First off, thanks for stopping by! My intent with this journal is to make myself a better trader and maybe along the way help some others out that are having problems.
I've been trading forex now for about 6 months, before that though I have about 10 years experience with the US stock market and options. I started with demo and too quickly made the jump to live but am back to demoing. I will have a link to my Trade explorer once I get all that figured out. I will also be posting summaries of my trades / live trades as they happen.
I have a few areas that I need to work on that I intend to specifically address with this journal. I'm sure new ones will come up but as of right now they are:
Overtrading
If I'm having a bad trading day I tend to "chase the market" and end up losing more than if I just stuck to my original plan or admitted defeat early. I also end up wiping out a few profitable trades by jumping back in after closing a trade, thinking "I can squeak out a few more pips!"
This was mainly an issue with the time frame I was trading (M5/M15) and having unrealistic expectations as far as TP/SL for that TF. I have since switched to a much higher TF (1H/4H/1D) which has cut down on the number of trades I execute in a day. The higher TF also puts my expectations more in alignment with what is reasonable.
Trying to follow too many pairs:
This is a similar problem as overtrading, but wouldn't necissarily result in overtrading (often times it did though). The biggest problem with followign too many pairs though is "being familar with all, and expert in none". I had an idea what all the pairs did, but I didn't get to know all their little quirks.
As part of my learning phase, I've tried all the majors and most of the big crosses. Luckily, I have been able to get a good set of data to find which pairs really work for me. The pairs that have worked out for me are AUDUSD, EURUSD, EURGBP, USDCHF.
Going forward though I'm only focusing on AUDUSD, EURUSD and EURGBP. I will also only enter 1 position at a time, looking for the best signal from those three instead of jumping into all of them based on mediocre signals.
"Forgetting" news events
With everyone reacting to what happens with the EUR as well as the USD it's important to pay attention to them, regardless of the pair you're trading. Also, with the AUD, China and Japan play an important role for that currency. Paying more attention to the FF calendar though will solve that problem. (A decidedly newb problem, that just sort of fades with experience.)
My "system" as it stands is pretty basic. I focus on pinbars / price pivots in the 1H/4H and use the Daily/Weekly as my trade bias. I actually do most of my trades using the Oanda android app on my phone. I used to think I needed a bunch of indicators and what not, but I've found that I can be pretty successful with just PA.
I would say my number one rule is "If the price is higher than the daily open, only go long. If price is lower, go short." I read on here that if the price is 50-60 pips removed from the open than the odds of the trend reversing is only around 10% (I am sure that is not quite right, but you get the idea)
My MM has evolved quite a bit since I started. Currently I enter 3 "lots" and scale out of the trade as it progresses.
For AUDUSD / EURUSD:
A fixed SL at -60pips (total 180 pips)
The first TP at 50 pips (move the SL to BE-10)
The Second TP at 100 pips (move the SL to BE +40)
The Third TP at 180 pips (move the SL up every 10 pips or so along the way)
If the price hits Entry +50 and then turns around I'm still +30 pips for the entire trade. If the Trade goes all the way to 180, I've netted 330 pips. At +100 pips, it nets 190 pips.
For EURGBP those numbers are halved.
I picked those TP/SL targets based on the historical volatility from www.forexticket.co.uk for the pairs that work best for me. Statistically I have about a 45-55% success rate (talk about coin-flip theory) over 100's of trades for those pairs. With a basic R:R of about 1:1.8 I need a success rate of 37% to breakeven. As I gain more experience I feel my success rate should go up (my success rate has been trending up, so it's not unreasonable).
My goal is to double my practice account before going back to live trading. The demo account had a starting balance of $5000 so that all the trades would show up in Trade Explorer (min size is the MT4 dictated 0.01 lots). My real starting account will only be $500. No biggie though, I'm good with percentages, which I will focus on in this journal.
So there you have it! I look forward to the discussion that is sure to come.
I've been trading forex now for about 6 months, before that though I have about 10 years experience with the US stock market and options. I started with demo and too quickly made the jump to live but am back to demoing. I will have a link to my Trade explorer once I get all that figured out. I will also be posting summaries of my trades / live trades as they happen.
I have a few areas that I need to work on that I intend to specifically address with this journal. I'm sure new ones will come up but as of right now they are:
Overtrading
If I'm having a bad trading day I tend to "chase the market" and end up losing more than if I just stuck to my original plan or admitted defeat early. I also end up wiping out a few profitable trades by jumping back in after closing a trade, thinking "I can squeak out a few more pips!"
This was mainly an issue with the time frame I was trading (M5/M15) and having unrealistic expectations as far as TP/SL for that TF. I have since switched to a much higher TF (1H/4H/1D) which has cut down on the number of trades I execute in a day. The higher TF also puts my expectations more in alignment with what is reasonable.
Trying to follow too many pairs:
This is a similar problem as overtrading, but wouldn't necissarily result in overtrading (often times it did though). The biggest problem with followign too many pairs though is "being familar with all, and expert in none". I had an idea what all the pairs did, but I didn't get to know all their little quirks.
As part of my learning phase, I've tried all the majors and most of the big crosses. Luckily, I have been able to get a good set of data to find which pairs really work for me. The pairs that have worked out for me are AUDUSD, EURUSD, EURGBP, USDCHF.
Going forward though I'm only focusing on AUDUSD, EURUSD and EURGBP. I will also only enter 1 position at a time, looking for the best signal from those three instead of jumping into all of them based on mediocre signals.
"Forgetting" news events
With everyone reacting to what happens with the EUR as well as the USD it's important to pay attention to them, regardless of the pair you're trading. Also, with the AUD, China and Japan play an important role for that currency. Paying more attention to the FF calendar though will solve that problem. (A decidedly newb problem, that just sort of fades with experience.)
My "system" as it stands is pretty basic. I focus on pinbars / price pivots in the 1H/4H and use the Daily/Weekly as my trade bias. I actually do most of my trades using the Oanda android app on my phone. I used to think I needed a bunch of indicators and what not, but I've found that I can be pretty successful with just PA.
I would say my number one rule is "If the price is higher than the daily open, only go long. If price is lower, go short." I read on here that if the price is 50-60 pips removed from the open than the odds of the trend reversing is only around 10% (I am sure that is not quite right, but you get the idea)
My MM has evolved quite a bit since I started. Currently I enter 3 "lots" and scale out of the trade as it progresses.
For AUDUSD / EURUSD:
A fixed SL at -60pips (total 180 pips)
The first TP at 50 pips (move the SL to BE-10)
The Second TP at 100 pips (move the SL to BE +40)
The Third TP at 180 pips (move the SL up every 10 pips or so along the way)
If the price hits Entry +50 and then turns around I'm still +30 pips for the entire trade. If the Trade goes all the way to 180, I've netted 330 pips. At +100 pips, it nets 190 pips.
For EURGBP those numbers are halved.
I picked those TP/SL targets based on the historical volatility from www.forexticket.co.uk for the pairs that work best for me. Statistically I have about a 45-55% success rate (talk about coin-flip theory) over 100's of trades for those pairs. With a basic R:R of about 1:1.8 I need a success rate of 37% to breakeven. As I gain more experience I feel my success rate should go up (my success rate has been trending up, so it's not unreasonable).
My goal is to double my practice account before going back to live trading. The demo account had a starting balance of $5000 so that all the trades would show up in Trade Explorer (min size is the MT4 dictated 0.01 lots). My real starting account will only be $500. No biggie though, I'm good with percentages, which I will focus on in this journal.
So there you have it! I look forward to the discussion that is sure to come.