✦ The Decision Checklist

My Trade Decision Checklist is the central engine of every trading decision. Every entry — initial open, re-entry after a take profit, or a drawdown add — goes through it first. The checklist removes guesswork and ensures each decision conforms to the rules of the plan.

✦ Trading Hours

• Sunday: Market opens at approximately 2:00 PM Pacific Time. Wait for spreads ≤2.5 pips before running the checklist.
• Monday – Friday: Any time during market hours. The checklist is the gate, not the clock.

✦ Opening Review

Each session begins with the same sequence:

✦ Intraday Check-ins

I receive a phone notification when a take-profit level is hit, or I check in during the day when I have a free moment. Each check-in follows the same three-step sequence as the opening review: close profitable trades first, then run the checklist.

There is no fixed schedule for check-ins and no minimum number required. Checking in more frequently simply creates more opportunities to capture a cycle when price is moving.

✦ Trading Records

Completed trades are recorded in the trading spreadsheet at the end of each day using the statement from Forex.com. This tracks performance over time and surfaces any patterns worth investigating.

1. Strategy Overview

Core Concept: Exploit the strong correlation between AUD/USD and NZD/USD through simultaneous long/short positions, capitalising on mean reversion patterns when the pairs diverge from their historical relationship.

Directional Rule: Always buy AUD/USD. Always sell NZD/USD. No exceptions. No conflicting positions.

Governing Principle: This document is the source of truth. The checklist, backtest engine, and all trading tools must conform to these rules. When in doubt, refer here.

2. Trading Hours

Regular Trading (Monday – Friday)

• Trading may occur at any time during market hours.
• Every trade entry or re-entry must be preceded by running the checklist.
• The checklist is the sole gate for all new entries — there is no fixed session requirement.

Sunday Market Opening

• Market opens approximately 2:00 PM Pacific Time.
• Wait for spreads ≤2.5 pips on both pairs before running the checklist.

3. Position Sizing

Scaling Table

Position size is determined by current cash balance only. Unrealised P&L and equity are not used for sizing decisions.

Daily Incremental System (LIFO Identification)

To enable individual position identification and LIFO closing, each trade uses a slightly different unit size based on the day of the week:

4. Entry Rules

Pre-Entry Requirement (All Scenarios)

• Run the checklist before every entry without exception.
• The checklist outcome is the sole authority on whether to trade and which pair(s) to trade.
• After any trade closes — whether by automated TP or manual close via price alert — run the checklist before placing any new entry.

Scenario One: No Trades Currently Open

• Open 1 AUD/USD buy and 1 NZD/USD sell simultaneously.
• Set automated TP at +10 pips price movement on both trades.

Scenario Two: One or Both Pairs Have Open Trades

Run the checklist to determine which pair(s) are eligible. A pair is eligible if any of the following apply:

• A trade on that pair has just closed at TP (re-entry).
• The pair is ≥50 pips in drawdown from its last entry price (drawdown add).

A pair is not eligible if:

• It already has 2 open trades.
• Total open trades across both pairs is already 4.
• Margin level is below 175%.
• Spread exceeds 2.5 pips.

Manual Close Pre-Check

• Before running the checklist, check all open trades on both pairs.
• If any trade has reached +10 pips profit but is still open, close it manually first.
• This ensures margin is correctly recalculated before the checklist makes its decision.

5. Exit Rules

Take Profit

• Target: +10 pips of price movement per trade.
• 10 pips refers to price movement, not net pips after spread. Spread is a cost of doing business, not deducted from the TP target.

Single Position on a Pair

• Set automated TP at entry price + 10 pips (AUD buy) or entry price − 10 pips (NZD sell).
• No manual monitoring required — broker executes automatically.

Multiple Positions on a Pair

• Automated TP cannot reliably target individual trades when multiple positions are open.
• Remove any existing broker TP orders when a second position is opened on the same pair — switch to price alerts only.
• Set a price alert at the level where the most recently opened trade reaches +10 pips.
• When the alert fires, manually close the profitable trade using its LIFO unit identifier, then run the checklist.

No Stop Losses

• There are no stop losses on any trade.
• Losing trades are held for mean reversion. This is intentional and non-negotiable.
• The margin floor (175%) and position caps are the only downside protection.

6. Risk Management

Margin Rules

Position Limits

• Maximum 2 open trades per pair.
• Maximum 4 open trades total across both pairs.
• These limits are absolute and override all other considerations.

Spread Filter

• Do not enter any trade if spread exceeds 2.5 pips on either pair.
• Typical spreads (validated from 12 months of real account statements): AUD/USD ~0.94 pip average, NZD/USD ~1.32 pip average. Both spike sharply at the 17:00 UTC daily rollover — AUD/USD ~2.76 pips, NZD/USD ~4.47 pips, roughly 3–4x normal. The 2.5 pip filter blocks entries on both pairs during that window. High spreads also occur at Sunday open, major news events, and other illiquid hours.

Financing Costs

• Financing is charged/credited daily on open positions. Validated from 12 months of real account statements: approximately $3.94/day per 100,000 units for AUD/USD long, $0.45/day per 100,000 units for NZD/USD short — not "a few cents" as previously assumed. Scales down proportionally at smaller position sizes.
• NZD/USD short financing was positive on about 1 in 7 observed days, but the average across 12 months is a net cost — treat this as a cost to budget for, not a reliable carry trade benefit.
• Financing costs (a few dollars per day at full size, not cents) do not justify early exit from a drawdown position.

7. Drawdown Management

Expected Behaviour

• Drawdown periods of weeks or months are normal and expected.
• The strategy's edge comes from outlasting short-term adverse moves and capturing mean reversion.
• Patience is not optional — it is the primary skill this strategy requires.

Drawdown Addition Rule

• When a pair is ≥50 pips in drawdown from its last entry price, one additional trade may be added.
• The 50-pip threshold is measured from the most recent entry on that pair, not the first entry.
• Maximum 2 trades per pair, 4 total — these caps apply regardless of drawdown depth.
• Margin must be ≥175% before adding a drawdown trade.

What Not to Do

• Do not close positions early to relieve psychological discomfort.
• Do not add trades outside the 50-pip rule to average down aggressively.
• Do not deviate from the checklist due to news, analysis, or opinion.
• Financing costs do not justify closing a drawdown position early.

8. Maximum Capacity Rule (v2.4)

When the account is at maximum capacity — 4 trades open — for an extended period with no sign of recovery, holding indefinitely is not always the optimal outcome. Backtesting identified a specific scenario where cutting the worst position produced a significantly better result than holding mechanically.

Cutting on day 7 produced $2,799 more cash, half the drawdown, and double the margin buffer versus holding mechanically through the same period.

9. Trading Psychology

• No impatient exits.
• No deviations from the checklist under any circumstances.
• Ignore external news, analysis, and social media sentiment.
• As the account grows, drawdowns in dollar terms grow proportionally — this is expected and normal.
• The edge comes from discipline and patience, not from predicting direction.
• When in doubt: run the checklist. If the checklist says no trade, there is no trade.

10. Version History

I track completed trades, analyse performance over time, and review patterns in this spreadsheet. Updated at the end of each day using the statement from Forex.com.

This website is a personal trading journal. It documents my experience learning and developing a forex trading approach. All content is shared for educational and informational purposes only.

✦ Purpose of This Site

This site exists to document my process, share the tools I've built for myself, and provide an honest account of how one individual approaches trading. Everything here reflects my personal experience, risk tolerance, and decision-making — yours will be different.

✦ Risk Disclosure

✦ Your Responsibility

Trade responsibly. Trade educated. Trade at your own risk.

Thanks for visiting. While I can't provide personalised trading advice, I'm happy to connect with fellow hobbyist traders. Use any of the channels below.