EURUSD MultiTimeFrame

Hi Everyone,

Decided to start this journal to stimulate my development as a trader and document my studies, trade analysis, insights and ideas on EURUSD.

A few words about myself. I've been trading for four years now, had my ups and downs (more downs than ups, definitely), and have a goal to grow and start trading for a living in the coming two years. I already know this journey to be difficult and humbling, and one in personal development in the first place. I trade intraday, looking for scalp entries with high risk-reward swing potential. My normal stop is 3-6 pips, and I look for trades that could produce at least 15 pips, a 3R multiple. In my trading I use the Brooks Price Action methodology for reading market context and market psychology bar-by-bar, but I also pay attention to the classic TA chart patterns. The only indicator I use is the 20-period EMA. Would like to incorporate Market Profile into my trading, but leaving this for the future for now.

My trading plan

INSTRUMENT: EURUSD
TIME: European session and US morning session
PREPARATION: Daily analysis of the previous day's performance and visualisation (10 minute mental toughness exercise)
METHOD, STEP-BY-STEP:
- Multiple timeframe technical analysis based on Price Action (Dudella patterns, Brooks Price Action)
- Document trade locations and ideas, entries and targets
- Follow 5 min price action chart bar-by-bar based on Brooks Price Action to/at trade location
- Entry on Tick Chart with tight stops 3-5 pips
- Take off to break even position on the next 5 min bar or scratch
- Breathe and hold to targets, scaling out
- 15 minute break and refocusing

Some take-away's from yesterday which was a good day for me.

#1 the Three Hills and a Mountain pattern worked perfectly. It was not a perfect pattern in that you could argue whether that was three hills or four, but looked very much like the classic pattern. Plus the volume that kicked in at the start of the Mountain was important.

#2
In the past, a very stupid and frequent mistake I used to commit was taking profits on a strong breakout and reversing to short for more, and then eventually giving it all back (and more) in impulsive shorts. After all there was selling pressure during the day and there were some good looking bear bars as the rally stalled. But checking higher timeframes gives you a complete picture why shorting here is a bad idea -- you'd be shorting where 4-Hour longs are getting in on a perfect two-bar reversal setup at least for a measured move scalp up -- whether there will be follow through fro them remains to be seen, but they're definitely driving for a measured move up.

Had a very good day yesterday, the market gave me three times my current daily goal. It feels good, but it's far more important now to thank God and understand that this is just a lucky streak and the favourable wide range conditions that we had yesterday, which may be completely gone today. Will be taking at least half a day off to clear the mind and not jump right into the market (well, I actually still have a minilot long in profit from yesterday night, but I caught myself that this was probably the first step to overtrading, very dangerous, so will just leave it with a BE stop to fend for itself).

Insight from yesterday. Took this trade because I saw bulls setting themselves up for a trap. Buyers were getting very strong signals and entries in terms of price action and better and better prices to get in with a hope for a High of the Day breakout. But that's too good to be true -- the market giving you cheap entries and then a spike to give you your profits. This was likely just an algo scalp trade to test the top of the range and run some weak bear stops, and many bulls remained trapped and then added fuel to the selloff that followed.

Must do some review and soul-searching -- as soon as I skipped my review and cut down on preparation in the midst of other duties and dissipation (but really unwillingness to take responsibility for results...), my trading went down the drain, lost Wednesday's profit by now to some unprepared trades, overtrading and undisciplined trading. So cannot overestimate the importance of preparation and mental rehearsal to avoid this kind of impulsive nonsense. On Thursday, I lost because I ventured trading bigger size than warranted by my plan (0.8), chickened out and widened my stops to take a couple of hits.

Friday was first profitable, but on small size (afraid to trade bigger without preparation routines), and the day's profits were erased and then some more lost during volatility in the evening on bigger size, making several fade attempts against the bull breakout. So, lesson number one is to walk away after reaching the daily profit target, which I didn't (and I had reached the profit target). Another lesson is not to do trades that were not prepared for techcnically in advance and are based on ideas derived just by watching current volatility.

The take-away from today (Friday), for we need something positive, not just whining about the money lost. The morning shorts worked well. The reason for taking them was that the bulls were having trouble even reaching the bear channel trendline on 5 min (drawn across candle highs) and selling pressure just looked stronger (more consecutive bear bars, closes on low). Plus this was just a pullback on the four and one hour timeframes. These became good swing trades eventually. Pity I got attached to the short idea and went shorting on the bull breakout taking many many small scratch cuts and bleeding all of the day's profit and then some more as a result.

A thought, provoked by discussion on another thread, reposting it in my journatl:

Contrary to what many ego-driven retail traders believe, the market is not a zero-sum game of wills and predictions when it comes to specific trades and gains. The entire market may be zero-sum in the end (though it is not actually, because new money is being issued all the time), but every individual trade is a win-win to the individual traders. Every trader enters because one sees an opportunity to win money and exits either to take profit or to protect one's money (which is still a win decision compared to taking a larger loss). It's never a one-on-one game, either, because you open with one counterparty and exit with another. The market is a fair game of opportunity for everybody to take what is he/she feels entitled to and capable of taking, through careful planning and execution of their plans in a systematic way. Those who bring their small egos and want to make them bigger on the market and want every trade or most trades to be winners, or be champions of prediction, should be prepared to suffer lots of pain and disappointment.

Seeing a strong bull case today technically: there is an NR7 bull setup on the Daily (breakout from a seven day tight range, breakout occurring above the smallest in a series of seven bars in the consolidation), from a lower-low trend reversal setup at that. The breakout bar of Friday was really strong, and if there is to be follow through, bulls will be getting in on a retracement of that Daily bar, first around mid-body, then on a volatile test below its body. Have entered Long on the 1 HR Moving-Average Gap setup, tight stop as always, scalp in already. But probability low given the bearish momentum. If stopped out, will be looking to re-enter B with a tight stop around 1.2445 as a quick test back into the tight range middle and the micro-trend line on the Daily chart.

I see this idea supported on 1H, as the bull BO of Friday was a third push up, and since the third push succeeded as a breakout (we're now may be seeing a breakout test of the broken bear channel trendline), it calls for a bull profit target in the 1.263-1.266 area. At that level (or another climax above it) I would consider switching to Short depending on price action. But currently looking for buy setups only.

Buying anything that moves up today, very tight stops of course. will likely get many small losses and breakeven scratches, but hope to catch the big momentum up when (and if) it happens. Seeing a slightly higher low and second strong bull signal on a swing low, possibly the start of a rounded bottom reversal. Buying pressure building up, but flushout still likely and would not be unexpected.

Out breakeven, no move really. Will wait for the news.

US news not good, long again, but not expecting a runner ahead of Draghi, a BE position at best to be positioned for the big news today.

Out breakeven, no follow through, a srong bear signal bar instead - double top bear flag, some bulls likely trapped, reversed to Short. Strong bear entry bar, larger bar, close on low, will hold for a lower low if follow through within three bars, targeting 1.245.

-- no immediate follow throug, breakout pullback, bull inside bar, strongish, next two bars key for bears.
-- another bull doji, looking to exit at BE or scratch with loss
-- out with 2 pip loss, but re-entered sell, outside down expanding range
-- trending bodies, 3 consecutive bear closes, tight bear channel emerging
-- took 0.1 off at 9 pip profit, stop to near BE, swing the rest, leaving until Draghi. Stopped out.

Going back to my long idea -- will wait for 1.432 area to be tested before buying.

Buying pressure emerges at the top of the anticipated support zone, looking to buy. On 1H, it looks a bit like final flag from the previous consolidation before news, which could fail. Tight stop of course. Looking to get out breakeven if run, and reestablish as a tight fade buy on the way lower down to 1.43.

OUT just below breakeven, doesn't look good for the bulls.

Re-entered buy again on the outside up bar, thinking any upward momentum from this level may still lead to panic short covering and always-in long again. But need a close above EMA within the next few bars, a bit risky.

tick up-tick down pretty intensive, looks like something's about to move, either up or down.

No, looks a dead cause, out -2 pips.

EU 5M
Looking to Short EURUSD. Currently seeing a bull attempt on 5 min to break above the bull channel median line. But the bulls have had three consecutive buy climaxes and some selling pressure is evident. Trailing a Sell Stop order below bull bars for an outside down move, but will be looking to scratch if no high bear momentum. Seeing this as a pullback on the big bear spike earlier in the day.

>> Stop order not triggered, entered fade Sell at bar 24.
>The current bull channel looks like some traders trying to position or exit positions before the news. If fresh bulls are buying, their stops below are still a target. On higher timeframes, 15M to 1H, the bull channel looks like a strong microchannel, which could breakout strongly in either direction, but I think a bear breakout is more likely as bears seem to have established a wide bear channel and may want to test below today's and yesterday's lows, given that today's signals off the low of the day were not very convincing.

Looking to buy EURUSD today. On the daily chart I see a double bottom after two closes above the 20 EMA in recent weeks. In the absence of big news until Wednesday, longer-term bears might be willing to take profits around 1.237 and attract fresh buyers, too. Technically, we have had a clean Low 3 selloff on the daily chart, a perfect scalp for bears on the daily chart, and quick and easy often means no follow through. The upward move that followed German news today shows many traders may be thinking at least a retest of the daily EMA by the bulls. I would expect a rather tight range day, around 40 pip or so, with a potential breakout to the upside.

On 5M we've had a rather strong bull channel (grinding = accumulation?) followed by a big down-big up move, which means range play with larger overlapping bars. Looking to buy retests of the 1.237 level or a little lower with a tight stop or even to chase the bulls on a strong breakout mode setup.

Update>
Bars 13-14 broke above two bear micro trendlines, high momentum, waiting for a signal bar to buy at or below the Low of Bar 1. The maximum measured move target for the current bear tight channel is 1.2379. A break below would flip Always In to Short.>

Out of my long, +30 pip, faded the Trading Range breakout on a second signal short, targeting at least the lows of bars 5 and 12 for retest.

>>Update: the short does not look good, will exit BE if hit
>> BE stop not hit on bar 42, added to the short as bar 43 formed a micro double top, 2 pip stop loss.
>> stopped out,
>>re-entered as likely a bull trap, stop very tight again. Bull entry bar 45 was triggered on a second signal sell Low 2 setup, but the second signal bar 44 had a bull close. Means either a weak setup and a rally will follow, or, hopefully, fresh bulls are trapped and a bigger selloff will follow. Expecting a spike in either direction.
>>Finally stopped out BE.
>> Did a few more fades after that and got tight stops hit, but then eventually caught a swing +30 pips. Still the day was down USD 20. It was a mistake to reverse to short after the initial entry. Just proves my point that one idea is enough and what matters is sticking to it to the end, because the initial plan is most often best thought out, not so with new ideas that come to mind while trading...

On the daily chart, EURUSD has setup a double bottom major trend reversal -- a perfect double bottom to the pip, and the bull signal bar was very strong, shaved top and bottom. The previous bottom signal bar was also strong. I would expect a range day today, and most likely a bull trending range, that could break out to the upside. Looking for longs. We've had the first bull spike and I'm looking to go long on pullbacks with an ABCD test -- in bull channel shape -- above the high of the day as the minimum target, and hoping the breakout could go much farther. Alternatively, if the range becomes protracted or breaks out to the downside, will still be looking to buy as a retracement on yesterday's strong daily signal bar.

>> UPDATE: scaled in long on bar 8
>Bar 11: much selling pressure, tight range, exited some and tightened to BE overall.
>Bar 12: bull BO, spike, close near high, Bar 13: breakout pullback, buy the close, but ready to scratch.
>Bar 14, scratched two entries, no immediate follow through, mid-tight trading range still a magnet, looking to buy lower.
>UPDATE: a bear Lower High Major Trend Reversal setting up, looks like a harmonic Gartley pattern. If it breaks out to the downside, looking to buy around 1.242 if there is a strong signal there, leaving it to unfold one way or the other in the meantime.
<UPDATE, 2 pm: Bears broke two bull TL's, looking to fade a breakout test of the first trendline above Bar 25 high - LIMIT order -, tight stop. Expecting possible Gartley play in the runup to news.>> CANCELED the limit order, will wait to buy lower.