(binned per thread starter's request) The big... IF

Thanks for the offer, and I may poke my nose in sometime.

This thread however is simply my journal, it is intended to show some of the things going on in my mind as well as some of the way I am trading. Less experienced readers may find some similarities with their day to day challenges - or not.

This is the most intensive learning session I have undertaken. The surprising thing to me is how I get myself into a mess sometimes, and declaring these mistakes is helping me to gradually eradicate my errant thought processes. I am not trading in the same way that I was...

...in this case badly. Today my original entry was based on sound reasoning - and my attempt at loss limitation backfired somewhat because there was less reasoning. At the end of the process I was ahead, which is ultimately just Ok, but it was a lost opportunity.

The red triangle shows a short entry which corresponds with an S/R level back at Monday this week. Price continued up, and I lost faith in my trade causing me to place another short at 1.5499, also an S/R level which is apparent on a 30m chart. On its own this would have been fine if I had waited for 5m close-of-candle instead of dumping this second short for a 5-pip loss. Then I sat back and reflected, the result being the green line on the chart which represented the BE point.

Price came back to me and I closed for peanuts in profit. A more sensible trade might have been to short the retracement, at least that would not have been counter-trend at the time.

Well, after a bit more time it is apparent that I was just lucky. Cable soared into the blue. Done for the week.

A passing member recently dropped a comment that looked genuine enough. As a result I spent some hours reading a thread, some 300+ postings, which tantalizingly gave a little - then a little more, but lacked some structure and a few critical elements which rendered it nearly useful.

Then I came across this:- "I will start releasing the new tools publicly where we can all benefit from them when one of two things happens: the thread reaches 50 pages, and/or I reach 10 vouchers". That rankled with me, it smacks of egotistical self-agrandisement. Prostitution almost. So after a few dozen more skimmed posts I abandoned the thread.

Other voyeurs wishing to read will find some insightful comments on trading, and a particularly useful examination of how to identify consolidation patterns that should yield very profitable trades. Breakout trading has been aired muchly in the threads of FF and this is a great piece of supportive prose.

However those of you wishing to follow a breakout system that identifies everything you need to know should go here (http://www.forexfactory.com/showthread.php?t=285912&highlight=turtle+trader) and download the turtlerules. Within you will find some interesting history, and a lot about identifying trades, position sizing, when to enter, when to exit (commonly missing from a lot of systems), and where to set stops.

You never stop learning.

In your last screenshot, did you go short while the rsi was overbought?

Yes @ 1.5499, but price was still rising at the time and I was suffering from LTP so I did not hold it. Hence my comment about closing that for 5-pip loss.

Ok,

I can't remember if i read this somewhere, or it is an observation or it is a bit of both. When the rsi goes overbought on a rally, the rally is likely to be sustained until the rsi drops out of the overbought zone. The rsi entering the overbought zone does not mean the end of the rally imo.

A good analysis. RSI is good for exploiting range-bound movement imho. If being so used a method for detecting breakout is necessary and a box would appear to be as good as anything. Been caught too many times in the past by that. RSI is also good for picking the minor pullbacks that occur in a trending movement.

Missed a good short entry on EU this morning. Loads of meetings today, school at 2pm and a bunch here for 4pm hence a bit distracted. Might have to shift my day to eastern european timing and go to bed after the NYSE shuts, or sooner

It appears I still have to overcome my capacity for watching a losing trade becoming even worse. Particularly I must shut down when I am distracted or disturbed for any reason. What had started as a promising day yesterday turned into a disaster just after Bernanke started speaking.......

Patchy trading this week due to visitors from abroad. Nice final play today thanks to Draghi or someone, otherwise it would have been worse!

An interesting thing happened on Friday (previous post), a bunch of people arrived so I set up a short with slightly less than my typical leverage and left it to develop for most of an hour. On return I was handsomely rewarded with about 65 pips which I decided to take. In hindsight there was more to be had but PA was beginning to display uncertainty at a level corresponding to earlier consolidation regions.

The trade was entered at a previous high SR region, which held again. PA was faltering at 1.1850 and this can be better seen on a 15m chart.

A nice trade, but the interesting thing for me was my change of attitude caused by reducing my trade leverage. I must ponder on this.

Here is a setup which I have often noticed and mostly failed to exploit (due to not placing a trade). The situation occurs that a trend is broken as noted on the attached chart. A feature then develops typified by the contents of the purple oval. Obviously all PA patterns are different, but the return to the horizontal line drawn through the break of the trend line occurs frequently.

In this example open long at 'B' with a stop somewhere below. Your choice of SL depends upon your preference but in this case there is a local SR at ~ 0.998 (10 pips) or a second SR slightly lower.

It is easy examining this chart which is now historic, but in practice PA could enter a consolidation or flag region when the trend is broken. Also there is a reasonable chance that this is a local retracement and the downtrend may then continue and so some strategy for handling this (usually an SL) is necessary.

Despite some earlier misgivings I read further through this (http://www.forexfactory.com/showthread.php?t=302007) thread and found it useful. The thread grew at a phenomenal rate last year and is still growing. The first 30 pages contain pretty much everything you need to know. It is quite a trawl.

The thing that did it for me was the AudUsd m15 chart below, which I was watching and traded at the time. ....no I only took the first dozen pips.

The essence is that a consolidation region forms, and the longer that PA remains in that zone the more likely that any breakout will continue to run in the broken-out direction. M15 is the preferred chart and a box is drawn which is 30-pips high and several hours long. People appear to have used as little as 7 hours, but I prefer more (9+ hours) because there seem to be fewer half-hearted or weak breakouts when the zone continues for longer periods. Also the height of the box varies depending upon the instrument, 30-pips seems about right for Cable and AudUsd, but definitely it should be smaller for my other favourite cross EurAud.

Today I reduced my trade leverage to 5:1, except for this gift on the EurChf which was for one standard lot. Only a few pips but hey....

This is a shot of AudUsd on M15, I took the short at 'sell' but due to running too tight a stop I went out for -5 pips.

Having drawn the lines I realised that there were another couple of possible entries in the middle of the night. The 'A' entry was maybe a bit inspired, but the 'B' entry was definitely playable with local SR coinciding with the entry point. ....must work on that 4-hours sleep 8-hours trade shift pattern.

I came back to this chart just before the FOMC event and was contemplating another short. However the statement was 2 minutes early and PA was well down before I realised. Fortunately I scalped a couple of rebounds which recovered yesterday's loss.

Well I missed the 'Short' entry indicated, and TBH it was less obvious at the time. However I am now watching the down trend on this 5m chart. The line has just broken at '??' (not shown) so I am waiting for retracement to 1.0560.

Well price never came back to 1.0560 during my attention span.


If you were still in doubt as to the value of the breakout method proposed in this (http://www.forexfactory.com/showthread.php?t=302007) thread, here is another example of a nice score you could have made on AudUsd. The consolidation region stretched for most of a day before breaking out. It being 3am at the time I was asleep and did not trade......

Trading on a reduced leverage has been interesting in some ways. My attitude to risk was modified somewhat. After a flat previous week this week is positive in two aspects. First I made some money , second I achieved 2% on this week .

Trading opportunities are disrupted for the rest of this month so I am not expecting great things between now and September.

So my visitors have gone back to China, and some reflection has been undertaken. My two main faults have been getting into a trade too early, and not exercising enough self-discipline when trades go wrong. So going forward I absolutely must correct this. A third and less obvious flaw is trying to second-guess the market. Reading through more of the SSBO thread has highlighted the uselessness of trying to predict anything, so play by the rules only.

Also I now have three trade plans, not including setups. Box breakouts seem quite reliable, trend-reversals shown above also look good but maybe a bit more risky, and movements between SR lines.

Missed some bouncing-ball setups today on EurChf mainly caused by not understanding what was happening. Also my yawning long on AU is coming back, quite low leverage on one mini-lot and the elapsed time has taken the entry price about 12 pips in my favour. I added a second mini-lot this afternoon which is now in profit and SL protected, just need some market enthusiasm over the weekend!

Yee-ay! just made 1.1% in 5 minutes.
I just wish I could do as well when the markets are not bouncing around like a pair of cats having a fight.

2 winning trades open for 20 seconds and 30 seconds, one losing trade open for nearly one minute.

One day I will write down what I do, when I can figure how to put it into words.