My Learning Journey

I am a relatively new trader and I have made too many mistakes on both trusting and not trusting my instincts.

I am currently trying a new system and it seems to be working out for me. Therefore, this thread is here to help me keep track of my performance and trades. Hopefully, I will be able to help some newcomers as well, although there are probably a lot more experienced traders here to do that.

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Explaining my system:

I used to complicate my charts with all sorts of garbage, indicators, lines, dots, arrows. Everything was everywhere. I decided to remove all the junk so I can have a clear view of what's most important. The candlesticks.

I re-charted everything. Making use of major and minor trend lines as well as major and minor fibonacci levels. I will occasionally make use of fibonacci expansions to find out the next price movements / retracements. I also make use of obvious support and resistance levels that don't come from fib levels on my chart but have been tested over and over in the past.

I am trying a new plan to start trailing stops every 15 / 25 pips (haven't decided), to catch a trend.

Edit: 18 September 2012

I have removed some indicators from my charts. Namely Stochastics and CCI from my EURUSD chart. I have also added a Daily Pivots indicator. I will base my trades solely on Support and Resistance as well as Fib levels only.

8 October 2012: I have decided to add Stochastics back into my charts.

Edit: 19 September 2012

My system does not rely on news fundamentals at all. It relies solely based on technical fundamentals. I do not believe in news fundamentals UNLESS the news would be coming out at significant key support or resistance levels. Most of the time when one pair is overbought and news brings it even higher, I would expect a large retracement to follow suit. If you're a person who relies on news fundamentals, you may find that my system does not compliment it but it does take into account that some movements may require news fundamentals.

Edit: 20 September 2012

I know this is a newbie's mistake. But I rarely trade with stop losses. I have decided that from now on, I will do PO's on fib levels or past support and resistance levels and place a stop loss roughly 10 - 15 pips in the opposite direction of my target. This edit is here to remind me how not putting a stop loss will kill you off faster than holding on and waiting for a turn around. If you are a new trader and you are reading this, trust me, stop losses are so important. I regret not making good use of it. With the implementation of stop losses to my trading system, I am confident of making better trades with better risk-to-reward by making use of trailing stops, roughly 15-25 pips per stop.

Edit: 23 September 2012

Going to try out PipTrapper's MACD indicator. If it works in my system, I will adopt it for future uses. (Will keep in my charts.)

Edit: 4 October 2012

Going to try out tmoney5474's channel surfing indicator that comes with price levels at the end of it. If it works in my system, I will adopt it for future uses.

Edit: 5 October 2012

I have decided to learn Elliot Wave Principle and add it to the way I trade. I have also removed the RSI indicator from my chart.

Edit: 7 October 2012

I have also decided to learn Harmonic Patterns and implement it with Elliot Wave Principles to see how I can trade better. Many people tell me not to predict where price is moving but to be honest, this is something new for me to venture into. And majority of the times, the retracements, pullbacks and what not are indeed forming a harmonic pattern. Most people think its wise not to predict the movements, but the fact that harmonic patterns still exists proves that it does work for people and it works enough for it to continue to be traded as a system. I shall learn more and continue exploring and venturing deeper into the vast world of forex and continue improving on my system.

Edit: 17 October 2012

I realised that I am a way better scalper than a intraday or long term trader. Intraday trading isn't something I should do because I always look at my charts. So I have a new plan. I intend to continue scalping until I get all my losses back. With a target of 10% of my account a day. I will then look towards using two accounts. One that will hedge positions (might not do hedging), another for me to continue scalping.

If I do start up scalping, I will post up daily results (not charts). I also intend to put a small amount of risk for longer term purposes to earn some "extra income". I will see how this system goes because I'm enlisting into the army soon. Once I am done with army, I may continue scalping with a 15-20% target of my account a day, compounded into a month with 1 withdrawal only per month.

Target number of pips: 10
Stop loss: Depends on long term trend.
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Once again, my trades taken here are entirely based on my own charts and ideas. Taking trades based on my ideas will be something you are willing to do at your own risk. Thus, I hope no one does that.

I will start posting my first trades after the FOMC "QE3" meeting today, hopefully closing all of my positions so I can start afresh for this.

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ADD: 15 September 2012

I have decided to also experiment and try out using the Commitment of Traders Report (COT) as an indicator to see if I should go long or short in a certain pair.

The COT numbers can be retrieved here:
http://futures.tradingcharts.com/menu.html

I will post the numbers each weekend to see how it has faired. Should this method work out, I will upload a screenshot of my compilation weekly to help traders who are interested and have knowledge in using COT as well.

ADD: 18 September 2012

I will currently only be focusing on EUR/USD, AUD/USD and GBP/USD. I will occasionally take a look at USD/JPY, NZD/USD and USD/CAD to gauge some correlated PAs.

Once I am more experienced, I will keep my charts with mixed pairs of EUR/GBP, EUR/CAD, EUR/JPY, EUR/AUD, GBP/JPY, GBP/CAD, AUD/NZD, so on and so forth. First to recover all my losses and continue improving my system first.

ADD: 22 September 2012

I have decided to add COT indicators weekly when I have time.

Because the COT list is really long, I will not be showing the column headers. So the headers go like this:

Date | Non-comm Long | Non-comm short | Comm Long | Comm Short | Non-Comm Net Positions | Comm Net Positions | Net Positions | % Long for Currency | % Short for Currency | Notes / PA | % Long for USD | % Short for USD.

If you are using my COT information to make your trades, you just need to know that when the first 2 columns for the currency are green, it means net long has increased. When they are red, net shorts have increased.

Same goes for USD on the last two columns.

ADD: 4 October 2012

Because I've made such a huge loss and I will soon not be able to have time to trade. I will attempt to convert my trading method into a place entry order and set TP and SL way of trading. My trades will be based on fib levels and channels and I will always have a target of a minimum 100 pips with a 35 pip stop loss. If this method works out well for me, I will target a target for more pips whilst slowly decreasing the amount of stop loss. This is to test my accuracy of trades and perfect my entries.

My chart Pre-FOMC for QE3 Announcement.

Will they announce it? I'm guessing not. Either way I expect a downward retracement to at least 1.26638 or 1.26477, lowest of 1.25935.

If this is indeed the end of Wave 4, we would likely see 1.23827. Then bring on corrective waves. But assuming lower lows, we could see something lower than 1.20419 in the near future.

I took some screenshots immediately after FOMC to record how prices went.

Sadly I was still unable to close my positions.

FED's QE is less than half of QE1 and 2 and less than expectations by a bit. They will be purchasing mortgage securities at $40 billion a month.

Some meanings tossed out were that they could keep doing this again and again until they run out.

EURUSD: shot down to about 1.2857 before spiking back to slightly above 1.296

AUDUSD: shot down to about 1.04246 before spiking back to 1.05142, even reaching 1.05183 a bit later on

GBPUSD: shot down to 1.60682 before spiking back to 1.61565

NZDUSD: shot down to 0.82212 before spiking to 0.82949, eventually going lower than 0.82212 but consolidating back to the norm

USDCAD: ranged at the highest 0.97627 and 0.97255 before breaking lower to 0.97017 at time of writing

USDJPY: shot down to 77.086 before spiking back to 77.733, and consolidating lower

Gold: spiked to 1718.737 before consolidating higher to 1772.585

Seems like all pairs will continue consolidating higher, breaking all my trendlines and not offering any retracements.

1 day after the supposed "QE3" announcement.

EURUSD has broken 1.3 and is now at 1.3043 at point of writing. Really, really odd. No signs of retracement. Expecting a peak of 1.3177 before either a big retracement back into the 1.29xx zone or a reversal and bearish continuation for wave 5 back down to about 1.26xx or 1.24xx.

As confused as I am right now, I think I shouldn't be. My AUDUSD chart is still in order but the rest seem to have been blown apart.

My trendlines are making no sense right now. This is going to become one busy weekend.

I found a new trendline top for EURUSD, which it incidentally is bouncing against now. Retracement / back down we go?

It also seems like each time PA reaches such levels, it tends to stay there for a few days / weeks according to Stoch. Before it shoots back down. So we might hover around 1.3 for a while. Probably going to test 1.32.

Short 1.31064, TP 1.3. Expecting it to retrace and retest support levels.

Closed for 10 pips. Scalping it because I'm expecting it to test 1.32.

Shorted NZDUSD at 0.83183, TP 0.81789. Overbought conditions, expecting a retracement to 61.8

Shorted GBPUSD at 1.62058, TP 1.60796 for retracement.

Closed at 0.83127 because plenty of time I could have gotten a better entry. Seems to be ranging right now. I shall wait for 0.8350 which has been touched on about 3-4 times and not broken.

COT Indicator for week 11 September 2012:

USD: Seems to have taken a slight long, but taken a beating on Thursday and Friday. This could turn it into Bearish mode for next week's report seeing as it rose 300+ pips from 1.28 to 1.31.

EUR: Still on a neutral tone, albeit a 0.16% long increase. Indicators from 17 July 2012 show that number of longs have steadily increased each week up till now. Should prices retrace and continue upwards, we may have a market reversal on our hands.

Edit for EUR: Forgot to add that it shot up a further 300 pips on Thursday and Friday. This would be a definite net long increase for EUR.

YEN: Still going on a Bullish run. Peaked out at 70.55% long on 24 July 2012, where I noted it is Overbought. Currently at 68.42%.

GBP: Consistently hovering around 40-50% long. Peaked out at 54.66% on 21 Aug 2012. Seeing the huge run up since 21 Aug, we may actually see a further upside here.

CHF: Numbers have consistently increased in terms of long positions, sitting at a current peak of 36.1%.

CAD: Numbers have consistently increased in terms of long positions, currently in overbought zones of 88.81%. Seems like a good time to short it.

NZD: Sat at a peak of 85.79% in 14 Aug 2012. I have indicated it as Overbought and since then it has been decreasing. It has room to the upside now although it is very overbought.

AUD: Peaked out at 75.84% in 21 Aug 2012. Currently sitting at 73.25%. Has room to the upside although I would actually expect a slight retracement here because it shot up on Thursday and Friday. I would expect it close to 75 - 77% by now.

PS: I have only recorded positions since 17 July. I will slowly expand and include previous dates when I have the time to do so.

Currently having internet issues so I can't make use of my desktop to upload charts. PA has gone up further Post-FOMC. EURUSD could be aiming to test 1.32xx. Not going to call a top yet.

AUDUSD has U-turned and looks to be going back to the top of my trendline channel which sits around 1.06xx to 1.07xx mark. From there, there could be a huge drop back down to parity. Assuming you can bear with the interest rate deficit, this is a trade not to be missed out on. (Also on COT, AUDUSD is coming to Overbought conditions. Similarly with NZDUSD.)

Still quite unsure on GBPUSD's direction. Although I would actually call for a retest of the top, before a retracement.

Will upload the charts with arrows once I get my internet back.

Managed to get internet back.

EURUSD: A retracement is due after the long wick from Friday indicating uncertainty in market. Peaked out close to 78.6 of 1.3177. May test 1.3177 next week. Unsure about 1.32, but there is a possibility it will tap the upper trend line and simply shoot back down (of which we can expect a new low past 1.20419.

Using COT, it indicates that we have reached some sort of a cap here. We may revisit 1.32/3 if USD continues falling and EUR continues rising, but that seems to be a peak.

AUDUSD: Direction seems more clear here. Retracement is due, but weekly shows more room for upwards movement. May test 78.6 at 1.07132 (which I drew after the screenshot) and test red upper trendline. Then movement is unpredictable. It may continue upwards to retest the green trend line or come back down.

Using COT, it seems like AUD is coming to Overbought regions although it has slight room for upward movement. If this is so, it should at most test 1.07132 before going back down.

GBPUSD: This pair seems to be ranging constantly from 1.64 - 1.69xx regions all the way to 1.4-1.5xx regions. Seeing as we're approaching the 78.6 mark of 1.62843 which has proved to be resistance 3 times before, and seeing as we're in overbought conditions. We may see a downward trend here, probably back to 1.54xx or back to the 50 fib level of 1.52716 which has proved to be a strong support.

Using COT, the previous times we were in such conditions, prices shot back down to 1.55-1.57 with a low of 1.54.

NZDUSD: Price level seems to be capped by 0.83 psych level where it has proved to be resistance over 3 times. I noticed that NZDUSD has also been ranging somewhere between 0.84564 down to 0.75185. Seeing as we're in overbought conditions and there is more room down than up, shorting here is definitely good (seeing as I missed out on my 0.835 short, whoever caught the short there is really lucky).

Using COT, NZD has been in serious overbought conditions for 6 weeks now. Having only been able to increase because USD has been bearish. Should USD keep up a third week of net long increase, we should see this pair go back down.

USDCAD: Inside bar, with bottoms. Oversold conditions. This pair may retest 0.99434, or at least the purple upward trend line. If we're lucky, it could retest parity, but not any time soon.

Using COT, CAD has been constantly increasing in net long positions with the most recent COT numbers showing that CAD may indeed be overbought right now. With the inside bar and oversold conditions, I definitely believe that USDCAD will go back upwards.

USDJPY: Interventions from BOJ at 75 levels prove that the BOJ does not want their currency to be too strong against the USD. While we were at 77.xx levels, it was a good place to long because we have way more up room than down room. We could look for a retest of 79.14 by next week. If it breaks, we could go further to 79.9.

Using COT, Yen definitely has room to increase, but with the BOJ intervention cap lying just below, it seems that this pair should have more room to go up. While at its lowest COT levels, USDJPY could offer up to 84.xx.

AUDUSD Long @ 1.0527, TP 1.06126

Pending USDJPY 77.50 Long, TP 80.00

Pending USDCAD 0.96768 Long, TP 0.99434

Pending NZDUSD 0.835/0.84639 Short, TP 0.77695/0.75185

Pending AUDUSD 1.06/65/1.07xx Short, TP1 @ 1.03, TP2 @ 1.0075, TP3 @ 0.97848

EURUSD seems to want 1.34/35xx if it breaks the falling trend line. If it doesn't break the trendline, it may bounce off the red trend line. We should be in this ranging area until we break back below 1.26, which then we will see 1.244/5 once again and possibly retest the yearly lows.

GBPUSD seems to also want to go higher up to about 1.65xx. Assuming it does not, we will go back down from here on.

AUDUSD broke 1.05 support.

EURUSD continues with bearish divergences but still pushes to the top side peaking out only at 1.3177 (78.6 fib).

GBPUSD also continues its upward pressure despite bearish divergences.

Looks like a big retracement coming along. This may shoot the pair to 1.07 and a possible hint of 1.08 and beyond. After that I expect to see it shoot straight back to parity.

Either way, this pair is going through a retracement now. It will head upwards soon.

Seems like AUDUSD did indeed fall close to 1.04296. It has since come up a little. I expect it to test 1.07132 soon.

EURUSD seems to be closing in a shooting star with a doji the day before. Overbought conditions indicate that this is a sell signal. I'm looking for 1.29344. Should PA continue dropping, we should retest 1.26xx.

Still unclear with GBPUSD. With EURUSD and AUDUSD dropping, GBPUSD seems stubborn enough and still wants to test 1.64xx.

Missed an opportunity with NZDUSD at 0.835. It has currently shot down and does not seem to be going up anytime soon.

As expected, USDJPY has shot up. I expect it to test 79.14 soon.