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Eklavya's Journal

  • #1
  • First Post: Jan 9, 2008 2:23am Jan 9, 2008 2:23am
Hi Folks,

I am a FOREX newbee and have just started trading in Forex. I have been reading up a lot in the last one year but have not done extensive demo practicing. I started live on Oanda one month back and have had a rocky ride so far with a drawdown of 50% to positive territory of 15% and now to drawdown of 31%.
I am primarily trading price action and Fib Levels. As I continue to trade, I am going to start posting my trades in this thread along with my reasoning for the trade, my SL and TP levels.
Most of my losing trades have been impulsive and hopefully by posting my trades here, I will be able to cut down on my impulse trades. Also, I would love any feedback on my trading rationale so I could improve on my reasoning and also others might benefit with some new perspective.
  • #2
  • Jan 9, 2008 2:29am Jan 9, 2008 2:29am
I am basically going to draw Fib levels on daily charts. Then use the 4 hour charts to identify and potential entry signals. Once I get an entry signal on the 4hr chart, I will analyse the overall condition of the pair using the 4hr, 1day, Weekly charts and the Fib levels. Once I can identify that it is an A trade, I will go down to 15/30 minute timeframe to fine tune my entry and enter the position.

My minimum risk/reward ratio will be 1:2. Will not risk more than 7.5% of my account on any single trade.

I think I am all set to go. I will continue to post my thought process on my trades as I go along.

Hopefully this is going to be a Educational and Profitable ride.
  • #3
  • Jan 9, 2008 2:42am Jan 9, 2008 2:42am
I got a trend breakout matching lows on the NZDUSD pair. I went down to the 15 min chart and entered the trade with a tight stop loss of the previous top on the 15mins chart. Needless to say, my SL was hit. Things I did wrong :-
1. I should have waited for the price to close below the 38.2 Fib level on the 15min chart before entering as that would have confirmed the price pattern.

Lost 22 Pips in the process
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  • #4
  • Jan 9, 2008 5:02pm Jan 9, 2008 5:02pm
Entered Short in Cable today as it broke through long term support. There was no specific price formation in the region but looking at a very strong bearish behavior over the last two days, took a position. Stop loss was the local high on the 15 min chart. Take profit is open as I see this going a long way down. Curently up 34 Pips.

The next target seems to be at 1.9320 which is so far away that I think it will take a long time to attain. I don't know if this is a psycological issue with my trading that I need to address.
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  • #5
  • Jan 10, 2008 12:37am Jan 10, 2008 12:37am
Well, Just now I entered one more trade on the short side in Guppy. Technically I again made a mistake of entering too soon without waiting for my system to give me a signal. I have a very strong bearish feeling for the Guppy and entered the pair 25 pips earlier. On one hand, I could have followed my system and could have waitied for it to close under the A-Down line.(Of the ACD system). Time will tell if I made the right decision. Probably I should not have entered but waited for a signal even though it would cost me 25 pips.
Attached Image (click to enlarge)
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  • #6
  • Jan 10, 2008 12:43am Jan 10, 2008 12:43am
So now I am short on both Cable and Guppy each having a risk of around 6% each. As both are strongly correlated to GBP, I think the net risk capital I have for a trade on GBP is in the region of around 10%, after accounting for some reduction of the risk due to diversifiction. I think this is okay as this would be a normal outcome of trading multiple currencies.

Maybe this is a case of further reducing the risk per trade as when we hold multiple currencies, we are anyway increasing the total risk capital per trade.
  • #7
  • Jan 10, 2008 12:53am Jan 10, 2008 12:53am
The one thing which is also making me confident about these trades I took is the upcoming BoE interest rate statement. Given the fact the Cable did not really rally meaningfully given the strong Halifax report, I think the interest rate is going to be cut and this would add to the downward pressure. The market is already factoring an interest rate cut in my opinion and so if the interest rate is not cut, then my stop might get taken out.

Lets see..Fingers crossed for the next 10 hrs.
  • #8
  • Jan 10, 2008 12:58am Jan 10, 2008 12:58am
At this point I have used up all of my margin and cannot enter any more trades till I close one of these or my SL gets taken out. This is the drawback of trading with Oanda as the leverage only 50x. So now I will only post my thoughts on my these two trades and how they are developing. If I see an opportunity in another pair, I might close one of these trades to take up the alternate position.
  • #9
  • Jan 10, 2008 2:49am Jan 10, 2008 2:49am
Quoting Eklavya
Well, Just now I entered one more trade on the short side in Guppy. Technically I again made a mistake of entering too soon without waiting for my system to give me a signal. I have a very strong bearish feeling for the Guppy and entered the pair 25 pips earlier. On one hand, I could have followed my system and could have waitied for it to close under the A-Down line.(Of the ACD system). Time will tell if I made the right decision. Probably I should not have entered but waited for a signal even though it would cost me 25 pips.
Well..Time has told me yet again to follow my system. My SL got taken out and I am further 6 % down in my account. This is the second of the of the three trades I have taken where I did not follow my system and I had to take the loss.
  • #10
  • Jan 10, 2008 12:47pm Jan 10, 2008 12:47pm
Quoting Eklavya
Entered Short in Cable today as it broke through long term support. There was no specific price formation in the region but looking at a very strong bearish behavior over the last two days, took a position. Stop loss was the local high on the 15 min chart. Take profit is open as I see this going a long way down. Curently up 34 Pips.

The next target seems to be at 1.9320 which is so far away that I think it will take a long time to attain. I don't know if this is a psycological issue with my trading that I need to address.
My SL got taken out during the BoE Interest rate announcement. In fact there was so much volatility during the time that the SL was executed with a 20 point slippage. So now my accoount is further in the red by 8%.

I guess I just need to persist and further reduce my risk per trade till I get back some confidence as it is at a low right now.
  • #11
  • Jan 10, 2008 8:32pm Jan 10, 2008 8:32pm
On the 4 hr chart bearish pin bar is forming just around the 78.6 Fib level and the weekly R2 Pivot line. This is also the resistance area in the daily charts. The 4 hr candle is poised to close beneath the upper resistance level. On the 15 min chart, the price has had two consecutive closes beneath the conolidation area as shown in the rectangle. The price is also below the 15 period and the 28 period EMA. So entered short with SL the upper level of the consolidation level and TP at 61.8 Fib. Lets see how this trade goes. Risk/Reward is 1:2.
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  • #12
  • Last Post: Jan 10, 2008 10:24pm Jan 10, 2008 10:24pm
EURJPY has just had a double high lower close candle on the 4 hr chart with the candle closing below the weekly Pivot level. I have taken a short position with SL the high of previous candle and TP at the 38.2 Fib LEvel. The Risk/Reward is 1:2.
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