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howtotradeforex Dec 28, 2005 9:01pm | Post# 1

My Journal Of Beginning Again.
 
12/28/05 Anyone is welcome to contribute to this journal.

This is the beginning of what may have been the end for some. My refusal to give up, and encouraging words from FF members gave birth to this journal. I'm especially grateful to SterlingTDR for suggesting that I start the journal.

February of 2006 will be two years that I've been in Forex, trading live for about 8 months. I'm not looking back. Yesterday's gone and only today matters. To look ahead would mean I need to have goals, a destination for my journey. Goals can and will change, so I'll do my best to update the results.

My first goal of this journal is to set my trading rules. So I'll spend time thinking of my rules and post them as they come about. Another goal would be how many pips per day/month I expect to gain on a consistent basis. I'll look at the math on that and post the results.

firedave Dec 28, 2005 9:16pm | Post# 2

Okay, let's make some pips here Good luck and good trading for you

diallist Dec 28, 2005 11:42pm | Post# 3

I would wish you luck, but you don't need it. You have something far, far more important. You have bulldog determination, and a rock solid belief that you will succeed at forex, and I admire you for having both of those.

Dial

khoong25 Dec 28, 2005 11:51pm | Post# 4

Good luck.. having determination is a big part of the battle won...

If you have trouble setting pips target, try working forwards...

try to estimate how much your system can produce on a daily/weekly/monthly basis ...

make sure your targets are in tune with your system.

eg:

for me, although i trade from daily charts, but rarely hold positions overnight. so therefore i would have a trade target which would be the 80% of the average daily range of the pair.

if you scalp, you should be able to set daily targets..

if you hold positions into weeks/months, ... it gets difficult to set daily targets.

why not consider basing it on the trade potential?


just some ramblings ..

hope that helps..

ken

james16 Dec 28, 2005 11:56pm | Post# 5

12/28/05 Anyone is welcome to contribute to this journal.

This is the beginning of what may have been the end for some. My refusal to give up, and encouraging words from FF members gave birth to this journal. I'm especially grateful to SterlingTDR for suggesting that I start the journal.

February of 2006 will be two years that I've been in Forex, trading live for about 8 months. I'm not looking back. Yesterday's gone and only today matters. To look ahead would mean I need to have goals, a destination for my journey. Goals can and will change, so I'll do my best to update the results.

My first goal of this journal is to set my trading rules. So I'll spend time thinking of my rules and post them as they come about. Another goal would be how many pips per day/month I expect to gain on a consistent basis. I'll look at the math on that and post the results.
Rule #1. Its not about trading its about not trading. I know you will understand what I mean. I have admired you for some time. Good stuff my friend. jim

james16 Dec 29, 2005 12:00am | Post# 6

Good luck.. having determination is a big part of the battle won...

If you have trouble setting pips target, try working forwards...

try to estimate how much your system can produce on a daily/weekly/monthly basis ...

make sure your targets are in tune with your system.

eg:

for me, although i trade from daily charts, but rarely hold positions overnight. so therefore i would have a trade target which would be the 80% of the average daily range of the pair.

if you scalp, you should be able to set daily targets..

if you hold positions into weeks/months, ... it gets difficult to set daily targets.

why not consider basing it on the trade potential?


just some ramblings ..

hope that helps..

ken
day trading off of daily charts is a road less traveled and a road to success. I have been looking for this statement for almost a year from someone. khoong just dropped gold if anyone cares to look closer. jim

vneufeld Dec 29, 2005 12:09am | Post# 7

Gold
 
Thanks for pointing out "gold", James 16. I'm a novice trader. I read something recently, however, that caught my attention. It was a comment that it was common for openings in a market to be at the daily high or low. I don't know if that applies to Forex, and with 24 trading, I'm not sure how to study it (?treat every market opening, e.g. London, Asian, NY as a seperate "day?") The comment of daily range brought that to mind. Any comments?

james16 Dec 29, 2005 12:31am | Post# 8

Thanks for pointing out "gold", James 16. I'm a novice trader. I read something recently, however, that caught my attention. It was a comment that it was common for openings in a market to be at the daily high or low. I don't know if that applies to Forex, and with 24 trading, I'm not sure how to study it (?treat every market opening, e.g. London, Asian, NY as a seperate "day?") The comment of daily range brought that to mind. Any comments?
you just touched on one of the most difficult aspects of forex trading for those who are used to futures markets. look at any daily forex chart and notice the staggered effect you get from a 24 hour market. now go look at a daily futures chart and notice the stacked effect. a one day move in forex really is comparable to 3 days or so in a futures market. this fact has and will continue to kick the ass of many futures traders just starting to trade forex. it did mine until i realised why. jim

vneufeld Dec 29, 2005 1:24am | Post# 9

question
 
Thanks James;
Not sure what you mean by "staggered" and "stacked." Any other notable differences between futures and forex worth noting?

james16 Dec 29, 2005 1:35am | Post# 10

Thanks James;
Not sure what you mean by "staggered" and "stacked." Any other notable differences between futures and forex worth noting?
because you have a large close time for futures the open can and does gap much of the time where in a 24 hour market the open will almost always start right at the close of the previous bar. this causes the bars in forex to much of the time cover most of the previous bar during its high and low movement. in futures the gap will counter move and then trend for a couple of days the direction of the gap. its hard to explain but very easy to see. the differences are to many to list. many traders believe TA is much easier with forex but i am not in that camp yet. probably because i spent so many years trading futures. jim

Isotonic Dec 29, 2005 4:56am | Post# 11

i agree with that - i think its much easier to plan and trade off dailies rather than smaller timeframes.

day trading off of daily charts is a road less traveled and a road to success. I have been looking for this statement for almost a year from someone. khoong just dropped gold if anyone cares to look closer. jim

howtotradeforex Dec 29, 2005 5:46am | Post# 12

Thanks for all the kind words guys. It means a lot to me. Trading begins in January.

**Goal #1: To gain 20 pips per trade for the first 20 trades. No more than 15 pip loss per trade. Should the trade exceed my 20 pip goal, then my stop moves along with the trade. Should the trade hit my stop, that's it for the day.

**Trading rule #1: I am a trend trader. I will always trade the trend, not the movement of one candle. This is where I lost most of my money, entering trades on the excitement of candle movement. Then I'd lose more waiting for the candle to move back for me.

I like the idea presented to trade daily charts. Short term charts, IMO, are for the pros who have plenty of trading capital and can afford to lose 50-70 pips a trade. I'll watch the daily charts the rest of this week to get a feel for them. I feel better already.

khoong25 Dec 29, 2005 2:49pm | Post# 13

One significant point to note:

the larger the time frame the price action occurred, the more powerful its 'meaning'.

eg pinbar on daily (read james16 thread about pinbar) is a much stronger indication of a trend reversal than a pinbar you see on the 15min chart.

good luck.

ken

james16 Dec 29, 2005 5:10pm | Post# 14

One significant point to note:

the larger the time frame the price action occurred, the more powerful its 'meaning'.

eg pinbar on daily (read james16 thread about pinbar) is a much stronger indication of a trend reversal than a pinbar you see on the 15min chart.

good luck.

ken
khoong is right on as usual. all of you who are new to these concepts should look only at daily and weekly charts until you are succesful there first. like khoong says they are more dependable and a lot less stressful plus they just flat work on these timeframes.

howtotradeforex Dec 29, 2005 7:34pm | Post# 15

A few more trading rules I thunk up.
 
**Trading Rule #2: Trade one currency pair at a time. Too often I traded two or three pairs, trying to make the pips flow.

**Trading Rule #3: There should be at least two reasons for entering the trade. Whether it be technicals, fundamentals, or just because the chart looked too good to resist, I need to have information to back up my entry. Help me out with this one guys, should there also be a reason to exit? Should the exit be predetermined?

**Trading rule #4: Once a trade has been placed, stop and limit in place, that's it. Have you ever had the price getting close to your stop and you move the stop "just a little?" Man, what a way to lose!

firehorse Dec 29, 2005 9:53pm | Post# 16

Hi,
**Trading rule #1: I am a trend trader. I will always trade the trend, not the movement of one candle. This is where I lost most of my money, entering trades on the excitement of candle movement. Then I'd lose more waiting for the candle to move back for me.
How are you defining a trend?
**Trading Rule #3: There should be at least two reasons for entering the trade. Whether it be technicals, fundamentals, or just because the chart looked too good to resist, I need to have information to back up my entry.
Could you define what will qualify as a reason and what will not qualify as a reason?
**Trading rule #4: Once a trade has been placed, stop and limit in place, that's it.
How will you determine your stop and limit?

Just trying to clarify your plan

Best regards
Alan

SterlingTDR Dec 30, 2005 2:47am | Post# 17


....To look ahead would mean I need to have goals, a destination for my journey. Goals can and will change, so I'll do my best to update the results. .....
....Another goal would be how many pips per day/month I expect to gain on a consistent basis. I'll look at the math on that and post the results.....
Mark Goals are important and its appropriate that you are thinking this way but the nature of those goals are equally important. Having a daily "pip" target is a huge distraction from what you ought to be focusing on and besides which its rather meaningless.

You can only make, in terms of "pips", what the market is willing give on any given day, regardless of your goal. Having an idea of what your return is one thing, but makeing it a goal is setting yourself up for failure because you cannot force the market to yield what it doesn't what to, without straying from your strategy.

Surely you'd be better served by setting daily goals which you had control over?
e.g. Flawless execution of you trading strategy or only taking high probability trades, things like that. The result will be regular and consistent profits. On some days you'll make alot and on others you may lose a little but on balance, you'll be ahead.

Just a thought.
Good to see you doing this journal BTW.

Steve

howtotradeforex Jan 1, 2006 12:48pm | Post# 18

Thanks for asking Alan,

Hi,How are you defining a trend?
Simply when the market is making higher highs and higher lows, then it is in an uptrend. The rule implies that I will trade with the longer term trend, instead of just trying to catch a ride on hot candle movement.
Could you define what will qualify as a reason and what will not qualify as a reason?
An example of a reason would be that the price has moved two full candles above/below -- support/resistance, whatever the case may be. Maybe the fundamentals indicate that the dollar is gaining/losing strength because oil prices are rising/falling. The rule implies that I need information to back up my trade instead of just throwing a dart at the chart and hoping for a bull's eye.
How will you determine your stop and limit?
I was taught to place stops and limits above/below the last known high/low. I'll need to determine how many pips am I willing to risk and stop the trade there instead of moving the stop to avoid being stopped out. However, I'm a big fan of moving stops to protect profit. The limit is the tough one. On one hand you want to move the limit to continue making profit but on the other hand when the trade turns back then your caught in the psychological warfare of stopping the trade or not.
Mark

howtotradeforex Jan 1, 2006 1:12pm | Post# 19

Mark Goals are important and its appropriate that you are thinking this way but the nature of those goals are equally important. Having a daily "pip" target is a huge distraction from what you ought to be focusing on and besides which its rather meaningless.

You can only make, in terms of "pips", what the market is willing give on any given day, regardless of your goal. Having an idea of what your return is one thing, but makeing it a goal is setting yourself up for failure because you cannot force the market to yield what it doesn't what to, without straying from your strategy.

Surely you'd be better served by setting daily goals which you had control over?
e.g. Flawless execution of you trading strategy or only taking high probability trades, things like that. The result will be regular and consistent profits. On some days you'll make alot and on others you may lose a little but on balance, you'll be ahead.

Just a thought.
Good to see you doing this journal BTW.

Steve
All very good points Steve. I think regular and consistent profits defines successful trading as a whole. Having a goal of only taking high probability trades is a great suggestion as it coincides with sticking to the rules. If I stick to my rules, then the probability of the trade will be greater than just entering a trade because a candle jumps 10 pips in a few seconds.

The direction I was looking with my pip goal was to place my trade, hit my goal, and stop trading until the next opportunity. This is where a lot of my problem is, the inability to walk away from the chart after gaining or losing in a trade. I would always enter another trade instantly, looking to recover losses. So a pip goal simply gives me the security of being able to walk away knowing that I made a good trade, closed with a gain, and didn't lose by trying to gain more.

james275 Jan 1, 2006 8:02pm | Post# 20

I really appreciate the maturity on this forum, people helping people. Howtotrade...i really admire your courage to continue with this journal. I too am now going 'live' again (an old futures trader). I have always had just a "general" trading plan. It was so general, i always had "excuses" to do something different and forget the rules.

Right now i am finalizing my plan. I am trying to really be "Ruthless" with myself in making the plan totally objective and not giving my selfany opportunity to change the rules in the middle of the trade. FIREHORSE'S comments are so important. For one, how do you define trend. When you say higher High's and lower lows, that is a start (at least for me), but i always struggeled when in a trading range, and this gets all goofed up. SO i have to define something that tells me not just what the trend is, but also when there isn't one on my trading timeframe! So somehow, an objective definition must be made.

Other things I'm trying to do:
1. Keep the plan very simple and clear. Even when and when i can't use discretion! I want to be able to unemotionally backtest it.
2. Clear entry, initial and trailing stops, and exit criteria.
3. Maintain clear trade record. Don't cheat in demo mode.
4. Clear % of capital that i wll risk. Too much, and i get nervous!

Best of luck this year to you as you continue. Look forward to seeing great results for you

Jim


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