Not a good R:R ... after taking the trade, I realized that while it was a good setup, momentum for the day was slowing down as it was just after 11:00PM, and the european market had just closed. So, I waited for price to hit the R2 pivot, and after confirming that it found resistance, I took profit. Only 0.27R return, but I felt good about taking profit and quitting for the day until tonight, and not having to baby this trade all afternoon.
Quick in, quick out. I'm not fond of counter-trend trades these days, so I was mainly concerned with taking a quick profit. Fear, yes, but I did not like the down-sloping 34ema, so I considered a 0.4R profit something I could live with here.
Beautiful, picture perfect triangle pattern. Price shot up right on time, and I took profit as price stalled at resistance. My stop was way too big here. I was trying to hedge against a false breakout, but a 36 pip stop was too big. Could have gotten by with 15 easily, and have made twice as much by traing twice as many lots. But, I'm content to take what I got and learn from it.
It's amazing how much more enjoyable a trading log is to keep when you actually make money.
I know it's only a small sample of trades, but so far the last 4 days, this week, I've had 9 trades, with 7 winners, 2 losers, an increase in equity of 3.5%, and a total 180 in terms of confidence. The main difference? Basically, I'm being more patient. Woodies CCI really helped with that because I'm waiting for good setups, no matter how many breakouts and opportunities I miss. But even my basic S/R trading has seen a total change in confidence level. I'm trading mostly from 7-11AM EST, and there are some good setups on 15m charts during that period. I think the 15m charts are nice for me because it's not too quick, but it still allows catching nice pullback on trends and things like this. Anyway, on to the log.
The two main numbers in my log that I derive (sort of the "bottom line" of my log) are the expectancy (average result on a trade in terms of risk, or 'R'), and the "weekly expectunity", or the expected increase in equity (non-compounded) I can expect to have every week, based on my history. Of course my history is too small now to mean anything, but I've really enjoyed keeping the log up to date. After annotating and posting screenshots, I probably spend at least 50% of trading time just logging, but it's worth it. I have 26 columns in my log to help me archive trades, and hopefully with that information as well as screenshots I can learn and get better.
Range Trade. Short at the top of the range. After trade went into profit, I moved the stop down, and my stop was hit on the tick, and price went back down again. Stop should have been moved a little further away. But loss was only 0.1%.
Perfect entry. Exited at 1R. Yes, price plummeted even further after I took profit near the bottom of the range. But range trading is not one of those "hold it and see how far it goes while you move your stop" kind of strategies. Buy at the bottom, sell at the top.
(spawned from a discussion on the james16 chart thread)
There may be a lot of draw to trading small timeframes, because some get so excited by the possibilities of a lot more setups and this kind of thing, and it may draw the impatient, "get rich quick" crowd. Well you already know my feelings...that's their problem, and I feel they will have problems no matter what TF they trade on ;-) But to the point--a lot of people also read about trading off of larger timeframes and big moves, and they say "wow, he made 752 pips on that trade!"
The problem with people saying "I made X pips this month" or "on this trade" is that +X pips tell you zero, zero, zero, about the performance of a system or the trade. The real measure of a system, or for that matter, an individual trade, is not how many pips were made, but how many pips were made as a function of how many were risked. If a daily trade winds up netting a whopping 1000 pips, chances are the stop loss was in the neighborhood of 150 pips, and chances are that the trade took about 20 trading days (about a month) to reach that amount. That translates to a 6.7% return on risk. That's absolutely great, but in those same 20 days, a smaller TF system which produces a decent expectancy, w/l ratio, and plenty of setups can easily produce the same results by netting far fewer pips, with good position sizing. If my system produces a humble 0.3R expectancy for each trade, and I get only 2 setups per day, that's 40 setups in a month, which is 12R. Of course these are hypothetical numbers, and the numbers could easily be swapped, and the trader, in the end, makes the system a winner or a loser. That's why it's so important, IMO, to allow traders to figure out what works for them instead of forcing opinions like "daily charts move much better and smoother." Again, IMHO, it's just not true. Have a friend take a chart whose currency you don't know well, cover the TF, zoom out far enough to eliminate noise, and try to guess the time frame.
A typical pro/con list of long/short-term systems is easy to find on FF and elsewhere online, but blanket statements like "stick with the daily TF" completely ignores the individual, personal element of trading and tends to bias people into a system that may not fit them well at all. Position traders often talk about how they trade few hours and get much more sleep, but honestly I get more sleep at night knowing that I have no open positions and am not concerned with the market when I'm not at my computer (ok who am I kidding, most traders think about the markets more than they should). I do believe that complete newcomers should observe daily chart movements, but as long as they're demoing, trying their hand at lower TFs will help them if they learn from it. Sure, lower TFs can blow an account quicker than longer TFs. But if you're new, you shouldn't be trading with real money anyway.
Simple retrace off of 38% fib level, got in at a good price, traded multiple lots at 1% equity risk, left with a 2R (2%) gain. Price still going up now, and could have locked in at least 3R gain. However, I'm starting to think bigger (as in, it might be a good idea to get a few 5R trades in each week to cover smaller losses).
Hopefully I will look back on today as a turning point in my trading. It's a small sample size, but the last week and 15 trades later, I've got a 70% w/l, 0.5R expectancy, and have increased my account thus far by 7% over the last 8 days. This performance may continue, and it may not. BUT, my best trade so far was tonight. 053, Long on GBPCHF. What made this trade so special to me is that it's the first time I really let go of the risk early on in the trade, got into the market rhythm, and just let it ride until it hit my target. I got out with 2R. However, as I look at this moment, I could have locked in at least 3R, and going on 4R at this point. I have a feeling inside me of slight disappointment that I let myself close out without riding it further, BUT it's my best managed trade to date, so I have to take things one step at a time. My goal from now on will be to have this attitude with all my trades.
A good friend of mine recently said that she started making lots more money when she started thinking bigger. In the past, "pocket change" to her was quarters and dollar bills. Then, she changed her mindset to "pocket chang" being 5 and 10 dollar bills. Then 20. Now, she's working on making a $100 bill "pocket change." I think a similar approach to letting my winners ride will help me go a long way. At first, just not losing a full 1R was a "success." Then, once I started feeling more comfortable, a breakeven was a success. Right now, and up until now, a profitible trade was a success, with a 1R being phenomenal! Until tonight. Now, a 1R trade is acceptable, a 2R trade is the goal, and a multiple like 5R will be phenomenal. I'm starting to think bigger, and I'm growing in my approach and risk aversion. If I were afraid, the aforementioned trade would have been closed for a (satisfactory) 1R gain, and I would have gone to bed $650 less rich. Now, I see myself going to bed somewhat satisfied, but about $800 less rich than I could be right this moment. Good things are coming my way....
Here's a picture of my trading log. I've got everything going with formulas automatically so I don't have to worry with too much manually. I keep track of a lot of things! It's very helpful to see what I've done so I can make improvements. How can you expect to get better if you don't know what your performance is?
AUDUSD. Price hit trendline, bounced back up, and I waited for a 50% retrace. Well, I got it, and I got a 100% retrace and stopout too :-/ I didn't really wait long enough for price to confirm that it wanted to go back up, and apparently it didn't, at least not then. Stopped out on the pip. -1%
Monday was a bad day. Placed four trades (too many), with three of them being losers. I broke one of my trading rules and really paid for it. Wiped out Sunday's great earnings. No charts here. Total loss is about -2.8% of equity.
Best trade to date, I set it, and went to sleep. When I woke up, target had been reached, and price still moving up. If I had the choice, I would try to finesse this a bit and trail my stop, but I was just too tired.
Notice how price moves just as well and predictible on the 30M chart as it does the 4H (obviously, it's the same thing, but the movments overall are no more erratic on the 30M). The 4H though, gave me the big picture which I used to make the setup for the entry. I'm finding the 34EMA to be an extremely valuable MA. Price found support on it on the 4H, and then on the 30M. Stop placement, big targets, and of course, movement from the market (the part I CAN'T control lol) made this trade a good one.
