Starting with $50

Good work kid!

I'm going to be starting something similar on here, the only difference is mine is going to take large risks, but the aim is to show that you can be consistent with results based on a solid trading method and timing.

Anyway, keep up the good work.

Thanks guys...although I haven't been called a "kid" in years, it does make me smile like this...


Anyway, I need to explain what happened on last nights trade. Bottom line, it did NOT go the way I had intended for it to go. Anybody ever have a trade go the "wrong" way? The nice thing about FOREX is you can wait it out if you were close or if news wasn't released that blew you out.

So I waited it out. Now the funny part would've been to film me as I watched the screen throughout the day. I bet I changed my exit price 6 times. And everyone of them have either been right or will be, so I said get out and trade again tonight.

The key to me NOT losing out on the trade was watching the Stochastics, specifically the 5,3,3 on the 4 hr chart and the 21,5,5 on the 1 hr chart. When this happens to me again, and you know it will, the key remember is summed up in one word...


Patience

Well, here we go again!

After last night and all day today, I feel like I've been humbled but in a good way.

So what's going on tonight? Looks bearish, like a pullback on a downward trend so we will go with that tonight.


Pending Sell Stop

Entry = 1.29715...Exit = 1.29315...Lot size = .02


I would explain it but I'm too tired, just look at the pretty pictures below...if the trade doesn't work out then I will try to bail out of the trade in the least painful way possible before the weekend.

Well, it did happen to me again and it did it on the very next trade. I found myself on the wrong side of the trade, chasing the exit.

That caused me to go into a focus to find out what went wrong. If the system I am using is based off of Stochastics then it had to be with it, specifically the settings and/or the timeframe.

That being the case, over the weekend I have looked at about 10 different settings and will be using SOME of them exclusively this week on my trades.

BTW, that sentence quoted above is what really sent my mind into overdrive. The second exit I decided on (and then chickened out on) hit for 78 pips.

So, I've made some adjustments to the Stochastics and the timeframe.

For the rest of the week I will using only a 1 hour chart so everything you need will be on the one picture below.


I will be using 3 Stochastics settings and they will be the following...

1. 8,5,5

2. 21,8,8

3. 30,5,10 (%K = 30, %D = 5, Slowing = 10)


The first two may go by the wayside in time but the one I am impressed with is the 30,5,10. It's very slow and deliberate. When it turns the trend is changing and the move will be impressive.

Here we go...

Pending Buy Stop order

Entry = 1.29625...Exit = 1.30145...Lot size = .02

The reason I picked those 2 points?

The price is currently stabilized at the Support 2 line (which is also an old support line) and will rise from there based on the 30,5,10 reversing...slow like an iceberg. My entry is gonna be just above Support 1.

My exit is based on a long, slow climb ending at the 38.2% Fib line.

This is NOT a recommendation but just my thoughts to see if I am close with entry/exit points of other pairs.


USDCHF.....entry = .93440...exit = .93125.....short


USDCAD.....entry = .97775...exit = .97400.....short

Whoops! Made a tiny, little , COSTLY mistake but don't mistakes always have a price?

The nice thing about mistakes is that they give me/you the opportunity to see where the problem is. How do you fix it and learn from it, etc?

So last night I was all excited about what I had figured out but thought I could leave out a very important part of the equation...the 4 hour chart.

The 4 hour chart is ESSENTIAL to my style of trading. Period.


Settings for the 4 hour chart are:

1. 30,5,10 Stochastics...(%K = 30, %D = 5, Slow = 10)

2. 8,3,3 Stochastics


Settings for the 1 hour chart are:

1. 30,5,10 Stochastics

How to Interpret

1. Look at the 4 hour chart starting with the 30,5,10 to get the general trend. It moves slow as an iceberg, maybe slower. That is the trend, forget everything else.

2. Still on the 4 hour chart...now look at the 8,3,3 for pullbacks against the trend or a move in harmony with the general trend.

3. go to your 1 hour chart...wait for the lines on the Stochastics to crossover in the same direction of the 8,3,3 (on the 4 hour chart) and then enter. Your ENTRY timing will be almost perfect.

4. Exit is based on past Support/Resistance lines, Fibonacci retracement lines (and this subject gets opinionated real quick), and the FiboPiv indicator.

From what I can tell, each trade will/should be approx 50+ pips. Per day? Yes, I think so. Add in multiple lot sizes and you are talking an income like a rockstar in a matter of 24 months starting with $50.

So last night's trade is all screwed up and I will have to eat some of it but make it up tonight and then we will be back on track.

Scratch my picks from last night. These are with the new settings. Here we go...


1. USDCAD...Entry = .97850...Exit = .97391...short Resist 2 to Support 1

2. GBPUSD...entry = .62202...exit = .62940...long Support 1 to Resistance 1

3. USDCHF...entry = .93454...exit = .92951...short R2 to S1

Boys, I gotta tell you this...being in a bad trade is a lot like dating an ugly woman. She ain't getting better looking as the day goes on but maybe she can grab that makeup bag and get things going.

I'm a little frustrated because twice now I have had sell orders in for today and Friday's trade that have gone past the exit point and not triggered. The nice thing about it is some people discredit the DEMO account as not realistic...I think that aspect of it is very realistic.

I should've broke even on both trades, which in fairness, both trades were bad trades. Just trying to keep my batting average as high as possible.

So, I'm stuck in this trade for a little bit.

Hi ocd, I've been following your progress with interest. What is your plan if euro does keep heading down? And my other question is, with a larger account size (say $5000 or more) would you use the same leverage as with a smaller account? I like the way you take the time to set-up only one trade per day. I do something very similar, but trade quite differently. Keep up the good work.

LOL

Going back to my old girlfriend. She was prettier and made me much happier!


1. oh, I'm pretty sure we are in a downturn for awhile...especially since I am in a long right now. My plan was to be out of this trade this morning but had to leave and it did not hit my target exit. I came back to much bigger loss than expected.

They say when you've got yourself in hole the best action to take is to STOP DIGGING. This method of using the new Stochastics settings has caused a problem and the only thing I can do at this point is to get out of the trade (stop digging). Then I can go back to trading and recover my lost gains.

I will exit with a big loss, laugh about it and press on.

2. I will continue to use 50:1 margin on an account >$5,000 only when I KNOW the method I use is a consistent, reliable producer. I would consider a portion of an account (<20% of the balance) for higher margin if it met my qualifications.

If you are not confident in the system you use, the prudent decision is not to use margin at all, matter of fact, don't even trade. DEMO the trading method until you are blue in the face. When it is a proven winner, 50:1 is good. BTW, hopefully you are not trading with money needed to pay bills with.

Hope this helps...now I have to go fix my trade and plan for the next one.

That killed me.

Okay, now I can breathe again. On to the next trade.

BTW, get rid of that 30,5,10 Stochastics setting.


I have tweaked the original settings FROM 21,5,5 and 5,3,3 to 21,8,8 and 5,5,5. Just some minor changes that should help with timing.

Current trade for this evening will be:

Pending Short Stop


Enter = 1.28630...Exit = 1.28400...Lot size = .02

Not a flashy trade, just going with bread and butter.

4 hour chart isn't quite ready but the 1 hour is....here comes the lightening, gotta turn off the computer.

See you in about 4 or 5 hours.

Well, after last week's good old butt kicking I received, I thought I would just take the weekend off and regroup. Good to do that sometimes to help clear your head. So I did and am back.

Last week the price resumed its decline and then a did a very nice pullback, looking like it was trying to breakout of that same decline, only to fall further. Gonna take some bad news from the US and really good news from Europe to help pull this thing up to the 1.30 mark again.

We are seeing a similar pattern again. Tank and then pullback and that's exactly where we are right now...doing a pullback. This pullback will be good for anywhere from 40 to 80 pips tonight.

So I'm bullish...kind of.


Pending Buy Stop


Entry = 1.28375...exit = 1.28750 with lot size of .02


Basically, I'm trading the Support 1 for my entry and the Pivot line (FiboPiv) for my exit, actually, just before it due to my exit's not being hit 3 out of 4 times last week wreaking havoc on my account.

I've gone back to using the 5,5,5 and 21,5,5 Stochastics on both the 4 hr and 1 hr charts...back to the basics.

My exit will be either too aggressive or far too conservative but I'm content with it.

Well done, nice trade. Good to see ya back into green pips. Keep up the good work.

It went good last night. And as I had thought, my exit would've been too aggressive or too conservative, it was too conservative.

Had I stayed and baby sat the trade I could've have exited later...or panicked and sold too early. But I made the trade and went to bed shortly afterwards and kept myself (my own worst enemy) out of it completely.

Nice, safe gains.

Most guys will fail in this business. Harsh statement but truth. Why will they fail?

It's not because of desire nor under capitalization. It's not because they won't spend the time to learn either. There are two reasons guys fail:

1. the market is unpredictable in that it will not go to the same levels every time so set and forget is difficult. One pattern shows price will go up "just like last time it popped for 100 pips" but this time it only gets 45 pips and retraces. That's what I'm talking about.

2. There are too many systems/strategies. Most will work to a certain extent but most fail when the market acts differently than when the system worked optimally. Some rules are designed to aid confusion...and that is what really messes people over.

So what is the key to not being a has been? Simplicity.

Certain indicators tell you what is gonna happen and they give an indication of the future strength of the move.

The charts I have been posting are usually kept clean so I can see what took place using the Stochastics, Fibonacci's, and FiboPiv. I also use a "worksheet" to help me see thru the noise.

We will look at one of my worksheets on the next post and see what other indicators I use and how...

This is from one of my "worksheets".

In this post I will look at what happens when I add 3 different indicators:

1. Bollinger Bands

2. diagonal and horizontal lines

3. a moving average

Please understand what I am about to type on some of these will NOT conform to conventional thinking. In many cases, conventional thinking is designed to mess your head up.

Let's look at the most controversial subject, the diagonal line. The way I will show you is COMPLETELY different.

Let's pretend the price is about to go UP but the indicators are telling you that it is gonna go DOWN. My diagonal line helps me with figuring this out.

Traditional thinking on this subject says NEVER draw a line thru existing candles...never, ever! Well, that's a lie. We are told to draw a line from the HIGHEST (or lowest) point to the highest LOW (or lowest high) point and wait for a crossover. Hogwash.

On the 1 hour candle below you will see the evidence. I have blacked out the area that we would not have known about because it was the future.

On the first chart you will see the traditional method and the unconventional method. The first shows the low point of the candle to the last candle...no help for the little guy.

The second chart draws a line right thru other candles and tells you plenty of information.