The Ogre's Trading Journal

Most of my system is listed in a thread in the Interactive Trading forum, there is a 1 minute chart trading thread there.

How I handle the 1 minute beast? I have a different approach and thought process than most who attempt to tame the beast. My goal, once I enter a trade, is to find a good opportunity to move my stop to break even. Once I do, I really don't care what the market does. It would drive my former business partner nuts that I could watch a trade get up 50-60 pips and then have it come all the way back to break even and not take any profit. But when you compared end of the month statements I would always blow him away with % gained with the same risk he had. Now, why is that??

Let's say the trade had 10 lots in it. He would take profit fairly quickly starting at about 25 pips and every 5 pips after that until he was down to just one lot left, then he would let that 1 lot run. This would happen fairly quickly as he was shedding about 50% of the remaining position every 5 pips. He was completely frightened of the market. He was scared to death that the market would turn and take him out and he would have a losing trade. He is a great trader and can analyze the most complex charts you have ever seen, but once he entered a trade he just knew inside that the markets and/or the brokers were going to take out his stops. Mentally he would just go into a fear of loss mode.

Now, for the renegade..... ME! Enter a trade with the full amount of 10 lots and then just wait........I know I cannot control the markets so what the markets do is entirely up to the market.........I don't focus on being wrong I already know that will happen I just don't know which trade(s). Take a look at the attached chart. I entered on the red arrow inside the green box. The price flirted with the blue line for a bit then headed down. While most people would be super happy with that move down, I am looking for another sign that the trend will continue. Do you see how the price moved down then gave me a nice swing high, then turned and headed down again? Once it started back down again, it's at that point I move my stop to break even. Now I can't lose, no matter what happens the worst will be a break even. If you think I didn't care what the markets did when I first entered a trade, you should see me now! LOL!

So now what?? I turn my focus to finding a decent place to exit the trade. Am I looking for a bottom in this case? Not really. I learned early on if you try to pick bottoms, all you get is smelly fingers. If my stop is at break even and there is a major news announcement coming up, MAN! I LOVE THAT!! I just let it go and I find that a large majority of the time, the trade really takes off with the news.

People get too hung up on "after X number of pips I move my stop to break even". Usually it is something stupid like break even + a few pips because heaven forbid that you should break even on a trade, that's like losing!! ROFL! Let the markets decide when to move your stop to break even not some arbitrary number. The markets are different nearly everyday, shouldn't you be also?

I will post more later, hope this helps.

There are actually several things, there must be a cross with a confirmation candle. A confirmation candle is one that moves in the right direction. They must also be a reasonable size. At least 0.5 pips but less than 10.0 pips.

That's why I have the arrows, I don't have to do the math or measure candles. I am way too lazy for that. LOL!

BTW: Great job on simplifying your charts.

Thanks for the info It sounded like you were talking about me in you post At the moment I'm bringing my stops up to BE +1 when I reach 35 pips and take 1/2 off.
Cheers

hi magnumfreak,

i have put your lines on a chart. they look pretty good. can you explain your exits with your system?? when do you decide to take them?? what will make you close your trades, other than your stops getting hit?? how do you avoid fakeouts with your system?? thanks

exits:

Nice thing about trading the 1 minute chart is that even if you exit too soon, in a little while there will be another entry and you can just catch the next wave. I am not really worried too much over exits. Like tonight for example. I got out with 218 pips, some could (and I am sure they will) argue that I could have made 50-100 more pips by just letting it go. My philosophy is why cry over the 50 you missed when you should be celebrating the 200+ you kept. I was on the phone with a friend of mine one time when he started cussing and yelling at the monitor (like the monitor really cared, LOL). When he finally calmed down I asked him what was wrong. He told me that he had just exited a trade and price moved 5 more pips in the right direction and he missed them....... 5 pips?? Good grief. I asked him how many pips he had made on the trade....95 he responded. He was upset because he wanted a 100 pip profitable trade....that just does not make sense to me in any way.

That's why break even stop outs really do not bother me at all. I have had streaks of 10-12 break even stop outs in a 24 hour period before. Some of those trades were up 50+ pips before coming back to break even. I am not in control of the markets, I am only in control over my emotions. Around the 10th stop out I started laughing out loud. My kids thought I had totally lost it, but in reality I was having a blast! I know my broker loved me. I wasn't losing money so why be upset? I knew based on past experiences, something big was about to happen and all I had to do is wait it out. And sure enough something big was about to happen. About 12 hours later, I started a trade that was the biggest trade of my career. Mentally, where would I have been if I gave up on number 10 and the trade took off around 11 or 12? Never give up.

When I started trading my first goal was just to get to the point of being profitable on a consistent basis. Maybe not everyday, but at least over the course of a week. After hitting that goal, I went on to set another of getting to the point of making as many pips in a day that I used to average in a week.

So I guess the main message is to not stress so much over the exits. If you are happy making 100 or heck even 10 pips a day what right does anyone have to tell you that you are exiting the trade wrong if you are hitting your goals? And, if you are not hitting your goals, who is to say the problem isn't in the entries and not the exits? When you really get comfortable trading you will eventually get rid of daily targets. That is when it becomes fun again. 'Click' how many pips am I shooting for??? I dunno... who cares?

fakeouts:

You cannot eliminate fakeouts completely. For example, I do not trade every cross. To go long I look for two consecutive up candles between the white and upper yellow lines between 0.5 and 10 pips in length (just the body not the wicks). Short is just the opposite, two consecutive down candles between the blue and bottom yellow lines between 0.5 and 10 pips in size. That is why I created the arrow indicator to help show me where these conditions exist. I will release that indicator when I finish adding a few things to it. But I get stopped out, it happens. Do I get upset about it?? Nah.... as Timone and Pumba from the Lion King say "Hakuna Matata" LOL!

Fake outs will usually stop me out no more than 2 consecutive times on any given pair. Occasionally it is more but only one time in the last 18 months and that was just 3 times in a row. I only trade during times that the markets are moving reasonably well. I talk about in one of my other posts about why I don't trade between the U.S. close and Tokyo open.

Hope this helps to clarify things somewhat.

HI magnum, ok I read thru the other thread and am up to speed on what you are doing here. I find it very interesting and am subscribing to your thread. I hope to follow along with your trades here. Thanks for posting this.

Scott

Hi magnum,

Thanks for this thread. I've also subscribed, and am finding it refreshing and interesting.

hi magnumfreak,

thanks for your reply. regarding exits. what i would most like to know is how you determine. when the trend that you are riding is reversing or ending??

my trading mentality at this point is a bit like the friend that you mentioned. traders like us are scared of retracements and loathe give backs of profits. hence we like to book small profits or take them when we can. although we might miss out on a big haul.

i believe you are already at the stage of being able to "sit tight when you're right". if i remember correctly, this is a phrase that jesse livermore stated in the book reminisence of a stock operator. that is how i see that you are able to garner a big pip haul. resulting in your spectacular pip gains. a level which i hope to reach one day.

thanks,regards.

So, on a trade like the one below that I would have taken if I traded the U.S. session today, if I got in near the red check mark going long what would keep me in during the red box area (by the way, the check mark and red box were added manually, they are not part of any indicator).

There are 3 things that I keep in mind when I am in a trade:

1. It's only 2% and probably much less. I base my risk calculation on a 20 pip stop, I will usually close a trade before the stop is hit when it crosses back over (in this case) the blue line.
2. The markets like to trend. Take a chart of EURJPY or GBPJPY zoom out as far as you can, now scroll back and see how the majority of the time they either trend up or trend down. Only occasionally getting choppy. But the markets also like to breathe. So I can either let the markets breathe or choke it off and both of us suffocate.
3. Even if I get stopped out, I know that in just a few minutes I will get another shot at the move. Maybe in the opposite direction, maybe in the same direction, I'm not picky. LOL


But all that doesn't answer your question. How do I know when a trend is ending?? Quite frankly.... I don't and neither does anyone else. ok, most likely the big banks know where a trend will end, but not us little guys. Now I am sure the support and resistance, fibonacci, pivot point and/or price projection specialist here and on every other forum in the world will argue that point with me. They will toss up charts with hundreds of lines on it and point to the one that just happened to be right at the stopping point while ignoring the 8-10 lines price just blew through to get to that one. Now I am not knocking those methods, some people make really great money trading that way and I would be one of the first to offer a high five to their success. My simple mind is unable to grasp those concepts so I just stay away.

In a nutshell..... when you exit really doesn't matter. The only thing I caution against is exiting based on fear. Big banks are not out to get you, most brokers are not out to get you and what Joe Schmoe on the forum is doing really has no impact on your decision making process. In fact, tell him to keep his "hot tips" to himself. Don't worry so much about knowing when a trend will end. It really isn't important. Why did I exit the trade when I did last night??? 'Cause I wanted to. I was happy with my results and decided that was enough for the day. The trend continued, ok that's cool. But while everyone else was worried about when to get out if they were in that run, I was sitting back drinking a cold one watching TV. Would the trade have been any less successful if I would have exited with 100 pips profit? While I would have made less money, in my opinion, the trade would have been equally as successful. I made the decision to get in, I made the decision to get out and most importantly there was no fear involved.

I realize that all of this goes against everything the so called "experts" say is the right way to trade. But this is what works for me, it's what allows me to stay at home and avoid the rat race of a job. I am as happy taking in 20 pips in a day as I am taking in 200 in a day. I can look at the charts and see that I missed at least 200 pips in the U.S. session today and that really doesn't bother me. In fact I am really happy to see the markets getting back into longer and longer trends.

I hope this clears it up some.... If not, just ask again. Take a little time to scroll back and look at your trades to see how often price turned and came back against you. I believe you will find it happens less often that you really think.

perfect trade

thx

magnumfreak

Magnum,

At what time do you normally begin trading the US session?

I have it set up for 7 am eastern. While this is about 1 hour before the markets open I will take any signals after 7 am.

Hi Magnum, and thanks for the thread. I'm also subscribed. you also set your asian session 1 hour before, any particular reason for the earlier start?

Because I am weird! LOL!

Actually I found that with my style of trading there is a large percentage of trends that will start in the hour before each session. On the days I don't get a clear signal during the hour before, it gives me time to get my head in the game.

thanks for the reply, two quick questions please,
I know that you enter using your indicator with strict conditions, but for manual entry without this indicator say you entered at the start of a session, and the two candles (0.5<candle<10) crossed already the blue line to the downside and you exited with profit. when do you re-enter if the price is still under the tunnel? do you wait for a retrace to hit the blue line and generate another two candles?
I demoed this during the London session cause I am in GMT+3 TZ, so I only caught the last hour of the asian session . I got out with +97 but I don't know if I got lucky or if the trades conform to your conditions.

P.S. is it a coincidence that the last hour of the asian session which is one hour before london witnessed some activity which was flat most of the session?

Guys , I've got a template / probably the latest/ from 1M only thread. That is what they use? dan

hi magnum,

please do not misunderstand that i am trying to ask you how to pick tops and bottoms. i just wanted to know your reasons on why you think the trend you're riding is ending. i read that good traders would develop gut instincts. for the market that they are trading in. as every individual trader is on a different trading mental level when trading. i just want to know yours. the reasons for why you did what you did.

what i'm trying to do here is to pick your brain and learn as much as i can from you. because you are a successful trader. 1 who trades live and for a living. a 1m trader like me and you speak the truth. from the posts that i see you posted in turveyd's thread and here. so our trading mentality would not be in much conflict . what's different is our trading mental level and results. because as individuals, we'll differ in some ways. like dna, not the same for everyone.

i was already frequenting ff back in 07. just reading threads and learning what i could. as i had just came into contact with fx then. took some time to figure out my trading style and tf i was suited for. i should have signed up then. so that i can pick the brains of merlin, darkstar and others. but i did not and just signed up in feb this year. but come to think of it. if i had signed up in 07. i would be screwed left and right by those guys for trading the 1m. hahahaha.....

now you started a journal and are willing to pass on your knowledge. so i am more than willing to learn. i read your first post rules. you stated that you would not answer questions. so i held back until another member came along. he asked you a few questions and you replied. so i just jumped in the fray. hope you don't mind.

i will stop asking you questions if you just give the word. will respect you on that. as i find that respect is sorely lacking now in ff. thanks for your system and explanations.

enjoy the weekend, regards

Because I do not know when a trend will end, I don't re-enter. I just wait for a new signal. I have looked at things like price rejecting off of one of the lines but I have found that although they are reasonably reliable (around 70%) signals I just couldn't get myself to pull the trigger in live trading.

Actually your entry was great, your exit yielded 97 pips so no one could even begin to question that (how many traders beg for 20 pips a day), nice job.

The end of the Asian session can be very volatile or very docile. In the span of 3 hours you have Frankfurt coming on, London coming on and Asia shutting down. Some days are really flat and others you feel like you got caught up in a news release.

People who enjoy trading Forex are the most backwards people in the world. While the rest of the world hates Monday's and loves Friday's, people who trade Forex, love Mondays and hate Fridays. LOL!!

I spend a large portion of my weekends studying charts, analyzing statistics and several other things that would just bore most people to death. I am constantly looking for ways to improve my win percentage without negatively impacting my total pips won. In other words why "filter out" 2 losing 20 pip trades if my filter keeps me out of the 200 pip winning trade coming up?? In reality, that filter that saved you 40 pips earlier and made you feel great about missing a few bad trades, actually ending up costing you 160 pips.

I think I may have found a new addition to my trading strategy. While back testing and weekend homework are great the only real test that matters is forward testing. Are you able to trade it when you don't have the luxury of seeing the future?

This week could be interesting. Probably won't sleep at all.

Magnum,

Thanks for your thread. I have been reading everything forex for about six months and really like your style of trading. I demoed GU Friday using a style similar to yours and tried to just breakeven using price action around the channel and then just waited. I had great results and guess what....it was fun!

By the way, I am a neighbor in AL. I hope that a little SEC football will help you to look forward to the weekends.

Forrest