journey to become "THE Professional"

hello all.

this journal is the next step in my quest to become "the professional".
Who is this professional you might ask yourself?

Well basically the professional is a trader in my head whom I one day hope to be.

Funily enough he keeps a journal and also has a network of traders that he calls friends.
So here I am at forex factory starting a journal and the journey to make forex connections!

He does many other things of course, alot of which ive already started to do
but more on that later.

So feel free to drop by, say hello and join me on my quest!

ok now for some of the things I currently am doing, and also some of the things that the professional does which I would like to be doing

for probably the last 6 months I have been doing the following things

-I have a trading plan with entry/exit/ money management rules.
- I save charts of the moment I place an entry order
- I keep an offline journal where I keep track of a heap of data for each trade and I paste my charts
-backtest and forward test in simulator program
-I am always reading some sort of forex/trading related book/pdf. In the last 2 years ive read maybe 50 or so

So some of the things I would like to start doing...

- regularly post in this online journal.
- post videos of some setups as im taking them in order to capture what was going through my head in the heat of the moment.
- regularly post in other threads at FF and interact with other traders.
- Do MORE testing in simulator program.
-Print off charts of completed trades and store them in a folder of some sort.

ok up next ill write about my method and rules and post some charts of recent trades

Welcome to the forum and good luck to you. Be calm and use your mind not your emotions when you trade.

Yilmaz

thanks for stopping by yilmaz!

That is good advice which I largely follow already thanks to my entry/ exit rules.

Ok time for some charts and rules

About 8 months ago I made a decision to choose one type of entry and stick to it. I wanted to completely master that entry before even thinking about moving on to another setup.

So since then ive been trading a wedge/ triangle breakout setup exclusively and have made close to 15% in 2010, while modest by some peoples standards I broke even in 2009 and lost 10% in 2008. So by my standards things are only improving

THEORY -

The idea behind the wedge breakout is that the market is winding up tighter and tighter until finally it has nowhere to go. The resulting move is often hard and fast.
This formation works on all timeframes however the lower I go the higher the spread costs are and there is less time to plan and execute trades.

This formation exploits the fact that the markets often go sideways leading up to important news announcements. Then when numbers come out different to the forecast there is often a sharp move.

The more obvious the formation and the tighter it winds itself up , the more orders build up around the trendlines that form the wedge. More orders means a faster and longer push when the breakout occurs.

The best breakouts occur at big round numbers ie 1.0000 as you can often see price move 10-15 pips in just seconds as stops and breakout orders are triggered.

ENTRY RULES

-I will only trade during the london open/ US open hours. I delete untriggered orders if I cannot monitor the computer

-I will always enter with buy or sell stop entries outside of the trendline

-The trendlines will need a minimum of 3 touches to be confirmed

-Max of 1 false break of the trendline is allowed before having to redraw the trendline as long as the trendline have been confirmed

-minimum spread is less than 15% of SL

Stoploss will be placed behind the opposite trendline.

-minimum timeframe that I use is the 5min

EXIT RULES
1.I will move my stop loss in favour of the trade as price reaches predetermined areas or forms new swing highs/lows
2. i can close out the position if it is in drawdown and not going anywhere.
3. I will not use take profits.
4. I can move stop to Breakeven if trade is in profit and I am unable to monitor the trade, ie bed time.

My main goal here is to let my profits run and cut my losers short. Ive experimented with taking partial profits, both live and in the simulator and the only thing it has done is make me feel good at the time.

getting stopped out at breakeven hurts when you have been in good profit but then having a full position get closed at 8x risk makes it worthwhile.


money management-

I will risk no more than 1% of total account balance per trade.
I can risk no more than 2 % on any one setup. (a setup can have multiple entries)
If I have drawdown from my starting balance in a calender month of 6% I will stop trading until next month.
Once my drawdown reaches 4% I will drop down to 0.5% per trade.
If i have a total drawdown of 20% i will stop trading until I sort out what is wrong and re do my trading plan

Good luck.

Your Theory, Entry, Exit and Money Management look very solid!
Looking forward to examples when you have time.
Good Luck!

ok a couple of charts coming up

this first one is happening right now so its a good chance to write my thoughts

So if I was going to trade this setup which im NOT..I would place a buy stop and sell stop at the same time. with stop losses in the same place as the other entry.

Im not going to trade it because one of the lower trendline touches was a friday afternoon liquidity freeze with 25 pip spread on my broker..Also it could also easily bounce off the 9800..

saying that it is still a decent setup with US retail sales out later today. Often these setups get me into trades some time before numbers come out. In the event of unexpected numbers I often get stopped out for Breakeven/small loss OR the trade takes off.

ok these next 2 charts are a trade from last month which made 8x risk. Showing off? yeah sort of.. But its trades like this that make the small losses worth while.

It is tempting to take partial profits and use targets because I dont want the trade to turn around and stop me out for a loss. This is an emotion based decision. NOT a profit based decision.

This trade could have easily given close to 10-15 times risk but I dont dwell on the near misses and such.

note- the first chart was the chart i saved after placing the orders

whoops meant to post the chart with the result

just stumbled on this post from rufus.
the professional in my head definately has just had the bar raised a little higher.

My current trading plan is ok but it definitely needs some more work.
I also like the mentor/accountability partner idea. I might add that to my original post..

Nice well defined rules, good luck with your trading.

If you don't mind me asking. That last EUR/GBP triangle. What was the decision making process for you to let the profits run for that long? Triangles on the 5 minute chart are pretty reliable signals but 8x risk is amazing.

Hi mysterio

basically with that trade it just moved so fast that pretty soon I was up 2 or 3xR .. So after that I was only checking the trade every 6-8 hours and moving my stop down if I could see a good area to put my stop.

I try to move to higher timeframes as the trade develops. So by the 3rd day I think I was only watching the 4h chart.

I dont think this trade was a fluke either.. as Ive had maybe 5 trades that would have returned +5R if I hadnt taken partial profits.

It has taken time to convince me that I need to give these trades a chance and really let them run.

So this was a trade I was in when i went to bed last night.

it finished up being being a 0.5% loss. I probably could have got my stop to breakeven with an EA but im really not that concerned. It could just as easily be up a long way.

sell stop triggered.

this is an interesting setup as it continued to go sideways right to the end of the wedge.

UK cpi out in an hour so this is where I hope for a little buffer before some unexpected numbers send this thing south..

interesting chart-

I see a battle between 2 opposing sides when i look at this chart.

The sellers are making their desparate last stand around 9865.. and the buyers are getting closer with each attack..

Whoever wins is likely to face little resistance for some time

so gbpchf went went nuts with cpi data.. 50 pip spread stopped me out,

on to the next one!

well well well

I didnt make this trade as the upper trendline was a bit ill definded.. but I still love to see the setups take off like this.

ok here is my first attempt at making a video entry.. I want to record my thoughts and ideas and also improve my speaking.


I apologize for the picture quality as im pretty unfamiliar with camtasia.