High Quality forex trading end-of-day by michal9

Absolutely!
Please don't think I am questioning your integrity. There are plenty of others trolling around FF that will do that.
I understand your predicament. Thanks for clarifying.
I'm just starting on my study of this methodology so it is useful to see those ahead of me that are putting it into practice.

Thank you Jim! Let's stay in touch.

Four trades closed today, three losers and one winner.
Luckily net day result is positive becasue one of the losers was a half-a-position size trade (I do this in case I place trades on correlated pairs).

Pictures say a thousand words.

AUDUSD, interestingly, after it quickly took my stop, it briefly touched my would-be take-profit level.
EURGBP nice entry. And had I not tightened the SL and TP yesterday, it would have been a slightly bigger winner. Anyway this is the trade that saved the day.
XAUUSD trade is a great learning not to take not-so-perfect levels just because "it is going up". See the departure from the level I traded? Not as fast as it should be.
NZDUSD was very precise in taking my stop. Let's see if it is going now to reverse and go directly to my would-be TP or keep falling.

No trades closed today.
A few would-be-winners I unfortunately missed today, i.e. did not place orders yesterday even though I saw the levels, now I see they would be 2R winners!

Why? I passed on them because of a daily trend in a different direction. Makes me wonder if this is a good filter to use.
A thing to analyze at my next journal checkpoint on May 15th. For now I stick to my system and am careful not to over-trade after I missed a few good setups.

I wrote a post on my blog about a trade filter and confluence factors that you can look at as you are building your trading system from its building blocks.
I invite you to have a look at my blog at www.HQforexTrading.com (no ads, no affiliates, no referrals for pips, just my articles on high quality trading :-)


Thanks.

Two losers today.

EURUSD, a good trade, but losing one. But level was valid.
XAUUSD, frustrating becasue it missed the TP by a few pips again. Almost. It is not good when a 1.9R profit turns into a -1R loss. But happens.

An idea to prevent such cases could be to use a trailing stop, or maybe even a trailing stop without a TP, or split the position into two.
But I do not want to change the system at this time. Now I am in execution mode ;-) Changes after May 15th chackpoint.

I missed a great EURGBP trade today. I am not attaching the chart becasue my rule is to show only the charts I really traded, not what I could-have-traded.
But it would be a 4R winner had I used trailing. But, as I analyzed the history, many other trades would be just 1R if I used trailing, while with TP 2R they are TP 2R.

I am in red after week 2. That's OK although not ideal after 17 trades. Curent result is a loss of $12, while 1R = $25, so I am negative 0.5R. That's rounding error. One winner will make it back.

And now... the weekend :-) Enjoy yours.

Here is the link to My FX Book!
Just like JimN suggested a few posts ago, thanks again.

I realized I can create a "custom analysis" in My Fx Book to show just a selected trading period for the account, in my case as of Feb 15th, 2014, i.e. the moment I started trading my SDH1 EOD system on a live micro account.

So I did and now myfxbook link is available. You can track my trading performance there.
http://www.myfxbook.com/members/hqfo...dun24dsFSZ4Xqp

I will still sometimes post a screenshot from MyFXBook here to better visualize my comments.

Ok, that's it for now, result is not great so far after 17 trades, but I am positive, and I think this is still within a normal distribution of winners and losers and also the outcome of one or two mistakes, while my confidence in the system, and my ability to trade it profitably is in place :-) We will see. Naturally, any outcome is possible, and in case it is negative, I have a plan as well: review and improve.

Two losing trades today.
That's OK.

What's next? Next high quality trade.

Learning from XAU trade? Should have not traded it, level was not great and should have not traded into the weekend. In fact I was lucky and got a fill even better than my limit order, do the loss was smaller than assumed. What a luck ;-)

NZDUSD was a good trade.

My fx book link showing my performance is in the post above. And today is not great, but definitely within control limits.

Off-topic of this journal yet likely relevant and helpful for traders

How many losing trades in a row should I expect if my win ratio is 40%?

How much money to risk per trade with withstand a given number of losers in a row?

How good a win ratio vs. average performance R ratio should be to "always" expect positive results on a large series of trades?

I had 6 losers in a row... does this mean I should drop the system?!

This and many other fascinating questions can be answered with an excel tool I created, a Monte Carlo simulation of the equity curve, or account balance chart. Check out my blog post on equity curve Monte Carlo simulation tool, if you are interested (it has a download link to excel file to play with). Of course, this is very simplified and is an approximation anyway. But hey, it is all about uncertainly and some assumptions are needed.

Enjoy and feel free to share & comment. As always, it is free, no ads, no registration, no affiliates, and no other annoyances or biases :-)

Four losers and three winners today, net plus.
This is the day with the highest ever number of trades closed for me. Note that all of them were in a "set & forget" mode, I trade end of day, I check charts once every 24 hours.

A losing USDJPY trade. I believe this was a fair setup, but not the strongest. Note is was a small drop, then consolidation, then big drop.

A losing EURJPY trade. This is one of those trades where a stop is taken by ONE PIP and then the market goes straight to the would-be Take Profit level. Yes. I could have placed a lower stop, before last swing low, not just the low of the engulfed candle.

A winner on AUDUSD. This one happened so fast that you can barely see it. If you look closely, there is a green vertical line inside the candle. It shows the entry and exit.

A loser on AUDNZD. This is another one where I placed a stop exactly at a level where the market reversed and went t omy TP level without me. Yes. Wider stop? Maybe. I will assess this on a larger sample of trades, once I do the May 15th checkpoint.

A winner EURAUD. This one is a beauty. Not only a perfect entry, but also an exit. Luck element is evident. I often wonder whether or not to start using a trailing stop insted of a fixed 2R TP. There are trades where there would be a 4R winner, there are ones like this where the trailing stop would take me out at around 1R.

A losing AUDJPY trade. Looks Ok, additional confluence I saw here was that the level was a support before. Well, this did not prevent the market to go up. The market can do anything and I accept this fully.

A winning trade on DAX. I like the way I nailed this one. I have just added SPX and DAX to my markets watchlist as my broker introduced microlots on the indices. I also have backtested this system before, if it works on stock index CFDs and it looked like it does (I am not judging this on this based on one trade, but on previously done tests).


I missed a nice trade on EURGBP, but there was enough today.
Net result for the day is not spectacular due to four losers, two of them would-be winners had I placed a stop wider by a pip, which of course is an insight.

Ok, that's it for today, thanks for reading this, and I will welcome any questions or comments.
Here is my fx book. Still slightly in red, edged up today.

Thanks for making this available. I've played around with this type of sim. before, but it is nice to have someone create a simplified one.
It is a good reality check after reading too many boastful trade examples (and always posted with hindsight) here on FF.
Another thing that comes to mind, a lot of people promote the "magic" of compounding. Another case of in theory yes, but difficult to put into practice.
You get a few wins, fantastic, now you increase your position size, then a series of losses (at the larger size), better reduce it a bit, then a series of wins at a smaller position size. Does not do a lot for your account balance.

It would be interesting to see how changing position size base on account equity after every trade would affect the sim. I would guess a massive increase in volatility. Probably too diificult to put into your excel version, but I'm sure somebody has done it already!
If they are reading this, and they have seen such, please point us in the right direction.

Jim, I think alike on compouding. That is also why I use "equal dollar risk per trade" position sizing method rather than e.g. 2% of the account.

How would equity curve look like with percent account balance? In case of winning systems it would parabolically go up towards the end of the simulation, which looks fantastic on paper, but is hard in reality, also from psychological standpoint, I guess.

Thanks for your comment.

No trades closed today.
Three positions are open, so I will let them get closed at SL or TP.
I moved the SL a little bit closer to the market on one of the positions.

Some more pending orders are in place.
Equity curve turned up today a little bit, as you can see on my fx book.

Hi michal9:

I closely follow your journal as I am also demoing a similar method like this before going to live. Because of my limitations of screen time and living in a bad time zone (PST), I also place limit orders on the supply/demand zone on a hourly chart at the end of day (9 PM PST). To make it more easy, I have tried different fixed SL/TP. With my limited testing with SL ranging from 30 to 100, I found that SL=75 brings better results. I put the TP as 130 with no expectation of hitting TP (although occassionaly it hits). I generally close all the orders next day. If I close all my orders generally around 7 AM (PST), I have a better results. But if I keep my orders, some times I can get a bigger win. Some times, I keep the order all day until next day 9 PM. Using trailing stop does not bring overall better results. It minimizes the profit and maximizes loss, in my opinion. Need to have a little bigger stop to avoid those spikes specially in a set and forget system. I need to figure out the best time to close all the orders. In day time, I can close the orders quickly/mechanically from my mobile phone, but I really can't concentrate or check the chart. Another thing, I also tried the daily trend to filter out. But sometimes it goes opposite to daily trend when it's about to hit a daily supply/demand zone. I really don't want to follow two supply/demand jone. I am also okay with smaller p/L with hourly chart. How do you use daily trend as a filter? Can you pl explain that with a chart? I want to have the system really less subjective, easy and as much as mechanical possible. Still looking for a solution. Just wanted to share this so that you don't feel like that you are alone in your journey. I am still a novice and please don't judge me by my joining date with FF. I started long time back and quickly moved to live account. Lost some money (not much) and I still have my live account (unused) with Oanda for many years. Off and on I am demoing different systems and never come to a position so that I feel comfortable with my live trading again. Discipline and dedication are a must and I lack that. But you have a very dedicated approach and I am sure you will be able to make it some day. Thanks for your good job.
FX_California

Hello FX_California,

Thanks a lot for your comments. Great to feel not alone. Currently my SL is ususally between 15 and 40 pips, depending on zone size.
I hear you are saying you use a kind of time stop. I will look into this at a next journal analysis round. And for trailing stop, I will also see if it works for me or not.
I think it is a very individual thing.

Theoretically we could objectively tell if trailing or TP 2R is better. After all, you can review all trades and to what if analysis. I am going to do it, by the way.

In reality, I think, the extent to which a given method suits us, determines if we trade it with high quality and and consistently, and this determines the outcomes. So, it is probably like this: if I feel good with TP 2R, I will likely have better results with this method vs. a trailing stop method, even if it has no scientific reasons.

My daily trend filter is unfortunately largely subjective. Becasue I like to trade and I want to trade, and very often counter-trend trades are profitable with this specific method, I do this: I look at the daily chart. If there is evident, obvious, clear trend, so obvious that everyone would agree there is a trend, then I apply it as a filter, e.g. if there is an obvious uptrend on daily, I will trade long only on H1. In all other cases, I trade both ways. For chart example: if you look at S&P500 or, even better, EURCAD daily, this is an "obvious" uptrend for me.

You may want to have a look at my blog where I wrote recently on "effortless trading" (to your point of feeling comfortable) and I also list different ways to identify a trend, more or less objective ones, in this post.

Good luck with your efforts, and let's stay in touch, you are very welcome here.

Four trades closed yesterday. 3 losers, 1 winner.
Net negative 1R, unfortunately a new low on my equity curve, still within norm, so no alarm, just need to trade with high quality.

Two trades on EURUSD, one loser, one winner. You will notice, as I have noticed, that a winner was 2R where I had my limit order, while 5 R was "available"!
This is a staple of the case where a trailing stop would make me more money. For review :-)

EURJPY failed on a EUR correlation. Normally I think all JPY pairs are very correlated, but of course, also, in case of a strong move driven by EUR, they both move. Otherwise it was a good trade. It fantastically shows why stop loss is a good thing.

Lastly, we have EURNZD. On this one, if I had a trailing stop, the loss would be 0.5R instead of 1R.

My fx book.

Good blog mate and nice journal. I'm enjoying following

I think the lesson we're learning here, is that the forex is a hard, hard game to win.

You've got an eye for this style of trading. I'm learning a lot....

One winner on Friday.
Uptick on my equity curve, although still in red, and a nice short XAU trade, a kind I like.

This was a 2R TP, now we see that a 3R was also "available". Yes, hindsight is great, but this business is not about predicting, but about executing the system that gives an edge, in a high quality way, consistently. That's is what I am trying to do here.

Note that had I used a traling stop with a standard distance, I would probably have been taken out at a small loss, or, at best, would end up same as 2R. Again, one trade means nothing, and even if occasionally a trailing stop offers a 5R, it "pays" for 5 losing trades, which is great, but again, likely difficult to execute with quality.

This concldes the week 3 of my live SDH1 test. I am in red, but the objective of this test is not to make as much money as soon as possible.

My objective here is to learn and prove to myself that I can execute a profitable trading system, with high quality, end-of-day, consistently.
And with this objective in mind, I dare to say I am on track. If the 3 months outcome is going to be negative, I will have the learning.

Have a nice weekend and a week ahead.

@S_Ferrer, thank you very much for your comment. I am very glad I am helping others learn, as I am learning myself, and I fully agree this game is hard to win. And yet, very rewarding and a game where the result is very clear and it is totally up to us, reflects our skill level.

No trades closed today.

Two positions are opened, not stopped out immediately, which is a good sign.
Number of orders is in place, both long and short for some pairs.

I updated my fx book, but there is no change vs. yesterday.

My routine. A daily market review of 15-20 pairs, trade setups order entry / delete, my fxbook update, and journal update takes me 20-30 minutes now. Practice.

Off topic, I am reading a book by Mike Bellafiore, "One Good Trade". While I am in the middle of it, I can already tell you I am finding it great and will likely add this to my top trading books list. Author's blog is here.

I am also doing a Financial Markets on-line course by Robert Shiller from Yale. It is free and I am finding it interesting and relevant for trading - to more deeply understand how to markets function and the math and psychology behind it. While it does not offer trading systems education, I do find it a good time investment in building knowledge, so I felt like sharing this.

One losing trade closed today, AUDUSD.

I think it was a good trade. However, definitely not the best of the best. Interestingly, with a benefit of hindsight, I can say if I used a more aggressive entry (buy limit at a middle of the level, not the top edge of it), then the 2R would be taken.

One trade missed a TP today by 8 pips and reversed to around break even.

Anyway, I stick to the system, this is my "playbook", as defined in the first posts, and my objective is to trade my setups, end-of-day, with high quality.
And that is what I am going to continue. The performance is a byproduct of a quality execution of a profitable system. This is to check both assumptions :-)

Keep it up.