Zappa's Journal

Dont know if you want any comments or not and if you dont I will bow out. What is your strategy? You probably have one but entries/exits at first blush appear random.

Hi, Winston. Comments are cool.

It is a complicated answer, because there are several things I take into account, but I essentially look for a place where the market should not go---a place where the market faked out a lot of people. Then I look at the high/low opposite of the fake. Was it a place where a lot of stops were taken? If not, then it will probably be revisited soon. How complicated was the fake----was there more than 1 fake? The more fakes in one area, the more powerful the ensuing move will be (unless it is a low-volume currency). I try to figure out where the next potential turning point is to maximize the gain, but also battle with myself to settle for less than the maximum to minimize my risk. The longer I am in a trade, the longer I am risking my money. So I don't want to be wrong predicting the potential turning point. The market can turn anywhere, but the "definite" spot is the recent "unimportant" high/low that was followed by a good fake or 2 or even 3. Then I have a definite target/stop. I use my best judgement in determining if I should place and keep my target at the "definite" minimum, or if I feel confident enough to place the target further away due to the complexity of the fake outs.

I'm always looking at all the major currencies, as well. If EURJPY looks bullish, but GBPJPY looks bearish, then how does EURGBP look? I want to see what looks like the weakest pair go against the strongest pair. Can I find it?

EURJPY target is officially 107.00.

Stop on this one is kind of weird. I'm watching CADJPY and EURCAD charts to see that they confirm my bias. Both should head up from right about here. If one of the pair doesn't do what I expect, then I will immediately bail out of the EURJPY trade.

The stops on those pairs where I will bail out of EURJPY trade is 79.37 on CADJPY, and 1.2800 on EURCAD.

Probably my worst AND best personality trait when it comes to trading is extreme impatience. It drives me to work as hard I as possibly can at trading, but causes me to always "go for the big target" to make it all as fast as possible. But going for the big target is usually not the greatest idea. What I have failed over and over to do over the years is recognize that the market can turn anywhere. The further I go out on my target, the more likely it becomes that the market will make a turn for the worse before the target is reached. This should obviously be common sense, but it is a major one to remember.

I need to always remember that even a 1:1 r/r trade is good if I am 100% confident about it. At 2:1 I am doubling my money compared to what was risked. And 3:1 is a tripler! That's fucking good! What is wrong with a triple?

With that said, target is moved closer to 105.95. I am as sure as I can be about this trade. That doesn't mean this is 100% to win, but it does mean I am in control of myself and making rational bets.

(Sigh)..Posting after a string of losses is not fun. I lose money and I feel like a fool times ten for telling everyone about it. But writing in this journal is helping me write down more of my thoughts which will make me a better trader. And none of the 2-3 people actually reading my drivel know who the hell I really am. Zappa.....ha. So I'll continue. (This is kind of a pain in the ass, though!)

I really didn't feel like posting this morning, but I did take some trades in the a.m.. I've decided to change things up a little bit. Instead of focusing my whole week on being right in 1 or 2 pairs, I am going to try entering several trades at a time with the same $$ risked on each trade. Right now I am:

-Short AUDJPY at 82.50 stop at 83.00, target 81.70
-Short AUDCHF at 96.82 " 98.00, " 95.50
-Long GBPAUD at 1.5487 " 154.58, " 1.5720
-Short EURJPY at 102.97 " 103.44, " 101.00

Well, so much for being in several trades at once. I've been sitting here looking at these trades and contemplating....and I decided to get out of all trades at market other than EURJPY at a small profit. They just don't look so good after further review.

The EURJPY's target was also put on a leash. (Like I say, always a battle for me to not be so damn greedy.) I'm risking 30 pips on this trade, max target is 3 times risk. That's a new rule for me. Target has to be between 1 and 3 times risk. That'll keep me from getting too greedy.

Lost 40 pips on the last trade. Just off to a terrible start for this journal.

Lost again last trade. Doin' real fuckin'good here!! Losing streaks are frustrating, and piss me the fuck off, but I do try to remember that you learn the most when you are losing.

Anyways, in the attachment below you'll spot two likely losers. If I could trade the other way (I can't, it won't work that way), I would. Meaning, if your reading this, do the opposite of what I say. I'm in a real bad streak here and so you all might as well profit from it, lol.

This was my last trade. I know exactly what I was thinking last trade. It had some logic to it, but it was too simple. What I will hopefully remember next time this type of move comes across, is that when the market makes it way very "easily", as it did on the way down, with no stops taken, BEWARE the sudden reversal off of minor levels (shaded circle). The reversal will go all the way to where maximum stops can be taken (yellow line), but will not break the last major fake (red line). I have seen this before, but did not favor it over the other scenario. Next time I will. All this stuff (fake outs) is relatively new to me in my ever evolving trading career.

CADJPY is doing the same thing as EURJPY. It actually has a better r/r at the moment. Well, we'll see what happens. I've sucked balls lately, so I'm probably way off.

Red lines are stops.
Yelow lines are both possible. Not giving the bottom yellow line its due respect is the main reason I was wrong going long last week. Won't happen this week.

You see, in the CADJPY, I didn't respect the bottom red line as a major turning point. If the market had turned at the top red line, I would have probably been bearish. I must give both lines equal weight.

Moved stop.

OK...this is a trade that can be better than 1:3 r/r. Sometimes rules are to be broken.

This is my updated trade plan. I'm aiming my dart at 104.22 (my actual sell limit will obviously be a little lower to accomodate the spread), with a stop at 104.41.

I am 100% confident in both the turning point and the target. The r/r is way better than 3:1, but I don't know, the target seems to be a gimme as long as it turns where I think it will. Starting to think the 3:1 rule I made yesterday was kinda stupid. I'll probably re-think that conclusion some other day when greed gets the better of me. But for now, I don't feel I'm being greedy with that large target. I don't see why it would have made a "real" low there. There was a weak breakout there, but nothing else around. Price must go back there I think.

Stopped on last trade at -4.

Short here.

After seeing the spike up after I had just went short, I was like...

..but then I watched as it came back down, and I was like this..

But now it's back where I got in and I'm not sure what to think.

Ok...in all seriousness, I awoke to dissapointment this morning (something I am all too familiar with) seeing that my stop had been hit. Yeah, it was a miniscule loss, but I coulda used a nice 1-2 punch going into the weekend.

My stop getting hit made me realize that the top was probably in, and that I wa wrong for predicting the top would be around 104.15. As always, I try to learn from my mistakes.

What I take away from this mistake is that the shaded high did not need to be taken out, because it already was with the move that I have ex'd out. If that move had not taken place, THEN it woud probably have been targeted. The place to watch for was the two highs that I have put a shaded box on. The fact that the top was different from where I predicted does not change the fact that the low at 102.16 needs to be broken.

The plan for market opening is to exit the EURJPY in favor of the CADJPY. Both should go down, but EURCAD looks bullish to me, so CAD should fall easier than EUR. I'd like to see EURCAD fall to the level on attached chart before doing the switch. Stop and target on CADJPY chart.

Well, I am out of EURJPY for +22 and now short CADJPY at 80.78. I'm not going to play aound waiting for a possible entry 15 pips higher. The stop is 81.42 and the target is 78.07. That's a 1:4.2 r/r trade, and I'm as confident in this as ever.

I'm sure anyone reading my thoughts must find my confidence in the outcome of trades pretty amusing when I turn out to be dead wrong, but the point in stating my confidence level is too make sure I am not taking any trades where I'm not 100% confident in the outcome. Those trades should never be taken. It's a personal filter for eliminating "dumb", "impatient" trades