30 Days to Profitable EUR/USD Scalping....

I started at about 10:00AM EST. Again, like yesterday we were between the central pivot and S1, the 5 min TF trend was downward. I only did two trades today. After my trades, as we approached the European close (10:30-11:00AM), the 5 min TF trend changed.

I really wanted to wait until after 11:00AM, to let some of the excitement die down. I couldn't reconcile the upward movement of the EUR/USD. It did later break out higher and traded through the 1.3550 "psych" level and above the central pivot point of the day. Though there was much movement, and I felt I should be in a trade or trading more... I had no plan. No obvious support or resistance and we were in-between pivots and such, with a recent probable trend change. I logged out for the week-end, about 1:00PM EST. "Big" 1 min TF candles spanning ranges of 10 pips or more all around the central pivot...bad for a small stop method of 8 pips like mine.

Chart below is a trade I missed, as I had just logged in. It's a fairly instructive "textbook" trade though. At that time, 5 min TF was in a downtrend. So, you are looking to get short. Price moves lower and breaks a recent low, and the 1.3500 "psych" level. Don't chase the first break, let it retrace a little and get short, which wouldn't have been too difficult.
I was just getting situated so I missed the trade...but it is a pattern you see over and over again, even on the smaller time frames.

I can tell you my two worst trading weaknesses. I can tell you because in addition to using a tracking site like http://myfxbook.com, I also keep a spreadsheet for the year with notes.

1. Removing or moving my stop-loss.
This beauty has cost me the most money in general.

2. Shorting unexplained, surprise moves upwards.
These are my fastest losing trades.

Bonus: I will tell you a third weakness.

3. Revenge trading after 1. or 2. to try to quickly make back losses.

I've traded about 80 documented trading days in Forex before creating this new scalp account. This spanned March '09 till now with 941 trades. (Three different accounts, beginning balances $1000, $1500, $2500) Drawdowns of about 20% each time caused me to "re-shape" my methods.

If you take my 10 worst losing days and cut them in half (by 50%), I would be net positive.
Sometimes the market is going to do things totally unpredictable, surprising, and way out of what seems normal possibility. You must have a stop-loss somewhere. Maybe it's a fixed stop-loss or a variable stop with variable position size, just have one.

Likewise, about weaknesses... get a handle on them. If you don't know what you do wrong and can't admit it, figure it out. Yeah, it seems much more fun to scour Forex Factory for systems, indicators, or the latest Heiken-Ashi charts on the 13 min TF with Slow Stochastics and 6 Moving Averages... but I guarantee you will save or make more money just by fixing your mistakes in relation to basic trading principles.

I traded from 10:00AM to about 3:45PM EST. Today was very exhausting. Perhaps I was trying to trade for larger moves, and we were ranging most of the day. I had a sequence of eight losing trades in a row today. Not all the trades were at the max stop-loss, but it was a frustrating series. Some of the trades in that series were 10 pip winners at one point. I spent most of the day trying to nurture winning trades. I broke two rules today, trading after hitting max stop loss twice and trading after being down (negative) 25 pips. It was a full day, 5 1/2 hours of screen time, which cost me almost 30 pips.

Honestly, if I hadn't spent the week-end reviewing last weeks volatility and how much I would've made by holding my winners longer...I would've been my normal counter-trend range trading self. Tomorrow is another day.

Unfortunately, I am distracted about things I want to get completed (non-trading activities) before work this evening. I sat down at about 11:00AM EST and finished at 11:45AM EST.

My first trade of the day was stopped out at max loss, I was "bottom fishing" somewhat on a long candle moving downward. The moves felt like yesterday afternoon, where they move things just enough to "shake" everyone out and reverse direction. The next few trades were me trying to get a "feel" for the market. With a total of 7 trades, my last two were 10 and 11 pip winners that put me profitable for the day.

My overall longer term perspective said "down trend", through the S2 pivot. At the time of this writing about 20 minutes after...we finally got there but not without significant up-down that would've "rattled" me.

A positive day helps psychologically after yesterday's battle.
I don't work tomorrow evening so hopefully I can set myself up for a full trading day with no other concerns.

You can't get wrapped up in your short term results. There are fluctuations and always will be. The best thing you can do is to keep doing the right things over and over again. The results will take care of themselves.

After the first 20 trades I had a win % of about 75%, it is now 57%...but my average winning trade is larger. After 115 trades, 11 days, the results are still short-term. Stay focused, do the right things, the results will come.

I don't want to make any "method" changes until the 30 journaled trading days are finished. Yes, sometimes my 8 pip stop-loss feels way too tight. Yes, sometimes I want to put on a larger position. Though lately, I have felt no desire to average or have more than one trade at a time. This is good, it's where I want to be, focus and manage the trade at-hand as best you can.

For 115 trades and 11 trading days, every trade has been entered with a stop-loss, though I have moved it closer to break-even on some trades that have gone profitable. I do use a default take-profit target but often move that. I have broken the daily stop-loss rules though.

Risk is one of the few things we can manage, that we actually have control over. You cannot control how much you make on any trade or on any trading day, week, or month. You can control how much you lose. Exercise your control on one of the few things we have power over. I will try too.

Check out this thread of "trading posters" created by our own members-
My favorite two follow...

http://www.forexfactory.com/showthread.php?t=9634

I sat down around 11:00 AM EST, I knew Bernanke and Geitner were speaking today...my intention was to avoid as much volatility as possible.
My first trade was at 11:50 AM and within 16 minutes I had closed 4 losing trades in a row. I was down 23 pips, very close to my stop-loss for the day.

I was trying to trade counter-trend, buying dips in an overall downtrend. I finally decided to go with the trend. I went short and had to take a nasty "pullback". These dealers, on the short time frames, will squeeze you till you can't bear it.

So after preaching just a day ago, and bragging about how I always had a stop-loss on every trade... I removed my stop-loss on this trade. I would've been stopped out at 8 pips, it actually went about 11 pips against me. I held the trade for almost 2 1/2 hours. Basically, I took too much risk for hardly any gains. I was angry that I couldn't close that winner at the bottom, I missed perhaps 13 more pips if I had closed it perfectly. I was angry that I had to hold a trade for 2+ hours to make up for 16 minutes of losers. I was angry that I removed my stop-loss.

This is exactly how NOT to trade. Being a bit emotionally unstable, I went for a run. I try to jog and exercise moderately 5-6 times a week.
I may trade the Asian Open if my head is "clear".

Chart below- the blue line is the daily central Pivot Point, the "dotted" lines are "Psych" levels 1.3600 and 1.3550.

Though you may not find the "holy grail" while sifting through all the posts here at Forex Factory, you will find a community that is often experiencing all the joy and pain that you yourself must go through.

Random things that made me laugh today (now that my anger has subsided)-

Pippy5000's post in the Spot FX Day Trader thread-

"yep.. I'm short ninjy 90.15 stop 90.4

but I might as well not use a stop since I'm planning on killing myself if this doesn't work"

and TheGabriel's signature-

"Trend is not your friend, he cheats on you and teaches you to be a bad trader, you are your only friend."

funny stuff, I had to share...

I sat down around 12:00PM EST, the 5 min trend was downward. I took 3 losses trying to short an up move around that time, trying to catch a slowing momentum. After that I decided to try to go with the buyer(s), lost 8 pips chasing and buying at the top of a candle. Two more shorts followed, both losers.
I tried a long again, above the 1.3500 "psych" level, perhaps the trend is changing...
It was in the money instantly, I held it for a little over an hour and sold when we broke above the central pivot point of the day. You can see all this on the chart below, I trade on the 1 min TF, but I couldn't show it all...so you are looking at a 5 min TF chart.
I'll be honest, I thought my scalping would generate a smoother equity curve. As of the last few sessions, I have had to take a "beating" before I catch a big winner. It's tough... what happens on the days when there are no big moves?

I watched the EUR/USD from 12:30pm EST to 3:00pm EST. This may be the last day of the February month for MyFxBook stats, I'm up 5.9%, unless I try to trade this upcoming Sunday evening Asian Open. I missed a few trading days in February, as this account started trading on February 9th. My screen time for these 14 days (actually being at the computer) was about 39 hours.

Today, I was looking for very low risk set-ups. I made about 2 pips on two trades.
Though I said I didn't want to make serious changes to my "methods" until these 30 trading days were finished, I do want to make a shift back toward higher win rate % trades. These last 50 trades or so, contained too much volatility and drawdown.

I am going to tighten my stop-loss by 1 pip also. I can't recall any trade that went 7 pips against me, coming back in my favor.. they usually just push farther. So, my new stop-loss is 7 pips net approximately. I have it set at 6 pips with Oanda's spread of 0.9 pips.

I swear the 5 min TF trend "check" gets me into more trouble than anything. I sat down about 12:00pm EST. EUR/USD is near the S2 pivot. I wanted to trade smaller targets and boost my win% somewhat today.
Here's how it looked on the 5 min TF when I started, mostly selling pressure since the European open.

Basically, I was looking for areas that were overbought with some exhaustion/stalling in the price to capture quick shorts. Started with 2 winning trades, but it never got any better. Thirteen trades, down almost 19 pips. Up and Up, difficult retracements, after serious spikes that were basically impossible to time, even with my finger on the button.

Done at 2:00pm, frustrated... but we have a long trading month, 23 trading days in total. There is no reason to try to trade the most difficult of times. I'm looking for more of a slower, ranging session.

I started after midnight during the Asian session. I was placing my pivot points and took a couple trades. I removed my stop on the second trade...weird things were happening. I ended up taking two larger losses (larger than my pre-set stop), before a winning trade which I entered around 5 AM. Four trades, total net loss was less than 1 pip, but my risk was infinite. I'd post a chart, but it would be ridiculously scary.

I shouldn't be trading the Asian session, it's a different animal. I shouldn't be entering trades at 5 AM EST, when I first wake up. I shouldn't be trading without a stop-loss.

I'm done gambling for today, very lucky I didn't do serious damage to my account.

I may demo trade some ideas I have today...but it seems I've gotten away from having a plan and being patient.

Given the nature of my loss of control, I'm reducing my trade size by 75% for the rest of this week (through Friday).

I'm going with one half a mini or 5,000 units of EUR/USD, max stop loss set at 10 pips. (9 pips with 0.9 spread)

I may trade a bit more than usual. Mostly, I want to get "on track" with high % win trades, smaller profit targets.

I thought about changing my position size down for a long while last night, as I said I would do in my previous post.
I decided against it. The rationale being that it seems I would allow myself to trade full size while gambling with no stops and If I decided to trade correctly, I would trade smaller ?! So... I stuck with my standard size, I am comfortable with it. It adds some consistency to my results as well.

This past week, I have been counter-trend trading...trying to nab little "pips". It hasn't been working. I have come to the belief that the longer time frame trend has little significance when trading the 1 min TF for small, quick profits. You need to be reacting to what is happening right now.

I used a different trade filter today. I'll admit I made two trade entry mistakes that cost almost 10 pips. I was down about 16 pips today on 14 trades. Post "Beige Book" action wasn't the greatest, and once again I missed the morning session. I traded from 12:00 pm to about 3:15pm. My new short term goal is to trade the morning session, 8 AM to maybe 1 PM EST at the latest. This has been difficult to do because my job often requires me to work till near midnight some days.

I've adopted something different. After watching and not trading yesterday... I examined the 1 min charts "stress free". I really am trying to mold myself into a momentum high win% scalper. Today, was my first day in awhile trying to go with the momentum, although it was "sluggish" with the afternoon volume.

I want to force myself to only take trades in the same direction as the last two previous candles. Obviously, some candle formations look like reversals, stalling patterns, etc. But today, except for 2 mistakes, I only took trades in the direction of the 2 same color previous candles.
I have a few other criteria, they have to be candles with more "body" than wicks and not extremely large candles (no more than 8-9 pips each).
I have more specifics, but for now ... let's keep it simple. I tried it this afternoon and though I was down a few pips, I think it is a healthy perspective if you are going for quick pips with low spread.
There are more ideas I am evolving into workable rules, but let's see how tomorrow morning's session treats me.

I traded 8AM to about 12:15PM EST. The volatility in the morning is crazy compared to the afternoon. It's very hard to keep losses small manually. (2-3 pips). I started with momentum scalping, made a couple pips. Then things start swinging around wildly, and so did I.

For those reading this, sticking to your plan is vital. The market will test you for weakness, stick to your "guns", stay with a consistent philosophy.
I have not been doing this.

Some wild trades, though I still like my "trade filter" as far as candle "patterns" go...you just have to be very quick to cover losses when things don't move in your direction. (14 trades today, up about 7 pips)

One of my last trades of the day... You think I covered too soon?

I was thinking about this today, but I couldn't remember where I saw/heard it... I found it in his original thread-
http://www.forexfactory.com/showthread.php?t=63215

This is posted as a reminder for myself.

Late start, about 12:30pm EST. Lost about 4 pips on two trades, spread was wider than usual, 1.2 pips versus the usual 0.9 pips. Then I got caught short EUR/USD at 1.5998... took a 20 pip loser on that. I reversed and am currently long at 1.618, up about 5 pips near US stock market close. This will be the first trade I've ever held over the week-end. I've held overnights before but not through Saturday and Sunday.

This has become a journal of many mistakes, but I've tried to be as truthful as possible. Perhaps it will help or save someone else from similar errors.

I keep switching methods and styles. There has been no consistency since about Day 10. My patient "watch and wait for price to come to you and your plan" hasn't been happening. Even that idea had volatility and mixed results over different days. I think the big problem was that I was not getting enough trades, therefore unhappy with the small profits.

Here's where we are for the week-end, we shall see...
My Profit Target is around 1.3660, Stop loss below 1.3580, ... 1.3575 ish.