I drink your milkshake

My trading method is based a sound foundation (balanced risk and sound money management) and a mix of fundamental analysis and observing price action.

I use a few crude chart indicators: your handy trend line, the ever reliable support and resistance line, an SMA 50, and fib retracements. I do not rely on these indicators to make me any money. They do help me locate where price is likely to bounce, bob, flip, turn, and do all sorts of unexpected exciting things!

Right now I risk 1% on near term trades (couple weeks to a month), and I'll risk more if the reward justifies it, but never more than 2%.

Long EUR/USD
@ 1.48215 13 Oct 2009 10:14 EDT SL 1.4758 - 0.68% Risk

Moved Long EUR/USD SL to 1.4830 03:58 EDT - 0% Risk

Closed EUR/USD Long
@ 1.48925 14 Oct 2009 08:20 EDT

Result: 0.71% Reward ^71 pips
Grade: C-
__________________________________________________

I bought the EUR/USD after price broke through 1.48, a level of key resistance which acted as a ceiling in September 22-24. When price breaks through key resistance it then becomes key support.

I bought on the first bounce off of 1.48, which proved to work this time, but in hindsight I should have bought on the second test. The first test of support could have failed, but I was confident enough in the trend strength when I entered.

My confidence came from:
- The daily double top was negated
- The US Dollar Index made a new 14 month low
- DOW 10,000 was in striking distance and S&P was making new highs
- Gold and Oil were making highs
- The Euro was shrugging of bearish news
- Higher time frames were not overbought
- My risk was minimal
- Price action confirmed my fundamental viewpoint

I entered this trade with a target of an initial target of psychological resistance @ 1.50, a soft target @ 1.52 depending on the price action.

I exited short of my target because there was event risk this morning and due to my experience I was not sure how to manage the "potential" volatility of a market moving news release. I was so befuddled I closed my position and decided to sit on the sidelines.

I graded myself a C- because I exited short of my target and my risk-reward ratio was unsatisfactory, 0.68%:0.71%, just a hair above 1:1. The positive of this trade was I did my research and I got out when I didn't know what I was doing.

What I learned
- The US stock market, Commodities, and Gold is inversely correlated with the US Dollar
- There will be a "stabilization" of the market preceding event risk

Long term I am bearish EUR/USD over the next six months. I originally was looking for a turning point in the pair to the downside, but when the double-top on the dailies was negated my viewpoint changed to near term bullish, giving me the opportunity to profit here. With 1.50 in striking distance I will search for a setup with good R:R, if not I will wait for trend to start showing signs of major correction and look to short into it.

A good R:R setup for EUR/USD would be a test of 4945 with a retracement to 4910/00 and I would buy on a bounce off of support in that area. I am looking for price to consolidate right above 4900 in the overnight session for this setup to be valid.

I may not trade EUR/USD 1.50 at all because heading into the weekend I have a funeral to attend and the 100 pips is not worth the headache of managing the trade and dealing with the stress of loosing a loved one. Plus the setup may or may not happen and I will not force anything.

EUR/USD has not lost any momentum in the overnight session, reaching past 4950 without pause. I will reevaluate my strategy to reenter the trade taking into account the activity of the last couple of hours.

My error was that I did not count price moving higher in the overnight session as a possible scenario and did not have a plan in place to account for it.

Demoing on MT5.
Building confidence on the demo is an ongoing process that will take a few years.
I am developing my own complete method to trade by.
I have to learn what price levels respond properly to my trading approach.
There is a certain PA I'm looking for and BB signals it well.
I randomly picked an indicator and landed on Bollinger Bands.
I decided to fit an indicator to me and not the other way around.
At the moment I am trading on strictly on technical signals generated on the charts.
I will expand and develop my method until I have a robust system that is back-tested.
Goal: Keep it so simple it requires no more than any 1 indicator & common sense.

I meant to post my signals live but I work a night shift and was beyond tired.
Live signals going forward, no bs.

Method
- Hourly chart supported by higher TF
- Bollinger Band (20,2)
- 1:1 R/R, SL = TP distance, (max 2.5%) crude and needs adjusting
- Signal generated: its a secret >.<
- Any currency, but prefer GBPUSD
- Looking for stronger setups, I have a well defined idea of the PA I'm looking for

2010.2.26 Demo Trades
- Single Lots
- Starting Balance 25,000
001 USDCHF 17:15 Buy (in) 1.07252
002 USDJPY 17:29 Buy (in) 88.906
003 AUDUSD 17:43 Sell (in) 0.89734
004 AUDCAD 17:45 Sell (in) 0.94431
005 AUDUSD 17:59 Sell (in) 0.89592 (execution error)
006 AUDUSD 18:00 Buy (out) 0.89613 +100
007 AUDUSD 18:02 Sell (in)0.89496
008 AUDCAD 18:18 Buy (out) 0.94259 +163.02
009 USDCHF 18:24 Sell (out) 1.07466 +199.13
010 AUDUSD 18:24 Buy (out) 0.89362 +134.00
011 USDJPY 18:31 Sell (out) 88.840 -74.29
Closed P/L $521.86 ^2.09%

#005 was an error, it doubled my position size to 2 lots, immediately closed it on #006.
#002 was closed for a small loss, price on the daily was near a new low.
Shouldn't have been trading anyway, it's a Friday, was too tired to even realize.
One thing I need to work on as I grow is never trading tired.
Over time I will lose more than I earn when trading tired.

I want to code an EA to back-test this joint once I define some strict MM & risk rules.

I get slightly queasy in my stomach during live or demo.
Has nothing to do with the fear of losing money.
Has everything to do with getting frustrated when I'm wrong.

No single trade will have a large effect on my account - win or lose.
Losses are a cost of doing business.
I understand losses are a part of trading.
I have to train my stomach to understand the same.

My gut will get stronger with experience.
My trading will be as easy as sitting on the couch watching tv.

Reading Japanese Candlestick Charting Techniques, Stevie Nison.
Back-testing my method a candle at a time back to '06.

Right On!

A fellow "There Will Be Blood" lover... Your avatar pic was my background for about a month! NICE TASTE!!

Curious to see how things unfold here w/ ya, I'll be keeping an eye on ya for sure!! Gotta show love to a fellow "Pipshake" drinker!

"Things go by Friendship in a Rush like this..." D. Plainsview

I would HIGHLY recommend checking out the Trading Simulater that is posted in my journal. This will allow you to back-test all of your candlestick data MUCH MUCH MUCH faster!! This will also give you this ability to test in "Forward-test" feel with "Back-Test" data of the closed market weekends.

DON'T LET THE MARKETS HOURS STOP YOU FROM PRACTICING!!

I'll be swinging in, seein how YOUR "Pipshake" is being drank!

The best of luck and many pips to you my friend!

Thanks for the advice and the well wishes Mrezoot!
There Will Be Blood is gritty and raw, I LOVE IT.
The path to success can be messy, dirty, and bloody.
Plainview had a mix of ingenuity and resilience I desire.

You're the OG Plainview avatar so I'll switch mine up, lol.

I read whatever I can get my hands on, then read it again.
I'm logging hours on the demo.
Even when not trading the demo I just watch the PA form.
Gotta get more screen time!
There are many great journals & threads to read as well.
I will check yours out now.

I'm just going to keep at it until something clicks.

Here is an interesting blog entry I found on BabyPips.com:

Fail Forward

The difference between losers and winners is their perception of and response to failure.

You must learn from your own trading mistakes and from the mistakes made by other traders.

The biggest mistake you can make is when you can't admit you made a mistake, accept the consequences for making the mistake, and simply close your trade.

What do you do instead?

You let your pride take over and you hang on to the losing trade because you can't admit to yourself that you were wrong.

Pride will lead to huge losses, especially after you've had a nice string of wins and you feel like a trading god.

Swallow your pride and learn to admit when you're wrong and move on to the next trade.

Set your stop loss and never move it backward to give your losing trade "more room" to come back around.

Mistakes should be used a learning experience. Making mistakes is how you learn what works and what doesn't. Just don't make the same mistake twice.

I hate being wrong.
I will read this daily before I open my terminal.
I will make a mental note to check my ego at the door.
I need to get into the habit of letting go of losers quickly.
The sooner I grow out of being a sore loser the better.

All the best 2 ya science!

21:18 Long UJ 88.734, 0.5 Lot
Target center band (soft target 89.100)
SL 88.364

...a bit late on my entry

...tired, time to shut it down
...confident trade would have done well, though

23:45 Close Long UJ 88.759, 0.5 Lot, +2.5 pips

Just got off.
Dammit, the uj trade was worth about 20 pips.

Audusd took off w/o me too, lol.

Been moving into new apt all week.
Back to my demo work.

Using MT4, MT5 doesnt have enough pairs.
250,000US balance
Wouldve posted trade sooner but laptop is slow.
Downside of leeching unsecured WiFi...

2010.03.08 19:28 EURUSD; Long 11 lots: 1.3632
SL 1.3595
TP 1.3669

22:47 Closed EURUSD Long 11 lots @ 1.3633 BE

17:54 EURUSD Sold 11 lots 1.3647; SL 1.3693; TP 1.3601

Will be moving more stuff into apartment today...
Couches, bed, etc.
Wont be anywhere near my terminal
A lot of other 'chores' and errands to run...
My TP & SL orders will do the 'heavy lifting' today

13:11 modified order SL 1.3684; TP 1.3610

Closed for another lowsy +1 pip
Just got my bed to my room and can't focus on trading
Will look into signals on the 15m & 30m later

Observing, no, stalking the EURUSD (1h candle) movement so closely the past couple of weeks - so much is clicking. I can see price bounce from level to level and understand why price moved before it moved. I am beginning to understand (from experience) that price can react only a few different ways to surrounding S&R.

Indicators can be useful but they have been a detriment to my trading up until this point.

I am continuing to read to build sound trading fundamentals and observe the market.