Trading a (semi) automatic approach...but want more

Hey Folks,

As a matter of full disclosure, let me begin by stating that I've been a FreedomRocks representative since December 26, 2006. That was my first introduction into Forex investing. So I'm about as Noob as they get right now.

I approached Scott et al here at FF with my journal intentions and offered a laundry list of rules I would abide by in beginning a journal that partially dealt with the taboo subject of FreedomRocks, and further agreed to abide by any rules they shot back at me. I have received their blessing so I'm giving it a go.

Many who wonder by (into) this journal may bring with you a negative attitude toward FreedomRocks either because:

-you've been spammed directly or indirectly
-you don't agree with their approach to investing

I ask, just as I asked Scott, that you judge me on my actions and don't lump me in with the spammers.

WRT the style of investing, you have your way of tackling Forex and I have mine. I'll respect yours.......

So that is the story with the semi-automatic portion of my trading account. The "wanting more" is not an attempt at greed, it speaks to my desire of learning to trade. FreedomRocks doesn't teach you Forex trading. Since learning of the Forex market, I'm fascinated at the opportunites. I actually want to learn how to trade and have that skill to carry forward.

This is what brings me to Forex Factory. I've spent most of my time in the Trading Systems forum, went out and bought a book and have read several articles on the Internet in search of "my" style of trading. I have opened Demo accounts and have had my share of good and bad trades.

So that's who I am and where I'm coming from. Let's proceed, shall we.

What I hope to accomplish with this journal:

-I figure by documenting all of my trades here in a public forum, it will force me to trade much more selectively. Even FreedomRocks entries and exits are subject to a fair amount of user discretion.

-To encourage the exchange of ideas should my method of trading dovetail yours. Though I am open to each and every constructive comment, no matter your style and how it might/might not mirror my own.

How I hope to maintain the journal:

-Document entries and exits with my thoughts going in (or exiting)

-Maintain an accounting of P/L and running account balance

-Maintain thoughtful discussion on analysis, entries, exits, and money management strategies ("clueless" might just begin to describe my grasp of money management right now)

Here's where things stand as I sit here now....

My FreedomRock live account sits at $6151.15. I'm currently in a drawdown of $1395.33 in unrelaized losses from positions I opened in GBP, CHF, and JPY back on January 23rd.

I am about to close a Demo account I've been running for the past 2-3 weeks that has been all over the map! I mean, if I saw I strategy in the Trading System forum that looked good I looked for the appropriate setup in my Demo account and fired away. Over the span of a couple of days I might have opened positions that were tied to 5 different currently discussed methods in that forum. All along, never fully realizing "why" I was entering. I was system hopping.

Well, I've since realized that's just not smart for me right now. So I decided to focus on one general method of trading/investing that suited my temperament and my schedule.

This method is based on Bollinger Bands and Price Action. I am also keeping an eye on Kevin Harvell's "RSI Daily Pivot" setups as discussed over in the Trading Systems forum.

My charts have BB's (Period:13 Deviations:2), thanks to a suggestion from Traex here at FF along with an RSI (10) indicator (as part of the Daily Pivot system), and an MFI (10) indicator as discussed in the book Bollinger on Bollinger Bands.

Good or bad, this is what I will use going forward for awhile.

The only position I have open right now as a result of what I see with the above-mentioned chart setup is a short of the Daily AUD/USD chart.

Oh by the way, I'm following all 6 USD crosses and I will keep an eye on the GBP/JPY at the suggestion of the Daily Pivot thread.

I entered the AUD short on January 26th and it is currently up 15 pips.

Very strong price movement resulting in tag of upper band. Brought RSI with it as it crossed above 50. Money Flow also took a healthy turn for the bulls.

The bands themselves are still tranding downward looking as though they might try to consolidate. Will keep an eye on this later tonite.

Of note, the Cable H4 looks like it may follow suit.

Well, since before going to bed last night my short AUD position has been hovering at my entry point. The 4H chart is really consolidating but I still see some downside room for my position to run on the Daily chart. We'll see. It'll be nice when I learn to make entries with an exit strategy in mind!

Currently on the EUR 4H chart, the bar that is forming is a strong bullish bar (with a little over an hour before full formation) but so far it doesn't seem that it has much support in the way of volume. This is on the heels of a previous upper band tag....setting up a downside reversal I'll be monitoring as this bar completes. Also, the bands are currently nice and wide suggesting room for a juicy bear run.

Does anyone use hedged-style investing as part of their core investment strategy? I'll be playing (with a Demo account) with an idea that could be construed as hedging my FreedRocks account (which itself is a hedge). As I mentioned, yesterday that account was down roughy $1400. It was as low as $1800 for a couple of days and then had spent over a day down around the -$1400 area.

So....ever confident of a recovery, I opened a Demo with Long positions in the same three currencies. In my live account, a $1400 runup puts me back to even. In the Demo account, a $1400 puts $1400 in my pocket. So, I'm using one account to identify a dip and "buying the dip" with the other. This is part my doing and part input from another member. Anyone doing anything similar.

The EUR 4H bar that just closed is a big 'ol Pin Bar that had a solid hit of the upper band. And, on reduced volume relative to the recent Bear activity (on the 4H chart).

Entered short at close of pin @1.2960

By the time I saw my charts this morning EUR 4H had "volume bounced" off of the lower band.

Closed my EUR short at 1.2948 (+12 pips)

On entry I sure thought the bands' width set up for more of a downside run. I guess sooner or later these setups turn into trend catchers.

Speaking of trends....I'm still open on my short AUD. Gave back some gains on yesterday's runup but if I'm reading my indicators correctly, I think it will soon continue to the downside.

Per my chart, yesterday's Pin Bar bounced right off the 62 ema and today's price opened above the 13 ema and is looking bullish.

The only thing that hasn't happened yet to further bolster my confidence in a good upside move is that the bands themselves are running flat, not yet turning bullish.

I'm not yet sure how to bring all of this info together to determine a good entry.

Any advice?

Randy

No sooner did I post the above and switch back over to look at charts did I realize this has set up for a Daily Pivot entry as discussed in the Trading Systems forum.

So here goes a Long entry @ 1.9689 with a 100 pip S/L

Wow, messed around and got very busy for various reasons these past couple of weeks.

Alright....

My last trade going long on GBP got stopped out by the way. It was also about this time I got a PM from Kevin Harvell discussing his "Method BB" as he knew I was trying to learn Bollinger Bands trading. Spent what time I could studying up on his strategy and have been generally taking some more time to read and learn about charting and TA. The Amazon stork should be dropping off Nison's Japanese Candlestick Charting Techniques later today.

I recently opened up an accound with IBFX (I opened with 1WF when I went live with FreedomRocks). On an IBFX Demo account I entered Long on USD/JPY on the break of the 20:00 Pin Bar last night on the 4 hour chart that ended up closing inside the bands. I'll be looking for T/P at the 365 ema for about 30 pips to the good.

As for FreedomRocks, my current position I opened in GBP/CHF/JPY back on January 23rd is d-o-w-n DOWN! To the tune of -61%. Looking back at the charts, I'm not sure I could have picked a worse entry date than my Jan 23rd entry. FreedomRocks claims you don't have to know anything about Forex investing to be successful with their system so, ill-timed entry or no, we should expect good things when the dust settles. Although I can't help but think a little more experience with TA would help better manage this portfolio.

Also with my new IBFX account I entered a second live FreedomRocks portfolio (same GBP/CHF/JPY) when my first acount (with 1WF) was -30%. I figured the 30% correction "due" the first account will result in a tidy 30% profit in the second.....eventually, I guess !!

Randy

Hey Randy,

I never noticed your journal! I will watch it with interest! Also, have you decided which method you will be using?

It sounds as though you need to work on your money management. I'm not sure if you mean your account is down 30% or what, but if so, you need some help. I'm sure you've heard this before, but say you have $10,000, and you lose 30%; giving you $7,000. How much % gain do you need to get to $10,000 again? 7000x=10000. X = 1.43. You now need 43% to just get back where you started, which is entirely possible, but a bit more painstaking. Anyway, I've created a money management scheme to go along with Method BB; I've only told one other person about it. If you're interested, let me know.

Regards,

Kevin(GOOD LUCK)

Hey there Kevin,

Yeah, I'm slowly narrowing my "style" scope to using BB with Price Action (or candlestick techniques....ordered the book you recommended by Nison) and EMA's on the 4-hour and Daily charts. Heck, just settling on a timeframe has helped be quite a bit.

Between your thread and the Phillip Nel thread I've learned quite alot as to some interpretations using the Bands and/or EMA's. I'm always re-visiting Price Action and very much anticipate learning about candle formations.

The two accounts I'm down in (my only Live accounts) are both FreedomRocks accounts. From a money-management point of view, that's pretty much wrapped up within their software that I take my cues from.

Simultaneously, I've been all over the map with Demo accounts because I have been "system chasing" for a couple of months though I am now beginning to realize what methods fit my available timeframe and temperament. And I've taken some good learning experiences with me from these dummy trades.

Yes, I would be very interested in a MM system that complements Method BB. Hopefully I will also have more time to be more involved with developing discussions.

Randy