The Manchild Journey

First post. I've been a long time lurker here, learning and *borrowing* methods, theories and strategies. I must say that this site has by far been the best find for me followed by actually downloading and playing with Metatrader (thus accepting that there is something of value in MS Windows.) If you haven't read it yet, find "The 5 Steps to becoming a trader" posted by Diallist. It's very telling and may get you beyond steps 1 and 2 more quickly. I would like to believe I'm at "Step 3" but I'm only going to accept "Step 2". I've been noodling around with Forex for about 2 years largely unsuccessfully (7 years in the stock market with mostly wins in the last 4 years.) I've had my first *conscious* successes in forex using variations on MuddBuddha's "Simple Forex System" and variations on my understanding of Vegas' methodologies. I could use some decent ranging market perspectives to chew on. Right now I have little interest in short timeframe trading - maybe when I can quit my day job and do *whatever* fulltime. My preference is to be able to get into a trade and sit on it for a day or more - which may be my source of frustration in a ranging market.

Anyway, my intent with this journal is to post my successes and failures. Possibly discuss trading styles and methodologies (I'm absolutely open to suggestions.) Maybe post a fun anecdote here and there. I will probably post any of my trades after the fact because it would be preferable to find out my trade was good/bad after I'm out so my decision doesn't become contaminated midstream. At the moment I'm mostly concerned with picking good trades with the goal of break-even. I will worry about perfecting exits after obtaining *BE* with solid entries for awhile. I don't want to worry about how much money or how many pips I gain. That's part of what got me into trouble in the past (greed.) The icing will be catching a big gain. Win or loose, the fast action in forex has matured my perspective in the stock market.

Anyone is welcome to post here with the following caveat: keep it polite, keep it honest and be thoughtful. I'll try to do the same. I no longer have the time and don't yet possess the time management skills to do otherwise. Also, there is no such thing as on-topic or off-topic here.

That's all for now. Thank you, good luck and have fun.

Manchild

Went short GBP/USD at 1.9028. Set initial stop at around 1.9100 (near a prior peak) with an initial TP of 1.8939. I later moved my stop at BE after the pair moved to 1.8988 - already a win for my current goal. I could take profit but I'm more interested in following this pair down to see where it goes. I thought about shorting another lot around this point but decided not to because that's not on my agenda with this trade. I'm now into the "Icing". Gradually moving my stops down when I notice significant price changes. When I got within 20 pips of my TP I bumped it to 1.8884 and moved my stop again. Regardless of what happens I will have a guaranteed profit. If my stop gets triggered, great. If my TP gets triggered, even better. It's a win/winmore situation for me in this phase. I will get out when the market tells me I told it to get out (I'm not even sure I understood that.) If I see my MA tip the other direction I'll probably tighten my stop. Either way, at this moment I will be guaranteed a 61 pip profit (excluding rollover.) By some combination of chance and skill I picked a winner. I felt fairly good about the pick when I got in and felt even better when I could guarantee BE because at that moment I knew that to some degree it was a winner.

Phase 0: Buy and sell all willie nillie.
Phase 1: Take good entries and only expect BE on exit.
Phase 2: Take good entries and make decent exits.
Phase 3: Increase lots on good entries improve and scale exits
Phase 4: Be (not BE) consistent in profitability.
Phase 5: Refine, hone and adapt.

I expect Phases 1 through 4 to take me 1 month to 70 years to achieve... hopefully sooner than later.

Enjoy,
Manchild

I went long USD/JPY at 116.09. Set my initial stop at 115.65, TP at 116.99. A couple hours later I moved my stop to BE.

I still have my GBP/USD position open but I'm already guaranteed a win so I'm fine with using the extra leverage on a new position. I have since moved my stop to 1.8889 and my TP to 1.8795.

Enjoy,
Manchild

Well, I got stopped out at 1.8849 for a 179 pip gain (minus the 0.5 pip rollover)! It looks like it just barely hit my stop at that. Must have been my broker hunting stops!! : My MA suggests I should still be in play but I'll worry about that some other day - probably when I play enough lots to scale out. The perfect exit within this play would have been at 1.8792 for an additional 57 pips but as we all know, perfect exits and entries are uncommon.

All in all, I have nothing to complain about. I gained 179 more pips than I set out to and all is good. I'm still in my USD/JPY trade and patiently waiting for my next signal.

+179 pips
-0.5 pips (collection plate for the forex gods)
Rolling total: +178.5 pips

Enjoy,
Manchild

I was stopped out at 116.41 from 116.09 (plus 4.1 pip rollover) for a 32 pip gain. I'm glad to have a couple of decent wins to take the sting out of future losses... they will inevitably come...
+32 pips
+4.1 pips (rollover... I may have to loose the collection plate analogy They gave it to me, I swear!)
+36.1 pip gain

running total +213.6 pips (only about 2000-3000 pips to go before total BE...)

Enjoy!

Manchild

I was going to ask about this mornings BOE Interest Rate Statement but coverage has already been started on a different thread. It's almost as if everyone was extremely disappointed that the expectations were met. I'm posting the link more as a reminder to myself to consult Google about what a bearish/bullish Gartley is. I also thought others may get something out of it. If nothing else there will be a higher likelihood of a meaningful discussion regarding todays BOE Interest Rate Statement on the other thread.

Thanks,

Manchild

http://www.forexfactory.com/forexfor...ead.php?t=7833

Evidence that it is indeed *possible* to make significant gains by holding onto your trending trades. I know there's a lesson in my last GBP/USD trade. Probably more than one. The most obvious lesson is riding the trend to it's conclusion. The *trick* is deciding when the trend has actually finished. IF, IF, IF. If only I was still in this trade I would be up an additional 200 pips (at the moment the price is around 1.8650 give or take.) There was a time when I would have been upset over not getting them and I may again in the future when I think I know what I'm doing. Right now I'm watching in amazement at what the price is doing and looking ahead to some unknown point in the future when I can catch another trade similar to this one and ride it even further . I have a little time to ponder if I should have done something different with my stop. I'm inclined to say that my stop was fairly placed though. Hindsight tells me that this is a good example of why it's beneficial to trade multiple lots and scale out. Locking in profits with one lot and feeding your curiosity (and hopefully lining your pocket book) with the remainder. I do get the feeling though that I need to change my approach to my initial stops. Currently I'm setting them at previous highs or lows. That put my initial stop with the GBP/USD with a potential loss of more than 70 pips. At least I'm starting to learn to move my stops to BE after I'm in positive territory.

There's much to learn.

Manchild

I was considering a re-entry on GBP/USD. In part because in the past I've avoided entering trends midstream and sometimes that just seems silly. The trend looks strong BUT... I have been doodling with Fibonacci retracements and that pair seems to be at one of them thar lines (the 23.6 level.) Interestingly enough, I noticed what FF indicates as a "High Impact" news event tomorrow regarding the GBP. Is there correlation between that news event and the flatness of the pair right now? The alleged Fib level and the flatness of the pair? All three? None of the above? I have not yet analyzed a correlation with major news events and Fib retracements. I've only started writing a script to place lines at NFP events and will probably do the same for other "High Impact" events. I predict the GBP will move again after tomorrows Consumer Price Index announcement. I also predict it will go either up or down. Regardless, I will sit out of that pair until after the announcement and decide what to do tomorrow. I am going to hypothesize that after it moves again it will keep moving until a few hours before Friday's CPI report. Do you think I can construct some random set of lines to predict where it will pause?

Please note that this speculation is purely for my entertainment. I really don't know what I'm doing and my crystal ball is still on back order. Be sure though that if I'm right I will run out and buy myself a lottery ticket.

Manchild

Bought AUD/USD at 0.7532 stopped out at 0.7495 -.5 pip rollover.
Well, Can't win them all. I entered this morning and was stopped out for a 37.5 pip loss (after rollover) negating a little bit more than my JPY gain. I just can't seem to get the Aussie dollar to work for me.

To stick another "Almost doesn't count" in my hat - the bend in my 4 Hour 8 EMA made me perk up a bit last night with the GBP/USD but I stayed out because of my uncertainty with the pair. Ironically, I think I was also somewhat uncertain with the AUD. Anyway, I am eagerly watching the GBP to see how things unfold.

Good luck,

Manchild

Sold EUR/JPY at 149.58 with an initial stop at 149.91. Have since moved my stop to BE. I wonder if the GBP has flattened out for the next couple of days. Time will tell.

Manchild

Technically I gained .7 pips but for all intents and purposes I'm calling it break even. I got gouged on the rollover going short on the EUR/JPY to the tune of 5.3 pips. This may explain why the currency pair has been driving up for the last several years. I would guess it will continue to do so until Japan begins to catch up on interest rates.

Manchild

Well, after sitting on my hands waiting the GBP/USD to exhaust itself on the way down and avoiding the entry on it's rise. I finally saw my opportunity and sold GBP/USD at 1.9000... and was stopped out at 1.9060 for a 60 pip loss. The Pinocchio bar (on a 4 hr chart) in the European session got me. It *Almost* makes me want to play without stops but as soon as I do that the market will run against me for 200 pips. I think I opened my position a few bars too soon. My 8 period SMA was pointing down when I entered but not after the close of that bar. I should have waited a couple of bars. The pair seems ready to come back down from it's recent rise but I could be wrong. We'll see. I will probably try the pair again later if it still looks good.

Manchild

I sold the EUR/USD at 1.2762 with an initial stop set at 1.2805. I have since moved my stop to 1.2752 - guaranteed 10 pips. 60 or More if the trend continues. I'm thinking about a re-entry of the GBP/USD but I'm wondering if I'd be better off opening another position in the EUR/USD due to a short term correlation between the two pairs. I'll wait a few hours to see what they do and make my decision then.

Manchild

Well, I closed my position last night at 1.2725 after my 8 SMA curled upwards and ended up with a +37 pip gain. Regaining a bit more than half of my prior loss.

The day after my loss with the GBP/USD I did re-enter. I sold at 1.8959. Currently my stop is set at 1.8820 and will probably move it down a bit. If I hadn't been stopped out earlier I would be gaining an additional 40 pips but I should never feel bad with a profit. We'll see what tomorrows news brings us. I'll probably either be stopped out or be sitting on a larger gain. I guess that's obvious though. I speculate that the price movement over the night will suggest what the movement will be after the news. Just my 2 cents.

I was stopped out of my GBP/USD position at 1.8700 for a total of a 258 pip gain (259 - 1 pip rollover.) My record for the month is 4 Wins, 2 Losses and 1 Tie (BE) for a total gain of about 412 pips on all 7 trades. For those of you who are trying to make 10 pips per day - My average for the month is between 15 and 20 depending on how many days you calculate.

Now I need to look to see what I can do to spot more trades in time to play them. I know this week alone I missed good trades in USD/JPY, EUR/JPY. It's most definitely a mix of timing and hesitation but at this point I'd rather sit on my hands than loose money. This has been a much needed month of positive lessons for me. I still need to keep my confidence in check so it doesn't turn into arrogance. For the time being I will continue to play 1 lot at a time per currency pair and wait until I can comfortably set my stops to BE before I open another position in a different currency pair... unless I see an AAA trade Opportunity. This mindset may also force me out of correlating trades. To me, this is a good thing.

Simplicity and Money Management definitely seem to be the way to go. For the most part I'm only using an 8 SMA to time my entries (and in some cases exits) and I'm largely trading in the direction of the greater trend. I have been dabbling in other indicators... but mostly just to see.

Enjoy,
Manchild

I sold GBP/USD 1.8846 and was stopped out at 1.8845 for a whopping 1 PIP gain! I would still be in if I had left my initial stop at 1.8900 but when I saw I was up +50 pips this morning I decided to move my stop to a pip below BE. I still want my winning trades to remain winning or BE because I'm still in a confidence building phase.

This seems like a very active day in the market. I'm sure those of you who are able to trade short time frames are making a killing today. It will be interesting to see what impact Mr. Bernanke's comments will have on the market today. My gut tells me that the powers that be want the greenback to continue it's strength against the sterling but I am not ready to trust my gut yet.

Happy Trading,

Manchild

I almost fell off the page. After missing the boat a few times and not having as much time to pay attention to the markets I finally entered a position in the AUD/USD and GBP/USD. Both short and both stopped out with a loss. 41 pips for the AUD and 60 for GBP. I know I said I should stop playing the AUD and now I think I mean it... until I have more time to get the rythm down with it.

Lately I've been wondering if I need to switch to a smaller timeframe thinking that I'd *see* more trades. Although, every time I look at the smaller timeframes it looks like a more spaztic version of the larger timeframes without much added benifit. I probably just need to add a coin toss and a horizontal line. If the price is above the line and I get heads - buy, tails - sell and vice versa when the price is below the line. Really, I just need to remain patient.

Vigilance!

Manchild

I've done some analysis on the odds of various events happening on GBP/USD daily data. I have no idea if anyone will find this useful but I do and I thought I'd share. I will be doing the same thing on a few other currency pairs but not all. I chose to start with GBP/USD because it typically seems to have the biggest moves and it's the pair I play the most and have had the most success with. My analysis begins January 1, 1998. I chose 1998 because I feel that is when the population of home-based traders began to grow which I feel may have tweaked the currency patterns slightly. My data is a mix from alpari and interbankfx. I may go back farther but my data from around 1978-1988 only gives open/close so I won't go back that far.

Disclaimer:
I do not warrant this information in any way. Use at your own discretion. Past performance does not necessarily indicate future performance. I do not take responsibility for the accuracy of the following information. This is for informational purposes only. This information does not make a system, model or strategy and does not necessarily correlate with anything else provided. This does not take into account the spread. Percentages are rounded to the nearest whole. The daily price moves were truncated, not rounded, to ensure some integrety. etc. etc. etc.

My findings:
- Daily high/low difference. Maximum range of the currency.
100% | the difference is >= 10 pips
99% | the difference is >= 20 pips
97% | the difference is >= 30 pips
96% | the difference is >= 40 pips
95% | the difference is >= 50 pips
94% | the difference is >= 60 pips
91% | the difference is >= 70 pips
88% | the difference is >= 80 pips
80% | the difference is >= 90 pips
75% | the difference is >= 100 pips
67% | the difference is >= 110 pips
57% | the difference is >= 120 pips
49% | the difference is >= 130 pips
41% | the difference is >= 140 pips
35% | the difference is >= 150 pips
29% | the difference is >= 160 pips
24% | the difference is >= 170 pips
20% | the difference is >= 180 pips
16% | the difference is >= 190 pips
13% | the difference is >= 200 pips
11% | the difference is >= 210 pips
9% | the difference is >= 220 pips
7% | the difference is >= 230 pips
6% | the difference is >= 240 pips
4% | the difference is >= 250 pips
3% | the difference is >= 260 pips
3% | the difference is >= 270 pips
2% | the difference is >= 280 pips
1% | the difference is >= 290 pips
1% | the difference is >= 300 pips
1% | the difference is >= 310 pips
1% | the difference is >= 320 pips
1% | the difference is >= 330 pips
1% | the difference is >= 340 pips
0% | the difference is >= 350 pips
0% | the difference is >= 360 pips
0% | the difference is >= 370 pips
0% | the difference is >= 380 pips
0% | the difference is >= 400 pips
0% | the difference is >= 410 pips
0% | the difference is >= 440 pips

Note: 1% and below is less than 35 days since the beginning of 1998. the ranges from 290 pips and up happened no more than 5 times each. eg. 290 - 299 pips happened 2 times, 300 - 309 pips happened 5 times, 440 pips happened once. If you gain 440 pips on a trade in 1 day go buy a lottery ticket too.

- When the day closed UP.
-- Difference from the daily OPEN to the daily HIGH.
100% | the difference is >= 0 pips
99% | the difference is >= 10 pips
96% | the difference is >= 20 pips
91% | the difference is >= 30 pips
85% | the difference is >= 40 pips
77% | the difference is >= 50 pips
70% | the difference is >= 60 pips
62% | the difference is >= 70 pips
55% | the difference is >= 80 pips
47% | the difference is >= 90 pips
40% | the difference is >= 100 pips
33% | the difference is >= 110 pips
27% | the difference is >= 120 pips
23% | the difference is >= 130 pips
19% | the difference is >= 140 pips
16% | the difference is >= 150 pips
14% | the difference is >= 160 pips
11% | the difference is >= 170 pips
9% | the difference is >= 180 pips
8% | the difference is >= 190 pips
6% | the difference is >= 200 pips
5% | the difference is >= 210 pips
4% | the difference is >= 220 pips
3% | the difference is >= 230 pips
2% | the difference is >= 240 pips
2% | the difference is >= 250 pips
1% | the difference is >= 260 pips
1% | the difference is >= 270 pips
1% | the difference is >= 280 pips
1% | the difference is >= 290 pips
1% | the difference is >= 300 pips
0% | the difference is >= 310 pips
0% | the difference is >= 330 pips
0% | the difference is >= 360 pips
0% | the difference is >= 380 pips

-- Difference from the daily OPEN to the daily LOW.
100% | the difference is >= 0 pips
83% | the difference is >= 10 pips
67% | the difference is >= 20 pips
49% | the difference is >= 30 pips
35% | the difference is >= 40 pips
25% | the difference is >= 50 pips
17% | the difference is >= 60 pips
10% | the difference is >= 70 pips
7% | the difference is >= 80 pips
4% | the difference is >= 90 pips
3% | the difference is >= 100 pips
2% | the difference is >= 110 pips
2% | the difference is >= 120 pips
1% | the difference is >= 130 pips
0% | the difference is >= 140 pips
0% | the difference is >= 150 pips
0% | the difference is >= 160 pips
0% | the difference is >= 320 pips


- When the day closed DOWN.
-- Difference from the daily OPEN to the daily LOW.
100% | the difference is >= 0 pips
99% | the difference is >= 10 pips
97% | the difference is >= 20 pips
93% | the difference is >= 30 pips
88% | the difference is >= 40 pips
81% | the difference is >= 50 pips
74% | the difference is >= 60 pips
65% | the difference is >= 70 pips
57% | the difference is >= 80 pips
49% | the difference is >= 90 pips
43% | the difference is >= 100 pips
35% | the difference is >= 110 pips
29% | the difference is >= 120 pips
24% | the difference is >= 130 pips
19% | the difference is >= 140 pips
15% | the difference is >= 150 pips
13% | the difference is >= 160 pips
10% | the difference is >= 170 pips
9% | the difference is >= 180 pips
7% | the difference is >= 190 pips
6% | the difference is >= 200 pips
5% | the difference is >= 210 pips
4% | the difference is >= 220 pips
3% | the difference is >= 230 pips
2% | the difference is >= 240 pips
2% | the difference is >= 250 pips
1% | the difference is >= 260 pips
1% | the difference is >= 270 pips
1% | the difference is >= 280 pips
0% | the difference is >= 310 pips
0% | the difference is >= 330 pips
0% | the difference is >= 340 pips
0% | the difference is >= 400 pips

-- Difference from the daily OPEN to the daily HIGH.
100% | the difference is >= 0 pips
84% | the difference is >= 10 pips
67% | the difference is >= 20 pips
49% | the difference is >= 30 pips
34% | the difference is >= 40 pips
23% | the difference is >= 50 pips
14% | the difference is >= 60 pips
9% | the difference is >= 70 pips
6% | the difference is >= 80 pips
4% | the difference is >= 90 pips
2% | the difference is >= 100 pips
1% | the difference is >= 110 pips
1% | the difference is >= 120 pips
0% | the difference is >= 140 pips
0% | the difference is >= 150 pips
0% | the difference is >= 160 pips
0% | the difference is >= 170 pips

- Consecutive days in the same direction.
This is probably off a tad but it's close enough for me.

number of repeated days |number of
in the same direction .... |occurrences
0 ----------------------- 731
1 ----------------------- 300
2 ----------------------- 163
3 ----------------------- 81
4 ----------------------- 28
5 ----------------------- 20
6 ----------------------- 9
7 ----------------------- 4
8 ----------------------- 1
9 ----------------------- 1
10 ---------------------- 0

Note: 0 means there was no repeat. e.g. Up, Down, Up, Down. 1 means there were 2 consecutive days in the same direction. If the cable has 10 consecutive days in the same direction it's an extremely safe bet you can trade the opposite direction and have chosen the right direction. If you're wrong, stay inside for the day.

--------------------------
What does it all mean?
EXAMPLE:
You buy on the open (00:00 GMT) and the pair closes up. There is a 77% chance that the pair will have gone up 50 pips or MORE at some point in the day. If you set your stop at 20 pips and let the trade go through the end of the day there is a 67% chance your stop will have been hit before the end of the day.

This does NOT tell you if the HIGH will come before the LOW. Nore does it tell you how many consecutive 80 pip days have occured. It does tell you that while it is possible to make 440 pips on one trade in one day it's highly unlikely. If it happens go play a round of golf... you may hit a hole-in-one.

Enjoy,
Manchild

Hey Manchild,

Great information! Thanks for sharing I'm sure this has taken you hours and hours

Best of luck,

Kevin