Perryg's swing trading journal

I am now in my sixth year of trading and to say it has been a long and arduous task would be a fairly large understatement and not to mention expensive. I would hate to even guess how much money in this time I have Invested in the markets ( I will call it that as it sounds better than lost) but can assure anyone asking that over these years it has been in excess of 100k investment.

Now most people think that that's crazy but to me it is the price of an education. If I were to go to university to become an engineer, that would take say 4 years and probably cost in excess of 80k without even trying plus there would be lots of cost that I am sure I am unaware of. I compare these two scenarios and in reality they are quite similar as any education cost money and time. Is this engineer straight out of University an expert, NO he now has to gain experience which will probably require many years at a low level of pay. To excel at any given career one must apply themselves whole heartedly and invest a lot of time and energy to gain experience so this makes it quite easy for me to justify these expenses. This is just a comparison and I am in no way saying that I am an expert of any kind.

I have learn t to keep my trading very simple, I don't like to complicate things as I feel the simpler the process the easier it is to replicate. My trading is I would say very similar to many others here at FF, if I had to summarize my trading into a few short sentences it would be as follows.

 

1. Look for price action around strong areas of support and resistance
2. Identify a low risk entry point
3. Manage my risk with the use of stops
4. Identify a target ( again this is based on areas of strong support and resistance)
5. Have a concrete plan for adding to my positions and try and build as much position size as possible while maintaining my risk parameters
6. Always plan my trades and trade my plan( this is of absolute importance)

Throughout the years I learn t that for me there were three options with trading if I was to succeed.

1. The first was to find a style that was right like 80% of the time, this I discovered was pretty tough to do and failed at miserably.
2. The second option was to capture long tails(trend trading) but inadvertently have a pretty low strike rate IE: win 30-40% of the time. This was ok but still wasn't really getting the returns I was after(50%+ PA).
3. The third option was the one that I eventually found and realized it fits my personality and thus I am comfortable with it and that is to capture large swings but build as much position size as I could while maintaining my risk. A risk that I am very comfortable with and can manage without stressing out and affecting my trading. By the way this still has a low strike rate , like 30-50% but when I am right I make it count.

The basic premise behind my trading is picking tops and bottoms of swings and then riding that swing as long as I can and adding as much size as I can. I trade the 4 hr chart for this style of trading and also trade the major news announcements, my all time favorite is the non-farm payroll which I religiously trade every month. I may go into that later but for now will just be dealing with swing trades.

I have procrastinated over doing this journal for a very long time and have finally decided to commit so I will endeavor to keep it up to date as often as I can.

Feel free to ask any questions as I am sure anyone on this forum is just as passionate about forex trading as I am and I look forward to any comments or constructive criticism.

Perryg

Here is an example of my trading style, I will explain the process in this post. I have attached a chart next as this will make it much easier to understand.

My first entry was at the close of the engulfing candle that confirmed for me that the 9300 level was strong resistance. I look at the daily chart to identify these areas and then place my S&R lines on the chart, I always look at 00 and 50 levels as well and will generally place my lines at these levels as I watch a general area for S&R not so much a level.

As I was watching this level this candlestick formation confirmed the second rejection at this price level.

At this time I just wait to see if the market can confirm my anticipation which in this scenario it did.

I then waited some more for a chance to enter again. this happened at the next retrace and another engulfing candle was the trigger to get me in. At this stage I moved my stop down to the 92.80 level which put my first position risk free and thus was able to keep my risk down to the one position.

I was anticipating a retrace from the 9000 level back up to the 9150 level but this never eventuated so I eventually took my 3rd position at 9010 level and was a bit late with my order. this was also triggered by another engulfing candle.

As price started to stall between the 8950 and 9000 I removed 75% of my position as I expect a decent retrace soon. I will let the rest ride or get stopped out whichever the market chooses as I have nothing to lose.

This has been a good example of when it works, trust me this is not always the case and can take many strikes before I get a top or bottom but by doing this I make all those losses back and some.

Here is a chart of the daily where I originally placed my S&R lines for entries and exits.


Perryg

I have just recently opened this position and am awaiting confirmation of price direction. Here is a chart of the daily and the areas that I am looking at.
These are areas that I have been watching to see how price reacts.

On the 4hr chart I observed the first rejection at the 126.50 level with a pin bar followed by an engulfing pattern but this was not enough for me as on the daily price had easily punched through the 127.50 level so I stayed on the sidelines.

After the pin bar formation on the daily I started to take more notice and began observing the 4hr more closely.When I saw the pin bar followed by the engulfing candle or twin tower as I call them, that was enough to initiate the trade for me. My long trade was at 126.33 with a stop placed at 125.15 below the previous low.

If the trade goes my way I will look to add positions all the way up to the 133.50 level where I will take a large portion of the trade off the table and let a small amount run in case it goes further.

That is the plan and all I can do now is wait and see, I have attached a chart for visual purposes.


Trade Well

Perryg

Nice to see you have started a journal friend. I have subscribe and look forward to seeing you succeed.

Razor

Hey Razor
Thanks a heap, I have contemplated it for a fair while but your suggestion the other day tipped me over and I decided what the hell. Have had a few good trades lately which makes it a bit easier to start off on the right foot.

My Aussie trade update, I have exited my most recent position which had some room to move against me. I had originally taken half off but I feel that price could move a fair way against me so decided to close last half for a loos of 14 pips.

I still have the other 2 positions open and profits locked in on the remainder. I am not confident they won't be stopped out but must leave them there for if price goes lower.


Trade Well

Perry

I awoke this morning to find that my Euro/yen trade had been stopped out so will now just wait and see what price does. I am still anticipating a swing to the upside so just have to wait until an opportunity presents itself.

My Aussie trade is still in play and if It has a strong move down through the 89.50 level I will then target the 87.50 level and look to start adding some size to the trade again.

One of the key things I have learn t with this sort of trading is patience, I spend a lot of time just waiting for everything to line up. It has been one of the many tough lessons that I have learn t over and over again. IT is one of those lessons that until you get it, the market will just keep giving you that same lesson over and over until you do finally get it.

That market is a great teacher but being a good student is another totally different thing. I am not sure why it is but we as humans seem to be very slow learners and tend to make the same mistakes repeatedly or that has been my experience anyway.

When I eventually get it I think to myself, what was so difficult about that it's so obvious DUH. But it seems we can only learn certain things when we are ready for them and not before.

Trading is so simple yet can be just sooooo difficult and it all boils down to sticking to the rules and everyone probably knows these rules from the first trading book they read but it then takes the next 2-10 years to get it, and for some they never do.

I am know just going to sit and wait my next entry, my Aussie trade has been the best trade for a while and has given me great profits so I am in no hurry to give it back.

Trade well

Perry

Patience is a discipline that takes time to master. I have found recently that by trading a larger account makes me more disciplined because the downside is far more painful for random entries and I dont need to capture as much of a move to make more than I used to with good entries and in the event like now where you have positions that are running, well you can do the maths on how good that is for the account. Find the areas of solid S/R, look for PA, Managed risk, take some profits for building and when the opportunity comes to take larger tails that are offered DO IT.

Take care

Razor

I have just closed out my Aussie trade as there is a base forming at the 89-89.50 area, I envision the retrace being larger than my stop so have taken profits as I prefer them in my pocket. It has been a good run and have some good profits on the table. Here is a chart at time of close.





I have also opened a long position on the close of this trade, lets see what happens.

Oh well that one was stopped out, I am still happy to have taken profits though as this is quite common for me as am never sure where the next swing will come.
Now is just a matter of awaiting to see what price does at the next S&R level which for me is around the 8750 region.

Perry

I am still watching the Aussie but am not committed yet to a direction so just waiting......

I did take a long position on the E/J as I feel the 125 level is quite significant. the daily chart shows previous S&R there as well. see Chart




Here is the chart of the four hour, I have also placed a sell stop order below the low at 124.68 as if price proves me wrong and heads south through this level I don't see a lot of support between there and the 115 level.



We will see what happens but have seen a fairly large price swing down and price is losing a lot of momentum. Will this go up, who knows? But the only way to pick a bottom is enter at these sort of levels and when right make the most of it. I can get a beating at times doing this but have to keep striking away as experience has taught me that the one that I let go is the one that pay's the way.

Perry

It is times like these that I can get a real hammering. When anticipating a trend change this is a time when I can get really whipsawed while the markets decides which team it favors (the bulls or the bears), It can also be a time of great opportunity.





As with all trading it is a double edged sword, do I or don't I. This is my style and I just TRY and take my trades as per my rules. When it works there are great profits to be had but it also can be real tough if I don't realize I am trading against a strong move.

I have taken a second position as I feel there is more to go, from here it is up to mister market to decide whether I get the opportunity to move my stops and add more positions. This pair has been range bound for a long time so no matter what happens it will ultimately break out of this channel and then greater opportunities will present themselves. Know we just wait.

Perryg

Well said. You have taken a tough trade with the 2nd one going long so close to the bottom S/R from the range. If we get back inside the range then you will be laughing but be aware friend of anything out of place should that S turned R show strength.

Loving the journal mate. Clear and concise about what you are heading for.

Razor

Thanks Razor, yes it is a tough trade but is within my plan so have taken it and it is now stopped out. Will wait some more now, I still have a order below the support if it breaks down and if it heads back into the range will look to add more.




NFP tomorrow, the best trading day of the month. Doubt I will do any trading between now and then but look forward to some possible great opportunities there.

Perryg

Well i was really hoping for a good surprise with the NFP numbers but that was not the case so no trades for me and off to bed before midnight which makes a nice change.

My other e/j trade was stopped out and the standing order I had sitting at 124.68 below support was filled on the big rush down.

I took off half the position at the 122 level as this is a minor support level. The other reason for taking some profits here is that Breakout trades are not really my thing I have always struggled trading breakouts.

I think the reason for this is that by nature I am comfortable trading reversals and getting in at a retrace. The smaller stops here allow larger position size and it is obvious to me where to position my stops.

With this particular breakout trade I just placed a sell stop order with a stop of a hundred pips. Why a hundred pips, well no reason at all I just wanted to have enough space that a spike was less likely to get me.

The logical place to put the stop would have been the previous minor high which is above 126.94 which would require a stop of like 250 odd pips. This has always been a challenge for me as it just doesn't gel with my nature I suppose and that is why I generally don't take breakout trades.

Then again this sort of breakdown of price from such a long term range is just not to be missed and thus the reason I had the order in place.

I am a firm believer of having a trading plan. Now this does not mean you have to trade the same rule all the time what this means for me is each trade I take I have an individual plan for my stop, where I intend to add positions and how I will take profits.

In this instance I have taken half profits on my position but will not be moving my stop at this stage as we may see a retrace back up to the original breakout level. If i see such a retrace I will be adding to this trade.

I will be monitoring price and am looking to add more to this trade on the next retrace wherever it pulls back to.

I am targeting the 115 price level so there is my plan, I have all bases covered, nice and simple and is now just a matter of waiting to see what price does.




Have a great weekend all, I am off fishing

Perryg

I have been sitting patiently on the sidelines awaiting a retrace, I am now anticipating the continuation of the downtrend and have added to the position.

I have taken 2 positions of half risk each, my reason for this is it is easier to set my take profits automatically at different levels and trade management is therefore simpler. I will take off half the position at the previous swing low and will let the rest ride.

Here is the chart



Perryg

My last 2 positions have been stopped out. I am still extremely bearish this pair and have been looking for another entry. My reasoning is the breakdown out of such a significant range as seen in the weekly chart below.



I have taken another position as seen on the 4 hour chart and will maintain this bearish view until something significant changes.




Perry

Well I am really in the war zone at the moment, taking a few hits not that that is anything unusual in trading from my experience. Get hammered a lot and occasionally have a run, anyway that last trade was stopped out so just looking for another set up.

I just opened this trade on this reversal pattern at a significant level.



Perry

Update on current trades are. I removed half of my position after the formation of the pin bar at position 1 on the following chart which leaves the other half nearly risk free.

I have added more to the trade (as shown on chart at point 2) as price action has now revealed that there may be more downside to come.



Perryg