NevFX Journal

In 2018 I started this Journal and for a while I was having some success. Following a trading pattern was good. Being able to consistently trade a pattern was hard, as the patterns by nature are subjective.
Later on in 2018 I studied for a diploma in trading and analysis and I was introduced to pivot points as a guide to where and when a trade could be placed.

I was trying at the beginning of 2018 to get away from indicators and trade naked. I was looking to get away from subjectivity and be more pragmatic with the trades.

It dawned on me whilst looking back at my course notes that the entry has very little to do with whether I am personally going to be profitable. I can get very good entries. The entries for me are not the problem. It's the discipline to take the best trade set up, take a certain amount of risk, take profits.

During my year, a lot of winning trades were undone by the pointless gambles that followed a good trade plan, badly executed.

So now it is 2019. I am determined to do this year properly. That means, defining my risk, taking a maximum of 1 trade per day until I can prove that a second will have just as high a probability of success as the first. I am going to take some profits in each trade at the first available chance. I am going to attempt to capture a reasonable amount of pips from the 2nd half of my trade.

 

1. I have been in the Forex markets for several years.
2. Pretty much tried everything that you see on FF and elsewhere on the net. I was the ultimate strategy hopper.
3. There is nothing wrong with changing the strategy as long as each time you learn something and more importantly you don't lose all your money. I have invested thousands of pounds into my forex education, I have to say invested as if I said wasted , I'd just cry.
4. I have actively looked for mentors and educators and i'll be honest and say I have never found exactly what I am looking for. I am starting to feel that maybe there is no one out there who can tell ME how to trade and even if they could, it would be best still that I figured this out for myself.
5. The reason for this journal is solely to maintain discipline. My aim is to publish one strategy and for me to trade it, with no deviations.

I don't profess to have any answers to the forex puzzle, however I am starting to see improvements in my trading and I feel I have an understanding of why the markets are moving but more importantly where they are moving.

All of my trades from now on will be based around this price action as described in the graphic.
They say that markets go Up, Down and Sideways and that for 70% of the time a market is non trending. Which means that for 70% of the time we are going sideways.

A lot of things are still happening when we go sideways. Sometimes buyers are building a position and the other times sellers are trying to off load. Accumulation and Distribution.

As the markets go sideways, traders that sell the top of the range will generally place a stop just outside the range at the top and vice versa for those traders buying at the bottom of the range.

The biggest turning point for me was describing certain actions by retail traders (of which I am included) versus describing what the institutional traders would be doing. Anyone who has ever bought the high of a move, knows that as they were buying more people or computers were selling and they were using the purchase for their sale.

Also, anyone who was taught the London Breakout Strategy or the Asian Breakout Strategy or the Big Dog Breakout Strategy or anything else where a range is the defining point for placing a Trade 3 - 5 pips outside of the range and a Stop Loss on the other side of the range, will know through experience, that your Stop gets taken a hell of a lot. Which should then lead you all to believe that some clever traders know that we place our stops there and use those stops as Liquidity.

As are the stops at a swing low or high!

Every time a swing high or low is formed, we retail traders tend to place our stops just the other side of our trade.
So points 1 - 3 form a range and nearly all the time there will be Stop Losses placed at these areas just outside the forming range.

If there is an order to buy just outside the range and someone needs to sell for some other reason, the best place to sell is at the exact point more people are willing to buy. It will guarantee your sell order gets filled. So if you are looking to sell, you need to start looking for where the logical buy orders will be sitting and that is usually the stops of retail traders that are short the market and even better if they have sold the top of a range.

Retail traders see the top of the range as forming resistance and the more failed attempts to break the top of a range the more resistance there must be. When in reality , the more Stops there the faster and bigger the move will be that cuts through them and takes the stops.

For years I would try and buy a breakout and hope for a risk to reward of 1:2
It looks so good when price pops out of the top of a range and trends all day.

I have become weary of all the times however, there would be a strong pop out of the range, only to see my SL get hit , or my Breakeven trade be just that, 0 gain and then for my original Take Profit to be hit eventually.

The trading plan:
1. Wait for a range to form
2. Wait for Stops to be taken either side of the range
3. Look to trade with the dominant momentum
4. Wait for a return to the range, specifically to a trading range defined using the fib tool between Point 4 & 5
5. Target Point 5
6. Stop Loss at Point 4

Todays plan was to sell the EURUSD



Luckily for this thread the plan worked out

Today I traded GBP/JPY.
The plan was to hold for lower but to also take profits and not hold just for the sake of trying to prove I was right in my analysis. Too many times I have held on almost forcing my will on the markets to prove me right. Most of the times I am not , so taking a decent profit is key to making money and surviving long term.

So did I make a good trade today. Yes , I set a trade and it 75% panned out exactly how I wanted it to. However, in hindsight, I was lucky.
Once again I didn't notice or pay any attention to the change in market sentiment. My trade idea was initially



The stops had been taken from an obvious swing high and swing low. The market came back to my trading range and during London open I set a short.
I had marked out an intraday high as a potential problem but we went through it and I took profit. If I had moved to an H4 chart I am sure the pattern that I am about to show would have stood out like a sore thumb.



Fortunately I took profits at the area where I could have been reversing. However, my original trade idea stayed with me and I did not change my view in any way. So in my mind I am still expecting yesterdays low to be taken out.




There are a few mistakes that all failing traders make

1. Trading too big
2. Not trading at a higher time frame Support and Resistance Levels on smaller time frames
3. Not adjusting to a change in market sentiment
4. Over trading

Next week I will try and be a better trader by working on at least 2 of the above

After the weekends analysis I see the GU coming down to test the lows. The chart above is the trade that I am looking to take today.

Had to close out at Break Even. My analysis is on the Daily time frame was that this needed to come down for a big move, I entered on m15 time frame, got to the first support , set myself to Break Even and then got stopped out. Happy to wait to see what todays range is before setting another trade tomorrow.

Hello, Once the trade is in profit, at what level do you lock in a break even stop?

My aim is to be more disciplined in doing this. Hope that helps

AUDUSD on my watch list now.

Trade ideas for today
Long USDJPY , Short GBPUSD

USDJPY has made a fractal setup in a larger time frame , so my bias is based on a daily but my entry and exits are based on m15



GBPUSD is in an H4 setup , i will take profits early on this as FOMC tomorrow

USDJPY was a cracker. Almost to the pip entry.

GPBUSD. I can see the sell reason with H4 zone in play. The D1 chart would be the thing keeping me out of shorts as it's a reversal play against the grain.

We've just engulfed and the trend still firmly up. That may change by FOMC so this can work out still.

Thanks for taking a look.

I have closed out of the trades. I wasn't really getting what I wanted to see on GU so closed that quickly.
UJ worked out as I wanted for my initial take profit but I have to close out of my positions by 9pm GMT so took my trade off around London close after the pop higher .

Here was some of my thoughts during the trading session.

went down to the m1 chart for a scalp.
The pattern is the same, basically a Head and Shoulders.

Having closed out the previous trade from today I can afford to sit on the side lines and wait and see how this set up pans out.
My hope would be that we reverse at 1.6000 but if we come lower to 1.5920 first we may have a reversal in EURAUD long term.

The double top on the hourly around 1.60200 is an obvious place for traders to have their stops, so if they get run and then price reverses, the daily lower low is in play.

EURAUD followed the daily momentum.
I have to admit I was sucked into a long on the H1 chart, took a small loss.

However, todays set up on XAUUSD is in line with a larger time frame, so fingers and toes crossed all plans out. The TP is quite high but I have trailing stop on this so happy to take profits anywhere between entry and high as its a Friday.

Higher time suggested that prices higher would be tested.





Unfortunately or maybe fortunately , when price gets to the first resistance I got the trade to Break Even, then a spike down takes me out of the trade.
Then you get to watch the move leave without you. I have learned not to chase these as I start to revenge trade and I end up entering in an area where the risk is higher than my original attempt.




After being stopped out of gold, i looked through the charts and found a set up on NZDJPY.
I took profit at the 2nd Take Profit level, then watched price continue to go down without me.

I am happy with both trades even though I didn't take the whole moves money.