One thing that I started to notice after looking at my eur/usd charts, and after yesterday's loss on u/j, is that I find myself looking at moderate to strong candles (pin bars and hammers) once price retraces.
My long on eur/usd is a good example.
I want to buy the dips, yet I'm looking at a pin bar on e/u daily (these tend to be strong bearish signals..or at least sometimes), and I can't help but feel that I'm trading against the trend, even tough it is my full intention to trade WITH the trend.
I drew two sets of 50% marks, on two different swings. Got news coming out in the morning and I'm sleepy, but if the market tanks, I'll be back in long at 3115.
Eur-Usd analysis: The bulk of my losses came this week in eur/usd, when I placed long orders ahead of news announcements. In hindsight this was a mistake, but in my defense, I'm a price action only trader. News comes out every day and I simply can't stay on the sidelines every time this happens. There were over 20 important (marked red on the calendar) news announcements this week alone.
On April 30th, there was a strong breakout on the 15min charts, and a double top formed on the daily. The next day (may 1st), price formed a pin bar on the daily. I believe I expressed concern for this in an above post but I place long orders anyway, not expecting such a strong down move. The next day (may 2nd) the market sold off crashing below all my stops (I had two buy orders and two stop orders based on two different price swings). I assume this was news related. On friday (may 3rd), the weekly candle ended as a pin bar, indicating what this coming week might look like - more selling.
Usd/jpy analysis: Not much to really say on this pair. The first trade I took using this system worked like a charm, and I wish all my other trades worked just as well. What I think made this trade successful was the resistance on the daily charts. Price sold-off and I captured the trade perfectly. My other trade on this, was just bad luck, because execution was good and price eventually reversed after stopping me out. Glad I didn't try and chase this market for another short opportunity because price chopped sideways before breaking out to the upside.
Gbp/usd analysis: I still hold this short. I'll do the analysis when the trade is closed.
Summary Ending: April 26th to May 3rd 2013 Trades: 3 Winners: 1 pips gained: +808 pnl: 250.48 losers: 2 pips lost: 1250 pnl: (-375.96) TOTAL pnl: (-125.48) Eur-Usd analysis: The bulk of my losses came this week in eur/usd, when I placed long orders ahead of news announcements. In hindsight this was a mistake, but in my defense, I'm a price action only trader. News comes out every day and I simply can't stay on the sidelines every time this happens. There were over 20 important (marked red on the calendar) news announcements this week alone. On April...
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Dear big_pipin,
as you've probably noticed I am a new member. Nonetheless, I have some remarks about this week's summary you posted:
You state that you cannot simply stay on the sidelines every time news comes out, while this is exactly what you should do if you do not trade the news. ESPECIALLY the news that came out this week: NFP, ECB press conference and a rate cut; wow! You could tell just by looking at the beginning of each day, the market was waiting for that news to come out, volatility was low and with good reason: who wants to let their trade get stopped out because of the news.
In my humble opinion: if you trade the news or not, it doesn't matter. You have to be aware of its impact, while it may not affect the general trend it will certainly cause an increase in volatility depending on the importance of the news, which in turn may cause spikes.
I personally don't trade the news unless I'm "sure" of its direction, I placed a short on the NFP number simply because it was pretty amazing. But as you can see, it did not affect the uptrend we have. After the knee-jerk reaction things calmed down, and where you should have bought, this is where you shorted. The thing I have learned about news is: it causes spikes but does not change the overall trend. There are two news announcements I usually avoid trading around: the ECB press conference and NFP, the others do not have that much influence and in my opinion can be traded around relatively safely without having your position getting stopped out. Nonetheless, I still monitor the numbers when news is announced and if required I close my position anyway.
Also you state that you were lucky you were asleep so you did not enter the USDJPY trade, I would still count this trade as a loss for my summary, as next time you might not be as lucky. Which brings me to my last remark: your attitude towards your losses. The thread that havaiana links on page 2 (http://www.forexfactory.com/showthre...83#post3749183) also mentions this. Excuses are for amateurs, no offense. If I may, it seems to me, that you attribute your wins to your strategy and blame your losses on being unlucky/your fault. If your strategy does not provide you with "sure" signals, you should adjust it or drop it. Remember: if you get less pips but more certainty, the trade is definitely worth it, provided good R:R ratio.
I decided to post because I recognize something of myself in you. I used to have this attitude, still have sometimes (trying to get rid of it completely), of thinking where I would constantly say: "If I entered here I would've made 50 pips, wow!", "Here and here and this, these are all good entries from this strategy, oh and you don't enter here of course because this doesn't line up with that". In hindsight everything is great, you can always find reasons why you should have entered there and should have stayed out on another trade. It's when we are in the now, when price is forming, that's when you have to be able to make the call: based on your strategy.
This is why backtesting in my opinion is almost completely useless. You can compare two strategies, where one may seem better than the other because you are able get more entries, however when you're trading live your entry can be worse, both in timing and direction. Less is more sometimes. You can't possibly hope to catch every move, nor should you, a strategy should protect you from bad entries, not create them for you! You can literally enter at any time of the day and be right. In conclusion: ...How does your strategy protect you from the bad apples?
Anyway, this was my take on your post, I hope it helps in some way.
Be well my friend
Also you state that you were lucky you were asleep so you did not enter the USDJPY trade, I would still count this trade as a loss for my summary, as next time you might not be as lucky. Which brings me to my last remark: your attitude towards your losses. The thread that havaiana links on page 2 (http://www.forexfactory.com/showthre...83#post3749183) also mentions this. Excuses are for amateurs, no offense. If I may, it seems to me, that you attribute your wins to your strategy and blame your losses on being unlucky/your fault. If your strategy does not provide you with "sure" signals, you should adjust it or drop it. Remember: if you get less pips but more certainty, the trade is definitely worth it, provided good R:R ratio.
I'm confused, why would I count a hypothetical situation as a real life trade? Profit and losses are only recorded for trades taken.
There is no such thing as a "sure" signal. Traders place bets on the future of price movement. Unless you can predict the future, an educated guess is the best you can do. Because traders are essentially professional gamblers (sorry but it's true), there is a bit of luck involved. If I take a trade based on the rules of my system, and it doesn't work out, then yes, it was bad luck in my opinion.
As time goes on, the system will more than likely undergo some changes, but not at this time.
{quote} I'm confused, why would I count a hypothetical situation as a real life trade? Profit and losses are only recorded for trades taken. There is no such thing as a "sure" signal. Traders place bets on the future of price movement. Unless you can predict the future, an educated guess is the best you can do. Because traders are essentially professional gamblers (sorry but it's true), there is a bit of luck involved. If I take a trade based on the rules of my system, and it doesn't work out, then yes, it was bad luck in my opinion. As time goes...
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Dear big_pipin,
let me start by saying that all of the above is basically what I would do. This is not a personal attack.
You state that you fell asleep, by which I gather you would have been awake normally and would have taken the trade. For example you have a strategy, you are trading it during the week. Someone knocks on your door, during the time where you went and answered your strategy gave you a signal to enter, but you fail to take it as you are not present. Would you say that "not being present at that exact moment" is a valid reason to disprove the strategy's weakness?
Of course there is no such thing as a sure signal, for that reason I put the sure between apostrophes. You use a strategy to gain an edge, depending on your strategy your signal will be better or worse than another. If you take a trade based on the rules of your system, and that trade ends up losing, it is my opinion this is not bad luck but basically a wrong signal. Because you have to remember on the other side of that trade is someone that did win.
It is my humble knowledge that, if you apply the rule of trading with the trend, there are two kinds of strategies:
entry on the pullback
When using the first strategy you enter when you think the pullback is complete and hope that the trend continues, which you cannot be sure of as there might be a reversal. The advantage is you have a great R:R ratio simply because you can put your stop loss really close to your entry and your take profit further away.
entry on the breakout
The second strategy enters after a breakout which is preceded by a pullback. The advantage being that you are more certain of the direction.
Anyway I will go to bed now, I want to get up early tomorrow.
Be well my friend
Thanks. Here is g/u on a daily that I also took short, but it will take several weeks to play out probably. Getting a nice pullback after g/u broke its descending triangle pattern. I expect a continuation of the down move. {image}
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...and the continuation continues after a little patience.
