My project over the year/years....

After spending some time here at FF I decided to start a journal where I’ll be able to post and discuss my setups. It will be mainly longer term trades – from days to weeks even months. Of course sometimes I can take a day trade but that’s not my cup of tea anymore. It’s a time consuming and honestly I can’t imagine sitting in front of the computer 12-14 hours a day waiting for the right setup.

The trades are going to be based on my understanding of order flow by trying to determine where the ‘smart money’ positioned themselves and trade on the same side. Whenever they are long or short it really doesn’t matter as long as I’m on the right side.
Some may ask how I know what those guys are doing as they wouldn’t reveal their positions. Well the answer is simple – nobody knows except them. But there are clues showing when their activity and you can be sure they would not be the ones to buy at the top or sell at the bottom. Having said that those clues as only probabilities not certainties, nobody knows what’s will happen.

Now to make this journal more interesting I’ll start with a small mini account, let’s say $1,000 and try to increase it over a period of time. Of course that’s not my real account but it will be handled as its real. For the purpose of the project I'll be ignoring the swap premiums as I like it to be as simple as possible.


Let’s get the ball rolling ..........

ok

The first setup I'm looking is EUR/USD. It’s not a high probability trade but honestly I don’t see anything else at the moment. I don’t like taking a counter trend trade but we’ve got to start somewhere.

Another great week for the euro making all time high and showing the trend is still strong but I have few concerns though:

1. the pair is hitting the top on the daily channel
2. latest COT report shows record long positions for third consecutive week
3. divergence on 1H, 4H and daily
4. completed or near completion of wave 5 according to EW ??

So the trading plan would be a little bit different. I'll be looking to sell the euro at current levels. I know, I'm fading a bull market and that trade is a VERY aggressive but R/R is looking good. Nevertheless I'd be trading smaller then I normally do and will be scaling my position. As mentioned before for that experiment I’m using mini account with a broker that allows to trade micro lots (something like 10lot = $10/pip, 1lot = $1/pip, 0.1lot = $0.1/pip, etc.)

Here is what I have in mind:

1. sell 0.3 @ 3650 OB, SL 3750 (equivalent to $30), TP 3300
2. sell another 0.3 @ 3720 OB (if it moves higher, otherwise I'll scratch that offer), SL 3750 (equivalent to $9), TP 3300
3. sell last 0.3 @ 3540 (on the break), SL B/E+1 on the whole position, TP 3300

As you can see I'm only risking $39 in total for potential $177 or $303, depending whenever I'll have 0.6 @ 3595 or 0.9 @ 3637.

Here is the daily chart I'm looking at :

Hi JimboFX, nice to see you starting a journal. Looking forward to see your good trades. All the best.

Very, very nice.
I was thinking of shorting euro myself. I like the idea of long term setups.

I am definitely adding this thread to my favorite threads list.

risk reward ratio looks good.

Thanks guys. I really appreciate it.


Back to the EUR/USD trade. I'm short 0.3 @ 1.3660 (managed to get get better price). That portion is up 100 pips so moved the stop at B/E. I'm scratching the offer at 1.3720 as a move above the highs will prove me wrong. Will add the other 0.3 on a hourly close bellow 1.3540 then move the stop on the cost at B/E + 1. Target still 1.3300 OB.


Regards

Trade # 2 :

The next setup is short USD/JPY. I've been waiting for some time time now and at the current price it's a high probability trade IMO :

1. getting close to a sell zone on 4H channel which as of now stands at 120.50/60
2. model and momentum accounts activity on the buy side. Usually those guys are late most of the time.

Again I'll scale my position :

1. sell 0.2 @ 120.20 OB, SL 121.10, TP 117.50 OB
2. sell 0.3 @ 120.50 OB, SL 121.10, TP 117.50 OB
3. sell 0.5 @ 120.80 OB, SL 121.10, TP 117.50 OB

Agerage price if filled would be 1 @ 120.59. Risk is $43 for a potential of $260.

Hello,
Great thread, look forward to your future posts
thanks
Tom

Hey mate,

Just stopping by to give you some support.
Good luck w/ your journal.

Thanks mate. Good to see you stopping by.


Good luck to you too. I see you doing very well, over 100% YTD, just like the old times .

Back to the yen trade. I'm short 0.2 @ 120.20. Have a resting order at 120.50 and 120.80. Bellow is the the daily chart. Let's see if that area would hold as resistance. And by the way if the market take a dive and I don't get filled on the other two pending orders I'll most likely add them at lower levels.

Trade #1 update :

According to CME daily bulletin Open Interest has been dropping on the way down. That leads me to believe that the recent drop was late longs liquidating and the market maybe ready for another advance before further correction. Also the market never got a hourly close bellow 3540 giving me the chance to add another short. That's way I'm liquidating my position ahead of NFP at 3560 for 100pips profit or $30 .


Acc balance : $ 1,030
YTD : + 3%


Bellow is 4H chart where you can see the bounce of the channel as well :

Hi Jimbo

Great to see you've decided to start your own journal

Best of luck & I'll be watching with interest.

Kind Regards
Steve

Thanks Steve, appreciate it .


The week ahead looks to be quite busy with interest statements from all over the place. Expectations are FOMC and ECB to stay on hold, BOE to hike with 25 base points to 5.5%.

What's interesting though is that market positioning remains net USD-shorts and that continues to be the limiting factor to the resumption of recent trends. I'd paying close attention to the market’s reaction to the data as profit-taking may again emerge on a ‘buy the rumor, sell the fact’ basis. In other words, if the FOMC, ECB and BOE act as expected and the dollar fails to come under pressure, confirming market positioning is too one-sided, then the risk of dollar rebound is raising.



Regards

that is a very interesting chart. Can/would you explain/describe the various elements such as what looks like a moving average envelope and channel markers. How they are made and how you use them. Thanks for your attention.

Trade #3 :

I've been looking to long the majors for sometime now as there is still one more leg up in my view and at the present cable is showing me a potential for that. By looking at the futures, which is kind of mirror of the cash market I see that the open interest is dropping telling me that the down move is not strong. The only thing that worries me is choosing the stop. It's one of those moments where you have to pick a number and stick to it. For cable my stop is usually 100pips so the trading plan for now is :

 

1. long 0.3 @ 1.9890, SL 1.9780, TP - new highs
2. long 0.2 @ 1.9860, SL 1.9780, TP - new highs

My risk here is $49 on both positions for a potential of $160 OB. When / if I see hourly close above 1.9973 I'll move the stop to BE +1. Also I might consider adding around that area as well if the move is indeed 5th wave up.


P.S. Hopefully we won't see 'buy the rumour, sell the fact' type of behaviour on tomorrow's BOE announcment.

I've been on the road for the past couple of days and didn't get a chance to do a regular update of my journal due to lack of internet connection. Hopefully next week I'll have that problem sorted.
The market sold off and can't say that was totally unexpected. Liquidating my euro short position now looks a bit premature but that's ok because I have a long bias on that market anyway. On the other side GBP long moved over 100 pips at one point so I moved my stop to BE+1 as planned which was triggered during the sell off. The second portion of that trade was canceled as my practice is once I have a lead and move the stop to break even I'd scratch any bids/offers bellow/above that point. The only open trade as of now is short USD/JPY and the good thing is I got filled on the second offer at 120.50. Now my cost here is 120.38 for 0.5 lots. By looking at the chart bellow I see a break one way or another next week and I still favour the downside but only time will tell. Also next week I'd be looking to buy those dips on the majors and just have to find a safe place.



Acc balance : $ 1,030.30
YTD : + 3%

Closed
trades : 2


Regards

Trade #4 :

As I said earlier I'd be looking to buy the majors this week. As of now I see cable giving me an opportunity. I see divergence on hourly. Also according to EW a wave up is due - either impulsive 5th or corrective wave 2.

Having said that the trading paln would be :

 

1. buy 0.5 @ 1.9760, SL 1.9696, TP 1.9950 OB
2. buy 0.3 @ 1.9740, SL 1.9696, TP 1.9950 OB
3. buy 0.2 @ 1.9720, SL 1.9696, TP 1.9950 OB

Took the first loss on the yen trade. Price broke to the the upside, invalidating my analysis but I'm still not convinced of the strenght of the move and will be looking to sell again if I have a chance. The next level of resistance is around 120.60/70.

The cable trade is still open. So far it looks it missed my second bid by 2 pips.



Acc balance : $ 987.60
YTD : - 1.24 %

Closed
trades : 3