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Mid July Update:
16 July 2026
Total trades: 13, Wins: 2, Losses: 11
Win rate: 15%
R:R= 0.024 (5.5 would be needed to break even)
Expectancy value= -0.6 R
Drawdown= -4.5%
Diagnoses:
July has been a brutal month to trade traditional breakout strategies (more specifically since 24th June).
Even high volume and RVOL confirmation have failed to improve the odds. Squats, T+1 reversals have been the norm.
Even on the days the indices had multi day gains, the broader market didn't participate.
My edge has pretty much acted like Barabara from "Shark Tank" this month ie. My edge looked at my trades and said "Nah..im out" 😆
The first 5 losses were an outcome of hubris and overconfidence on my part due to May and June successes, and i expected follow through days where there were none.
The remaining losses were a slow bleed, as they piled up one after the other. However, the losses were mitigated significantly by reducing size and frequency of trades, and stopping new trades after 11 July, as it became clear that it wasn't an environment for me.
All trades were taken on a T+1 day basis, after my "Breadth Regime Formula" flashed green, but in most occassions the market breadth suffered mean reversion in a day or two following the initial break. Breadth and the indices also closed negative for the day even after a large gap up at the initial open.
This lack of a multi-day follow through and "gap up-lower close combo", led to most trades squatting or reversing, despite volume confirmation. Even the decent, sizeable unrealised winners reversed aggressively and turned into breakevens or much smaller winners.
My preferred entry, position sizing and exit tactics, were clearly not suited for this environment. As stated earlier, my edge was ineffective.
What may have worked (but i don't have enough data to prove it):
1. Entries made on the same day as the market breadth move
2. Entries made as the price moved up from a pullback, closer to the 10/20EMA.
3. Quickly moving to breakeven or selling into strength
A combination of these may have worked. Though i don't have the hard data to prove it yet.
Positives and Negatives:
I am upset that i let hubris get the better of me in the first few days. But i am happy that i reacted well enough to reduce size. Ideally, i may have been able to avoid atleast 4 losses out of 11. The remaining 7 losses are a cost of doing business that could not have been avoided.
The Drawdown could have been reduced to -2.5% had the avoidable trades not been taken.
Drawdown would have increased to -11% had i not reduced size and stopped trading after 11 July. I took several paper trades after 11 July, using my preferred strategy amd tactics, and the outcome of those paper trades was just as ugly.
Advice For New traders:
Avoid trading in low probability environments. You could easily end up in a 10-20% drawdown if u aren't mentally prepared for such a market. You could suffer even bigger losses if u are unable to take losses and start lowering your SL in panic.
Furthermore the emotional trauma will make you incapable of reacting and taking trades when the market environment subsequently improves. ie. You lose capital in bad environments, and fail to recoup it in good environments.
Cheers!
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