A Gnarly Journal

Edit: 8/5/12

I'm trying to sharpen my edge with S/D, S/R, trend lines, geometry, and COT/volume. I may post a stock idea here and there, but I trade specifically spot forex for now. I would like to get into futures as well, but that will wait.

Edit: 8/7/12

When price is above the 50 & 200 EMA, and the 50 is above the 200, I enter short. I may be long before price crosses above both and the 50 over the 200, but that's because the price was below the 50 and 200 while the 50 was below the 200.

I need to keep sticking to these rules 100% of the time. Every time I don't, it's always a loser.

Edit: 9/17/12

Took out all EMAs, charts are completely naked except for the lines I draw. S/D seems second nature, now. S/R combined with S/D creates geometry I can analyze. I use H-lines to determine levels of S/D, with lines being far apart indicating low strength and a handful of lines indicates strength. My H-lines are determined off of the open/close of a swing high/low and it's retracements. The larger the time frame, the stronger the lines, as usual. After I've drawn up my lines, I'll sometimes use the fib retrace or expand to see if my lines resemble the fibs. I'm still working on a good entry/exit system.

On the chart, the top four lines are based off the previous downtrend. The highest open/close, then the retracements, using only the highest open/close. The bottom three lines are based on the uptrend visible on the chart below. I didn't put a line on the swing low because price isn't near that level at all, but I did use the lowest open/close of the retracements.

I hope this makes sense.

An example:

The price is below the 20 E, while the 20 E is below the 50 S, while the 50 S is below the 200 E. The price is close enough for when the 20 and 50 cross, the price will be breaking the 200. The price never retreats, making the signals here very clean. The confirmation signals go through. RSI goes along with price, making a new high.

I am finding the close the 20/50 cross is to the price/200 cross, the stronger.

I took ten trades and am so far less than -1% of my equity, or around -35 pips. Some were just bad trades while others were good but unexpected volatility made the tight stops get hit. (As a rule of thumb, most of my stops are first located above a zone or something, then I add in either one to three spreads. This has helped me avoid a few stop hunts, though I don't think I did that at all this time around when it would've helped out.)

Right now, I'm looking at the eurusd. I think the price will go up to 1.26 at least, 1.266 at most. If this move happens, I believe price will breakout downwards when it does. If not, then the RSI (14) will make an new low while price won't, making the price break out upwards. 4H

I've pretty much ditched the moving average stuff and just want to stick to candlesticks and S/D. I've gone through all the pairs I have subscribed on the monthly charts and designated S/D zones. There's a few setups I'm really digging.

USDJPY
USDCAD
AUDUSD

I haven't posted here in a while, but I've made some sort of breakthrough. It was something Sam Seiden said in one of his webinars that made pretty much everything click for me. Ever since then, my winning percentage has skyrocketed. I've completely covered my losses, though on a very small account.

Hopefully, I can sharpen my edge even more. Here's a current trade, long on the cable. About a 1:4 risk-reward ratio. I think I have the "Ask" chart instead of the "Bid", but it's not too much of a difference. Hopefully, a double bottom will happen because I want to add more. (on the minute chart)

15M

Could've gotten in on a third time. However, I took a .5% profit. I'm trying to keep my trades a little longer. Get ansty sometimes, but I'm getting over that.

It's possible that Aud/Usd could go up to about 1.065-1.07. It's also possible for it to go down.

The first chart, 4H, shows a channel up. Price had made a new high. Nearest area with high demand is around 1.040-1.045. This lines up with the previous high and the 50 EMA. 1.039 is an area where demand was stifled after a nice rally which happened on 7/26.

On the 1H chart, you can see where price dipped down to the 1.045 level, barely missing the 200 EMA. The rally that happened on 7/26 has an origin around 1.0315. If price drops down to this level, it could very well touch the 200 EMA. Added probability. If price breaks this level, then 1.022 is another demand area.

You can see a possible double top forming on the 15M. With the trend lines lining up with price on Friday, we could see a sharp move on Monday. Since price hasn't made a new high since the 2nd, we could see a price make a new low from Friday.

With the COT released Friday, you can see the traffic on the Aussie. The smart money has added 12k more shorts will taking off 5k longs. Also, the retail traders are longer than they are short. Since most retail traders fail, doing the opposite of what they do seems like a good idea.

I like MA crossover, however how does your system performs in a ranging market? As that is the Achilles' heel of a crossover system.

Price formed a H&S instead of a double top, which is still good, as I got 16 pips from the right shoulder to almost the pivot before the pullback. I will be anticipating support at the 1.053 level, which is around where the 200 EMA is.

+.25% for .1% risk.

15M

Took a scalp on Bernanke's speech. I like experimenting with patterns I see, and a lot of the time, I see circular patterns. Sometimes, price takes one quadrant, and sometimes it takes too. After completing the quadrant, price broke out and I took profit at the 50 EMA.

Then, I remembered it's the US opening and since price went down for Bernanke's speech, maybe price will do the same here. Took profit at the 200 EMA. Seems price shot up since I've been typing. (I'd be stopped out by now.)

1M EU

Six more pips. Took a short as soon as I saw the screen. Price moved up pretty fast, and I saw a potential double top. Weird slope, but still got it.

Wanted 4 more pips, but the candle before I exited was showing a large wick. Price wasn't moving as fast as I wanted it to at that point.

Aussie
1M

I wouldn't be surprised if price went back up to 1.01. Price is under the 50 EMA and 200 EMA, while the 50 is below the 200.

Maybe next week.

USDCAD
1H

I've been watching the AU for a bit now and don't know if I missed my chance to get in, but it seems like there's going to be an even better entry coming up.

If price reaches the crosshair, which would actually be the London open I believe, then it will could it's current pattern. I want the 15M 50 EMA to keep going below the 200, and only enter on the minute chart when price is below the bottom BB, when price is below 50 and 200, and 50 is below 200. TP would ideally be 1.06. Still trying to find an ideal SL, though.

Why must I constantly doubt myself? Is it because I'm scared to actually be right and make money for doing so? Am I scared of being successful?

I was in the Cable, as well, and that was a near pip perfect entry, but I figured it has another zone to fall so I took some early profit. Instead, I miss out on a load of pips. Stupid me.

Aussie
15M

I've been reading the Art of War these last couple of days and I'm trying to apply it to trading. I've seen some other perspectives on this site, and I would like to add my own. Maybe I could call it the Art of Profit, unless such a thing already exists.

Here's the first adaptation on the first chapter, though this is subject to changes:

Moral law is a sense of believing in oneself. One should not only be confident in his plan, but he must be able to execute it as many times as oppurtunity allows.

Heaven refers to time. When your sun is not up, another's sun is up; when you are cold, another is hot.

Earth is terrain, whether one deploys chartism or not. Mass fear and greed can ripple the ground.

The commander is at peace with himself in life. He does not trade when tragedy strikes his family, nor when he has just married his wife.

Method and discipline refer to outside of trading. One can not trade money he spent on hookers and drugs last night.

Every successful trader has mastered each of these concepts. Every trader who doesn't master these concepts is doomed to be margin called.

Every trade has a buyer and a seller:

Which of the two is imbued with moral law?

Who is more capable?

Which one has favorable conditions? (Heaven and Earth)

Is one side motivated by fear or greed?

Which side is stronger? (supply and demand?)

Which side is more trained?

Which side is consistent with profit and loss? (big winners and small losers)

According as circumstances are favorable, one should modify one's plans.

All warfare is based on deception.

Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near.

The trader who wins a trade makes many calculations in his temple before the trade is entered. (This will be tied to other chapters)

A couple EurUsd ideas: price will go down to 1.234 or 1.247 or 1.235; it could possibly go up to 1.27-1.28.

Daily
4H
1H

Price went down to 1.248 before the weekend close.

Chapter 2: Waging Profit

Long-term trades take rollback, use this to your advantage. When in position, if you are not with the momentum's direction, your mind will grow stressed. The better trader does not chase trades. If long-term, compound profit. Profit should be your goal instead of being correct.

Stocks! New positions: Long based on largest loser among peers for ytd or soemthing; short based on new company, price is just crazy high and I can see this one going from 19 bucks to just a few pennies. More sentiment than actual analysis. (Demo account, started with 25k)

I'm still working on Chapter 3, seeing how I can apply most to retail as most is easily used by institutions and banks.

Also, http://www.forexfactory.com/showthre...72#post5903372 has actually worked out! Pretty stoked about that when I looked back at the post the other day.

Took out all EMAs, charts are completely naked except for the lines I draw. S/D seems second nature, now. S/R combined with S/D creates geometry I can analyze. I use H-lines to determine levels of S/D, with lines being far apart indicating low strength and a handful of lines indicates strength. My H-lines are determined off of the open/close of a swing high/low and it's retracements. The larger the time frame, the stronger the lines, as usual. After I've drawn up my lines, I'll sometimes use the fib retrace or expand to see if my lines resemble the fibs. I'm still working on a good entry/exit system.

On the chart, the top four lines are based off the previous downtrend. The highest open/close, then the retracements, using only the highest open/close. The bottom three lines are based on the uptrend visible on the chart below. I didn't put a line on the swing low because price isn't near that level at all, but I did use the lowest open/close of the retracements.

I hope this makes sense.

The chart below shows two lines really close to each other. This level will provide a good amount of supply/support. I can't say how price will reach that level, but when price closes above/below a line, it will go to the next one more often than not.

1H AusUsd

Good, honest Journal bro