It's Really All About Consistency...

Hey Aaron... thanks for dropping in... and i'm quite pleased your enjoying it.

Thanks for the V by the way.

I know that most here either don't get to see into how a profitable retail trader deals with various day-to-day issues in the markets, and I need to get a better grasp on it myself! lol. Thus, the reason for this.

While I'm still kinda scratching my head in regards to why it seems quite a few people are interested in seeing how I personally struggle with my own improvement... I'm really glad to get the positive feedback and see others feel it's giving them a better understanding of how to look at things, or maybe how to go about their day..etc..


Anyway, feel free to contribute any time... I WELCOME feedback or criticism of any kind so long as it's on topic.

X

Well, looks like the AUD/USD is going to work out after all...

finally found support/resistance across all major comdoll currencies, and the S&P found some pretty significant support as well, with increased volume on the 5 min up candles as we moved towards the top of the range.


once the calling wedge brok...we retraced a touch back to the trendline break, and pushed up abouve the important 9645. from here on out, it should get to 9685 before stalling much...and I think we'll see a retest of the friday highs.

and for the usd.cad, I filled back up a bit more as I saw all of this lining up for the Com currencies... and re-opened the half I closed a bit lower. Over all, not my favorite way to trade.... it feels like i "overmanaged" taht position.... and yea...my ideal entry from 0440 would clearly have been better... but all in all, it seems things will work out to some degree of profit on both trades.

However, still to early to celebrate... at this point just nice to see things working out eventually.... at least so far.

Because I like the way this AUD/USD trade is working out, the trendling break up, the momentum out... the slower retracement to the breakout point around 9645 as it slid back down... I decided to take one of my 3 "live intraday" trades... these are the trades that allow me the most discretion in my entries, though I can only take them on one of 4 markets.

And at this point, I must let something resolve, because I am only allowed to have 3 losing trades in a day (besides my highly mechanical entry which only sets up a few times a week and has the highest win rate),
and I now have taken 1 trade from my "live intraday trade" class, and 2 from the "preplanned 1H +" category.

Now, it's just a waiting game to see what works and what doesn't.

but so far, both are looking good now... and it seems the 9645 level IS holding for a bounce... so, great.

now just wait and see.

Well, I'm pretty much done for the evening. I feel like i'm fighting an uphill battle, the way price action is moving, the lack of any movement generating news developments, the really solid techincal levels that have been pounded on constantly today, the fact that every bullish small TF trendline break hits the FIRST possible stalling point...and stalls.

I just don't like to play games, and since I had an opportunity to take SOME profits, and reduce my risk on what I have left to zero, I decided to take it.

And of course, europe is on a holiday today so I don't execpt the strongest of price moves except maybe to run stops... but which way? I really am not sure at this point.

With so much uncertainty, i'm just happy to be DONE tonight.

That being said, the last entry on the AUD/USD long worked out pretty well, and the first was at least a bit profitable.

here's a link to the chart of the last entry:

http://www.forexfactory.com/forextra...trade953934059

Hit a new equity high if I'm not mistaken... and other than the one early entry off a weak price (friday's close) on the usd/cad, I don't feel I really made any mistakes.

Sentiment just moved against. I will be better prepared tomorrow for it, but, compared to thursday, I felt MUCH better about the level of structure and control I felt I had on my trading. Nothing impulsive, only 1 action I feel was a "mistake", and in spite a bearish sentiment day, i've managed my trades well, exiting at techincal levels, and getting out before asia closes down during this low liquidity london session.

I am not sure yet how I feel about tomorrow... as I acknowledge I missed the reality of market sentiment today and probably could have reviewed more data before making a decision (that was, admittedly, more techincal than anything else)

So, i guess the obvious conclusion is for tomorrow, to focus better on the "soft data" before the trading day really begins, and stay out of trades until they hit SOLID levels...not so-so levels (like in USD/CAD)

Good trading to all...

X

Well... after getting some rest, I wanted to see just how the markets ended up performing after I closed shop.

turns out moving my stops up on the aud/usd cost me a bit...but that's ok, given the circumstances, I would have taken a very similar approach regardless.

I am wondering however, If after I reduce risk and take something on the position for profit, if I should not just leave my stops at a plce where stopping out would result in a BE...rather than a win.

I sometimes do this, but have been more focused recently on locking in profits. I will track this for a while, colllect needed data, and then determine which is best.

For examplke, if I have a long on AUD/USD from 9640... with a 30 pip stop, and a 45 pip first target.... and lets say price moves up 20 pips...but starts to stall.

I can move stops to BE of course, or I could take some off and move stops...

But, I wonder what taking, say.... half off, and then moving stops to 20 pips below entry... I wonder what effect this would have on my over all profitability.

This way, should price decline back to my entry point, or even as much as 19 pips below it... i'm still able to make a good profit on the trade.

In fact, now that it's a risk free trade, I can even go for a much further target if i have reason to believe it has a good chance of getting there before retracing down 20 pips below my entry.

It would have absolutely made me a good profit today on aud/usd... I could have easily gone for the May 31st highs at 9733... or even just the friday high of 9706.

At any rate, something to consider as I gather data to determine which is best over all

Now... the surprise setup. I was able to get short EUR/USD right around
1.2497 This is a $hit hot level IMO... 1.2505 is a previous daily high, and one can see from the confluence of significant trendlines, as well as a significant area of previous resistance, the daily R1 pivot level at 2494, and a significant figure number at 2500.

Furthermore, the 1hr candles are showing a topping pattern, and there is a 23% fib retracement from the highs around 3278 before the drop, down the the low around 2300.

I mean...for just purely techincal reasons, I've not seen so much confluence at a level in a while...and given the overall fundamental outlook on the euro, and the still lacking concrete plans to make drastic change in order to improve the situation, not to mention the negative news out of china and the rest of the world in general...

I can't see any rason to NOT short this...other than the fact we just broke out of resistance... which we see clearly at around 2460...but between 2500 and 2460, I see almost no reason why price could move u past this to 2530+

So, i'm targeting 2455-60 for a first target, then about 2435 for a 2nd.

I almost wish I put more on the trade, but I hate to get greedy on the first day of the week, especially when I haven't been watchign the markets all day, and therefore might be missing something.

anyway, i'll post a chart below.

Here's to a bearish euro

X

here's the chart:

So... I'm struggling with this eur/usd short right now. It's profitable, and all of my knowledge and analysis are telling me to stay short, to hold it, that there is a 90%+ probability that we will touch 2465 before we touch 2530

but, after the 2nd bounce from around 2473, I just don't want to take that chance.

Now, this is not the biggest problem really. It's not like i'm closing the trade... I just took a large portion off so I could bring stops down around the highs of today... and in the event it stops out, I have essentially a trade that did JUST better than break even.

But, why even do this when I believe there is a 90%+ chance to get all the way to 2465?

it seems counter productive. And maybe it is... in this case, I believe it is. I recognize that it's an emotional tug that I am experiencing to have this resolve, or at least break down further...and that i'm uncomfortable with the waiting.

I find slow liquidity times difficult to "stick to ones guns", particularly when I greatly desire to not put any of my previous profit at risk.

I often will use trade management strategies such as this...but I do wonder how much it costs me in the end, or does it really actually work out pretty well.

This is something else I need to very carefully track and record.

However, doing this is still much better than some plays last week, where I just impulsively closed the trade out anyway.

Here, I may have taken off a good portion of the origonal position, and I also did it at a minor techincal level..... however, now that I cannot lose on this trade, I will absolutely let it run the duration to stopping out just a touch better than BE, or targeting down to 2460

At least I know I can't be doing it terribly wrong here, because it's hard to argue with a risk free trading opportunity.

It just maybe could be done better...

X

It's all a measure of your risk appetite. Since you trade for a living, or due to psychological reasons, risk-free trades may bode better for your trade management style. However, it hints of compliance to the popular adage that one won't ever go broke taking profits. It's a give and take relationship..keeping your stop in place will overtime yield greater profits, as your winners will be on the full position size as opposed to a portion. This however is the psychologically harder approach to take, as it may be difficult for you to cope with taking full losses, especially with a discretionary system. I also don't know your W/L ratio or your average trade holding time so won't be able to provide much further input.

Regards,
xXTrizzleXx

Well, i've decided on a solution to this. really easy... and this way i can get a good idea of how things actually work, and COULD have worked had i just let it alone.

I'm gonna start keeping records on an excel spreadsheet that records my origional entry/stop/target, as well as at what point I actually take profits, reduce my trade size, and modify my final stop.

then i'll go back over it all once a week to get an idea of how well my managing the trade helps, or how much it hurts from my origional stop and target.

should have some decent idea in about a month...and after 3 months, i'll probably have a really, really good idea of which is best over all.

X

Hi (I buddied you)

Subscribed!!!

My spidy's sense is tingling. Me thinks we're having a very good trader in our mist here.

How old are you? If you're not comfortable, then don't be specific (an age range would suffice)

What's your background? Education, etc.? Work experience in the industry, etc.? Again, don't need to divulge if you're not comfortable.

What lead you to this mess that is FX trading?

If you're doing this, then also include what would have happened if you did not take profits, but let the trade run until the present day. Your results may be interesting.

Regards,
xXTrizzleXx

Great point Trizzle... and your right, since I do use profits for my own needs on a regular basis, it cam make this type of thing particularly hard, psychologically speaking.

and it is a string of losers that would put a pressure on me and this can cause poor trading. I've experienced in the past, and therefore often resort to trading in this manner.

That being said, I do think I willl put it to the test and get the hard data on it all, to see if there is an overwhelming conclusion that one way or the other is better.

Because I am discretionary, and if the data is "close"..say, 15% more profit by not touching things... i won't bother trying to change, as the pressure doesn't justify the profits.

but, if I see a signifncant difference, 50%+ increase... I think i will possibly designate a portion of my trades that I feel are higher than average probability to require a further minimum price movement before I do such a reduction (say, I must always allow the trade to move 75% of the distance to target before reducing anything, etc)

if nothing else, I know it will bother me if I don't get hard data on this, and have some understanding of what I may be missing! lol

At any rate, thanks for the post, and i'll consider the psych ramifications of trying to alter my trade management style...


X

And is this 90% determined by statistical sampling or just a "HUNCH". Just asking.

statistical sampling... if only i could somehow develop a valid way to generate accurate statistical data using a perpetually dynamic series of unique circumstantial events... I could make a few hundered million as a groundbreaking statistician rather than watch a chart all day

It's a hunch no doubt. and also why it's hard for me to hold such a trade.
If i had data to prove this hunch, I would be psychologically able to hold it probably almost every time it set up.

but, the elements that went into the analysis here are price action, an estimate of price ranges and the relative liquidity or lack of liquidity at different points in price, likely intentions of larger traders based on price action and volume at various levels, current world events particularly those in europe... headlines and news events coming out over the last 24 hours, and how they may or may not result in more or less fear/greed than the previous friday, flow information as it is published on various newsfeeds (who is buying and selling, and at what prices according to some of the larger interbank market makers), the amount of confluence of "traditional" technical techniques such as trend lines, trend line breaks, candlestick formations, etc. How current correlated markets are performing, and what the influence of upcoming news releases may have on market participants, and if such upcoming news would cause larger players to "wait before acting" or "act now before news", as well as the relative overbought/oversold condition of the market, and how sensitive it may be to a "shortsqueeze" or a "longsqueeze"

I could actually go on... and as you can see, each trade I take is based on information that I determine from a wide variety of considerations, and many of them are unique to each trade.

but, it's many, many many times when I see this many technical/sentimental/fundamental factors line up, that those trades seem to nearly always hit their targets.

Kinda like a talent scout for basketball i suppose. he can see when a high school player could go pro... even though each player is unique and there is no "statistical standard" to draw from... there are some very obvious points (like leading the league in points), but that will mean different things in different leagues, and at different size schools, etc.

So, it's a lot of individual points that are either "mostly bullish", or "mostly bearish"...and whenever a trade has a lot more "bulish traits" than "bearish traits", i know which way to trade it...etc.

X

P.S. but, I would bet that such a trade will work out as I originally planned for stops and losses comfortably well over 60%. 90% may be high... but, lets say "without any question, the majority of the time" Other than that...i'll need that breakthrough in stat math

Hey X,

I asked that question to kind of "Warn" that when we hypothesize that there is a higher probability of win, we ought to place larger bets, hence higher risk percentage relative to our account (just my own experience). But when we hypothesize the probability of a win to a conservative number (i.e. 60%) we place smaller bets, which may bode well for sustainability of our trading capital.

As there is no guarantee in trading, my position size are "ALWAYS" proportionate to a lower (conservative) probability of a win.

Yea, no absolutely. I usually do so... and I mentioned that in one of the posts above... this time i didn't do so because I hadn't conducted a fully updated analysis of news conditions, nor had I been watching the markets on the whole, so I didn't have as good of a "picture" as i usually do. I just had woken up, and with the level being what it was, I decided to take the trade.

had I been watching for this though, and felt i had a grasp on all the considerations I typically try to consider, I would have placed a larger bet...

I don't like the short squeeze implications tho, lol

however, if we ca get to 2620ish... and if everything is looking just right, a level like that i'll risk a full 2% (which is my max risk on a trade).

that is, if everything is also looking right

but good advice. I try to use it... though maybe I should try to develop a set of criteria by which to decide when to use it or not.... but that'd be some time out...I have a lot of other things i need to get better before something like a "standardized" way of doing such.

X

Well, this week has really been all over the place, and I have a decent idea as to why. A death in the family, although not a person I am close to, has become an aspect of distraction and preoccupation. Also, being over
extended caused me to fall asleep before U.S. session started yesterday, and I had some great trades that turned out to lose because I wasn't watching the screen. This alone tells me i'll have to settle for a down
week. It is what it is... and I'm not going to fight it anymore. I will respond to any and all PM's and posts sometime this weekend, or next week.

Also, I over-traded, as I was not able to fight the urge to try to trade to make back a small loss, and most of all I simply was not paying close attention to my trading amounts due to several "split" orders, and
the whirlwind of family activity going on around me (and causing a high degree of distraction)

This has always been a real challenge for me.... knowing when to "quit". For now, I need this break, and it will likely be self defeating if I don't take it.

I may papertrade the last day of the week.. but today, there won't be anything.

Furthermore, I am not reading the thread right now as I'm avoiding all things trading at the moment, but someone kindly suggested that 2 trades a day as recommended from their mentor made a big difference in their trading.

I will be adding to my trading plan, that anytime I have a losing day, that the next time I trade I will only take 2 trades a day, both at half normal risk. If I am profitable, then the next day I go to 3/4 normal risk, and the next day, i go to full risk.

3 consecutive days of success with 2 trades a day, and I can resume my normal trading.

If any day fails, I will continue to reduce my risk by half. If I have 3 losing days in a row, I will go back to papertrading until I have 3 consecutive winning days.

I feel very, very good about this type of structure and self correcting strategy I am going to add to my plan. I have had some loose guidelines in the past, but this feels better...and I think 2 trades a day will
make a great deal of difference.

I will look forward to next week when I see it, but for now, I am satisfied with my decision to NOT look at a chart.

Well, I did leave one last order open, one that I felt I would be almost doing myself and my account a dis-service by not taking. a short around 1.2620 on the EUR/USD.

The trade triggered and resolved as I was away... and I guess it again goes to show the best trades are, IMO, both easy, and unnecessary to manage. This is something I will keep in mind.

At any rate, I'm up for the week, which is a pleasant surprise, and that makes 3 weeks in a row of profit.

I feel I am at a bifurcation of sorts... a "crossroads".

This point is where I often find my trading start to degrade...treading water, or slightly losing for days or weeks until it is "back on track".

This is, I suppose, the exact "mental place" that has troubled me recently, and one that I need to develop a way around if I'm going to bring my trading up to a greater degree of consistency.

I will continue to take the rest of the week off, and I will spend a fair amount of time considering not so much how I got here, but how I will get out, so to speak.

Darn frustrating business this one! At any rate... I have a few ideas...will report here as I mull them over. Ideally, I'll have found a way to get back in a proper state of mind to trade at my best by this coming week.

Will type it up as I go along here... time will tell.

If only I had followed JUST those insights, would have done well.

This write up was after the positive GDP numbers for AUD were released, but before london opened.

Again, in case anyone is curious, check the end...my summary and conclusion, and it'll show you how I draw conclusions about what to do for the day. Would have been very successful day had I just done that and that alone...

U.S. stocks rose yesterday as ISM services index rose slightly to surprise the marekt, however, it is not moved with much momentum, and nothing is better in europe. Market tone is still that of concern. Also, it’s now below it’s 200 day MA... this is very bearish.

some rumors of a specific fund to help spain are coming out of the EU, and spain officilly asked for a bailout of sorts yesterday, but merkel is still strongly againt some sort of joint bond efforts.
Spain is having trouble accessing the capital markets. Spain prime minister said he is prepared to give up some of spains financial controls so it’s banking system can take shelter in the larger EZ framework. merkel is under increasing pressure inside the ez and abroad.

Germany however along with finland do not want euro bonds unless a signficant change in the EZ political power structure changes toward a more federalized aspect. It would increase the better rated nations cost of borrrowing, and germany sees it only as an incentive for problem countries to borrow more, and not force change. these are very powerful points. Should the EU somehow increase federalization, this will likely boost the euro. shouold this not play out, the euro will likely sink further.

The ECB meeting coming up tomorrow will look to discuss a possible rate cut, as well as a possible LTRO. any sign of either will push the euro down. Bottom line is look to short the euro/usd... or maybe the eur/cad (cad is the most likely to be strongest of all currencies)

Spain is going to sell bonds on june 7th, as will france. Also, the ECB will probably keep it’s 1% interest rate...slthough some see a possible 25 point cut. Italian debt seems to be lowering it’s yield, and is looking stronger. spain....is not really. but lots of uncertain news is emerging over all out of the EZ.... so hard to tell...rangeing looks like the flavor today


CAD was a see saw after Canada CB signaled stable rates, but also inferred a possible increase in rates in the not so distant future. Also, their 10 year bond yields fell, and the CB is the most hawkish it’s been in a while considering the world.... a EUR/CAD short may be the way to go...at least, look for CAD long plays
CAD CB and government is looking to pay down canadian debt.... very hawkish indeed.

Also, AUD rose after the interest rate cut, and now had a better than expected GDP. these 2 factors could be “gamechanging” for the AUD/USD over the rest of the week, and possibly into next week. At least for today, I will look to get long AUD/USD at some point if possible.

Seems japan is getting very outspoken about a willingness to intervene in the currency to weaken the yen, and the USD rallied (as did others) against the yen on this announcement. However, some market players seem to believe it will only lead to a momentary spike in the dollar, but nothing sustainable.

BoE is expected to keep their main interest rate at a record low of 0.5% on thursday, june 7th. They are also expected to hold their 500 billion USD asset purchase plan (QE). This bodes for further weakness in the GBP against the DX

the AUD rose 0.1% AFTER the announcement of a rate decrease. that’s impresssive..and worth looking hard at the AUD as a buy. Also, AUD rose after the interest rate cut, and now had a better than expected GDP. these 2 factors could be “gamechanging” for the AUD/USD over the rest of the week, and possibly into next week. At least for today, I will look to get long AUD/USD at some point if possible.

U.S. treasury’s fell as bond holdersplace bets that yeild drop is unsustainable. I personally disagree given what is going in the EU. should no resolution evolve...yields could go to nearly zero. However, we are not seeing MORE bad news... and things are in a state of flux it seems between the euro and the dollar. “RANGE MODE” is possible... and more likley than either to rise or fall strongly... although, if one were to move, it would likely be dollar up. London session will give lots of clues as to larger players intentions.

premium, a word invented by the fed, shows a negative 0.86% on bonds... this means a negative is that investors are willing to accept yields below fair value. this peaked in 0.94% on june 1st, a record.


Summary: tough day to make clear decisions. I don’t know the general market tone is going to be for today. However, it looks like the CAD and AUD are the strongest players, particularly the AUD... and it looks like we are slightly favoring risk on, at least with the good aud new, and the stock markets in asia moving on up.

This is not entirely too surprising, as we have had some serious oversold conditions. Pay close attention to events as they evolve coming out of the EU.... that will be the most likley thing to affect the markets next.
CONCLUSION: look to get long the aud or the cad, particualrly against the usd or the jpy

Well....after some debate, I am going to take my 2 trades per day max rule into play today for the first time.

I wasn't going to trade today, as I felt very distracted earlier, but with things back to normal for the most part, and I feel I have such clarity on the situation and opportunities in the marketplace today, I feel fully capable of making good trading decisions today.

Therefore, I will trade, no more than two trades, and at most 0.50% risk per trade today. Just to re-establish control and confidence in my analytical abilities.

Actually I feel darn excited. I wrote up a post the other day, and in it I used the recent NFP as an example of a driver of sentiment, and that to show this wasn't good for risk, it was really jsut bad for the dollar.

I also said that if it came out that a QE was not on the near term horizon, one could expect this risk rally to falter pretty quickly. When I saw that was exactly how things seemed to play out over the last 12-18 hours, I felt great.

Furthermore, I had some other hypothetical situations like that... 1 or 2 of which came to pass, and indeed, the market reaction was as I said it would likely be. Again, this re-enforces that my overall market analysis is quite sharp, and I feel a great deal of confidence from these small successes, even if an actual profit wasn't derived from them.

So, this confidence, combined with a knowledge that I will GREATLY limit my trading activity today to only two trades over all is what I believe is creating a sense of enthusiasm in me with regards to trading, as opposed to a subtle fear of "I'm slipping... and I don't want to lose money... and I need to take a break to clear my head...etc"


Overall, I couldn't be more confident in the opportunities I see tonight, but in spite of this, I am mostly excited to know I will be going back in with "training wheels" of sorts....by limiting my entries to only two on this day.

I may take multiple exists, but only 2 entries. That's the rule...and I'm looking forward to seeing how effective I find it helps me interact with my psychological state as the trading day plays out.