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Razors Journal - Basic trading with PA at S/R

  • #201
  • Jun 30, 2009 6:29am Jun 30, 2009 6:29am
Razor

Just wanted to make sure you didn't think I was having a pop at the trades you have taken. Wasn't the intention!

The good thing about trading TF's lower than dailies is that you get a tight entry (say 20-30 pips) so the market doesn't need to move much to give you 5:1 r/r. With an r/r like that, you can take lots of losses and still make a profit once the winners have been counted. With that in mind, taking all setups can be less stressful in some ways (by not making you agonise over the chart) so long as you can psychologically take the almost inevitable lower strike rate

As with all things, there are pros and cons. I thought I'd write it as it's pertinent to me at the moment as I'm trying to move down from dailies to the hourlies (for the richer rewards it can offer the right traders) and the question of taking more setups or fewer is one I'm working with. It is psychologically harder to be hit more, but with a high enough r/r it may be more profitable.

Still not sure which way I'll jump! Maybe will run 2 accounts with low stakes and see how they fare!
  • #202
  • Jun 30, 2009 6:51am Jun 30, 2009 6:51am
For those who know me, I take nothing seriously, life in jest is fine.

R/R is the life blood of trading lower TFs. The drawdown can often be:

1) being glued to a screen to manage the trade, unless you can take 1:1 and walk away for a while
2) dealing with the fluctuations of emotions, Should i take 1:1 early, should I do this, should I do that.

There are others but not going to get into what has been said over and over. While you are correct in the lot sizings that can be loaded with less risk the compounding problem can be that low risk. What is easy to eclipse (1:1 growth) can so easily disintergrate before your eyes.

I love the hourly's for that reason, I can at times effectively double a trade because the risk is 2 times less on a lower TF. The other side of the coin can be that whilst risking 2 times, I may be in a trade earlier that doesnt run and gets me stopped out. Its in alot of ways attributed to momentum which is why higher TFs hold more water.

I think as an evolved trader you learn to take opportunities on whatever TFs, So long as you follow your plan. As Strat mentions on his thread " if your um'ing and ar'ing and making changes to your trades as you go then you are not trading a plan" I trade a plan and understand that drawdowns and losses are part of that plan, its when we try to eliminate those that we start to really fall apart.

Take care m8, Lifes to short for me to take the written language seriously, that goes for verbal tiffs too, i generally get the upper hand on those because far too many people take themselves seriously

Razor

Quoting TrendsFriend
Razor

Just wanted to make sure you didn't think I was having a pop at the trades you have taken. Wasn't the intention!

The good thing about trading TF's lower than dailies is that you get a tight entry (say 20-30 pips) so the market doesn't need to move much to give you 5:1 r/r. With an r/r like that, you can take lots of losses and still make a profit once the winners have been counted. With that in mind, taking all setups can be less stressful in some ways (by not making you agonise over the chart) so long as you can psychologically take the...
  • #203
  • Jun 30, 2009 2:03pm Jun 30, 2009 2:03pm
Quoting TrendsFriend
Razor

As with all things, there are pros and cons. I thought I'd write it as it's pertinent to me at the moment as I'm trying to move down from dailies to the hourlies (for the richer rewards it can offer the right traders) and the question of taking more setups or fewer is one I'm working with. It is psychologically harder to be hit more, but with a high enough r/r it may be more profitable.

Still not sure which way I'll jump! Maybe will run 2 accounts with low stakes and see how they fare!
TrendsFriend, it seems to me that you are at a point where you need align your method/strategy with your personality. Asking the right questions will hopefully guide you to the right answers for you. However, moving down to the hourly charts because of the potential rewards they offer certain traders might be a wrong focal point.

Hope Razor doesn't mind us using his journal this way?

Z
  • #204
  • Jun 30, 2009 7:26pm Jun 30, 2009 7:26pm
Quoting zuret9
TrendsFriend, it seems to me that you are at a point where you need align your method/strategy with your personality. Asking the right questions will hopefully guide you to the right answers for you. However, moving down to the hourly charts because of the potential rewards they offer certain traders might be a wrong focal point.

Hope Razor doesn't mind us using his journal this way?

Z
Not at all, we are all here to learn and evolve.

Razor
  • #205
  • Jul 1, 2009 2:28am Jul 1, 2009 2:28am
Zuret

Thanks for your reply

I think you're right and I think I've been learning about that over the past few months whilst studying and tenatively trading the hourlies. The psychology of trading isn't something I have read much about in the past but I think the lower the timeframe, the more relevant it becomes. I've been reading New Market Wizards recently - it's been helpful to read how different traders deal with their emotions - it has helped me to explore mine

Personally, I don't think I like having a strike rate much below 50% (I manage about 60-70% on daily charts) so I think the answer for me is to be selective in my trades - waiting for top class setups - even if that means missing some moves. One of the advantages with the hourlies is that setups occur more frequently than dailies, so if I pass one over, another will probably be along within a few days

Typing up the answers to my questions here has helped clarify my thoughts a little so many thanks for listening and, Razor, for not minding the intrusion. Will butt out for a bit and leave you to it.

Good trading all!
  • #206
  • Jul 1, 2009 9:29am Jul 1, 2009 9:29am
Quoting TrendsFriend
Zuret

Thanks for your reply
TrendsFriend,

It seems to me that you already have a system/method that works for you. Review your filter for trade selection and you might be better able to align the method/system.

I came across Razor's Journal is on GUFX? http://www.gufx.info/showthread.php?t=12122

It seems to me a lot of people are gaining from this journal.

Z
  • #207
  • Jul 2, 2009 9:54am Jul 2, 2009 9:54am
Great start to the month.

Traded the 5 m post NFP release with the GBP/USD long and USD/JPY short.

GBP/USD long got to around 35 pips before falling, took some off the table netting about 10 pips and the USD/JPY short struggled before dropping below 96.00. I took more than 2:1 off my first 2/3 (much better than 1:1) on a position that i loaded to 5% risk (20pip risk) so this month has got a tremendous headstart. My last 1/3 is locked at BE and has an ultimate downside target of 95.55 if it gets there.

With the NFP release this is how we trade the IB strat

NFP is released at x time and the market goes ape sh*t. We go down to a 5 min chart and wait for the NFP initial shock to settle. Normally the first 5 mins will give a massive candle, the next 5 may be smaller and the after that we are looking for an IB to get it.

We try to take the first available IB and set up in the direction of the news. IE if it is good news then we are looking more bullish USD bias and vice versa. Some will take breaks either side and reverse. I prefer to be with the market so in the case of todays news the greater news was bad, close to 80K difference. USD therefore I had short bias and took it. I got a good risk IB of 16 pips, 1 pip either side gave me my range of 18 pips plus I was fortunate to get a 2 pip spread.

Now managing profit is up to the trader. I feel 2x risk because of volitility is good for my 1:1, usually at 1:1 i will move my SL to BE. From there we like to hold for about 4 hours or until a profit target has been met.

This is only good for NFP. I havent tried it on anything else. Cable is usually the best pair to trade it on because of the increase volitility. You can at times get great risk (less than 25 pips) and see 100 pips in the hour, dont count on it just trade for your 1:1 or 2:1 and see how the rest pans out.

Razor
  • #208
  • Jul 2, 2009 6:11pm Jul 2, 2009 6:11pm
Quoting Razor_trader
Great start to the month.

Traded the 5 m post NFP release with the GBP/USD long and USD/JPY short.

GBP/USD long got to around 35 pips before falling, took some off the table netting about 10 pips and the USD/JPY short struggled before dropping below 96.00. I took more than 2:1 off my first 2/3 (much better than 1:1) on a position that i loaded to 5% risk (20pip risk) so this month has got a tremendous headstart. My last 1/3 is locked at BE and has an ultimate downside target of 95.55 if it gets there.

With the NFP release this is how...
Just thought i should add a chart to highlight what you have written so beautifully.

Red line is the open at 1.30pm (GMT) when NFP is released. The inside bar setup is in light green.

Z
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  • #209
  • Jul 2, 2009 6:22pm Jul 2, 2009 6:22pm
Similar setup on EU M5 and a beautiful IB on the 30min...

Z
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  • #210
  • Jul 2, 2009 7:37pm Jul 2, 2009 7:37pm
We the morning after NFP seems to be (for now anyway based on 2 successful months now) to be warm and sunny.

Last night got an account ravaged by chop back on track, at least alittle. So far last nights results added close to 22% with a position still running. Worst case scenario is a 20% gain with the final position locked now at 2:1 (where I took profit on the others 2/3's). So we are at least back in the green for now. As stated last month, most of my trades will be taken on a higher TF. So just to clarify.

TF 4 hourly, Daily Inside Bars.

Trades are taken with the Weekly direction bias. So if IBs form above the weekly open then we are looking for longs, vice versa.

Some exceptions do take place. IBs formed after Shooting Stars or Hammers (typical reversal Price Action, especially on a Daily where the initial candle formation can be view as a Key Reversal candle* see definition below if you are unsure) will usually be taken with the preceeding candles bias. In these situations depending on whether it is against or with the greater trend (weekly) we may adjust our position sizes to compliment.

Please feel free to ask any questions.

Razor

Key Reversal candles: Usually useful on the dailys and weeklys to give an early indication of change in sentiment.

Bearish Key Reversal. When a candle forms a new high but closes lower than the previous bar.

Bullish Key Reversal. When a candle forms a new low but closes higher than the previous bar.

In either case the market has travelled to a higher/lower place, met S/R (may be visible in trendlines, horizontal S/R) and then met opposing direction signalling the possibility of a change. Ill post some charts to explain incase you are unsure.

Take Care
Attached Image(s) (click to enlarge)
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  • #211
  • Jul 6, 2009 8:04am Jul 6, 2009 8:04am
Todays 4 hourly breakouts worked nicely.

GBP/JPY short took profit at 200 pips (bout 1.6:1) on 2/3rds of my position
EUR/JPY short took profit at 110 pips (bout 1.4:1) on 2/3rds of my position and
GBP/USD short took profit at 130 pips (bout 1.7:1) on 2/3rds of my position.

The rest will now run for the week or longer or get stopped out. Looking at monthly charts we looked to have hooked over into a possible retrace. Depending on the initial strenght of the retrace we could see the next couple of weeks offer a bearish market for the above pairs. I will hold these until such a time comes that we hit some major support on the monthly be it FIB and support, or until I want to take it off the table.

Take care

Razor
  • #212
  • Jul 8, 2009 9:28am Jul 8, 2009 9:28am
Still holding shorts from the beginning of the week. Added a EUR/JPY short yesterday which got 1:1 (I removed 2/3rds) before coming back and taking me out. Added a GBP/USD short today based on a break of the hourly pin. It has so far dropped a little but not quite 1:1 so will still hold this. I think 1.6000 is the next major barrier before more major resistance comes to play. Not sure whether we will get lower on the last short but holding holding holding.

Trade the plan. This week has been good, tough but good. Tough because it is so easy to see why you can get out will great pips when things start to look a little worse and you get some big pullbacks against your positions. EUR/JPY and GBP/USD have really tested this week with both going backwards (- pips) after being up quite strongly. I have traded the plan and the results are those positions have gone back and created new lows. In the end I have added to my order for the week twice, one was successful (i netted positive pips through 2/3rds off at 1:1) and the other as mentioned is struggling a little but still not stopped out.

GBP/JPY short took profit at 200 pips (bout 1.6:1) on 2/3rds of my position- currently + 384
EUR/JPY short took profit at 110 pips (bout 1.4:1) on 2/3rds of my position- currently + 231
GBP/USD short took profit at 130 pips (bout 1.7:1) on 2/3rds of my position + 139

GBP/USD short -23

Razor
  • #213
  • Jul 8, 2009 9:42am Jul 8, 2009 9:42am
We read about it all the time, trade your plan. What makes it so difficult for us to execute and trade our plan to the dot.

For me it has been the past, watching positive trades turn bad, stringing loosing trades together and then looking for solutions. So at this point in time, when trading has been so choppy why have I changed, why am I now more capable of accepting looses and moving on, taking profit that is slightly less than what was available at one stage but it not worring me.

I think it is the plan, and the fact that I am 100% comfortable with it and I trust it.

Comfortable and trust. We cannot do things for a prolonged period of time if we are not comfortable, just as we will not execute things and follow them if we do not trust them. In the past 6 months I have found, read and understood a couple of strategies that I am now comfortable with and trust, just as I have found, read and understood some Risk and MM tools that work well with the strategies. The ultimate formulae of my mission statement, or my PLAN is designed from all of these. It includes the strategies that I now trade, the risk I am willing to accept in a WORST case scenario (I am now happy to focus on the worst case and let the best case work itself out) and the goal that I want to achieve.

It is interesting still though, even with my new found plan (it is about 4 months old, still an infant) that I do at times get an itchy trigger finger. In these cases I need to walk away for a little while, get a cup of coffee and put my feet up. This week has done wonders for me and has really reinforced why we need a plan and why it is just so important to follow it, especially through the bad times and also as importantly the good.

In time, I know I will trust it more. I am 100% comfortable with it, I just need to trust in it, trust in myself and the trades that I have executed and let them work out.

Take care

Razor
  • #214
  • Jul 8, 2009 11:15am Jul 8, 2009 11:15am
Current
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  • #215
  • Jul 8, 2009 11:18am Jul 8, 2009 11:18am
Quoting Razor_trader
...Trade the plan. Razor
Great writing as always Razor. One of the keys to success in this business is trading a method/style that suits ones personality. Often when people have trouble trading their plan it is simply because they are not trading fully in line with their personality. This also explains why virtually all traders start out by losing consistently (trying many different methods or systems) until they realize that they need to stop arguing and figure out a method that best lines up with their personality.

Amazing how the market(s) help us discover who we are (to an extent)?

Happy trading.

Z
  • #216
  • Jul 9, 2009 9:47pm Jul 9, 2009 9:47pm
How's it going Razor ? Iam from Perth as well (also trade London) Until now, I haven't met any fx traders from Perth.

Anyway, interesting journal !
  • #217
  • Jul 9, 2009 9:54pm Jul 9, 2009 9:54pm
Quoting runkarn
How's it going Razor ? Iam from Perth as well (also trade London) Until now, I haven't met any fx traders from Perth.

Anyway, interesting journal !
Great, are you residing in Perth at the moment. Im living south of Perth near Mandurah.

Razor
  • #218
  • Jul 9, 2009 10:16pm Jul 9, 2009 10:16pm
Took profit on all my positions from the start of the week.

Could have been better (we all say that) with at 1 stage profits exceeding close to 1600 pips on running trades. Took profit when the market returned back through some areas of resistance and fib levels. Still was extremely happy that I held trades well past points that in previous years I would have just closed at (set limits of 100 pips or less) so to take profit at intervals all the way to close my GJ above 500 pips was testiment to how comfortable I am with allowing some trades to run.

Since then I took a GU but was stopped out for a loss. Took this trade short got executed and then stopped shortly after.

All in all great start on the back of NFP.

Take care

Razor
  • #219
  • Jul 10, 2009 12:02am Jul 10, 2009 12:02am
Quoting Razor_trader
Great, are you residing in Perth at the moment. Im living south of Perth near Mandurah.

Razor
Well, Iam actually Swedish, but I'll stay here for a couple of years (at least) Right now, I live in Murdoch (15min from the city)


Are you a full time trader ?
  • #220
  • Jul 10, 2009 2:13am Jul 10, 2009 2:13am
Quoting runkarn
Well, Iam actually Swedish, but I'll stay here for a couple of years (at least) Right now, I live in Murdoch (15min from the city)


Are you a full time trader ?
Not at the moment, I would love it but right now Im just working to become systematic in my trading. I trade Inside bars and another breakout method which have done pretty well over the past 5 months. I have been trading for about 4 years but now it is all starting to come together so I have 6 months to give it a real go and then the plan is to sell my small business and use the money from that to go into trading. At the moment I am just expanding it again so I am due to sell half in the coming months and then the other half at the end of the year. If I get what I want from it then I should have a good account to trade with, and provided by then my current live account has grown then I will know whether I am ready for a full time business in trading, but im not in any rush.

Keep in touch bud

Razor
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