Trend Following Quest

To me that run up looks like a corrective upward move, the general trend is still down with continuous LH and LL's maybe it is trying to reach a breakout point and sellers will take it down from there , I'm wondering how you define the wave up and down ?

I have been trying to trade with the trend, but it turns out that timing that entry and telling apart corrective move from impulse wave is so much more challenging than buying low and selling high which is a no brainer and if you're lucky you can really hit home runs.

The entry and exit decisions are made only on the H1. After the fact, I can look at H4 and daily, but only for fun like saying "let's look at what H4 and D1 are saying".
For me, those timeframes are kind of different worlds, you cannot trade them the same way, they don't produce the same waves.

I trade waves on H1, while we could call them tsunamis on D1

I don't define and I don't even know if what I'm on is a wave or not, you only know that at the end. If you re-read my first post carefully, it's all written in it.


If really buying low, selling high was a now brainer we would all be millionaires ! So I don't think so. Dont stay stuck at past far LH's and LL's but look only at recent price action, that's what I do.

As for why EURUSD and CADJPY, EURUSD is the most liquid and traded pair, and CADJPY because it's not directly related to it, you see ?

Trade 27. +24 pips ($18.72) profit on EURUSD

Trade 28, 29, 30. All failed trades on CADJPY with -27, -13 and +2 pips ($-21.61, $-10.50, $1.85)

Trade 31. -29 pips ($-18.12) loss on EURUSD

Trades 32 & 33. Took small profits +11 & +19 pips on a failed EU down trend. Taking what market gives

Trades 34 & 35. Sister trades giving back the profits of trades 32 & 33 and more for a total loss of -68 pips cumulated (-$48.~).

Nice sharing mate.

This one in itself deserves a whole post...

Trade 36. I finally got the home run in CADJPY I was waiting for. It cost me 6 days of patiently watching the ups and the downs until I finally reached my target. The patience has paid and well paid with a total of +208 pips or $170.15, +41.7% which is the best trade till now bringing my balance to a new high.

So it looks like I'm finishing the month with two home runs in the two pairs I trade for what else could I ask ? To increase my gains because CADJPY and EURUSD are making new lows at the time of writing ? So yes, I'm exiting my trades too early, at least for these two in particular but at some point in time, when I reach my targets I have to take my profits, I think that this helps to keep the greed in check and anyway, there will be another day, another week, and most important, another trend...

Trade 37. Home run in EURUSD for a total of +124 pips ($74.34) in a trade that lasted 4 days.

nice one

The Lucky Episode 2 - May 2018 - A bit more than just luck, +121%

I'm still in the stage of the occasional thing, you know, when you're successful two or three months until the unexpected comes or that the market changes, we all know it, so this luck period should now come to an end. Let's see if markets are always changing or if they are always the same, let's see if I can continue trading in the coming months (weeks?) like now. In the meantime, my results are more than encouraging and certainly, at least I hope, due to something more than just luck. It's up to me to confirm these results by repeating what I'm doing, the markets are encouraging me to do so, at least and maybe, until they decide differently.

On the risk side of things, my concerns have a bit dissipated but that doesn't mean that I won't continue watching it very closely. My return by trade shows a nice up trend and even if some losses could be categorized as large, between 5% and 10% of balance, no less! No single losing trade shows a disproportionate drawdown in the whole picture and that's due also to the even bigger winning trades, thus the importance of letting the profits run in order to keep the profit factor above 2 if possible.

This month I finally got the wave I had been waiting for in CADJPY. One target reached after two months of failures or half failures.
I had to be patient but finally it came at the right moment and in the end it makes me closing a very good month with a stellar +121% in profit.

With this second month of trading, I consider my "luck" period over and declare a new "Encouraging" period of three months open, this period will serve to confirm that there was not only luck involved in my trading.

Luck is a matter of preparation meeting opportunity.
- Lucius Annaeus Seneca



Month Stats.

Terminating the week with a bunch of losing micro trades. All fine as for me the markets were in distribution mode.



Hopefully this should change next week...

June is being a difficult month and on top of that I messed things with my risk calculation while over-optimizing for more profits and made trades far too big, all that was due to greed and also by introducing a new type of "Counter Trend" that I will occasionally enter from now on on certain conditions.

I paid the error by giving back a bunch of my May profits or in other words 30+% of my account, but now it seems that it's all correct again so I'm back to my normal trading with special attention to these new trades that will maybe still need some risk adjustment, time will tell.



Those 0.3 and 0.16 lot trades shouldn't have been there !

Wow! Took a bath with last two FOMC and BCE events, shit happens !!!

April and May profits gone but at least didn't blow the account and still some 10%+ positive overall so I'm still here for another battle.

Now in the process of analyzing and replaying the events in order to figure out how to go through this with less damage next time.

Worth mentioning my first composite contrarian trade entered at 1.1582 and 1.1553, while price going down, thus the contrarian nature.
Progressing and going out of water step by step from a low balance of 135.67 to current one of 201.




First Entry:


Second Entry:

Rebuilding Episode 3 - Starting Again, -57%
---------------------------------------------------------------

How right I was when guessing that my luck period was over, and WOW! Over it was for sure !

FOMC roller coaster took out all of my previous two months profits. I was expecting some run, up or down after the announcement and like always, the unexpected happened, none of both, or better said, both simultaneously, a move down and back up in the current range. It’s interesting to note that I kept trading the same way on the ECB release which had also some up and downs but this time I went through without much damage, which means that for sure my system needed some adjustments which I have already made, but also that not all was bad and this is quite encouraging.

Anyway, it’s better to have this kind of events now that instead of 10 months later in the course, and with a larger balance, I get it as an opportunity to improve my system at low cost. Now that the improvement was done, the future will serve to validate some additional rules.

On the trading and account side, I have decided to trade only the EURUSD pair as it’s for me the most rewarding pair, CADJPY needed too much work and patience for the reward. I have also decided to increase my balance by $150 each month in order to accelerate the grow up of my account until I reach about 2K, hoping that someday I will reach that amount ;-)

And last but not least, I have finally decided to lower my risk, my greed took a hit but I’m happy to be more on the safe side. Time will tell if my move was enough to make my trading durable while at the same time enough profitable to satisfy my expectations.

I hit the wall hardly but fortunately I could get out without too much damage as I terminate the month with still an all time profit of 30%, and most important, an improved system to trade with.

I have now 4 new short term goals to achieve and as many reasons to stay motivated:

 

1. Trade profitably for more than 2 months.
2. Go past my previous profit and return.
3. Trade through FOMC/NFP events without too much damage to the account.
4. Reach 2k in balance and stop deposits.

And, as Winston Churchill once said,
If you’re going through hell, keep going.


End of month stats.

Market is being hard with me this month too. Already down 36% and not yet gone through NFP !!!

I'm currently applying my new protection rule, that's why I'm now micro-trading with 0.01 lot, otherwise I would have had a higher long position and by doing so putting the account more in jeopardy before the NFP tomorrow. Looking forward to see how I will go through this...

My drawdown being a bit higher than what I would like, my max being 30%, I guess that I need to lower my risk a bit more in the coming months...


Captured drawdown for the records.

True that !
It's a continuous torture, until you start to find your way through deliberate practice and perseverance.

Completely true, but better for your health to not to feel it as a torture but instead as an occasion to improve and do better next time ! And of course for that, you have to not bet your house at every trade, that's why my trading account is only few hundred bucks. If I'm not consistent and safe with that small amount, there is no way then to put more money on the table.

Improving, is just what I'm doing here. I think that I have a successful system, of course, this has yet to be proved over the long run, but which doesn't work all the time like almost any system, it's up to me to detect such moments and put firewalls in place to protect the account during those times.

Hadn't applied my last improvement, I would have been in a position now of risking 20/30% more with the incoming NFP announcement of today or maybe, with luck, recovering my last loss, but that's not trading, that's betting, it would have been almost binary for the account, and for me, that's not the right approach. With my micro-trade approach, either I get back or loss I think between 2-5 percent, and this is far more sane for me and my account.

Once NFP gone, it will be time to trade normally again ;-)

Sure it is ! It's all about improving striving to do better the next time, to gain more knowledge and not to make the same mistakes over and over again until you find your tempo keeping the risk as low as you can as opposed to your account balance is the way to go if we want to stay in the game long enough to actually see our hard work come into fruition.