Martynp's trading journal

This is my journal for me to be able to out down my thoughts on starting out as a new trader. Before I post some actual charts and discuss them I suppose I should say a little about myself.

I am 29, married with 2 young sons and 2 older step daughters, 1 of which has moved out. I work full time and live in the UK. I was drawn to trading, like most people, because of the potential to make lots of money, however, since I have started reading more and more I have seen that trading is hard work but with effort and patience it can become a lot of fun and could make a difference to my life. I also see many similarities with online poker, which I played for a long time earning extra money until such time as it was taking up too much time and was effecting my family life so I had to stop.

The major similarity I see is that whenever I used to say to someone “I play poker” I would get the same response that warned me off and said I could lose a lot of money and its pure gambling. This was all from people who had no idea that by working hard and studying the game of poker you could create a huge edge over all the fish that play. People still do not understand that poker is a skill game for the 5% of people that actually make consistent money from playing. For me this is exactly the same as trading as people automatically think its gambling because thats all they know, they are ignorant to the fact that with a lot of hard work studying the markets, an edge can be created and consistent profits can be made.

At this point I'd like to point out that I am new to this but I am fully aware that I am not going to turn £500 into £50,000 in the next 3 months and maybe not in the next 3 years or 30 years. I realise that with a lot of hard work I may be able to make consistent profits and that is what I am aiming for. One thing that poker has taught me is to not focus on the amount of money you make but whether your decisions were correct and whether you played the hand right, regardless of the outcome. This is my approach towards trading. I am not going to set myself financial targets, the only target I have is to follow my trading plan and to continue to read and learn.

I have created a trading plan which I will not be publishing on the forum as I think each traders plan is personal to them. There will no doubt be snippets of the plan as I discuss my trades and decision making but I will say that my plan covers my risk management, entries and exits but it is a work in progress and is being updated the more I learn.

Anyway this has got long and so I will post below with the figures I have on my account and thoughts on todays trades.

Ok so my trading consists of trading price action setups that have confluence with support & resistance (S/R), price pivot zones (PPZ), Fibonacci retraces (FIBS) and other supporting factors to enter a trade. I will be trading on longer term timeframes from daily upwards for 2 reasons. 1. I have a 9-5 job and cannot trade intraday. 2. It has been recommended by more knowledgeable traders that newbies should start out on longer timeframes as you get more time to think.

I will be trading mainly forex but also the major indicies and some commodities, mainly gold, silver and oils.

My broker is Tradefair and is a White label of London Capital Group and I have £8,550 in a demo account. I will be looking to risk no more than 5% per trade with an overall market risk of 25%. If I suffer a drawdown of 40% I will stop trading for a week and spend time analysing my trades to establish why I have suffered the drawdown.

My overall objective is to demo trade for at least 3 months profitably until I risk real money.

Thats all the house keeping out of the way and on to what I have seen today.

Unfortunately I have not been able to find anything that I think is tradeable on 53 separate instruments. I have mainly been looking for pinbars and DBHLC/DBLHC but nothing has shouted out to me.

There was a pinbar on the Gold spot weekly TF that bounced off a weekly PPZ but the length of the stop (stop below the low of the pin) was 1440 pips and so I would be risking more than 5% of my account if buying the minimum of £1 per pip. In addition the open & close (the pin body) was slightly outside the range of the previous bar and I see a First Trouble Area (FTA) being at 1760, which is approx 1000pips which would be a poor R:R. That is why I did not take the trade.

Hopefully there will be some more to look at tomorrow. Until then happy trading.

Hey all,

Just scanned the markets and seen a fair few interesting bars. Only 4 now have my eye as they are all pin bars at good locations whereas the others were BEOB/BUOB and DBHLC/DBLHC bars that I wasn't sure on so I passed.

The first one is the AUD/JPY pin bar (see chart). The pin occurs at a PPZ that dates back to 2009 and even touches price in 2003. However this area is a low not seen since mid 2010. However it occurs at a swing low and there is confluence with the 50% FIB from the 4 Feb 09 low to the 11 April 2011 high. I have placed a buy order at 73.79 with a stop at 72.02.

My FTA is at the lows of 29th & 30th Sept bars (74.27 area) and then the 75BRN area which is also where the high of the left eye is at. I will be keeping an eye on any retrace of the pin and looking to move my stop below the retrace or the PPZ area to minimise my risk. This is assuming the pin is validated by being broken. If its not then I will cancel my order.

My next trade is in the below post.

Another pin at a serious area of resistance during late 09/early 10 and there is some confluence with a 50% and 61.8% Fibs.

FTA is the open of the left eye which coincides with a previous area of support that could turn into resistance.

I have a buy order at 0.9597 with a stop at 0.9386. I will be looking to get my stop to BE and take some profit if price stalls at FTA.

The next one is on GBP/AUD and is pin off a major PPZ at the 1.6342 level, through the 365 EMA and at a 50% FIB. However the body of the pin was not as far down the nose of the pin to make the actual pin perfect. There was also the issue that the low of the pin is close to the 1.61 BRN area. However, given the location I thought this was still a good opportunity.

Due to the issues stated above I decided to place a sell order just below the 1.61 area and a stop just above the high of the left eye.

My FTA is the low of the left pin and then the 1.60 BRN. I will be looking to get my stop to BE quickly and maybe take full profit at the 1.60 BRN. will evaluate this once/if price reaches that area.

Last one is on the USD/CAD. Nice pin bar with a long tail and body right at the low of the pin with open and close within the range of the left eye.

Location is at a swing high with lots of space to the left, is at strong PPZ which has acted as very strong resistance during 2010 and has confluence with a 50% fib.

Buy order is at break of pin with stop above the high of the pin.

FTA is the open of left eye (1.048x area) and then down to the 1.04BRN. Will assess price at these levels and look to move stop up as soon as possible to minimise risk and to lock in some profit.

So far so good on all of them! Congrats!

Thanks yep they all doing well. I have closed out partial positions on all 4 trades and taken profit. The remaining positions are all still in profit and stops at BE or better.

Too tired to write a full report so will try and do that tomorrow.

Thanks for reading.

hello Martynp,
read your post in the other thread. i can see u are doing well.
keep it up Sir!

Hi all,

I am still in all 4 trades (just about) but have removed some profit and let the rest run whilst trailing my stops. Below has been my thought process up to now and what my targets are:

AUD/JPY (Chart 1)

I entered this trade on the break of the pin at 73.79 for £2pp, which kept me within my 5% risk per trade and my FTA was at the 74.2x area. The trade reached the FTA and stalled so I decided to close out half my position at 74.12 at £1pp and moved my stop to BE. I did this because I wanted to lock in a profit, however small, and also minimise my risk.

Since then price has moved on above the FTA and so I moved my stop to 74.00 as it is a BRN and I suspect will act as support on a retrace. Price is currently coming down over the last couple of hours but I am hopeful of a turnaround back up. My next target area was 74.65, which has been tested and acted as resistance with price bouncing back down. If price breaks through and heads for the 75.35 area then i will move my stop up to the 7.2x area.

AUD/USD - Chart 2

I entered this trade on the break of the pin as well at 0.9597 for £2pp in order to stay true to my risk management policy. The FTA was the open of the left eye, which price reached and I closed out have my position at 0.9657. Again, I did this to lock in some profit and to get my stop to BE. My stop has since been moved to the 0.9620 area which has seen recent support on the hourly.

Price has continued its move upwards and my NTA is the 0.9778 area, being an area of recent support on the daily. If price reaches there I will look to move my stop up to 0.9667.

GBP/AUD – Chart 3

This has been a crazy pair so far. I originally put my order and stop in overnight after the pin formed and when I woke up my SB broker had a price spike which triggered my sell order with some major slippage and then retraced on the same tick to hit my stop. Was in for £3pp and lost £750. Checked other data feeds and it was just my broker, no-one else, so I re-entered my order and I am glad I did.

I played the entry different on this as I put my order further below the break of the pin which would have been 1.6120 but I entered at 1.6094 as I wanted to make sure there was a proper downward move. The FTA was the 1.60 BRN, which was hit and bounced. And I panicked…twice…and took profit off the table at 1.6074 and 1.6039 with the remaining 1/3 left to run. Price then broke the 1.60BRN and I moved my stop to above the small resistance level at 1.6035.

Whilst writing this news broke of the BOE QE measures which sent price shooting down to the 1.56 level and then back to the 1.57 level. I have now moved my stop to 1.5901, which is a level of S/R and will then be watching price to see if there is any retrace. I am out on the beers tonight so I may well look to bring my stop in closer to lock in profit as I won’t be able to monitor the action.
USD/CAD – Chart 4

Entered this at 1.0497 with FTA the 1.048xx area, which price hit and I again panicked…twice…and removed profit at 1.0460 and 1.0432. Price continued down and to the 1.04 BRN and then bounced before breaking through and stalling.

Currently my stop is at 1.0440, which is above the resistance at the pullback on the hourly and the 150EMA. My target for this is……as I write this I have just been stopped out by a sharp break upwards. In total I have taken 157 pips (in 3 separate closes of positions) off this trade and so I am not too disappointed.

Price looks to have moved sharply across all my trades so I will know more on where I stand in a while.

Ok so all my trades have now been stopped out and the results are as follows:

AUD/JPY Stopped out 73.99. +33pips 1st 1/2, +20pips 2nd 1/2. Total: 53pips
AUD/USD Stopped out 0.9649 +60pips 1st 1/2, +52pips 2nd 1/2. Total: 112pips
GBP/AUD Stopped out 1.5871 +20pips 1st 1/3, +55pips 2nd 1/3, +223 last 1/3. Total: 298pips
USD/CAD Stopped out 1.0441 +37pips 1st 1/3, +65pips 2nd 1/3, +55pips last 1/3. Total: 157pips.

Overall 620 pips from those 4 trades. Total risk at initial stops were 672pips but I moved stops to BE very quickly on these and so the risk was minimised to nothing very quickly. Due to the price spike on my brokers software my account lost 769.5 before these trades started and so basically my starting account was 7780.5. This gives me a %R on my account of just under 8%.

I am very happy with these trades and I have learnt a hell of a lot about trade management. I have also learned a lot about myself and what trading makes me feel like, even on a demo account. I have realised that I want to get my stops to BE and close out partial positions early to lock in profit so that my trades do not run into loses on retraces. I would rather be stopped out with a small profit than suffer the loss although I haven't experienced being stopped for a small profit and then the move taking off so maybe that will change.

I am not around tonight and so I won't be scanning the markets. Out for a few beers and a curry with some friends. feels like I have actually earned £620 real money today, its a very strange feeling. I hope this was not a fluke and I intend to keep working hard and contributing to the J16 thread. I am hoping that come 2012 I can move onto a live account if things run smoothly.