KAS Trading Journal

140408

Beginning of my trading journal. I consider myself as a Forex Trader with about 8 months of experience dealing with forex, even though 5 years ago, did commodity trading resulting in loss.

This trading journal will show the records of my live trading, using combination of trading systems out there. The logic, the do's and dont's, the analysis, the before and after and hopefully all the learning experience will be written here as a journal, so that it benefits me first, then to whosoever reading this thread.

Right now, market has not opened, waiting.

Current result

doing scalping with KAS721C trading system - my own trading system -

-24 pip loss.

I am trading EU, UC, GU, UJ, EJ and GJ.

Current trading system used - 'Congruent' - when 4 timeframes (1m, 5m, 15m and 30m) give congruent buy/sell signal - then enter accordingly.

Result :

12 winning trades
5 losing trades
-24 pip loss.

analysis :
Even the winning trades are more, the losing one is bigger in amount - need to adjust the SL value.

What is KAS721C trading system ?

A Simple Moving Average (SMA) of 7 and 21 and 'C' stands for Congruent.

Entry at the signal (the cross of SMA 7/21) of lowest TF which is 1m - while at that time - the rest of all other bigger TF has crossed - that's why it is called congruent.

Analysis so far :

This system is simple, and believe to be very profitable IMO.

Mistake done -
1) Close the trade too fast
2) SL too near

Perhaps -
1) The entry is very reliable and can be profitable if I let it run till the other cross happened, in the lowest TF - in which I close it (forced).
2) Re enter if another signal in lowest TF occur again - with the same rule, close it when counter signal occured.

Will do that after this.

With this system, I could define 2 things:

1) Ranging definition - when all the signals are not congruent - some TF show buy, some sell.
2) Srong Trend definition -whan all the signals are congruent - it really telling us that it is in the 'strong trend' - upward or downward.

So, the system is very simple.

Right now, all the pairs are in 'Ranging' zone - so no trade taken.

Analysis of the worst losing trade :

GJ with -27 pip loss. Buy at 199.53, hit SL at 199.258 to be exact.

It seems that after it hits my SL, the price shoot up back right after that. And it immediately triggers the congruent signals which end up in 100 + pip move after that.

Lesson learned.

1) My SL should be moved to last swing low for buy signal (last swing high for sell)

2) The second congruent signal is more powerful - ie. when price is breaking out (the first congruent signal right after ranging period), it will normally retrace back, the second congruent signal is more 'safe' to enter, plus with Elliot wave thory it gives more range of travel.

3) So, 2 things to be done after this :

a) Entry at second congruent signal after break out (first congruent signal).
b) SL should be set to the last swing low or high.

Will do that after this.

Analysing all losing trades - all having the same mistake - SL too close - right after hitting price rebounce in the direction of profit.

So, analysis is firm and the TO DO is mandatory.

150408

2 consecutive loss of trading -> -24 pip and -26 pips. Stop and analyze.

Both because of emotion. Again not following the rule. Or, maybe the rule is not clear enough. The rule should be - the signal of entry time is at the beginning of the cross of lowest time frame, 1 or 2 bars after the cross (while the rest of TF has already crossed), not after that bars. Mistakes done because entry at 5-7 bars after the cross - and price shoot down again.

160408

After that, I continue with my analysis of finding the Set and Forget system which I have been trying to find since one month of actively trading forex. Until now, trading demo does not create good result, however, starting 160408 I think I found something that I really want.

Why do I want a SIMPLE, SET and FORGET system ?

Because, most trading system available that is based on Indicators will make the Traders wait for the correct time based on the signal - it may take hours before the signal came, and time like these, not to say that we dont have the patience, but, as a human being we tend to see things differently when hours after hours infront of computer screen. Things that can make us forget about the original rule - and normally when this happens, emotional will take place - and we will follow our instinct - something like, woow the price is moving upward that fast ! come on, fast, get in NOW, u press the button - the moment u place the entry, seconds after that -20 pips, u enter at the peak of that movement already, being deceived again and again by that sudden volatility - I believe many of us had been caught into these situations, and honestly, these has been happening to me, many, many times.

Demo result of today 160408.

First few trades are losses.

After changing the parameter the Last few trades all are profitable.

What have I done ?

Defining the new breakout Buy and breakout Sell area, based on the previous day Open, Close, Low and High.

Take profit only 20 pip each. Buy limit and Sell Limit orders are placed at the beginning of Buy and Sell breakout area.

I will continue testing these parameters till I am happy with the result.

170408

Testing with the same Breakout Daily Strategy based on previous day close, low and high.

But, do different setting than 160408, to test the performance, all buy and sell limit order (or entry order) with TP = 40 pip and SL = 40 pip.

The performance is as attached. Not good, 3 out of 9 Buy/Entry order hit the TP, the rest hit the SL. For my note later, the first and the last one row result are based on other trading system - still congruent methodology.

What I will do for tomorrow for this Set and Forget System is to Set TP of 20 pip and SL of -40 pip. This is because based on my analysis, if the TP is set for 20 pip, most likely it will hit the TP, as shown by the result of 160408 and also today.

1:19 am 180408 - my country time.

Now, KAS721C trading system looks very promising with new rule that I have modified. 2 trades with 62 pip and 45 pip profit.

Basically The Rule is as follows :

1) Only use 5m, 15m, 30m and/or maybe 1H TF (which is optional).
2) Ignore the 1m - this is what I think I made the mistake in previous trade.
3) Use 7 Linear Weighted, Median Line MA (Blue line) and 21 Linear Weighted, Median Line (Red line).

Long Entry Rule : (Refer to attachment)

1) There is a cross of 7/21 LWMA upward in 5m chart, Bar at dark orange color line.

2) Go to 15m TF, wait for a cross of 7/21 LWMA. In the chart, it does happen at the Orange color line. WAIT for the Close of the Bar.

3) 3rd confirmatoin - Go to 30m TF, and the Blue LWMA should be above 21 LWMA pointing upward.

4) Enter BUY at the 15m TF, opening of the Bar, after the Bar of the crossing 7/21 LWMA - indicated by the yellow line.

Exit or Take Profit or Force Stop Rule or Short Entry Rule :
(Basically the reverse of Long Entry Rule)

1) Cross downward of 7/21 LWMA has happened in 5m TF.
2) Look for 15m TF. If there is cross downward of 7/21 LWMA (wait for the close of the candle), then Exit/Take Profit/Force Stop/Enter SELL.

Results of the trade based on the new rule as attached.

Testing Rule 2 of Entry : (refer attachment)
(Rule 1 is the beginning of the trend, Rule 2 is during the trend)

1) All 30m, 15m, 5m, the Blue LWMA is above 21 LWMA indicating strong upward trend.

2) In 5m chart, suddenly there is a dip of Blue Line towards Red Line, or it may appear to touch or kiss the Red Line. Then the Blue Line pointing upward again.

3) Enter BUY at the beginning of the next bar (indicated by yellow line), while making sure that in 15m and 30m TF charts the Blue LWMA is above Red LWMA line.

The 15m and 30m chart.

180408 2:30pm

Last night result, because i want to sleep close it with -4pip loss.

This morning at around 9am, set the Buy/Sell entry order.

Result as attached.

As of now, for Set and Forget system :

Looks like 2 of out 4 hit the tp of 20 pip while the other 2 hit the SL for -40 pip loss.

For KAS721C trading system,
The sell at 203.63 has closed with SL set at -36 pip loss, but another trade is open at the other direction, because now the BUY rule obey - more explanation later on this

Explanation on the SELL entry at 203.63.

1) Both 30m chart and 15m chart - the Blue line is below the Red line.
2) The 5m chart, the blue line has made a dip towards red line and later pointing downward - the yellow line is the point where the SELL entry is made at 203.63.

3) Because I have to be AFPC (away from PC), i have set the SL to be at 204.00 and put a BUY entry order at that point, in case the price move upward and at that point definitely the Rule of BUY should happen.

4) True enough, that's what happened.

Analysis : Had I am monitoring the trade.

1) I would have close the SELL trade at 203.78 and put up a BUY at that point.
2) This is because, at the Orange vertical line, the 15m chart has the 7/21 cross and the next Bar should be the BUY (while in 5m chart, the Blue line has already been above the Red line.

3) So, the trade should have loss only -15 pip only. And the new BUY trade should have made +40 pip profit already.


Conclusion : The KAS721C trading system is still relevant and it still profitable.

Anyhow the BUY trade at 204.00 is still open and currently at around 20 - 30 pip profit.

Based on the chart of 5m, 15m and 30m - it is a strong trend upward. Refer attachment.

30m chart is just having a 7/21 cross up. I will wait until the other SELL signal happen before closing - EXACTLY following the Rule.

The 30m chart.

At the time I was writing this - it is already 50 pip profit zone.

I have decided to close the trade with a 53 pip profit and will wait for a dip and upward pointing of the blue line again in 5m chart. Still cannot handle NOT to take the 53 pip profit. I trade this trading system as if i am in live trading.

Following the Rule again, put up a BUY here. (the blue line is pointing upward)

Note that 15m and 30m chart the Blue line is above the Red line.

Result of trading today - the Set and Forget and Congruent system.

Looks like we have 4 x 20pip TP hit and 2 x -40pip SL hit so far - so still the net = 0 on the Set and Forget system.