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stevefx Jun 3, 2010 10:36pm | Post# 1

Eur Simple Trades High Risk Journal
 
Okay so this is it, my new venture.

Basically I'm a bit of forex freak whose aquired a good number of skills over some time, but hasn't really put a lot of trading discipline together in order to turn a profit. I find trades that I back out of wind up in profit...Without a solid framework the market will eat you up like a lawnmower and spit you out. My total losses in fx are only about 250$, though. I really want to turn this around so I'm starting this journal to better structure my Euro trades.

Once I commit to a trade, entry size, tp and sl, thats it, its getting carried through.

Nothing really new here, my idea is to get behind the market and only trade when I spot something solid. Another bad trait to get rid of is trading too much. Many traders, including me, can spot good trades, but after they cash in they feel they have to re-enter right away even if they don't have a good sense of where the price is going from there.

I use, BB's, RSI, chart patterns, and price levels.

I'm going to be running a high risk short stack strategy. My account balance is around 96$. Mainly try to gain around 20% per trade at 100 pips or so, with a sl of up to around 15%, nothing so set in stone but thats the general idea. Risk to me can be interpreted or expressed in many ways. Mostly I see risk not as how much of your account you risk per trade, but not always taking the trades that you know are best for you. Its short stack so if it gets busted no big deal. But if it grows I can lower the risk size over time.

Thanks for reading, first post done, trades to follow...

stevefx Jun 3, 2010 10:50pm | Post# 2

first trade
 
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First trade has just been placed. Its a long entry Eur/Usd at avg. 2172, 2 entries 10 cents a point each for a total of 20 cents a point.

Market should be in corrective mode tonight.

Chart shows growing bull weakness on 4hr. Next trade target somewhere hopefully just above my current TP the Daily R1 2275. All relevant levels have been posted on charts. (Levels courtesy actionforex).

SL down at the 50% fibo 2105 or so. 100 point gain potential vs. 70 point loss fits pretty well into my scheme-20% vs. about 14%.
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stevefx Jun 3, 2010 11:05pm | Post# 3

BTW this is an open journal, anyone can post here, discussion, comments, and criticism are always welcome.

trj6911 Jun 3, 2010 11:27pm | Post# 4

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Gday steve great to see you putting a journal here bit of a newbie aswell ..there is some great information on FF to help you and its a great tool for education and its free..

To me give away them BB they get annoying after awhile and add a auto pivot so you dont have to map them everyday there is a few on here and its just me but but try removing the grid and adjusting the properties to black on white charts i can say that this has improved my trading alot its seems clearer ,,cheers and best of luck...trev.
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stevefx Jun 4, 2010 12:30am | Post# 5

Gday steve great to see you putting a journal here bit of a newbie aswell ..there is some great information on FF to help you and its a great tool for education and its free..

To me give away them BB they get annoying after awhile and add a auto pivot so you dont have to map them everyday there is a few on here and its just me but but try removing the grid and adjusting the properties to black on white charts i can say that this has improved my trading alot its seems clearer ,,cheers and best of luck...trev.
Hey thanks, thats quite a discrepancy between Action's DP and your own, 10 points. I'll definitely look into finding a reliable tool for autoprinting them. I'll feel naked without my BB's though, haha, they're like my security blanket. Although truthfully I only use them occasionally to verify trend/directional movements and possible strength of those trends. They give little clues here and there....Thanks for posting, charts will improve!

stevefx Jun 4, 2010 6:22am | Post# 6

Result of first trade
 
Closed two longs at 2210, +39x2= +78 pips
Rebought for 1/2 pos. at 2205 and waited for recovery from bounce off DP, didn't pan out so closed at 2189= -15 pips.

Total= +63 pips.

Account balance = 101.02$.

More entries for long may still develop. Bad bounce off DP>>back to range.

No I didn't stick with plan to hold to 2275-but-was successful in holding my position much longer than usual. Scary countertrend trade and just before NFP always a little spooky. Didn't mind leaving early but probably not a good idea to rebuy just then. Those things don't usually work out. A trade needs commitment and confidence to work. This journal is helping me to develop better commitment.

Basic goal here is to 1) learn to stick to trading plan. 2) get away from compulsive/revolving door type trading. Only trade set-ups.

stevefx Jun 4, 2010 9:34pm | Post# 7

NFP was a loser lesson learned
 
Crazy NFP friday, craziest I've seen yet. Market started tanking a good 90 minutes before US data was even released, supposely off of CAD employment numbers. Traders in the Eur thread saying it was just institutions positioning themselves early, and many willing to enter longs too early in hopes of cashing in on the retrace. But bear proved to be serious as a heart attack. Much bickering and hair pulling in Eur/Usd thread. Just a remarkable change in the regular patterning of NFP days that I've experienced before....

1)No more countertrend trades. This is limiting but I'm sorry its just not worth it. I have been in days past a contrarian in spite of myself, and contrarians lose, lose, lose....Its better to learn that with baby pips than with big pips-I don't think demo trading will really teach that...

I went against my own rules and paid the price for it today, anyway, with a 19$ loss. It was just scalping-but I had set one of my Euro MT4 charts with a higher lot size and forgot about it-I have like 4 Euro charts open. So my trade was 3x what it normally would have been, by accident. Then of course the hammer comes down, and instead of cutting off the finger, I am forced to later cut off the hand. Then after I do market comes back of course. Its at a point like this that you feel the market is somehow dogging you, as if you had a curse. But its just the psychological dynamics working-the market is made and built 100% to eat people in that kind of situation and frame of mind for breakfast. Thats why trades need to be structured, and traded with confidence and commitment in order to work.

Waste but not a waste if the lesson is learned. So here I am being honest about it, even though it is difficult to be. The more experience I gain with the dreadful uncertainties of the market the more convinced I become that 90% of the difference between success and failure lies in the simple trading ethics and grounded or ungrounded practices of the individual trader, rather than with supreme technical or fundemental analytical expertise.

You can read this stuff but you have to go out there and learn it for yourself, is what it comes down to.

I may in the future be incorporating other crosses in order to take more trades, if I can find one sufficiently decorrelated to the Eur.

Anyway, AC balance: 82$. Never give up, just learn from your mistakes. Bliss may follow....

So:

1)Only trade with the trend.
2)Only trade planned set-ups, no on the fly trades.

Be back later with some tech analysis.

trj6911 Jun 5, 2010 3:04am | Post# 8

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hey steve bad luck you realizing your mistakes and learning...my pivots may not be the perfect to action forex and im not disputing there but my levels are close as per price i come out the nfp with close to +670 pips so yea its possible.. i was short eur/usd at weekly PPX but closed for +50 that was 350 pips ago that was my mistake...cheers.
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stevefx Jun 5, 2010 4:42am | Post# 9

hey steve bad luck you realizing your mistakes and learning...my pivots may not be the perfect to action forex and im not disputing there but my levels are close as per price i come out the nfp with close to +670 pips so yea its possible.. i was short eur/usd at weekly PPX but closed for +50 that was 350 pips ago that was my mistake...cheers.
Very nice trades thanks for sharing them, and congrats. Just trading in direction of larger trends and placing trades when PP's get broken, simple as it can be! Thats how it should be done, where I'm trying to go. Your comments are most welcome here..

stevefx Jun 5, 2010 7:14am | Post# 10

Tech analysis for the upcoming week
 
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Okay got some rest, getting my head on straight. This is what I'm looking at for the upcoming week. This chart defines trend in terms of different time frames from 15 minute up to Monthly. I've taken this technique from another traders journal who was good enough to share it. I like it a lot because it concretises trend definition, and offers some interesting insight about the way different TF's are trending in relation to one another.

We can see only 15 min. TF is bullish (corrective), 1hr is square, and everything else is bearish. Worth noting that 4hr TF is the first bearish TF to be encountered. For that reason I've added a couple of extra 4hr resistance points into the chart than I normally would, as they may serve as temporary bounce points during consolidation. I don't plan on scalping but the lower 4hr points might make good scalp points/come into play in the short term.

Anyway since main trend is defined as bearish we will only SELL this week, whatever else we do....

The hieght of retracement, which determine our entry point can only be guessed at, though other estimates I've read come in at 2150 to 2175, and my own work has led me to come up with 2120 to 2180 zone as a reasonable expectation.

There is an area of confluence around 2120(year 2000 50% fibo, should be a price magnet) to 2139(50% fibo local move down from DP), also including 2132 the H4 R2. This zone would be my first SHORT entry area. The second would be around 2173, the Daily R1 and yesterdays Daily opening price.

Stops placed behind the Daily Pivot, 2225. TP is open. I would be inclined to be liberal with it as it may run long, but lock some in.

Another scenario is Price (PA) retraces minimally and just runs down hill, in which case we're out of luck. Need to wait for a pull back to ride this pony. Have a good week.
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stevefx Jun 6, 2010 10:45pm | Post# 11

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Well looks like we started out on the short side. No countertrending, no selling(yet), stick to plan. Perhaps SELL entry target can be considered a little lower. Anyway, here is a fibo study I posted in the Eur/Usd thread. Shows the likelihood of a retrace back to the 50% line. Yellow boxes show first penetration of important fibo, red boxes show retrace...
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stevefx Jun 7, 2010 7:34am | Post# 12

Sorry one correction from previous chart 50% # for local move down is 2046, same as the new Daily Pivot for today. Weekly Pivot set at 2091. Fibs and pivots all over the place. Essenentially if we clear 2020 we should be good up to those levels min. And if we hit those levels I'm betting 2122 is going to get its respect. Anything can happen though, bulls take forever these days.

stevefx Jun 7, 2010 8:39am | Post# 13

Update
 
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Here's an updated chart with a new look at the current TF trends. In the shorter term it is quite a bullish picture as everything but the monthly points up. Larger bear trend still in tact obviously. But gives me some hope for more up and better place to sell from. All corrected, and with current pivots and relevant resistance points. Moved the potential stop back behind the current weekly R1, might as well since its just a few more points back.
(this is deep sea fishing BTW, going for the whales, patience is required)
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stevefx Jun 8, 2010 6:35am | Post# 14

Sold Eur/GPB
 
I actually got my first signal of the week, SELL Eur/GPB @8272.

stevefx Jun 9, 2010 6:50am | Post# 15

Stopped out on Eur/GBP -25 pips. Price came back, just misjudged entry a little. Thats ok, better looking pairs out there.

Aud/Cad is in the zone right now, pending sell for 8700 if it can climb the 30 points.

Rednose Jun 29, 2010 2:22pm | Post# 16

Bookmarked.
 
Hi Steve,

I just bookmarked your thread, gonna read it and get back to you.

Greets.

Red.

stevefx Jun 29, 2010 3:12pm | Post# 17

Hi Steve,

I just bookmarked your thread, gonna read it and get back to you.

Greets.

Red.
Thanks Red, I'll be updating and changing this around in a bit-appreciate it!

stevefx Jun 30, 2010 8:32pm | Post# 18

New Plan
 
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I've been away from this journal a little, doing some reorganizing and searching around, trying out new methods.

MM: high risk=stupid. The original idea was to make a little bit into a lot by taking a few great trades and betting large. Basically, I decided that even if I was successful, it wouldn't really be teaching me very good lessons in the long term. Long term, its a bust cycle. Best way is to learn is by playing small, and paying small.

Slow and steady wins the race, and all that.

Past that I've been developing a trading system which I'm going to present here and now:
--------------------------------------------------------------------

I went through a number of things. I was looking for something that would present high probability set-ups reliably, again and again. So I put together a pretty simple system based on MACD divergence.

Indi's are an MACD, with fast settings-6, 12, 9.
RSI with standard settings, 14 period, 70, 30.

Suitable trades can be found on various time frames. I like the H1, but bigger TFs can work.

1) First step is to find some suitable divergence on a chart.

Bullish Divergence: Price is moving down while MACD is moving up.
Bearish Divergence: Price is moving up while MACD is moving down.

Notice that when price and MACD diverge, trend should move in the direction that the MACD is moving in, if divergence plays out sucessfully.

Divergence plays are always therefore reversal plays.

2) Second step is to check the trend. If your trading against a trend that is super strong, divergence can repeat itself a couple of times before playing out. In this case, if you get in early enough, it may play itself out partially before moving violently in the other direction. Set reasonable SL, and if in profit set SL to BE +2, 5, 10, ect.

If you can place the trade into some further context-divergence showing plus trend stopping beneath some important fibo or resistance zone of some kind, this adds strength to the trade. Also provides logical SL points.

3) Check the next higher TF that you're trading on, to see weather it is showing similar divergence, or at least shows the MACD moving in a direction in which you expect the reversal to move. Ex., if you find div. on the 1hr chart and you expect it to be bearish, but the 4hr chart shows the MACD in an ascending state-this is less than ideal.

4) If all of that checks out to your satisfaction, proceed as follows.

A) Check the RSI to see that price is coming from a significantly oversold or overbought state and is moving in the favored direction.

B) Wait for the MACD to contract so that its either at the zero line, or very close to it. (Sharp drops in the MACD twords the zero line are more favorable than a gradual slope twords the zero line.)

C) Make the trade.

So, I'll be scouring the charts over different TF's and pairs to come up with these setups, and I'll be posting them before-hand if anyone want to follow along. They are not a dime a dozen, but should produce a few good trading opps per week.

Example and Template provided below.
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fastmacdchuck.tpl

stevefx Jun 30, 2010 9:32pm | Post# 19

CHF
 
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USD CHF is a big contender for a big prize. She's not ready yet, but I'm putting her on alert. Will research more.
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stevefx Jun 30, 2010 10:29pm | Post# 20

EJ Daily
 
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EJ Daily is developing. Lower TFs have yet to fall in line. Another one on watch.
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