My GBPJPY trade journal

Hi Greg,

An old high school friend of mine who is a highly successful forex trader regards you as his personal mentor and showed me to this journal sometime last year.

Being a Korean stock trader with some success, I started taking an interest in FOREX several months ago and found it quite attractive for intraday trades.

He strongly recommended that I study all your charts.
First thing I did was print them all out and literally binded them into two books.

However, I couldn't really comprehend your trades until I saw your recent ones which I can look at the smaller time frames on my MT4 on OANDA.

I am very grateful that you posted your recent trades. Now I can analyse and learn what you see before pulling the trigger and how the mass crowd sees the setup.

I also read all the specific details you kindly shared with others in the posts. They gave me alot of insight about the importance of waiting.

Only problem I have at this point is trying to get the same pivot point setup you get in your MT4 chart feed which I think is due to different time feed from different brokers.

Hence I have 2 simple questions if you don't mind:

1) Do you use Market orders when you pull the trigger?

2) What broker do you currently use to get those chart feeds? (I ask this because my FXCM AU chart on MT4 also seems slightly different to yours)

Thanks in advance!

Regards,

Yon

Hi Yon,

Great post. (1) I always use market orders. (2) FXCM MT4 frequently has different prices/quotes than the charts I use, FXDD MT4. I used to subscribe to both charts but found FXDD MT4 more reliable/accurate, stopped using FXCM MT4 (although I trade with the FXCM platform).

I use "auto pivots" that you can download. I think it's still called, "1000 indicators for MT4." Maybe you're already using them. I hesitate to turn people onto that site, particularly new traders, because playing with/trying out all those indicators can be a very confusing head trip. That noted, most indicators work in a trending market. -- Unfortunately the market is trendless half the time or more (one hr, 4 hr, daily charts, etc.), and trending indicators are not as reliable.

You didn't ask but I'll pass on a couple more random thoughts (I'm sure I've said this before): For me, the simpler the better. The last trade I submitted was a striped down version of what I normally have on the charts: Candle sticks, a pivot, a stochastic, some kind of trend indicator, 55ema, channel lines. Guess that's about it. These few simple indicators have been tried and proven by great master traders for decades. I wanted to show (you and myself) that the charts can be clean and bare bones, and it is still possible to make a good trade. Charts don't need to be confusing with a mash up of indicators.

When it comes time to do my analysis and whether or not to trade today, this is my approach: I have four charts on my dual screen that I pay almost exclusive attention to, 1 hr, 4 hr, daily, weekly. I sometimes use the smaller time frames for entry timing (5 min, 15 min, 30 minute charts). However the time of day I'm placing a trade is more important.

The primary thing I'm interested in: -- is GBPJPY in a trend? Easiest enough to see: I look at the weekly chart; the daily, 4 hr, 1 hr. The more of my time frames trending in the same direction, the better. Developing the skill of discerning the trend is very important, yet simple.

As I'm a trending momentum kind of guy, I know I'm not going to see much if any momentum (energy) unless there is a trend (I've been observing the charts a long time). I've saved a lot of money, made many fewer mistakes in recent years by standing aside when the market (GBPJPY) is tracking sideways in a tight range (low volatility).

Next I'm interested in where the candles (price) are in relation to the new central pivot point. Above or below? If the market is in a downtrend and the candles are moving significantly below the new CPP, then, everything else being equal (my other indicators), I'm inclined to consider a trade to downside. But I may wait to place the trade. Depends on how ripe the setup is. If the initial analysis was around 3:00pm (PDT, new pivots), I may wait until the pre-London Open, and perform a second analysis. If that anaylsis confirms the earlier analysis, I'll place a trade.

Caveat: I will not place a trade unless I've established a 100 pips+ target from my entry point, ideally to another pivot point. Or the target may be a tested top or bottom, etc. Why 100 pips? I may not capture the whole 100 pips, but I'm looking for enough of a move from entry point to have that opportunity. Otherwise I consider the potential move weak, as in weak trend.

I don't place a stop loss order initially 99% of time. I used to, 10, 20 pips out. At least half the time the stop was hit. I'd reenter, still convinced the market was going to take off in my direction, only to be stopped out again. Talk about eating away my stake. The big boys (whoever they are) are gunning for the stops. That's my theory anyway. I don't want them to see me sitting there like a sitting duck, so I don't place a stop loss (like all the newbies do, and like the "experts" say you should). Exceptions to the rule: Occasionally I'll place a stop 100 pips out as I did on the last trade because I was away from the computer. I would never place a 100 pips stop loss if I'm going to be at or near the computer. It indicates a lack of confidence in my analysis of trend direction.

Ouch, that stove's hot! I hate losing trades. Hurts the ego, my wallet. If I lose too often it begins to mess with my head. I begin to have doubts. There's nothing like winning consistently to keep you on the straight and narrow. So I try to pick the spots that give me the best chance of winning. One winning trade a week is enough. Two is heaven. Beyond that, well what can we say?

If I'm not placing a stop loss initially, I have to be a sure as I can about the trade. But even then, sometimes I enter in a trade only to watch the market go against me twenty pips. Then it comes down to my tolerance for pain, i.e., at what point am I willing throw in the towel and admit my analysis was wrong (believe it, if the price continues to go against me 40, 50 pips, I want to understand how this could have happened, why it is happening. I need to understand what is going on). Somewhere around a 40 or 50 pips loss I get out.

Fortunately my analysis about the trade is correct most of time. The strategy works. That's a good feeling. And that's the goal, to understand what the charts and indicators are telling me. No guess work, no hunches.

Eventually I place a stop loss at break-even entry when the trade is 30 to 40 pips to the good. I don't move the SL, I don't adjust it. One trade, one stop loss, one profit stop per session. There are times when the break-even stop loss gets hit. If that happens I'm through trading for the session (with rare exceptions). Not enough momentum to make it to target. Okay, fine, tomorrow's another day. Didn't make any money, didn't lose any. The more trades I make in a given session, the higher a chance of loss. I am better off to walk away after one trade. Forget about it, go for a long walk.

I don't need to trade every day. That was a tough lesson to learn. I used think I had to trade around the clock to make money. It was dangerous, addictive thinking. So many things I used to do when I didn't know better. I knew I had to find a simple strategy that worked time and time again when the opportunity presented itself on the chart, and trade that only.


Cheers,
Greg

The kind of setup that gets my attention. Alas, I missed the trade.

what time frame (chart) you Enter? Do you always stick to same time frame?

Greg, what do you use for your stop loss? If anyone else knows for sure what Greg uses for a stop loss, then you are welcomed to reply also.

Umm, how about read Greg's post - the one about 3 posts above where you asked that question

When it comes time to do my analysis and whether or not to trade today, this is my approach: I have four charts on my dual screen that I pay almost exclusive attention to, 1 hr, 4 hr, daily, weekly. I sometimes use the smaller time frames for entry timing (5 min, 15 min, 30 minute charts). However the time of day I'm placing a trade is more important.

The primary thing I'm interested in: -- is GBPJPY in a trend? Easiest enough to see: I look at the weekly chart; the daily, 4 hr, 1 hr. The more of my time frames trending in the same direction, the better. Developing the skill of discerning the trend is very important, yet simple.

As I'm a trending momentum kind of guy, I know I'm not going to see much if any momentum (energy) unless there is a trend (I've been observing the charts a long time). I've saved a lot of money, made many fewer mistakes in recent years by standing aside when the market (GBPJPY) is tracking sideways in a tight range (low volatility).


There's nothing like winning consistently to keep you on the straight and narrow. So I try to pick the spots that give me the best chance of winning. One winning trade a week is enough. Two is heaven. Beyond that, well what can we say?

I don't need to trade every day. That was a tough lesson to learn. I used think I had to trade around the clock to make money. It was dangerous, addictive thinking. So many things I used to do when I didn't know better. I knew I had to find a simple strategy that worked time and time again when the opportunity presented itself on the chart, and trade that only.

Excellent post Greg. Great wisdom imparted here. Thanks.

Hi Greg,

I felt that I should also thank you for imparting your wisdom and taking the time to explain your strategy through and through. I have been using it successfully for 2 years now on GBP/USD. I have enclosed an example of a trade I took last week using your strategy for all those interested:




In retrospect I closed the trade too early however I was leaving for the weekend so 50 pips had to suffice!

Many thanks again.

Great trade, Marquis. You're talking the talk, walking the walk!

Cheers,
Greg

Chart and summary

Thanks ALOT Greg for the information and your gem insight!

Now I can see your setups clearly on the FXDD charts while trading on my OANDA charts.

I tried to replicate your Chart setup as closely as possible except where I use red for bull candles and blue for bear candles. Koreans choose red for price going up and blue for down. It was confusing like no tomorrow switching it around. hehe

Looks like I was lucky to see the right setup that you did this time round.

I couldn't make much use of the stochastics and MACD indicators at this stage since I am not familiar with its uses. They seem to help me confirm whether I am in the right direction of momentum only AFTER I have entered, as well as give clues of what other traders might be thinking at a particular point of time.

I entered a sell 124.312.
I guess I lack the experience to have the gut feel to jump in as early as you did.

Your strategy is excellent as long as one has the patience to wait.
I'm loving it already!

Still figuring out your discretionary exits which seem more difficult than understanding your entries.

For now, I havent exited yet so I will let the fate of the Market to decide whether it hits the pivot at 123.067.

Thanks again and looking forward to your future trades!

Yon

I feel kinda silly now, knowing the answer to my question was just 3 posts above mine.

This thread is so large that I was sort of overwhelmed, and thus, I decided at the time to just ask about Greg's stop loss (in his system) rather than trying to find out through the 500+ pages of the thread. Ironically, the answer was just 3 posts above mine! lol.

Sebastiaan76, thanks for pointing it out. And thanks to Greg for that post and this thread. There really is a lot of good information here.

Chart. Diagramming potential setup

Two week trades summary

amazing. so jealous lol

no point being jealous.. read the journal and try the system out for yourself. Greg has been kind enough to walk us through hundreds of examples of live trades - don't focus on the P/L but rather focus on his analysis and learn to see a chart the way Greg does and you will be sure to identify and capture ripe setups in a similar way

Hi Greg Wilson,
I have gone through all the pages in your journal and first off I have to congratulate you on your success and inspiration you have given to many traders over the years. I find your work very compelling however I have noticed that times have changed and was wondering if you are able to answer a few questions for me.

1) Do you look at other pairs to see how they are moving ie the USDJPY and the GU as these two pairs directly affect the GBPYEN movements I have noticed most recently.

2) With the "slowing" of the markets ie no 100 pip opportunity are you willing to bring that down to say 50pips? As my aim is to get about 100 pips a week. This leads me into my next question.

3) I have noticed recently that you have switched the 4hr charts and starting to swing/position trade, could this be due to the fact that there are no more 100 pip opportunities? Or is it better to be looking for these longer term options as the offer a greater reward than the intraday trending market does.

I have been trying to apply your craft to the markets through a demo account first and have found that I can normally get at least 20-30 pips on a trade then either momentum will die off or the trade reverses. I think we must change with the times and take what the market offers us. Your thoughts would be greatly appreciated Greg.

Regards,

Tony

For its simplicity I think this is one of the best posts of this journal and here is why.

Reading alot of the journal, a great portion of it shows winning trades with your analysis which shows you are successful but along side that this is humbling in that even with all the years of trades, the dedication and commitment to trading your particular way, there are loosing trades which shows to the audience that trading is never a one way street. The other thing it shows is that having read alot from you, you trade more or less with an out look of 100 pip risk for 100 pip gain however you have the skill to take profit earlier if the market looks to have hit is cap point. All too often traders get stuck in that mindset that they have to take X amount of pips and they fail to read the signs that clearly state it is not possible at this time. Also the flip side, when markets tend to behave nothing like you have planned for, you cut the losses.

That is what I gained from this post. Well done on the positive result

We never do get there do we?

I used to trade sometimes 20+ times a day. Now I make more money from half that per month but I still get sucked in occaisionally

Less is definetly more in trading and thank God for risk management when we feck up.

Thanks for your honesty and showing that even after all these years like me, you still make mistakes. This is the reality of being a trader

Below is a comparison of two accounts over the same time period. The first example takes one trade, win or lose and thats it for the day. The other allows me to fight on after a loss using my trading expertise to win back my losses. Both made a profit

definitely less opportunities - definitely more skill and definitely more patience required..........i am wondering the same question too.

i know i cant give up my day job... just yet.. but the daily grind of the day job is what keeps me trying.......to get there.