Heizenberg Trading

price did not grind lower in a expected manner so cutted for net -0,6R

EURNZD. EUR - negative interest rates mentioned yesterday. NZD - probable rate hike in Q1 2014.

Price did not mange to climb above 6420.. tested and pulled back. quickly broke the HH HL sequence on TFs M15 and M30. Price has printed a fresh LL - good indication fo sell strength.

ECB news hit the wires with lower inflation expectation -> slower growth -> no reason to hike rates -> no free money -> EUR should go down. Macro is down as well.

But price suddenly jumped. one trading floor reported - short squeeze. due to sentimental imbalance in this pair expected things to hold so kept the position. Got stopped out.

Now is this fair? hell no. did someone manage to fill better shorts - yes. they amde money cos were smarter. end of story.

chart from trading view... since my chart is very very messy.

Saturday morning ahhh.... Review Time.

 

1. NZDJPY short. Trade idea - reasonable. Pre-planning - poor. TP1 would have been hit. TP2 - not reasonably set since NZD is a one way street. JPY has been working as safe heaven asset lately. therefore the NJ got sold off... JPY got a boost
2. EURCAD short. Trade idea - reasonable. Pre-planning - relatively good. Hit both TPs. EUR was somewhat negative. CAD was heavily oversold (not exactly the right term) and across the board was making pullback. so EURCAD was the obvious candidate. another that did not consider was USDCAD. But passed on USDCAD cos it is in a strong up-trend.
3. USDCAD short. Trade idea - good. Pre-planning was poor since timing was totally off. it was too small pullback to short it. should have waited for more significant level to be tested.
4. GBPUSD long. Trade idea - reasonable. Pre-planning was appropriate but was really nervious during the trade. Even though plan was working out.. TP1 hit, SL reduced so chunk of risk was taken off. worked out nicely.
5. USDCAD short. Trade idea - reasonable. Pre-planning not rational. Seeing that it has hard time to break lower should have targeted current swing low for smaller R but "sure" gain.
6. AUDUSD short. rational but retracement was too low. Price did grind much higher for the next 2 days.. can't figure it out this one.
7. EURNZD short. Trade idea - rational. Else.. sucked. EUR news and their rationalization was not rational got stopped out for a full loss. On the other hand Inflation forecast is lowered but with in the mandate's goal: 2%. So it could have been perceived as ECB doing a good job.

these were all trades for the week.

Trade limits and trade risk.


ATM daily loss limit is 2 risk units (R). can be more than 2 trades though cos if trade turns to quick full loss - sentiment/analysis is way off. Though if price continues to drift.. consolidates etc and turns out to be 0,5R loss then was I "less wrong" than quick full loss. High win rate is achievable IMO with great market knowledge AND PA understanding.

All Rs stated are after comission IF shared at all. Personally, consider stats important, but if focus too much on those get nervious. Market understanding comes first IMO.

The Setup.

Hardware: 1 laptop + 2 additional screens

Software: MT4 - trading platform. TradingView - as charting package. Excel - to keep stats.

Daily reads: Bloomberg, Reuters, WSJ, bank reports that can scratch for free.

Order Flow: Talking-Forex Squak, bullet info

IT Notes are used as checklists, reminders, etc

Outlook for next week.

 

1. Monday is US holiday - watch out for thing volume
2. USDCAD was bought by real money - rumours atm. Even though it was sold off... let's not forget USDCAD is bullish.
3. Market environment looks like RORO (Risk-On/Risk-Off). Some talking heads make comments and things change in a split of a second.

Market has short memory. So should Speculators.

In addition to the outlook. Risk Events - should look to position ahead of them:


Tue:

 

1. BoJ rates - unchanged.
2. GBP CPI (very very important) - prev. 2%, cons 2%
3. GBP Core CPI - prev 1.7%, cons 1.9%
4. EUR ZEW - prev 61.70, cons 61.70

Wed:

 

1. BoE minutes (bullish?)
2. USD bulding permits - prev 0.99M, cons 0.99M

Thu:

 

1. China PMI -> biggest hits will be AUD, NZD, JPY
2. EUR Manufacturing PMI - prev 54.30, cons 56.50

there are more but enough to keep one's head busy.

finally last post today..

There is something magical about markets when price does not tick and news do not update. One gets calm and awareness gets developed. With markets closed there is no pressure to perform, no fear to loose money, no greed to lure you into some crappy trades etc. Only facts and rational thinking are present in the current moment. Saturday morning is my favorite time as far as learning something and getting insight to markets/past trades.

Live Market is very deceitful and every trader needs time to grasp it. Mine, as already mentioned, is Saturday morning. Part of the routine.

Hi Jerry,

Thanks for a perspective. Agree on having rules for entries etc. Though AUDUSD comeback is due to Risk-On environment IMO (considered AUD employment surprise as factor with more weight - mistake!). Chart - risk currencies move in tandem during risk On enviroment.

ENZD - short was obvious play FA. my entry was rational so as SL. was too slow to cut it right after market reacted to news in the way I did not anticipate - Market is always right though IMO and it was very predictable that I should cut it.

AS far as entries... don't think traders should pay too much attention what other traders do though. One needs to develop discretion and your profitable discretion is not my profitable discretion. That said, I appreciate your input here.


That strength indi would be interesting to test out. Care to share? and some guidelines how it is derived would help interpreting it. I do look at strengths as well but having info on chart would def be a time saver.







H.

US holiday.. took a short AUDUSD. with reduced risk due to US holiday. price bounced of swing low - warning sign. cutted for tiny loss of 0,24R.




Reason why protected the position:

Counter trend trade - NZDJPY short

Location




Entry, SL and TP1 and TP2

EURUSD short. Price was 0.3 pip shy from TP2. moved SL very tight as per plan (if price comes that close to target) and got stopped out.. 2 pips shy from 3 R.

also added super duper Fib RR tool

FTSE long

entered after price pulled back into the range. have bullish outlook for FTSE.

Whilst in trade adjusted the TP - broke the rule. So this was the last trade today.

planned TP below 6788 then adjusted to 6777.

Trade 1 - UJ short. reduced the SL a bit but got a 0,8R loss




Trade 2 - CJ short. not rational to short another yen pair while first one is in the red... full loss on this one. Was looking for trapped buyers... but ended up trapped seller myself. What a day!





stopped trading after second loss for the day.

Gold short

closed it for 0,1R loss not according to the plan. lately have been too protective (or scared) and am broking trade mgmt rules...

AU long.. took it too early.. should have waited longer to confirm trapped sellers

2,5R