To the moon!

So, after lurking for months, I have finally decided to start a journal. The reasons are that I really need to keep track of my trading to learn something and currently just watching what I did for the day is not providing that much insight. Besides, I'd like to get other people's opinions, in case they know something I don't. With this idea, I will post charts of all my trades.

About me:

I am a 30 year old guy. I've been trading demo and reading stuff about trading for years now but never had the guts to really try at this. Recently I lost my job and decided to give this thing a go. With this idea, I have set up an account with 500 euro that I intend to trade until I become profitable. In case this account loses too much capital, I will set up a new 500 euro account, and so on. If at some point I start getting profits, I will progressively grow the account to one day be able to live off of it. I really like trading, so I will fully dedicate myself to this learning process. I hope achieving my goals doesn't take too long, but I will not give up any time soon. There are traders in this forum that have proven to me that it is possible, so I feel like becoming profitable is just a matter of time and experience.

My trading:

Of all the stuff I have seen everywhere, the most convincing method I have seen so far is trading breakouts, so that is what I will be doing. I will not be using indicators for this, as I don't really believe in completely fixed rules to enter or exit trades. I think it is experience that will tell you whether you should enter or exit and not some indicator. I will use however support and resistance lines on the chart (obviously, since I'll be trading breakouts)

Broadly speaking, this is the plan:

- I will trade only forex, all pairs that result from the combination of USD, EUR, GBP, JPY, AUD and CAD.
- Every night on a 1H chart, draw support and resistance lines on all the charts, to have them prepared.
- Set up sound alerts right above and below the lines that might be broken.
- Every morning, wait for the price to cross one of the lines and trigger one of the alerts. Once this happens I'll switch to a 5M chart.
- If the crossover happens in the direction of the trend (the trend will be determined subjectively), wait for confirmation (a pullback or a growth in momentum) and then enter the trade.
- If the trade is going well and not losing momentum, re-enter the trade every time a new maximum/minimum is reached.
- All open positions will have a stop loss and a take profit. The stop loss will initially be just behind support/resistance and the take profit just before support/resistance. The idea is that the price has to break support/resistance to hit the stop loss but doesn't have to to hit the take profit.
- As the trade develops, the stop loss and take profit will be moved according to my feeling about what's likely to happen.
- If one day I lose a 1% of the account, I stop trading for the day.

So far I haven't had a lot of success with this, but the experience has also told me that it is potentially profitable. The main problems I have encountered so far are:

- Fake breakouts. I hate those, but when I wait too much to enter, it becomes too late and eats up all my potential for profit.
- Monitoring the breakout and seeing it gain momentum, then think that there will be no pullback. Then the pullback does come and I have a losing position right from the start. I can just stay in but this makes me risk more than I'm comfortable with. I can't believe how many times this has happened, but it keeps happening.
- Overtrading. As I feel really eager to test my system I spend too much time watching the charts and try to enter a trade just anywhere. In the future I'll try to control this a bit better.

I did have one profitable week (out of 3 so far), and I think the reason for this was simply that I didn't overtrade (I opened 3 or 4 trades a day)

And that's it, I will be updating this every day. Feel free to comment with absolutely anything you want. All advice, criticism, suggestions, praise or whatever is welcome, as I am a beginner and need to learn as much as possible.

Well, today went well with a good EUR/GBP trade. As per usual it started correcting right when I entered the trade, so I started losing money but in the end it moved in the predicted direction. I thought it would go much further, but it didn't and took me out on a quick correction. Oh well, I got a 0.6% on that so it's enough.

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Hi Sundude,

best of luck with your journal and trading!

may i ask: were you one candle late for the breakout? ( the previous M5 candle broke the range + closed above it already)
or is that how high the spread was, or the range narrow?

you sound a little down or disappointed about booking +0.6%!! almost like: oh, well, i was hoping for a whole lot more...
but dont be!
clocking 0.6% in 2 hours is nothing to feel bad about, just the opposite!
keep such results consistently, and you have 10%+ months.
results lie that can potentially open for you avenues that you dont even dare to think about just now, trust me on that one!
patience, consistency, persistence, + low drawdown

once again, good luck with your journal!

Thank you for the good wishes, you know you've been a great inspiration for me

Yes, I was a bit late for that breakout, mainly for two reasons. The first is that there was a previous maximum about 6 hours later that I really wanted to see broken before entering. The second is the spread, as you pointed out. I feel like I'm always entering too late, but when I try to get ahead of it, it always ends up being a fake breakout and taking me out on stop loss. I find it hard to find a balance between the two situations.

And no, I'm not at all disappointed by that 0.6%, if only every day was like this... But I did have some other resistance lines above that I expected would be tested. Also, as I entered late I had to risk too much putting the stop loss far away. This always makes me a bit uncomfortable, as I feel the risk/reward is too high.

Let's see what tomorrow brings, but yeah, I'll be persisting. Patience has always been one of my virtues

Today went quite well, 0.6% up after two successful trades. The first one happened quite quickly on the EUR/JPY. As I expected resistance I had the take profits just before it. In the end it continued to go up when I was out but oh well...

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After the first one was done so quickly, I saw a nice setup on the EUR/USD. I was doubting whether to re-enter the EUR/JPY (which also looked nice) or go for the EUR/USD and in the end decided for the EUR/USD as it has lower spreads. After the breakout it had a pullback so I could enter on low risk with a stop loss just behind the support. After taking profit for the first time I decided to get the stop loss to the profit zone and just forget about it. It took me out on a small correction.

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I'm feeling quite well right now but I got really tense during the trades. I really need to work on my emotions or I'll never be able to scale up.

Horrible day today. Had two EUR/USD trades go wrong only to then come back up the way I thought they would. I guess I have to place the stop loss better to avoid this in the future. There's nothing worse than guessing right and still losing money. I have another position open. The third position on the GBP/AUD did indeed go wrong too.

So, I'm done for the day. Maybe tomorrow things get better.

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like your journal,
subscribed!

Thanks, I appreciate the support

Another day, another failure

I stand by the decisions I made today, but it just didn't work this time. I opened two positions, an EUR/GBP and EUR/USD. The EUR/GBP one was going great but corrected a bit too much and took me out on stop loss. This failure and others from this week are making me thing that I need to stop moving the stop loss so early. From now on I will only move it when there is a retracement after which a 5m candle closes on a new maximum. This way I avoid the frustration of seeing it go the way I thought it would after it takes me out on stop loss. The EUR/USD went horribly wrong but this was a standard error in the prediction and nothing more. It just didn't lose floor as much as I thought it would.

And again the same thing. Possibly again the stops were too tight, at least the one on the EUR/AUD.

I'll have to change this a bit for next week. Overall it went quite bad in the end... I guess it will take some time to become profitable.

i know the concepts say average in is bad vs. pyramiding is good....and i think that concept has all the good intention, and works great on every charts( especially hindsight, until it doesnt).

we have a proverb in my language: "the road to hell is paved with good intention"

so, that good intention can be the pyramiding, or my advice here, you need to decide...even both can be wrong.

but here is a few observations:
on the charts you seem to enter a little late (GU, and some previous ones too)... this may be because of your spread. I dont want to debate between brokers, but given you from Germany, you have plenty choices. Right now both GU and EA has on my chart a floating 0.3-0.7 pips spread approx....vs your 2 pips!! and add to that the fact that Oanda "randomly" widen that a fraction here and there, where it seem to suit them. they actively earn when you lose, should be a first to not tip their own hand. have no doubt, they do, that is part of the MM model!

even if trying to pyramid, your 2 entries are too close, and in a turn it greatly accelerate the speed of losing money.
using the not so "right" averaging in, and buying a few pips bellow the first that second entry, would give you a chance to place your same $ risk SL also somewhat lower, and giving you maybe that needed little breathing room to have a chance to survive the initial test back from the breakout.

and finally, not to debate style, cos i am not per se trading breakouts much anymore, but the opposite. however it highly relates at some point, cos for me to make money these breakout need to fail. so, technically i have to have a good eye for to decide when it is likely to do so.
for me, the bigger the run up already within the day, or a period of time, the more likely that the fresh breakouts get faster exhausted, tired, and ready to fail.
i would based on those facts probably would assume the first one-two breakout after a narrower range has better chance to succeed...and for the very same reason i avoid fading those, cos i am likely to lose money on them.

ultimately, it is keep trying until you get it right. or learn after a period of time what isnt likely to work and move on to change. time will tell.

i still wish your screen shot would include the chart with the price scale for a better picture.

I had also considered that the pyramiding was happening too soon, but like I told you, I was never successful with it. I am basically trying it out now seeing how I can do it but I still have problems with it. It's good advice to try to do it later I suppose. In some of the trades it has worked quite well and in most others it has contributed to disaster.

Regarding the brokers, I agree with you, the spread is taking a lot. I joined Oanda because by the time I opened the account it was the broker with the lowest spreads that allowed for microlots. I don't intend to stay in Oanda for long, but I need the broker I use to allow microlots for me to be able to develop the strategy without losing big amounts of money. Once I start scaling up I'll try to find a better broker. Yours sounds indeed very good.

But most of the entering too late that you see is more related to me wanting the previous maximum to be overcome. What I could do instead is joining before this maximum is overcome and double the position size. The "bad" averaging you mention sounds risky, but it would be more or less equivalent to doubling the initial position. The breakouts I try to trade are supposedly fresh, since I trade the first hours of the european markets. I suppose this is harder to calibrate when you introduce other currencies like the AUD in the same time window. Trying to catch them fresh is the reason why I avoid trading after 1 pm.

What is clear is that something has to change. I will work on it this weekend and hopefully next week will go better. Thank you for the advice, I will take it into good consideration. But also, keep in mind I'm just starting. It will take a long time to find the right way and develop the "good eye". That's why for the moment I trade a tiny account, so that I don't have to worry too much about those lost euros...

PD: Since you're my only follower, I'll gladly include the price bar from now on

Today I tried to get ahead to avoid entering late. I should have postponed that second entry, though, but got overconfident. The results were really bad, since I had decided to put the stop loss far away to give it some room to test the support several times if needed. Things like this make me want to be playing the opposite game, so far I seem to be really good at detecting when a support will not be broken and my stops are always set exactly where the price will resume the previous direction

Today has been also quite bad, because I was trying to do the same as before. I have been thinking of ways to fix my trading and I have come up with something. One of the big problems I encounter is with exiting a trade. I was using stop loss and take profit because I really couldn't find a good way to do it manually. Countless of the failed trades I took were winners for a while, only to end up turning against me later. I would be left watching the screen in disbelief, seeing all the profit evaporate and turn into losses. What I have thought of now is simply an exit strategy for my trades.

I got the inspiration for this from Profitfarmers use of the RSI. Basically we are trying to catch opposite moves. In an ideal world, I would trade the breakout, cash in my money and just as I get out, Profitfarmer would get in and ride the reversal. But how to know when the price is losing momentum? It can be done just by looking at it move, but as sceptical as I am about the use of indicators, the loss of momentum is well reflected by some of them. One of them that reflects it quite well is the RSI. So my plan will be to try to catch the big surge in momentum after a breakout and exit the trade as soon as the momentum is lost and no later. In case the price doesn't move in the expected direction, the trade will be exited immediately, losing the spread and very little more in the process (I still need to give it some margin to allow it to move)

I will keep everything else from my trading plan intact, but I will implement this small modification to it. To summarize:

- As the profit target will be much closer and trades won't last so long, I will double the position size with the aim of keeping the risk profile intact.
- Trades will be exited as soon as the RSI moves out of the oversold/overbought areas on the 5M chart.

Now I have to adjust the parameters so that the levels work on a 5M chart. Let's see how that goes.

it is important to try out new ideas.
the reasoning to get out when the momentum start to fade away seem to be a good precaution, as it about 80-85% of the time seem to result some reversals.
probably some trial and error, but M5 i find responsive enough to have a good predictive value without much lag, or many fakes.
you may also find CSM useful for your breakouts.

CSM? Google tells me that this could mean currency strength meter. If so, I was already using something similar some time ago, maybe I could recycle it. It was just an indicator telling me the trend on individual currencies instead of currency pairs.

I would honestly just jump ship and start trading like you do but it seems quite difficult. I'd say your style of trading requires a lot of experience, since you need to be convinced that the market will stop doing what it's doing to start doing something else. The temptation is there, but I think I'll stick to easier methods for the moment...

Anyway, trial an error it is, indeed. Tomorrow I'll have to see exactly how the implementation goes. As usual, thanks for the advice.

google is smart.
will send you a PM later...

Well I've been absent for a while but it was my brother's wedding and I didn't have that much time to post anything. Today has been an interesting day. I made some progress and also some mistakes, but I couldn't pay that much attention to the daily trading as I was desperately trying to set up a crypto-currency portfolio. It's just a speculative move with some small money to try to get a quick and easy profit, but it is completely separate from my main trading. The goal is still to become profitable trading forex, as I don't think profiting from a bubble has much to do with making a living in the long run.

Anyway, tomorrow I will resume posting charts as usual.

I moved to a different broker by recommendation of Profitfarmer to try and keep the spreads small. It seems to be working well.

Today went well, particularly the USD/CAD trade went really well, considering it was way too early for the USD or the CAD to be moving that much.



Unfortunately I messed up a trade on the EUR/USD very early in the morning and basically all my efforts were to come back from that. I also traded the EUR/USD again a bit later and this time it did work but I was really exhausted so I left it at that and didn't try to ride that one.



And I also traded the EUR/CAD, which also went well:



I'm really enjoying the mini terminal window that comes with IC Markets. I have set up the template for an order to enter a trade and a different one to add to a position and my desperate ultra-fast clicking has been considerably reduced. Now I can just chill and wait with the mouse hovering the button to click the trigger.

The day started quite well with a very simple GBP/CAD trade that closed quickly.



Then I decided to continue the ride but on the GBP/USD, as it was freshly breaking out of resistance and had lower spreads. This lasted for a while, as I was entering and exiting trying to ride it to wherever it would take. I took some loses in the process but ended up positive:



As I was riding the GBP/USD I got an alarm on the USD/CAD so I decided to open a narrow position and let it develop. I couldn't supervise it, because I was focused on the GBP/USD but it went well.



I must confess however that I was weak. Soon after the GBP/USD gave me the last profit I entered again and didn't get out of that position for 8 hours. I was unable to take a loss after so much profit. Besides, this opening was done after tons of momentum had accumulated so it really didn't have many chances to succeed. It was an impulsive decision as it seemed to me that I was missing on tons of profit. I put away the stop loss and decided to play it out as a position trade since the daily chart looked good. This was however an irrational decision and I need to watch out in the future and be quick to close when I make a mistake. The risk/reward is completely off otherwise. The idea would be to learn to avoid mistakes, not to survive them by taking huge risks.