term success rather than short-term speculation.

Implementing a “Cool Down” Period: To enhance my decision-making process, I plan to implement a “cool down period” after closing a position. This means I will refrain from opening any new positions immediately after a trade. By allowing myself time to reflect and assess the market without the pressure of immediate reinvestment, I can better evaluate potential opportunities and avoid giving profits back to the market too quickly. No giving it back to market right away.

Setting Thoughtful Trading Goals: My goal for future trading is to reduce the overall number of trades I make, focusing instead on quality over quantity. I aim to take only thoughtful and well-analyzed positions, ensuring each trade aligns with my established strategy and risk management principles. This shift will help me cultivate a more disciplined approach, ultimately improving my trading performance and profitability.

In summary, these insights and goals will serve as guiding principles in my trading journey. By adopting a more patient and strategic mindset, I aim to enhance my decision-making process, leading to more consistent and profitable trading outcomes.