Attempting to trade... Again

It's been over a year sense I been trading but now I want to get back into the grind. One of the reasons for not being around is because a business deal went sour with my partner and the money that I used from my trading account is..gone. That being said, this journal is based on paper trades until I have another bankroll.

My trading style is based on median lines (aka Andrews pitchfork). Without going too much into detail the method revolves around Newton's law of "For every action, there is an equal and opposite reaction". Anyway, I'm no master on the subject but here are some resources for those interested:

http://www.forexfactory.com/showthread.php?t=76597
http://www.medianline.com/articles
http://www.marketgeometry.com/

So lets get started.

Shorting usd/jpy off 1hr

Entry: 80.439

reason:
[] even though the blue fork has an upward slope, I'm shorting based on the double top resistance AND the fact that price has tested the UML of the blue fork twice already.

Stop:
[] SL at 80.600

Target:
[] Looking for a target along the blue ML around 79.86 (579 pip estimate)

Risk/Reward ratio: 161 pips vs 579 pips ( 1 to 3)

And here is the chart for usd/jpy

Nice chart. 2 suggestions:

do NOT put your stop at a significant high like where it is. Either put it 10-30 pips ABOVE that high, or wait for price to hit the level, and make a reversal candle pattern (like a bearish pinbar, or bearish engulfing) before you enter, and then put your stop a little bit above THAT new high (of the bearish candle pattern)

reason is... I (and others) USE YOUR STOP to get out of our LONG trades, at the very highest point.

Personally, the vast majority of my trading entries comes from placing an order just about at the exact high previously made, and then a stop above that.

like,in YOUR trade here...my Entry order to go short would be EXACTLY where your stop currently is. and my stop would be 15-30 pips above that.

So, that's #1.

#2 - use longer term TF's to do a top down analysis. If you look at the weekly charts...this thing looks like it's breaking up after a few weeks consolidating...and it looks like it'll be a pretty strong move up.

It's very very obvious on a weekly, and something you would be wise to pay attention to, as it will most likely limit the amount of profit (if any) you can get, and also increase the chance of the trade just failing over all.

Hope this helps.


X

Nice chart. 2 suggestions:

do NOT put your stop at a significant high like where it is. Either put it 10-30 pips ABOVE that high, or wait for price to hit the level, and make a reversal candle pattern (like a bearish pinbar, or bearish engulfing) before you enter, and then put your stop a little bit above THAT new high (of the bearish candle pattern)

reason is... I (and many others much bigger than me) USE YOUR STOP to get out of our LONG trades, at the very highest point.

Personally, the vast majority of my trading entries comes from placing an order just about at the exact high previously made, and then a stop above that.

like,in YOUR trade here...my Entry order to go short would be EXACTLY where your stop currently is. and my stop would be 15-30 pips above that.

So, that's #1.

#2 - use longer term TF's to do a top down analysis. If you look at the weekly charts...this thing looks like it's breaking up after a few weeks consolidating...and it looks like it'll be a pretty strong move up.

It's very very obvious on a weekly, and something you would be wise to pay attention to, as it will most likely limit the amount of profit (if any) you can get, and also increase the chance of the trade just failing over all.

Other than that...I like your trade, and your analysis is sound. I'm long myself, but it's a long term play for me. good luck


X

I no longer mix time frames. It's simply just too confusing for me but yes I would agree that u/yen is showing bullish momentum.

hmm.. ok, well, I think this may be a lack of experience. years ago, I felt the same way about multiple time frames.

but, as I gained more experience, it all started to become a bit more clear.

I've found some of the best trades are when things look bullish on a weekly chart, and also on a daily chart, and also on a 4hr, and 1hr.

but, not over extended on ANY of them. looking like it's about to move up on those 4 TF's, and yet, not over extended...these are GREAT opportunities. then it's just a matter of isolating 2 or 3 possible entry points, each offering more than 3:1...and you can even take all 3 if you need to, and still very likely end up ahead.

or taking it a bit more simply, after things have dropped and consolidated and are breaking out to the upside...look to get long on retracements, rather than short at possible apex's. just ABC trend trading really.

bottom line, I like your trade, but I wouldn't take it myself. however, if price pulls back the lower end of the channel... wild stallions couldn't drag me away from placing a long trade there.

Got stopped out by just 12 pips over my stop, then price reversed. REALLY?..C'MON. Would have had a nice trade on my hands.

Thought after trade:

Now it's time to look for longs as price is headed back towards the ML on the 1hr. The longer term charts (daily) also suggest that we should hit the daily ML of 81.50 with an 80% probability.

covered short from 80.439

loss: - 201.25

well, I know it's totally bad form...but, as I mentioned earlier...your stop is where I would have placed my sell order...cuz your stop was where other stops were...and that's where the big player like to use your stops to get short themselvesl without any slippage.

but, wait for the long... it'll be the better play anyway IMO

Trade # 2

Short eur/usd

Entry: 1.25061
stop : 1.25301 (240 pip stop)
target: 1.24 (1061 pips)

Risk / reward ratio: 4.4

reason:
[] price broke the up-slopping blue fork, breaking below its warning line, then re-testing.

[] price also has closed below and is now re-testing the longer term (pink fork on the 4hr charts) down slopping fork's upper median line which is also a test of resistance.

[] the most recent fork (gold ) has also been tested at it's median line. If this IS the probable path of price, then I expect price to fall further to 1.24, which would be a retest of the median line.

[] daily charts are also down trending

concerns:

only real concern I have is the swing low at 1.245 might come into support, however by that time, I will have at least moved myself to breakeven (hopefully).

Also I'm trading before the London market opens, and with my small stops, I subject myself to whipsaws .

Stopped out for $240 loss.

After thoughts:

I may need to widen my stops (or am i just unlucky?) because once again, I got stopped out near the highs. As I mentioned earlier, price is having problems breaking this support, but if I was still in the trade I would at least be at b/e by now.

The blue warning line is now validated and could work as a nice short signal on the way back up. The gold ML is still in play also, but with that support level getting stronger, I may not be able to reach the ML.

Trade #3

Third straight loss

Long Eur/usd on the test of the ML. Price stopped me out in the next bar as shown by the arrow and the flat green line .

Long entry: 1.26536

Stop : 1.2599

Target: 1.2814

PnL: -546.00

post-trade analysis:

If I had a regular fork on my charts and not a mod schiff I would have seen that price has tested the ML and retraced off of it.

For the last couple of weeks I follow Forex analysis using MLs at myforexview.com and this looks really good. Any advice?