MinceMeat’s Trading Journal - My Walk to Freedom

I’ve decided to start a journal to document my every trade, I have always been pretty slack in the past at documenting my trades but have found over time records to be invaluable in that they allow you to learn from mistakes made or identify areas in which you can improve on.

How do I trade?

I’m a Price Action trader and look to take positions at obvious levels of support / resistance where I expect large order flow to be. My trades are generally short term (couple of hours to a day) but will occasionally take longer term trades if I have good fundamental reasons to do so.

My trades will mainly be based on technical analysis, but I will keep a close eye on risk sentiment, current news and events which may have an impact on my trade. Generally I will not take a trade based solely on news but if the fundamentals line up with my technical analysis for my trade I may look to increase the risk on my trade. Adverse fundamentals to my technical analysis and I may look to cut my risk or close my trade short.

Time Frames

Generally the support / resistance levels I trade off are based on the Higher Time Frames (daily, weekly, monthly) but I will trade off a well defined lower time frame occasionally provided the level is well respected and obvious. Although I mainly trade off the Higher Time Frame (HTF) levels, I will enter and manage my trades using the Lower Time Frames (LTF), usually 1 hour. This obviously includes fine tuning the entry, Stop Loss (SL) placement and Take Profits (TP).


Lastly, I must give credit where credit is due, the way I trade today is based mainly on what I have learnt from the J16 thread as well as Lovejoy80’s threads and the_wizard’s thread. I started off trading candle stick patterns in the traditional way taught in the J16 thread but it was not until I turned my attention away from the different bar formations and focused on the source of the move, the support / resistance levels, did my trading really start to come together. In fact I believe the way in which most traders are introduced to trading Price Action is incorrect, true Price Action is knowing how to read price and having an understanding of market dynamics and the order flow at levels of support and resistance, rather than relying on candlestick patterns to tell us when to get into a trade. At the end of the day candlestick patterns and bar formations are the result of Price Action and lagging in nature. Still I do think they have their place and I may use daily or weekly bars for a bias on which to base my entries on lower time frames.

Update 23/09/2012

It's been 6 months since I started this journal and I'm pretty happy with my progress to date. I still trade more or less in the same way as to when I started the journal, although now I also tend to dabble in the lower time frames occasionally using the same principles. Who said lower time frames were just noise ;-).

Thanks to the teachings of Lovejoy80 I have also managed to fine tune my entries and reduce the size of my Stop Losses. This has allowed me to get more %R out of my trades. Too many traders use unnecessarily wide Stop Losses in my opinion. If you haven't already I would check out his thread where setups are discussed daily:

http://www.forexfactory.com/showthread.php?t=288707

FTB to a well defined LTF SR. There was a HTF topping formation that was brought to my attention by the_wizard so I had daily bias on a strong move lower. Price had a nice reaction to the area and dropped down to the 82.97ish level where I took 1/3 profit and tightened my SL to a bit above my entry. Price broke strongly through the 82.97 level and I took another 1/3 off when the bar lows at 82.70 were hit. I then waited for price to break below the 82.58 level and test from below before moving my SL down to just above 82.74. I was subsequently taken out overnight on the last remaing 1/3.

Lesson learned - with an expectation of a strong move down, I probably should have looked to have taken first set of profit off at the bar lows where I took the 2nd lot of profit off, thus increasing my R.

Entry: 83.16
SL: 83.42
TP1: 82.97 (1/3 off)
TP2: 82.70 (1/3 off)
TP3 : 82.74 (last 1/3 taken off on retrace over night to SL)

Profit/Loss: +1.4R

LTF FTB to daily SR level. Price consolidated below the entry before retracing which is not ideal for the setup as there is a good chance price could shoot away from the consolidation with high momentum into your level and take out your SL. Once price penetrated the level and closed above, I closed half of the position, price was not going anywhere fast and after finally moving down in my direction it seemed to be finding support at previous consolidation area (demand zone) I decided to tighten my SL above previous bar high to be taken out on that position on the next couple of bars.

Lesson learnt - consolidation below your sell entry is not ideal and reduces the probability of the setup working out. Either do not take the setup or reduce the amount risked on the trade.

Entry: 83.16
Original SL: 1.3182
FTA: 1.3160 (is where I planned on taking half profits but was never reached)
TP1: 1.31969 (1/2 off for a small loss after price closed above level)
TP2 : 1.3192 (2nd 1/2 closed for a loss as stop was moved down and hit on next couple of bars)

Profit/Loss: -0.57R

LTF FTB to a well defined SR level. Once price hit first level of support, profit was taken on half of position and SL was moved down to just above high of entry bar. Price then broke below support level and closed below testing area as resistance, SL was then moved to BE+. After price consolidated for a while, SL was moved down to just above SR area. Final TP was hit a few bars later with the help of poor New Home Sales data.

Entry: 1399
SL: 1404
TP1: 1394.1
TP2 : 1390.3

Profit/Loss: +1.36R

FTB to a strong daily SR. I was expecting a quick reaction to the level so had a pretty tight stop. Unfortunately Bernankes dovish speech resulted in USD weakness and I was not able to pull my order before being filled, but did shortly after for a small loss.

Lessons learned - it pays to keep an eye on the news and current events. Saved me from taking a 1R loss on this trade.

Entry: 0.9949
SL: 0.9930
TP1: 0.9963 (was not reached)

Closed trade before SL at 0.99426.

Profit/Loss: -0.34R

Break of a daily SR and FTB to test as resistance. I was expecting a quick reaction from the area and shortly after being offered at my level, price consolidated in a very tight range. AS it was not reacting quite as I expected I closed half my position and tightened my SL just above the entry bar high. Price did eventually come down to hit my TP where I took full profit on the remaining position. Not my greatest trade.

Lessons learned / notes - don't want to get into a habit of closing trades early but felt in this case that price was not moving the way I expected price to move after bouncing off an area where you would expect strong supply.

Entry: 83.64
SL: 83.88
TP1: 88.578 (1/2 position closed after price consolidated)
TP2: 83.44 (2nd half of position closed at original TP1 area)

Profit/Loss: +0.54R

EU FTB short to 1.3395 area. Not the greatest level and I didn't take this trade, but may have been worth a small position given the confluence of USDX and the FTB to the monthly level at the time.

Had this level marked up on DJ30 but got distracted .....

Break and First Time Back to 13149.

FTB to a strong daily / weekly SR. Cable has always been a choppy pair and on the lower timeframes the level was not the cleanest but still a good opportunity for a long IMO. Took profits at FLR and moved my SL to breakeven where I was stopped out on a couple of bars later. Price then proceeded to where my original SL would have been.

Lessons learned - need to start using an EA, taking profits at market often leads to poor fills, first TP was supposed to be at 1.5940 ... only a few pips but it adds up over time.

Entry: 1.5908
SL: 1.5874
TP1: 1.5937 (2/3 position closed at FLR marked in grey)
TP2: 1.5910 (2nd half of position closed at BE+)

Profit/Loss: +0.51R

FTB to daily SR, previously support and now we expect it to act as resistance. Took slightly less risk on this one as we had some congestion not far below the entry which would also now act as support. Just over half profits taken just above FLS and the rest moved to BE+. As you can see price came back on the next bar to take me out.

Lessons learned - often a tough call on whether to move to BE straight away or give the trade a bit more room to move by moving SL to where it would be a net break even trade after profit on first position. This can often lead to runners which I try to get as often as possible. Due to the current congestion on most USD and JPY pairs at the moment, I think the right decision has been to tighten SL as we have not really had many runners of late. Still something to be aware of and you don't want to have tight management while maintaining a balance of letting your trades run ..... easier said than done!

Will def be looking at an EA to manage my TPs and SL .... got nailed again when trying to take profit at market on TP1.

Entry: 0.9068
SL: 0.9086
TP1: 0.90552 (Just over 1/2 profits taken at FLS)
TP2: 0.9066 (2nd half of position closed at BE+)

Profit/Loss: +0.43R

FTB to daily /weekly SR. Entered and managed the trade on 1 hour.

Lessons learned - I think the trade could have been managed better, I should have definitely walked away with a better %R on this trade. If I had stuck with my original plan to take half profits at TP1 (FLR in grey) and 2nd half of profits at the next minor SR in grey I would have had +1.7R. Plan the trade and trade the plan!

Also got a bit lucky on this trade after rumours that the ECB would be looking to boost the firewall to 940 Billion EURO from the previously discussed 700 Billion. Still would have expected some order flow at my entry point regardless.

Entry: 109.90
SL: 109.65
TP1: 110.146 (1/2 profits)
TP2: 110.247 (1/4 profits)
TP3: 110.17 (Stopped out on last 1/4 after tightening the SL)

Profit/Loss: +1.1R

Nice simple trading, you drawn very similar levels to me. Trading really doesn't need to be complex, eh?

Hey Trotty.

Yep, like to keep things simple ..... don't need a chart full of indicators that's for sure.

Good to hear we having similar levels.

Thanks for stopping by!

Break above of a daily SR and FTB back. Price initially showed a reaction which can be seen on the lower timeframes and closed above on the 1 hour, on the next bar it broke the SR level and took me out for a 1R loss without any warning signs. It wouldn't have been the first time I have been taken out by an impulsive move on Gold. Oh well, it's all part of the game!

Entry: 1665.5
SL: 1658.5
TP1: 1671.0

Stopped out at 1658.5 on full position.

Profit/Loss: -1R

There were a couple of more trades from yesterday which I either missed or chose not to take as they were correlated to some of the trades I was in at the time.

EURUSD long at FTB.

2 more examples from yesterday where we had a break of an SR and retest from the other side. The GBPCHF is not one that I would have played as generally I would like more time to have passed between the break and the level being retested from the other side.

Another loss on commodities for me. FTB to a daily / weekly SR level. It was clear that there was a large amount of congestion and price pressure suggesting a strong move down from the 104.58 so I chose to reduce my risk on this trade. Just as well as the level although pretty good on the daily timeframe was barely respected.

Lessons learned - obviously the price pressure build up above the entry was a cause for concern and you really have 2 sensible options to consider, either do not take the trade or reduce your risk, I chose the 2nd option in this case which obviously did not work out for me but it could have quite easily been the opposite. It's all about balancing the probabilities with risk. With the price pressure above, this was now looking like a slightly lower probability trade had there not been this build up above and hence I risked less on this trade.

Entry: 103.75
SL: 103.15
TP1: 104.30

Stopped out at 103.15 on full position.

Profit/Loss: -1R

LTF FTB to a daily SR level. Due to broker issues my order was not filled on this trade but had I taken the trade I planned on taking half profits at the FLS and moving my SL to BE. Would have been taken out for roughly 0.5R when price retraced.