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More losses than wins this year, and I think you can pretty much see that my account took a slow and steady slide throughout 2011. I can't say I'm happy with the results, but I am 100% sure I have grown as a trader. As disheartening as this may all seem, I think -no wait, I'm certain!- that I ended 2011 much wiser. 

On one hand, I've learned to gain better control of my emotions. It's much, much easier for me to shake off losses now, which I guess only comes naturally seeing as I had experienced so many this year. Overall, I think I've become a lot more objective with my approach. I see a good setup, I take it. Market looks bad/gives me signals to bail, I exit. 

So then why did my account take a hit? Well, I seriously think I need to reassess and make major changes to my current trading strategy. Psychology and strategy go hand and hand and they have to jive. 

While these days, I have a much better understanding of the economic landscape and of news and developments in the forex markets, I feel that it messes with my current trading style, which is mostly day trading. Basically, I think I need to realign my mindset with my approach. So while I do know what's going on in this economy and that economy, and how it can affect this currency and that currency IN THE LONG/MEDIUM TERM, knowledge of all of this doesn't really translate well into the day trading environment. Sometimes, it can even set you up for losses.

I also came to learn that trading actual news events isn't my thing. I think they're just too unpredictable, and it feels a lot like gambling, TBH.

Basically, I've come to learn that short-term trading isn't working out too well for me. The responsibilities of my job don't allow me enough time to really stay glued to the screens to really stand a chance. I mean, full-time pros have a hard enough time being profitable trading short-term time frames and they devote their entire day trading. It's hard for me to imagine that I can do much better with only a couple hours to spare for day trading.

But now that I am fully aware of all of this, I plan to make some concrete changes.

First, I plan to trade higher time frames, perhaps focusing more on the 4hr TF/Daily. This will allow me to do several things which I think will help me get better results:

1) Monitor and make adjustments to my trades properly. I had a very difficult time monitoring my day trades because I could only afford so much time in a day. Longer-term trades won't be as demanding.

2) Trade a basket of pairs. This will help me tweak my risk exposure.

3) Hold on to winners. From what I've seen, trends are more noticeable/predictable on longer time frames, and I think that as a day trader, I missed out on major opportunities to catch big moves because I was so near-sighted.

4) Realign my mindset with my approach. I regularly read up a lot about fundamentals and I think this has a bigger and more predictable impact on swing/position trading than day trading.

I understand that I'll have to widen my stops significantly and take bigger positions (to make up for the fact that I'll probably be taking less trades) as I transition from a day trader to a swing/position trader.

On another note, as you can see, I was doing alright towards the middle of the year. My account stayed flat during this time, and I experienced big wins from time to time. But towards the end of the year, my account began to slide steadily, even though I made no changes to my general strategy. But what I did notice is that the market environment had changed, it had become a lot more choppy.

My conclusion? I need a different strategy for different market conditions. One size does not fit all. What works for one environment might not work for another.

To remedy this, I have something concrete in mind: have a different approach for trending vs ranging markets.

For trending markets, I'm thinking of employing a system similar to the Trend Is Your Friend system. I like how the rules are simple and clear-cut. And to be honest, I was quite impressed with its backtest results.

For ranging markets, I think I'll continue to rely on Stochastic. Actually, I think I’ll limit my stochastic trading exclusively to ranging markets from here on out, as it seems to be most accurate with that. This was something that I personally have come to observe, and it was also confirmed by a speaker at a recent Bloomberg seminar that I attended. Also, I'll stick to trading established horizontal support and resistance lines, since I observed these work best.

Of course, to do all of this, I will need to first identify what kind of market environment we're in in the first place. But I think I've grown a lot in that aspect and I can do a pretty good job at it.

Now that I'm at the start of a new year, I can't help but feel hope and excitement for what lies ahead. I have come to learn so much over the year, and now that I've taken a lot of time to reasses my trading performance and laid down concrete resolutions, I feel I have a better shot at ending the year in the green.

So do I still want to become a consistently profitable trader? You bet! Because despite the fact that I ended the year in the red, I enjoyed trading. Each trade (even those losses) gave me a high. I enjoy the challenge that comes with trading and the fact that there's always room for improvement. I guess it comes with being naturally competitive. So I'm not giving up. The dream of becoming a consistently profitable trader is as clear and alive as ever!