TheChalleger's Journal - My Trading Journey

Can you write your system up so that a non-trader could understand it? Can you put it into bullet point or numerical sequence, such as if 1 is met then go to 2, etc?

Thanks Dopey,

I have writen something more solid in the past, but have changed afterwards. I haven't had my updated procedure yet. Let me spend some time to write and post here later.

cheers,
kk

How far am I from success?

Today, success seems far away again. Those methods I used before seemed to have a high hit rate in the past. But today, the market did not response as what I observed before. A number of S/Rs seems too weak to hold. Is it because of the narrow sideway market of today or what? I don't know.

Dear Dopey,

Here is my procedure, without precious value yet. Hope you may give some advice, if you may.

1. Mark S/R, start from D1, H1 to M5.

For Fading

2. Observe the price moving towards the marked S/R
3. If the momentum towards the markded S/R is not strong, fade the S/R
- If price move down to a S/R, place a buy limit (adjust value with spread)
- If price move up to a S/R, place a sell limit
4. Place the stoploss/ take profit with pre-defined value

For Pullback

2. Identify S/R breaking
3. Wait for the price move back to the S/R
4. Allow reasonable time for the price move back (to prevent false breakout)
5. Place order with predefined stoploss and take profit.

Remarks: Make a notice of the news. Prevent trading before news time.

kk

Realtime Observing

There are some possible successful fadings today. Since I am not in mood to trade, I just do real time observation. Twice today when EUR/USD moved up to 1.4303, I was observing. I expected a rebound in each case. With a stoploss of 5 pip + spread on my mind, both was successful. The 1.4303 was also hit at some other times, but I was not observing. The one just before London open is one I would prevent because of opening volatility.

For USDJPY, I wanted to do one fade following the close of outside bar, but I was hesitating, so I would unlikely trigger the trade in realtime.

How far am I from success?

How can I tell them?

A few days ago. My ex-university classmate called. I saw his caller ID, and didn't want to recieve his call. He left a message saying that he was organizing a classmate gathering. Later he called again. And again, I hadn't got the phone.

How can I tell them? Can I just tell them I have been working for 1 year on trading method without success? For a long time, I believe I am not the kind of person care too much about how other say. Nevertheless, at this point, how can I tell them?

They will think. Am I a gambler? Am I wasting time or so? I don't want to face them.

Something when I go down to the street, I worry that I will accidentally meet my ex-colleagues in my last the trading firm. If I do meet them in the street, how can I tell them?

Life seems so tough at that stage. How far I am from success?

This one also work out well with 5 pip + spread stop loss while I was away. I like the 94.05 S/R.

I don't really like the 1.4286, although price rebound there. This S/R was marked 1 day ago, but it was abused since yesterday. I like 1.4282. Nevertheless, since it has rebound at 1.4286 which is 4 pip away. This in effect weakened the 1.4282. I better not fade 1.4282, if price go there now.

I really wouldn't fade 1.4303 again. It is ascending triangle now. Better to trade pullback later. Great! now it revisit 1.4303, fading 1.4282 will give a better probability.

Unsuprisingly, with the ascending triangle, it breaks upward. It is not wise to fade 14315 either, breakout is usually very powerful. No way to play low-probability fading. This would be a great opportunity to trade breakout, but I don't trade breakout and I am not familiar with the setting.

14322 can be a good reference point here. Let's see.

The magic really works! The level 1.4322 just said really works!. (It is not historical chart. It is real-time chart. You can check the timestamp of the post here.) and you can see the around 1.4337 level may give another pullback trade.

Well done. Another nice pullback trade present itself at the target level.

KK,

I can't really critique your trading method per se. Why I asked you write it down was so that you could see what it looks like. A lot of people probably don't have it written out it detail. Everything needs to be written out, this includes risk and money management as well. By doing so, it clarifies things and gives one a map to use in all situations.

You use a lot of discretion in your trading. That's fine. Discretionary trading requires a lot of knowledge and experience to be successful. You said that when you observe you're always right, but when you trade you're always wrong. Are you really? How do you know that for a fact?

Try this. Get a notebook and put it next to your keyboard. Every time you THINK you know what is going to happen next, write it down in detail. Do it every time you look at charts and make a conclusion about what is going to happen next. Be very honest about it. I suggest a dialogue to help you clarify your thoughts. In other words, talk to yourself. "Ok, price is coming to this S/R point. Do I think it's going to bounce? Yes, I do, I think it's going to bounce at least x amount of pips. Would I want to risk my money on this trade? Yes, I would. What would be the optimal stop and take profit?", etc. Then write down your conclusions, Entry, Stop, and TP points. At the end of the day, then write down what actually happened. Did price bounce, would your stop have held, was the TP points hit, etc.

Do this for 30 days. Firstly, doing it for 30 trading days straight will make it a habit. Secondly, you need a large sample of your "intuition". After 30 days review it all. Be very honest about it. The goal here is to find out if you really do have the knowledge and skills you think you do. You're trying to find out if you can trust your discretion. If the numbers show that yes, your discretion translates into making money, then you now have proof that you can trust your intuition. This should make it easier to trade your method and not close out trades early, and to take the trades you should.

If you find that your discretion isn't what you thought it was, then pat yourself on the back for proving that to yourself. You're now one step closer to being a successful trader. Now you start working on the next step.

All goals are met one step at a time. Your posts and pms to me indicate a serious lack of confidence. Well, let's see if that is warranted or not.

Thanks a lot again, Dopey.

Right, I agree to write everything down. I have actually spent one full working week to write an "operation manual" for my trading method to describe exactly how I trade. Nevertheless, when I later try to "optimize" my trading method and make some changes, the manual are now not very useful. I will draft a more update one later. A good writing need redraft a few times, and sometimes the final version may be completely different from the first version.

The discretion of fading S/R is actually not my own development or intuition. Rather, it is a manageable number of scenerioes for decision that I learned mainly from an experienced trader on a forum thread here. When I mastered it, I will add my own discretion upon more experience.

Your method is quite systematic and to-the-point, I will think about how I can implement it in my trading life. Thanks for show me a roadmap to success!

EUR showed at good rebound at 14315. 15-20 minutes after news. I will normally not fade anything that shortly after news time, if the price does show a reaction to the news.

JPY breaks the S/R at 94.45 at news releases. If there were no news, I might want to fade this S/R.

My stoploss is only 5 pip + spread, how can I trade around news time?

P.S. JPY hit 94.05 support eariler the second time. No too long ago from the first time. A descending triangle price pattern. No fading.
P.S.2 Between 94.05 and 94.45, I can hardly find a reliable S/R, and so no fading within this range

So, what you are saying is that you are trading someone else's discretion? Because that is what your words mean.

All S/R is discretionary. Don't you see that? The labeling of any point on a chart as S/R is purely subjective, there isn't anything objective about it. One could argue that round numbers are objective, but I bet someone like Hanover could run a test on that and prove it isn't any better than random.

So by virtue of identifying any point as S/R is a discretionary act. It's what you do when you trade, yet you're not taking responsibility for it because you just wrote that it's someone else's method and that when you master it you "will add my own discretion upon more experience."

This is what people are talking about when they say that trading is a mind game. You are not looking at what you are doing very deeply, you haven't taken responsibility for it either.


The map is in your mind, not my words. Some of your posts reek of self-pity and victimhood. You really need to address those issues as well. You've chosen to see yourself that way whether you admit to it or not. Your words reveal it. Knowing what the right thing to do and doing it are two different things. You say that if you're not trading that you can see trades clearly and that they are winners, yet when you trade you always lose. This is indicative of serious mental blocks. Posting a journal on a forum is not going to do anything to address those issues. As I stated to you in a pm, you've got to work on yourself to a degree uncalled for in most professions.

This is friendly advice, don't take it any other way. The fact I'm putting this much effort into it shows I'm interested in helping you, but you've got to be interested in helping yourself. You've got to be intellectually honest with yourself. You've got to do some critical thinking which means stripping everything you think you know and believe down to their base elements and evaluating each and every one before you put it all back together. It's a lot of work, but until you do, you're not going to succeed at this.

Couldn't agree more, Dopey.

Since I read Brian Marber's book on this I have been a changed man as I realise that all these points (fibs, S/R, round numbers, trendlines etc) are purely potential areas of interest and have no value unless you react to how the market responds when such an area is reached.

Trading blindly at these points, ie going long just because the market has reached what you think is support, reduces trading to nothing more nor less than a gamble.

I only trade horizontal S/R now but I treat each level that I mark with the utmost respect and accept that sometimes the market sees those levels more or less as I do and at other times completely ignores them.

Picking the right levels isn't hard but does take time see which MAY be of more value in the future.

Dear Dopey,

Thanks for your sincere help again. If this is what you mean by discretionary, then yes I am using my discretion to trade. While the majority of trading methods are discretionary to some extent, my style is relatively more discretionary.

I think I am taking responsibility for my trade on the surface, but yes I know I am unconsciously escaping. I have never thought that trading in compared to other employee career is so mental. I like your description "to a degree uncalled for in most professions".

I am hitting a mental block. This may be the first thing I have to face. Solving this may be even much more difficult than trading itself. I may need to try Vipassana Meditation.

cheers,
KK

Hi PeterFM,

Now, I also use only horizontal S/R. The S/R cannot be faded blindly, there are a number of scenarios to learn and based on them to make judgement. That is what I learnt from a thread here, and there are successful "graduates" within months of learning.

cheers,

KK