DATA TRADE - Trading Journal & Community

Hello members of forex factory and welcome to my trading journal.

My process always starts with a Macro/Fundamental catalyst. Most of my time is spent researching said "catalysts" as this is the backbone of my process.

I'm hopeful that after some time a community will build here that bounces ideas off each other for their trade ideas/catalyst.

After the hard yards are done its time for some basic analysis while I look for entries. I have a 3-factor process involving Price, Volume and Volatility. I trade when these 3 factors are in line with the overriding Macro/Fundamental bias of the market.
Risk management is huge for me. I get more satisfaction out of small drawn downs than I do big profits! I'm always looking for risk and then managing it objectively based on the data.

I'll be posting my results after each closed trade here in this thread as proof of a consistent, discretionary process that is low risk and data-driven.

No question is a dumb question and my hope is I also learn from this community!

Thanks
Jack

End of Week Trading Results - 12/04/2019

Thanks
Jack

Hello Traders.

Thought I would post COT here as it is part of my process although not a huge part. I don't always use the COT its more of a guide. I use Z-Scores to measure extremes net positioning.



Hope the trading week is going well for you all. The process has me currently long oil again. ill update my data here when the trade is closed.

Thanks
Jack

Posting implied volatility for FX majors tomorrow.

I'm currently long the US10Y and OIL

A small amount of risk on oil and a larger position on the US10Y

Will also post update trading data tomorrow.

Have had some questions about how I use the COT report and IV in my process. Thought a little tutorial could help.

Implied Volatility Premiums/Discounts

Volatility is just another factor I use when trading markets along with price and volume
You know the old saying buy low sell high? When using implied vol terms we say sell complacency and buy fear.
When implied vol is at a discount we assume investors are becoming complacent and are bullish on the market. Conversely when implied volatility is at a premium those same investors are becoming fearful.

I try avoid becoming part of the herd as the herd generally lose. Implied volatility is a great way of measuring the sentiment of investors for a particular asset.
Z-scores for implied volatility give us a reference point in which to judge the current level of premium/discount. A 32% premium on oil is not the same as a 32% for the S&P. A Z-score of -3 indicates 3 standard deviations away from the mean and extreme levels of complacency amongst investors compared to the average. A +3 indicates an extreme level of fear compared to the average.

How I use the COT report

As said above I try to avoid following the herd. My reasoning for this is price has a tendency to mean revert when we reach extreme levels. When does that reversions happen? We don’t know. What we do know is that reversion is closer that it was before.
When the herd are Net short the euro with a Z-Score of -1.55 I stop shorting the euro.
These indicators are tools like a compass helping us navigate the asset you are trading. What they are not is BUY/SELL signals. Don’t buy the euro just because everyone else is short and don’t sell oil just because of an implied volatility discount. Please use these tools to augment your current trading process and manage risk more effectively

On that note here is today Implied Vol and COT report


Hope this helps and please be patient with my grammar. I’m a trader not an English teacher.

Thanks Jack

Current open trades


XTI/USD take profit is now at 2%

Continuing to hold my bond trade with a small drawn down under 0.5% on the UST10Y - Still bullish on bonds for now.

I'll be posting COT and Implied Vol data at some stage tonight.

Thanks
Jack

FOREX COT and Implied Vol



Thanks

Jack

Update on the oil trade.

1. Still bullish from a macro perspective
2. Top end of the Data Trade Dynamic Range
3. Managing risk with take profit at 2%
4. Holding off on more longs until price reaches the bottom end of the Data Trade Range
5. If volume, price and volatility give the signal ill cover my long position and remove my take profit leaving the long position open.
6. If we continue higher take profit will be moved higher - again we are at the top end of the range so managin risk appropriately.



Bond trade is now in profit and I have moved stop loss to break even.

Below are my open positions


Thanks
Jack

Closed out the XTI/USD trade for 1.75% gain



I will be re-entering long when price hits the low end of my range

Thanks
Jack

Potential Trade
XTI/USD
29/04/2019 8.46PM

Analysis

1. Bullish from a macro perspective.
2. Immediate term trend has seen selling.
3. Price has found support at the low end of the DR.
4. Volume was scattered and shows a mix of selling and buying.
5. Although the volume is scattered we still have a clear automatic rally setup.

Strategy

1. Based upon the scattered volume between buyers and sellers i will be waiting for more selling and another high volume setup
2. The high volume setup could happen tonight in the form of a fake breakout of the recent low
3. From here I'm still looking for another automatic rally to setup + lack of supply with a high volume push and close through the AR

Trade Opened

Setup

1. Price continued to see selling until some volume came in creating a higher low
2. Another automatic rally setup but there was still some volume on the selling
3. There was a push through the original automatic rally on low volume
4. The push was followed by a test of the AR finally showing some clean strength/volume
5. I opened a 2% position on the retest during the Asian session at 10.40 am

Risks

1. A push below the high volume support on the low volume

Management

 

1. Stop loss is at 2% of the account balance
2. Moving to break even when the position is 1% in profit

Current open positions



Have locked in +1% on the UST10Y trade

XTI/USD was opened this morning. Expecting that to be in profit tomorrow.

Thanks
Jack

This is great

Just want to say thank you for your insight sharing. am new to trading and hope to learn a lot from you.