The Simple Trader

Thanks for visiting and hope you will find this interesting.

I plan to use this thread to post all my trades as I go. They are mostly simple trades as I like things simple. I don't use many tools.



The key parts to my trading are:

1. Price Action
2. Candlesticks
3. Moving Averages
4. Support and Resistance

I have been trading forex on and off for about 18 months. i've just had a 5-6 month break to clear my head and started up again on 28 January. Since then (as at 3 Feb) I have placed 10 trades with a net win of 228 pips and my account is up 26.4%. It's never quite gone like that for me before so I'm thinking the break has done me good and I am looking forward to developing my trading abilities in 2011.

I should explain that within the 26.4% was a big no-no trade. It was my first trade and at the time I wasn't really thinking of getting back into trading seriously and so, seeing a "no-brainer" short I entered, risking around 18% of my account (not a very big account at this stage)- it won me the first 16% for a great kick start...not again...!

...I do have money management rules and now that I am trading seriously only risk between 2% and 3% on each trade.

That's probably enough about me at the moment. I will now post all 10 trades to date and we'll continue from there. My aim will be to make my charts as appealing, readable and interesting for you as I can. Comments, questions and advice very welcome. Would like to gradually refine and improve the strateg(ies) I use...

Many thanks

Doug

I decided to check up on EURUSD last Friday afternoon. I noticed heavy resistance and after the long wick was formed on my entry candle (see small green arrow for entry point), having failed to reach the prior highs, I thought "This needs to be shorted"....

I set my profit target for the Daily Support Level 1 (I use an Auto-Pivot program in MT4 to get these lines). you will see below it soon hit the target and beyond...I'm sure many of you enjoyed that ride as well..!

46pips

I had been introduced to 5secs rainbow trading by my brother and thought I'd just have some fun with a rainbow scalp for 6pips....


Total 52pips

I enjoy GBPJPY and it is the pair I have traded the most. However after revieing its recent ADR (Average Daily Range) it has been a bit lacking. This used to be 250+, over the past 3 months its been 118!

I was looking at the 4hr when first seeing this reversal and then moved down to my favoured 30m chart. Notice the engulfing bull candle. I could have perhaps entered earlier but not sure I was watching at the time.

The trade then hit fairly persistent resistance. I prefer to take profits rather than see them reduce to losses and so closed. Trade 4 will then see a continuation...

19pips
Total 71pips

Well, we had hit that resistance area at the Weekly Pivot and I had made an exit. i was now waiting for a break of the resistance. This came nicely after a small pin bar rejected lower prices for a final time, then up we went, break, and I was in.

My Profit target was then the Daily Pivot line as marked (confused myself there originally marking it "weekly pivot" - it was definitely a good R line anyway!).

Hesitated before target so closed for 60pips which I was very happy with.

7 hours later it would have hit the target but I'm not that patient and I don't like risk !


60pips
Total 131pips

I like trading ema crossovers, they can put you into long trends....if I had the patience. This one happened at too fast a pace and the risk of reversal was too high risk for me and so I sat it out - one missed? Well fortunately there was a bit of a retrace which then confirmed the uptrend through a strong candle formation. I entered shortly afterwards after a couple of small bullish candles to confirm. Nice to see it then go up.

Next morning I sat through the first evening star / doji formation but put my stop to BE. This looked like a potentially strong reversal formation and if it happened I didn't want to lose a thing.

Dropped the kids off at school I think and came back to find the trend still in place and shooting up quite nicely...

...but then another big pin / evening star formed - annoying as its long wick took me up to about 78pips, I exited at 44pips as this rollercoaster was too much for me....at the time it really did look potentially very bearish, although I guess the trend line was never broken....


44pips
Total 175pips

I follow NickB at forexfornoobs and he uses 4hr charts and looks for line breaks and reversals - mostly reversals right now. I have therefore been keeping an eye out for reversal patterns on the GBPJPY 4hr (NickB's main pair). I spotted the one below and entered short.

I set my target for S1 but missed the fact that Psycho level 131.00 was just before that...if I had registered this it would have been a nice win. I wasn't at the screen when the large pin formed south or I might have closed. As it was I closed at break even, considering a shorting strategy to now be void.

After the pin formed (the market showing strong rejection of lower prices) it was unlikely to go down again here, but I was seduced by a relatively quick market movement for a second punt. I went against a rule that I normally follow: wait until close of candle before entry - often makes a huge difference. Was a stupid trade in any case, but hey !


-43pips
Total 132pips

Right, well I will post the other 3 and any further trades tommorrow.

I'm going to start reading my new book, "Trading in The Zone" by Mark Douglas - I need to really get hold of a better trading psychology although I'm fairly pleased with the improvement of mindset experienced over the past week....

Well an interesting day, I wasn't planning to trade as didn't want to face the terror of the NFP report, but caught an opportunity later in the afternoon with GBPJPY....we'll come to that one later.

Will now post the rest of the trades from the last few days....

Hope you enjoy them...

This one was an attempt to catch a bounce of GBPJPY off a resistance level it had recently broken through. It looked quite a strong resistance (R1) with quite a few prices coming off it over the past week.

OK so price had just broken up through this and there had now been a reversal back down with 2 strong bears (black knights?). My thought was that the bears would not be able to break back through the previous resistance level and so would turn into strong support. Well I thought it would be worth a shot anyway - 70% chance maybe?

I therefore put in a limit order to buy once price came back down to the R1 level.

It did and respected R1 for a short time before pearcing it, triggering my entry (as spread made it a couple of pips below) and then I had a nerve racking experience watching it on the 1m time frame. (see below)

I find 1m useful to see how price is behaving and to spot any patterns to give hope.

Well price came down further than I would have liked and missed my SL by 1pip...

...eventually when I was out price did go back up to my PL - just tucked under the recent high...but only by about 0.1 pip or something I worked out!

So a bit of luck on that one but I need some luck to actually go in my favour after all the many times I have missed a good trade by that 1pip !


37pips
Total = 169pips

I was eager to place a short entry on EURUSD but was too soon as crossover only just happened. It might have succeeded if I had let it run into the next day (not sure exactly where stop was), but my view was it was a bad trade and price was now coming back up for a fresh EUR surge ! (well down maybe - check it out tommorrow!)

-42pips
Total 127pips

OK so my previous day's short hadn't gone to plan, but the bears came back the next day....

I waited for the crossover gap to widen and for price to break S1, I was then in before the plummet, which was an enjoyable experience.

The slight retrace after the plummet looked like a continuation pattern, but I really didn't want to risk a pull back and so settled for a nice 101pips when price started slipping back down again...

Pips 101
Total 228

Well done, dude! Keep up the good work. Akira

I think I mentioned previously about keeping an eye on the GBPJPY 4hr chart. Well I'm glad I did today at around 4:30pm.

There was a very strong pin-bar reversal pattern which proved absolutely correct. there have been a lot of those on GBPJPY in the past couple of weeks...

Well I entered shortly after I saw it which was pretty much the best timing....I really wasn't expecting what happened next; a pretty hefty price surge up to my PL which I had set at Daily R1, 74 pips away...It spent about 10 minutes hesitating 4 to 7 pips away from my PL but it was looking 90% likely to hit so I let it and that is the best to get a nice green circle on my chart (exit at PL target rather than manual exit).

I'm well chuffed with that trade as I hadn't intended to trade today due to the NFP report...but a great opportunity on GBPJPY I couldn't miss (I miised yesterdays Short reversal due to timing of school run...a similar candle formation)

74pips
Total for 6 trading days = 302pips and 29% onto my account

Everything has seemed to gone with me during these 6 days which has honestly not previously been the case...I wonder how much of this is luck or probability? Will be interesting to see how next week goes...

Hey thanks Akira ! Really appreciate that.

Hope all is well with you,

Doug

Well on pondering over it I think I can answer my own question there: I was faced with a good amount of "luck" with prices pretty much always going in my direction on the trades I have so far taken.

8 Wins
2 Losses
1 Break Even

With an average of 48 pips on winning trades.

I think it has been an exceptional week and unlikely to be repeated.

However, I would also say that my mindset has improved and have remained more calm and collective while trading. However, I have found this after having trading breaks before. One comes back to things fresh and with a less tense attitude to trading....previously when coming back from a break, after a few losses creep in the psychology begins to slip away...we will see !

I should also add that, like we often do, I have previously had a tendancy to over-trade with the feeling of, "I have to have a trade on the go (at least one!) or else I'm missing out!"

I could equally have made 22 trades this week and ended with a 50-60% success rate. As my Risk reward has been about 1:1 on average that would have wiped out most/all of my profit.

So I have learnt from this week:

 

1. Keep calm and collective and take a break if not.
2. Only trade high probability set ups and don't have to trade them all
3. Avoid over-trading as much as you would avoid getting run over by a bus.
4. Trade with the expectation of winning but prepared to accept a loss if it doesn't work out - don't fear the market.

In summary I suppose I am saying in all this that "Psychology is King". read as many books on trading psychology and positive thinking as you can. My new book is "trading in The Zone" which looks just the ticket...

Any other thoughts welcome

Have a good weekend,

Doug

Well closed 2 trades today and were both lost. Attempting to get in on Euro as it broke below support (last week's weekly pivot), but price retraced twice to cause me to exit manually and then get stopped out.

I have been influenced by seeing a weekly chart of the US$ index on Olu's thread where a nice pin bar formed last week at a low - a higher low, could now strengthen and as Euro is 50% of the index I was keen to try and get in on a short, but not to be today...

I also am currently running a GBPJPY trade from 9:30GMT this morning after it broke last week's high. Hoping for the retrace to bounce back up again for a big target....waiting...waiting....waiting....

Yup The GBPJPY trade as above got nicely stopped out in the morning.

From this I think I should introduce a rule to my trading that after a certain amount of time if my favoured friends don't turn up (bulls or bears), I close the trade...

There was another problem with this trade. Perhaps entry was ok, I don't know, but afterwards on the 4hr chart there was a "tweezer top" with an engulfing bearish candle, which was a lot more bearish than bullish!

However, I was already in the trade and to allow conflicting information into my decision making part of my brain was being seriously filtered: cognitive dissonance - see more detail on the graph attached.

Even if it was bearish - all these setups are only probability setups aren't they? So really anything could happen and I'm going to stick with the original plan despite lots of signals too the opposite ! That was exactly my thinking and a few times I had glimpses of hope as some bullocks appeared to only wimp away from the approaching bears !

Wow, to be able to trade with a free mind without negative filters and trade always with the highest probability in mind.....

This one is just too embarrassing for commentary...embarrased smiley not working...ah, now it is...