High Quality forex trading end-of-day by michal9

Hay Michal, Well done thread and I have been fallowing with interest. I have found it to be very benifical.

Thanks for all the hard work and time that you put in. If you do start a new journal, I will be there to learn what I can
thanks again for all your time.

Hello Michal,

Thanks for continuing to post despite the negative equity curve. Most here would have stopped posting once green turned to red, gone quiet for a while then started a shiny new thread hoping for better results. I'm sure you have learned a lot from this exercise. I'm impressed that you did not alter your strategy or give up. The fact that even with a strategy resulting in a negative expectancy your account has suffered a very small drawdown shows that you are able to maintain discipline.
I think trading the H1 time frame if you are unable to monitor, or at least look-in on it during the day may be a problem. Perhaps you may be better off taking fewer trades on a higher time frame.
I wish you all the best with your continuing trading career.

Regards,
Jim

Hi Michal:
I have been following your thread closely and impressed with your discipline. I am sure that it will take you a long way. Minor loss in a few months is not a big deal for the long run. I wish you best of luck in your next strategy. Please provide a link in this thread so that we can follow your new strategy as well. Being in the same boat like you, I would like to work with 4 hr/daily trading method.

Thanks for your all good work.

-FX_California

Thank you!

Your comments made me feel very good :-)
I am very happy to see that you were still with me and that you found this journal at least somewhat interesting or helpful.

Yes, I will certainly share a link to my new thread here, once I create it, or I will continue here.

Thank you and all the best.

Hi michal9,

As you may be aware that I trade similar strategy, so here is my take on your trades.

I have not gone into each and every trade details, but glanced some trades closely and noticed that your stop loss was set too wide from the edge of the demand zones in lot of trades. I understand that you check charts once a day and as such you want to give a little bit space when setting your stop loss in order to avoid stop hunting or slippage etc. or any other reason you might have. But you also have to look it from other perspective, for example if your SL is 30 pips than your TP is 60 pips, if you are using 2R target, whereas the same trade if your SL is 20 pips then automatically your TP will be 40 pips (same 2R), so the odds of price moving 40 pips in one direction before hitting your SL compare to price moving 60 pips is much higher.

The reason I brought forward this issue is forex liquidity have gone down considerably in last few months, I remember EURUSD 21 Day ATR was 90 to 100 pips few months back and now it's about 58 pips, so if you are taking a trade with 30 pips SL and 60 pips take profit in current market condition on EURUSD then you are expecting too much from a single trade.

See below example of last AUDUSD trade.

Hi Alifari, thanks for the analysis. You are probably right :-)

I am back and here is my plan for the next chapter of my trading.


I am going back to basics - price action, candle patterns at key levels, in line with the trend.

But this time I will use H4 candles, with a quick glance at the market during the day, for 5 minutes, each time a H4 candle close, to see if a pattern formed at a level I previously identified, in any of the markets I identifed as candidates for trading opportunity on the previous day.

I will continue testing this by mid June, then, if I am able to "qualify" this approach, I will start a journal here, from June 15th.


I plan to continue to trade end-of-day, meaning that I will do the whole analysis and search for trading opportunities in the evening, however, I will add a few minutes for a quick look at H4 three times the day. With this, I hope I will be able to sucessfully combine trading with my full-time day-job (when others look at social media, I will have a look at the charts ;-) and to be able to watch price action in the real time (vs. trading "blindly" like I did earlier in this thread).


My new system / approach / method idea - look for engulfing bar or pinbar, at a key support or resistance level, ideally also a Fibo retracement level, in line with the trend. Open at market on the candle close, no limit or stop orders to enter. Stop loss above / below key level plus ~10-15 pips. No take profit orders. Exit half of the position manually once the profit is around 1R, i.e. the stop loss distance, and move the stop to BE. The other half of the position, manually trail the stop behind key levels. Markets: all forex pairs, but watch out for correlated positions. Position size: risk 1% equity per trade.

You may notice the method above is very simple and has no innovation in it. That's OK :-)
I want to do things that work, if applied consistently.


OK, that's it for now. I may continue to refine the system idea above as I do the manual backtesting and demo now.

I will be back here with a live micro journal, once I am ready, plan is mid June. I will continue to keep an eye at SD levels, which I have used so far and I continue to think it is one of many valuable tools.

Thanks.

Looking forward to your new journal Michal!

Best

Mat

I said I would be back mid June, so here is an update.

My plan above holds, i.e. look for H4 candle patterns, in line with a D1 trend, printed at key levels. Atmarket entry, half the position exit around 1R, half trail.
I tried the above on demo for the past month... and I was down 4% after 20 trades... and I learned a number of things.

I plan to, in a few weeks or months to be ready to start a new journal. Not yet, as I want to share it once the chances of profitability are higher as my competence grows ;-)

My new trading approach is described here. I am back from vacation and in a demo phase of this new approach.
Let's see how this goes. I will be back here when ready.

In the meantime, I felt like sharing my approach, link above, becasue it offers a new twist... weekly review and a disciplined approach to trade ONLY IF there is a price action at a place (marked with orange rectangle on my charts) that I identified during the weekly review. And the places are key levels. I trust this will work for me and help me eliminate over-trading, and I recommend this approach to others.

In a nutshell, a weekly review on weekend (2-4 hours of work, review all charts and mark trends on W1 and D1, write a text label what they are) and mark key level where I will look for candle patterns (pin, engulfing, outside bar). Then, during the week, daily EOD and possibly at each H4 for 5 minutes, scan if there is a setup at a predefined area. Trade only if there is. Simple? yes. Easy? Unlikely, but will see.

Thanks.

I started a new journal thread.

And a new approach, not even the price action as above, but a pure and simple, almost mechanical, trend following.
I trust this will be a right system for me. The rules should prevent me from over-trading. It perfecty fits my schedule to trade End of Day only. It has clear and evident rules. I trust it offers an edge. It makes sure I will participate in trends if there are any. Will see :-)

Thanks for being with me here, I invite you to keep an eye and comment on the next phase of my journey.
And so this journal thread is closed. It has served its purpose well.