Thexder's journey to(ward?) freedom

I'm going to take the last day of this week off, need to sleep. I stayed up extra late to go do some things and now I'm off schedule.

So overall I missed that big move yesterday that could have given around +60 with following my stop as I would, and who knows about today, maybe I'd take a hit but I'd like to assume I'd come out with at least something positive (like yesterday starting with a loss), so what this means is I think the last two weeks are on par afterall.

If I'd been paying more attention I could have been currently sitting at +160 for this week including a loss and at least 3 break evens, and there's still a day to go. Last week I had +165. So I'm still ok with my method and next week I hope to again maintain this average.

It's still labor intensive to sit there waiting for all the moves, and as I demonstrated yesterday sometimes even if I'm doing that, I can miss one by missing one candle's close (where a new peak is finally formed) and then not being there in time to set a pending new order. I'm still on a side journey to trade longer time frames and make this scalp more of a hobby or supplement to another pip generator.

Even with taking in that many pips with relatively consistent wins for two weeks, I'm still making stupid mistakes that we all know not to make but do it anyway, which is surprising after all the time I've been looking into this and now finally getting somewhere. It's a discipline issue. I think I do have to print out a mantra and stick it on the wall where I can see it while trading.

I added a trading mantra to the first post.
I should know these things but I still abuse them so I have to have them in front of me.

Jared:

Here is a recap example of how I do the fib walking specifically for the scalp method. This is the current action unfolding right now and shows how I start each day as well as both ways I declare a scalping swing complete, ready to draw a new one.

In the first image on the left I have a rather small swing across a consolidation that sits at the top of yesterday's up move. Other techniques would probably draw the swing high where I have it but the low would be down lower probably on the next major looking low before this high. But I usually only concern myself with the range of Asia to start the day.

Before normal London trading time there was a minor break out to the long side and it did reach target 1 but the move overall wasn't expected to be very big based on that swing range. Considering time of day and the small swing range, I'd probably not have taken that, but I'd have paid attention to it for keeping my swing up to date.

That first image shows two circles around peaks to indicate the highest that swing went and then a lower high formed on the next candle's close. That lower high is reason enough to pull the new swing as shown in the second image, but also note that price returned back within the break out area. Even if a new high hadn't been formed, I'd consider that action to be a swing completion sign and I'd still update the swing fib because although there may not be an established new high, there is a retracement in price action and if price should run back up, it may be significant when it breaks the "most current" high in play. So if you had 3 consecutive up candles with higher highs and higher lows, no "peak" to trade, the retracement is a sign that there is a hidden peak (on a lower time frame it would be clear) worth trading.

It turns out that the new fib will be as shown in the second image, pulled from the low that initiated the break out run, to the high it made during that run before swing completion in the first image.

A high break occurred within London hours and reached targets, and it is currently still in play. So far there was no retracement to the break out area and no lower high has been established. If the current candle shown closes without making a new high, leaving a peak on the break out candle, I would pull a new swing as shown in the 3rd image to span the break out move up to the high that would be formed, and if another high break occurs I'd trade that.

I'm not trading tonight but using the M1 trail, I'd have gotten around +20 out of this current up move, and at this time it has collapsed so that +20 would have been a good score. There's 10 minutes left in that hourly candle and it's JUST now as I type this, made it back to the swing high (break out area) and it also looks like it's going to leave a peak behind (on the break out candle before it) so the swing in the 3rd image is now the current swing on my chart. If it breaks low or high, I'd trade it if I were trading today.

Using this method of pulling swings and setting M1 stops, if the price action reverses against the trade too far, I capture the pips, and if it should then turn around to continue its original trend, as long as it sets up properly on the hourly chart and I can pull the new swings, I can get back in the trend. So this is my way of managing hourly trades. I do a series of scalps and get in & out of one big trend if I have to rather than riding it all out and possibly taking a bigger hit.

This sounds like a microscopic version of what Bo teaches, using the hourly to scalp along the daily trends.

Thanks for the detailed explaination as well as the charts.

I like your new pdfs. You have come to some very similar conclusions that I came to using vHands about trading the first breakout in either direction from the asian session. The problem with vHands is you can't switch from hourly to a 1 min chart. So, this method has to be forward tested in real time too. As far as using the 1 min chart to pull the fib to the beginning of a move, that sounds like a good idea. I'll try it.

One suggestion, which you can take or leave, is to pick a top or bottom with at least part of your position, as to lock in profits. If momentum picks up and price starts to move quickly, perhaps don't wait for a new peak or valley to form in order to move the stop on the entire positon. Close a part of it when momentum dies down just as price begins to reverse or flatten on the 1 min chart, then when a new peak or valley forms, move the stop on the remaining position and possibly ride the move up more if it keeps going further in your direction.

Yeah I do all kinds of things like that while in a trade, but when it comes to picking a top or bottom in terms of doing a stop and reverse the other way, that's where I won't pick the top or bottom any more, thinking it's time to retrace. One bad experience was enough. But for choosing when it "may not go any higher" and it's time to lock in profit, I do choose a top or bottom to exit at. But with only 1 lot in play usually it's all or nothing so I try to be sure before I get out rather than hold on for more movement. Things will get more freestyle when I go to 2 lots.

I've been distracted on a side project all weekend (including pdf's) so I haven't posted my trade count yet for the week. I'll lump sum it maybe over the next few days for how this week is going.

When I update the scalp PDF (maybe now) there will be an example of finding hidden hourly moves on M1 to get a more accurate TP range expectation as well as a new place to place the next trade (that sounds like a good way to state the objective when I write about it...)

For anyone wondering what we're talking about with new PDFs, from now on anything I upload will be attached to the first post of the thread so I can retain control of it after a few days (we can always edit post 1 but the rest can only be edited for a day or 2 after posting them). That way I can revise documents with error corrections or add new ideas. Too many times I've read a thread and found a document of the method, only to learn that 200 pages later it was revised or totally changed 7 times - sometimes it's good to know these things before you start.

I just updated the hourly scalp document on post 1 to include some examples like those in the last few weeks here. I still want to find one more type of example but for now, it's more refined and worth reading than the original skeleton document.

Thanks for the updated PDF. Long may your success continue. I used to trade a more mechanical GBP/USD breakout method, which used to work well for a while and then fade into drawdown reducing the win rate to around 40% - your work has addressed those issues very well.

All the best.

I'm hoping my "current" method doesn't end up becoming obsolete in time but it's held up the 4 months I've evaluated it plus a few random visits back in time as far as MT4 history will permit (somewhere in 2005) it seems to still be valid as far as I can see. I hope it lasts. OR if not, I hope I can adapt again. I came up with this method somehow, I should be able to change with the times if necessary or by then, hopefully develop a daily strategy to compensate.

Cable Hourly Scalp
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Week 1: +165
Week 2: +100
Week 3: -10 +35 = +25

Net result since Jan 14: +290
(completed) Weekly Avg: +132

Now that I'm getting caught up on my side projects I have time to update for this week. I had one loss Monday for -10 and today scalped +35. Both of these days seem to have been large moves and I'm sure other methods can tap into more profit but this is only a scalp afterall, and it's the small consistent gains that count in the long run if this is to be a primary system so it's still good to be in the green so far this week.

Monday was a very wide swing day throughout the time leading up to London and with a pending order straddling that (around 150 pips) it was scary to take a long break when price moved from the very bottom of the 150, all the way up and then triggered an order after a huge move (how much more can it possibly run up before a retracement?) but I stuck to the plan with blind faith, chose my stop based on recent support on M1, and I did get stopped at that initial stop for the -10. Much better than setting a wide arbitrary stop and having that taken out, so it was a low risk trade even against the odds of its success. Who knows, maybe it would have gone just enough higher to have given me +10 before it collapsed.

Today was another long trade entry from Asia and although it looks rocky on the hourly and M1 charts, all that back and forth ranging that occurred after entry was contained within an M1 support and resistance while waiting for a new high to form, and eventually we got the new highs and rode it right up to the tip of the day's move, getting stopped out for +35. Letting the profits run and develop and trading the plan consistently with no fear is all it takes.

Thexder, congrats from a fellow canuck (NB area). You appear to be trading the fib the same way that I envisioned it while reading thru some of Bo's thread before realizing you had this journal. Excellent work, and thank you for the comprehensive pdf.

Al

I already have new ideas for updates to that and other new PDFs, stay tuned. I'm currently in ON, originally from NF.

Today has been around break even and the day is almost done so I probably won't see or take another setup, I have other things to start doing now. So three days into this week I'm only still at +25. That's still good overall. I'm able to recover my failed trades to at least break even or take small profits when times are tough, but I know from the last two weeks when things are good I can cash in. The three days of this week so far have been ranging within 200 pips and there's a lot of long wicks on the hourly so being able to ride this out and not lose a shirt is a good sign.


2 notes for my own reference.

If 10 pips a day is all that is ever consistently earned when averaged over time, 50 a week, 200 a month, that could be enough to get by with as little as 2 regular sized full lots (20 mini lots). If the confidence is there, those 2 lots could become 3 or 4 lots and provide luxury returns without getting crazy.

If those same lots are used but the returns are 150 a week, several hundred a month, even better.

Also a note not to forget that I specify a tradeable range as one spanning at least 40 pips - if no such range exists when the day is starting, wait until a range of at least 40 appears and then start the day. I noted this range of 40 in the PDF but the reason I choose to emphasize it now is...today's chart started out with an Asian range of around 33 pips, then there were a bunch of false break outs and a lot of ranging. Just now (around 5:30am EST) a range of exactly 40 pips showed up between 1.9877 and 1.9917, and a long break just happened which may or may not be a losing trade but it seems to have cleared that tight range we've been locked in.

I chose 40 based on my experience since November where anything less doesn't lead to enough reward potential for the risk involved, and in this past month while I've been paying more attention to the smaller time frames, I think I understand why. This pair can easily swing around in a healthy range of 40 or even 50 pips during normal movements and so it's easy to get stopped out by trying to trade a range smaller than this. 40 might even be pushing it but it's something I ended up going with for now.

January 2008 Monthly Earnings: +480

Even though it's only Thursday it is the last day of the month so I'll post a monthly pip count (only started counting on Jan 14 so I have 2 weeks and 4 days of the month to work with).

I'm posting this info because I had 2 weeks of good trending and then the past week has been ranging with not much going on so it is worth taking the average for now to get a better view of this system's potential under all trading conditions.

Looking at the chart for the first half of January where I wasn't trading, it looks to be relatively trendy so I'll consider those to be possibly good trading weeks, but I'll calculate the missing data using the known overall daily average from the last half of the month, which is going to be a low estimate because it includes non trending times. The likely results are more than I am estimating here, which is great news.

Cable Hourly Scalp
January Report For Trades Taken
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Jan 14-19: +165
Jan 21-25: +100
Jan 28-31: +35

Net result since Jan 14: +300
Approximate January Weekly Avg: +100
Daily Average (including losses and bad trading ranges): +20

Potential extra gains from first nine days of January including losses and ranging periods for Jan 1-4 and Jan 7-11: +20 x 9 = +180

January Total: +480

This is in keeping with my back testing results of the original Oct/Nov scalp method I started with so I'm satisfied with the way the system has evolved and I find it better to work with it in its present form. Also if my overall target is 10 pips a day on average to consider myself successful, this is 2.4 times better than my ideal monthly target.

I'll start a fresh pip count tomorrow to track February results. In the long run this month won't matter in my count because it was only a partial month, I didn't take all trades I could have, and I continued to tweak and work out small kinks. Hopefully it's ready for mass production now.

I'm also once again working on some revisions/tweaks to the scalp method document, but I want to gather some more live examples to illustrate what's in my thinking. I again just looked over all of my posted chart examples in here and even I am learning from them by seeing what the hourly was doing at the start of those days and if I still agree with my thinking. I see some very weird things I did a few weeks ago that I probably would be more conservative about today. I'll put a revision history in the document next time to keep track of what's changed so people don't have to read the whole thing trying to figure out what I changed.

Good going, Thexder. Turn these stats in month in, month out for a while and free you will certainly be

Looking forward to reading your updated doc.

Well this was certainly an annoying day, the first of the month. I didn't trade anything, partly because I was away from the screen when the BIG move came (Could have gotten over 100 on that single move and maybe +10 on a move just before that)....

But on the bright side, had I traded it, I would have been back on par with my weekly average after a horrible week of mostly losses. Overall the first 4 days of the week still gave a small profit, then today there were 2 possible false break outs on my chart, but since I wasn't there to watch, I don't know if my broker's prices would have triggered any orders so I can't say what would have happened, but even if the trades were taken and failed, the losses still would have been contained by the M1 trail and I'd lose at worst, the previous 4 days profit of around +35, so I'd be sitting here starting the week at break even on a Friday morning just before news time....and that would have worked out great IF I WERE sitting here....

Just before the news (NFP, the big bad one, first Friday of every month) I would have had a short entry and it would have been running smoothly but then NFP came and spiked up, so I theoretically would have been stopped for +10 if I were in that and there were no slippage.

When the dust settled from news, there was another good and proper (no trade chasing) short setup, and if I had been here for that, I would have had a VERY smooth M1 peak/valley descent right down to giving me over +100, maybe +110, I didn't check the final tally because I am already annoyed and don't want to see any more charts until next week.

So if I were taking my previous worst case estimate of +100 per week as quota, I'd have made that today alone, to cover the whole week. Depending if some potentially failing trades were triggered or not, I could have actually been closer to my "good trading week" average of 150 to 165.

The moral of the story, the way I've been trading my system is I start the day and if I get a good one, anywhere from +20 up, I consider calling it a day, and that's where I maintain my average of +20 a day as calculated, but if I start out with a loss or small gain only, I keep trading the setups until I do feel satisfied for the day beating +20, since I know eventually I can balance it out and it's not just being stubborn about losing. So the method seems to take care of itself and self heal when it does get wounded, and even when there's a whole week of bad trades, it will balance out with days like today.

Even in the original Oct and Nov testing, I had up to a full week of mostly getting stopped out for losses, and I still cleared several hundred per month.

So I'm still happy with it all. I just need to be there in front of the screen too much. Which once again is why I'm working towards a daily trading method on the sidelines.

I couldn't resist.
I just did a pip count on the missed big trade. I would have been stopped for a profit of +125 on that one, and +10 on the one before it.

So if I were triggered on the near miss failing trades earlier today I'd have probably netted +135 for the week, but if those near miss trades weren't triggered on my broker and my previous +35 were in tact:

My total for this week could have been +170

Even better than the last 2 GOOD weeks.

Now I'm not happy!

For better or worse I revised the scalp document and put a few more example trades, expanded on the rules, and I think I might have made it sound a lot more complicated now - not sure until I step back and read it later. But I think all the info is in there. I may have to now work to clarify it all at some point, maybe from other people's feedback.

I think it gets confusing when I talk about 2 ways to consider a trade complete, and it gets into using a retracement second fib along the break out move of the first fib's trade.

Well nobody said it was easy...

Another trading week is about to begin and I'll continue scalping but I'm also now working on some different strategies that may take me to several other pairs to trade on multiple time frames from hourly to daily, possibly more options as time goes on.

I have been working on this for about 3 weeks and I've started from scratch several times. I"m still not sure I have something concrete but I'm going to start posting a document with my ongoing progress in the first post here. Maybe someone else can contribute insights if something stands out.

What I'm evaluating right now is a two stage filter using daily and 4 hour charts before taking an entry on the hourly, based on a form of support and resistance swing break outs (swing as in waves of momentum, not the fib). The idea is to only use the hourly chart to get in and manage the trade while it's (hopefully) growing, and when it becomes stable, migrate backwards through the H4 and hopefully daily charts and not sit in front of the screen all day (night).

I am basing this research on several well known ideas of swing wave trading, pull backs and all that, 1-2-3 moves, ideas that I've seen in books I've read, websites I've visited over the years, and of course in threads on here. Now I'm trying to tweak the ideas into something that works for me.

I've posted the first rough draft PDF in the first post now to outline some of the preliminary rules (work in progress) and two example consecutive trades starting from a daily EUR/JPY chart, first going long, then taking the next signal short. The long trade turns out to be just a small pullback in a bigger down trend but still gives up to 200 pips. The short trade that's taken after that one is stopped, goes on for up to 4 days and lets you get in on a 1000 pip drop with minimal screen time unless you want to keep adding to the position on the hourly chart as it drops in your favour. That's where the flexibility comes in and you only need to trade when you want once you are in the trend.

I'm sure this document/method will go through many more changes and tweaks, including lots of testing required on more data and on different currency pairs to see how it really performs.

If it works out, it's a good bridge between hourly scalping and the ultimate goal of daily and up only.

Cable Hourly Scalp
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Feb Week 1: +55

Starting a new count for a new month and the rules of the scalp considered all tweaked for now unless a new idea comes along. Today's trade came early in the start of the week and start of London.

I had a range pulled across 1.9627 and 1.9679, and a long break came along with clean momentum on the M1 chart, forming new highs and lows and moving strongly up. The final stop was located somewhere just below 1.9747 by the time momentum faded and the final result after spread and padding was +55. Since this was a "good trade", I would consider the day done now.

Who knows, maybe I could take another move today like that, but I would be concerned that I'd end up just taking 2 or 3 more trades that end up stopped out at small loss or break even since we already had a good move. That's part of how I use this strategy. As soon as I see a trade giving me at least +20 (daily expected quota), I consider calling it a day so I don't lose what I have, the same way longer term methods will move a stop to break even or small profit after a move goes so far.