Trend/Breakout Trading with Bullbear80

Ok so first things first, this thread is a continuation of my previous Journal "Trading Journal August '14". The link is below for anybody who wants to know how this all started...!

http://www.forexfactory.com/showthre...03#post7708203

In my previous post I named a few markets I was looking to get into. The only trade I posiitioned for was EUR/GBP Short. My exposure to EURO is at a maximum now and I wont be looking for any further CCY pairs involving Euro. If you've been following my thread, you'll know I've definately changed my outlook for this pair. I was kicked out of two Long trades in this pairing during August. With the current EURO crisis deepening day by day and the charts showing a Short entry in the offering.....worth getting on board.

Tomorrow morning I will review the equities I was looking to get into and then I'll make a final decision on whether to position any trades or not. There is an issue with my brokers mobile platform which could scupper my plans though. Today, I received a connection error and when I contacted them they advised it was a vendor issue and they were working to resolve. If I dont get the mobile platform up and running, I obviously wont be able to place any trades as I'll be at work. As I said in previous posts, I work out my trade price, size, stoploss, etc from home before I go to my 9 to 5, then when the US market opens later, I key in the trade on the mobile platform. So lets keep an eye on this, obviously I am monitoring all downtime on any system. Too risky to be out of touch for any extended period of time.

Here is the EUR/GBP trade I positioned this morning and which also opened this morning:

SELL EUR/GBP @ .7900 with a Stop Loss @ .7956

Thanks folks, back in the morning
Bullbear

What is it about Mondays and Tuesdays......they always seem to give me headaches.

EUR/GBP touched my Short position at .7900 and immediately rebounded up thru my stoploss, knocking me out for 1%. This CCY pair has cost me over 3% in the last month. Still, I will stick to my entry rules and when I can get back into that market again, I will. What's a strategy if you can't stay firm when things go against you? EUR/AUD is also trading at about -.5%. Still has a bit of breathing space and I will let it run. A bad day all round for my EURO Shorts in any case.

The issue with my mobile platform has yet to be resolved...Very dissappointing. This morning I had made a decision based on the charts to take a Long on Twitter and a Long on HP at the 21 highs. Unfortunately I was unable to place the trades at market opening due to this vendor issue. An email to my Broker for an update also went unanswered, which in itself was pretty frustrating. I will contact them again in the morning. A 48 hour outage....unacceptable.

On another note I have been in position to Short Gold for more than a week and this trade was finally triggered today. See below. Gold has been ranging on the weekly daily chart with a definate Bearish bias. It hit the 21/52 day low today and I'll keep an eye on this one as Gold hasn't behaved as one might have expected over the past few monthes.

The pitfalls of trading folks, but stay positive, every day is another day to make money! Just stay focused and stay the course.

Any questions or thoughts? Fire away.

Happy trading and talk tomorrow!
Bullbear

Hi Traders,

Getting my journal in early today!

Today my unrealized gains drove up to over 8%, a new personal record. Unfortunately my balance sank lower by 1% due to the loss of my Long on Twitter. This loss was very similar to my EUR/GBP loss yesterday. Both pinged my entry point and then moved opposite in a retracement all the way past my stoploss. I use a stoploss of 2*ATR, which is a tried and tested protective barrier. This enables me to manage losing trades and close them myself if I feel they are not performing. But the speed of both losses was both unfortunate and unexpected. Having said that, the unexpected is always expected and my strategy ensures I can absorb exceptions like this.

To summarize briefly my Trading Strategy:

1. All trades can only be entered when they hit either the 21/52 day high/low.
2. Trades cannot be entered if trending beyond 6*ATR.
3. All trades can only carry a maximum risk of 1% and the Stoploss must be set at 2*ATR
4. Trades are only profitable when the ten day high/low trail passes thru breakeven. The ten day trail then becomes my Stop Loss.
5. New trades should be discarded if not enough floating profit. Otherwise stoplosses must be tightened to accomodate new trades.
6. Long and Short trades should be treated independantly of eachother.
7. The maximum risk my portfolio should carry at one time is 5%, split evenly between Long and Short trades.
8. I will only trade Breakouts and Trends. I will not range trade.
9. I am a technical trader. Price action is key.
10. RISK MANAGEMENT is my most critical priority. Capital must be protected. Then growth will follow.

It's important to reiterate these points. Keeps it fresh in the mind.

So, the mobile platform issue has been resolved. This enabled me to place my ill fated Twitter Long and also a Long on HP. Below are images of both entries. All in all it has been a good days trading. Equity is moving in the right direction and as more of my stoplosses trail further past breakeven, locked in profit will only take my balance higher. A slow process yet, but trend trading is certainly a marathon, not a sprint.

Any questions or comments on any of the above. Please feel free to get in touch.

Thanks and happy trading folks!
Bullbear80

Good evening Traders,

A busy day in the world of trading. Mario Draghi sent the Euro plummeting this afternoon. Pushed my equity up to over 15% and my unrealised balance up to 8%. This is due to my three shorts on EUR/USD, EUR/AUD, EUR/CAD. Although my Long on CAD/JPY and AUD/NZD are also performing well. You'll remember earlier in the week, I was knocked clean out on a EUR/GBP short. It's important to stay in the game. Trend trading is about taking a few small hits, safe in the knowledge that big wins are out there. Patience is key. Having said that, none of my trades are in profitable territory yet, except for EUR/USD and AUD/NZD. A retracement in the EURO tomorrow or the next week, could wipe out todays gains. We wont pat ourselves on the back until our trailing Stoploss locks in our profits. My trades are all planned, irrespective of how the market behaves on a day to day basis. "Plan your trade and trade your plan"

I didnt place any further trades this morning as I was busy tightening my stoplosses to ensure I'm not carrying more than 5% risk in total. This was an error on my part as I should have tightened the stop losses immediately before or after I placed a new trade. I want to write this journal with as much integrity as possible. It's my journey and it's a learning curve. I'll make mistakes along the way but if I go down, it wont be because I was fooling myself and you guys reading (if there is anybody reading..ha!).. If I go up, it will be a valuable document of where hard work can take us.

Anyway have a good evening and happy trading
Bullbear

Good evening all,

I didnt record my trading journal on Friday evening as I had a late night out so didnt get a chance. It was a hectic and very positive weeks trading. The first two trades of the week hit their stoplosses almost immediately to knock me out for 2%. Then Mario Draghi dropped a bombshell and sent my Euro Shorts plummetting. NZD also had a poor week against AUD and CAD performed well against JPY. My open trades are now carrying over 15% in equity.

Over the weekend, a UK general election poll suggested Scotland would vote to break away from the Union. I am not in any GBP trades right now and I must say, I'm content to be out. The poll could have gone either way, so no learning was to be achieved. In my opinion Scotland will remain in the UK come Sept 17, but we'll wait and see. Again, I am a technical trader, so I try not to base my trade entries on fundamental analysis.

If you take a look at the three screenshots below, you will see the big gaps created in each market. Initially, this evening when the markets opened at 10pm GMT, these gaps, primarily, caused a drop in equity of 5%. None of my Stops were triggered. This is important as 90 minutes later, my account is performing almost identically to how it was prior to 10pm this evening. It's vital to leave stops exactly per my strategy and not try and lock in profits too early. My strategy is long term and is designed to absorb this kind of day to day volatility in as many instances as possible. So a good example of trade management, worthy of note.

I will be trade hunting tomorrow morning and will advise of any potential positions to be taken.

Anyway, I hope if you were in GBP, things went your way. Heres to another week of positive trading.

Have a good night and happy trading
Bullbear

Happy Monday all,

Today has been a quieter day for me than the previous two Mondays. I had no new trades trigger today. I did however position myself Long on AUD/JPY this morning. The weekly and monthly charts are both heading Long and the daily is following suit. That's the first thing I look at. I like to have 'all my ducks in a row' so to speak. As you can see on the Daily chart there has been a steep climb from 96.104 on August 20th. This market was ranging previously, before breaking thru the resistance. It's been climbing ever since, so I needed to make sure I hadn't missed the boat and that a trade was still feasible. I do this by ensuring that the market hasnt moved 6*ATR beyond my last conceivable entry point. Now if you are reading this, you may not understand this concept, but if you would like to know more, feel free to drop a message in the thread or email me directly. Anyway, in this instance, the price of my entry point was within 6*ATR so I positioned the trade. It hasn't hit as of today, but when the market is ready, I will be waiting.

BUY AUD/JPY @ 98.65 with a Stop Loss @ 97.84

Enjoy the rest of the evening traders, back in the morning
Bullbear

Good evening all,

Today we had a retracement on our open Euro trades, we came back about 2.5% and our AUD/JPY Long also triggered. Unfortunately, this trade was short lived and was soon extinguished due to a retracement of it's own. A loss of 1% was incurred. Not to worry, the trade was entered thru the correct parameters and this is simply the cost of doing business. We will catch the trend again as it continues north in the near future. Our HP Long trade placed last week, hit it's stoploss today too. The loss here was also 1%.

You may read this thread and think, "wow, so many losing trades, two this week, two last week..." but you must remember, each losing trade carries only 1%, each open trade can make an undeterminable profit. For example, if I place 10 trades and 6 of them lose, I've lost 6%, however if 3 or 4 of the trades are profitable, they only need to reach 2% each for my account to break even. However, the trades that get traction in the trend will usually run with it however far it may go, and with a trailing stop, very large percentages can be gained. This style of trading is long term. It suits somebody doing a nine to five like myself. I am not around to play the market on a daily basis, I need to work with the market. I try not to get too excited by big moves in either direction in the short term. As long as the rules have been followed and the trade is open, I'm satisfied. Any questions or comments on this style of trading?

Have a good night folks and back tomorrow
Bullbear

Good morning traders,

Yesterday, I was active in the markets. I positioned four new trades that matched my entry criteria. Long USD/CAD, Long EUR/GBP, Short AUD/USD and Short AUD/CAD. Screenshots below. Currently my open trades are carrying 13% equity down from 15%. This now equates to 5% profit overall on my account, down from almost 10%. I have made a decision not to let my account slip under 1% profit. In that event I will tighten all my stops and also tighten the parameters for trade entry until such time as market preformance and risk appetite return. Capital protection is all important. At the end of the day we are all here to make money, not lose money. I wanted to make this decision early in time, so no panic moves are made later. At the moment however, this is only a contingency plan. I will be looking for more trades this morning.

My Short on Silver has also moved into profitable territory and my Long on AUD/NZD hit its trailing stop for a .7% profit

Have a great day trading folks

BUY USD/CAD @ 1.1025 with a Stop Loss @ 1.0909
BUY EUR/GBP @ .8036 with a Stop Loss @ .7948 (open)
SELL AUD/CAD @ 1.005 with a Stop Loss @ 1.0150 (open)
SELL AUD/USD @ .9154 with a Stop Loss @ .9264 (open)

Good morning traders,

An exciting week ahead of us. Obviously the main talking point this week will be Scottish Independence. A volatile week in the currency markets awaits.

So I havent made any journal entries since Sept 11, and in the meantime I have lost EUR/GBP, USD/CAD and EUR/CAD. EU and UC cost 1% each and EC came in with .4% profit. AUD/CAD and AUD/USD also triggered and between them are carrying about 2.6% profit. My account equity today stands at 4% profit and my trading equity just under 15%. I have this morning positioned myself Short on S&P at 1968.00. The market is currently at 1980.00 but downward momentum is building.

SELL CME.US @ 1968.00 with a Stop Loss of 1988.00

Anyway, have a good days trading folks, talk tomorrow.
Bullbear

Good evening traders,

Not much to journal this evening. It's been a quiet day for me. No new trades triggered and only one positioned. At the moment I am being cautious. The reason being, the majority of my open trades are either consolodating or trending slowly. I'm managing the trades I already have, at this point. When there is positive movement on my portfolio, I will enter more positions. If I see consolodation for an extended period of time, I will look to close non-performers and position new trades. This way, I also manage my risk effectively.

An interesting point to note....In my last post I mentioned that my USD/CAD Long trade hit it's stop with a loss of 1%. I am convinced that this event took place. When I viewed the chart, it seemed a gap down had triggered my stop, before the gap filled back to its previous level. However, during a later review, I spotted that this trade was actually open and still is. Has anybody else had a similar expierence of this? Does this happen occasionally when gaps occour? Anyway, I will definately refer back if this happens again.

Time to hit the hay folks. Have a good evening
Bullbear

Hello Traders,

Scottish Independence vote tomorrow, should be interesting to see the markets react...My money is on a "NO" vote, but lets wait and see!

Since my last journal entry two days ago, my EUR/USD short has expired. Hit its ten day trailing stop for a profit of just under 5%. Not too bad at all. According to my rules (Rule 2 above), I will now keep away from further trades in EUR/USD until such time as a new entry point becomes available. I am aware that I could miss out on further profits, but there is money to be made elsewhere and my rules must be followed mechanically.

I also positioned a USD/ZAR trade which I failed to mention. I placed this on 12 Sept. It is open, but only hovering around breakeven. See the screenshot below. This market was previously ranging before breaking out and heading north. I am in at the right time so we will wait to see if we can build momentum.

Today I positioned three new trades after finding suitable entry points. A Long on EUR/JPY and GBP/JPY and a Long on Crude Oil. All three screenshots are below. I didnt actually want to take a short on EUR/GBP, my stats on EG are dismal, in fact that pair has performed the worst for me historically. I chose a Long GBP/JPY instead as although I dont use fundamentals to enter a trade, the technicals offered the entry on the Long and a positive vote tomorrow should see GBP rise. Both EJ and GJ were entered after passing thru the 21 day high and both have been ranging on the weekly charts.

Anyway folks, have a great evening. Back tomorrow
Bullbear

Good day Traders,

We had a busy week just gone in the markets. Scotland voting against Independance, the build up to polling day was more volatile than the actual result. I have only been in one GBP trade this week, a Long on GBP/JPY and this trade has been performing well to-date. A pull back is likely, but a continuation north is where I will be looking to see this pair go in the long run.

Firday Sept 19th I scaled in on my Long JNJ trade. The price recently pushed thru the 52 day high, see below (black trail). I have already been in this stock since Aug 20th at 103.05. My scale in at 107.80 should now carry less risk. As explained in previous posts, 21 day trades use the ten day trail as its stop when it breaks even. Trades taken at the 52 day entry point use the 21 day trail as its stop. The only exception to this rule is that when the 52 day high/low price is the same as the 21 day high/low price, the trade is treated as a 21, for risk purposes. As you can see in the scrrenshot below, I have my stoploss of my 21 day trade, sitting at the red trail. As the trail moves, so does my stop. My 52 trade will not follow the red trail but follow the blue trail lagging behind it.

This week I also lost USD/CAD for a .8% hit.

In terms of my overall trading account, it has been another good week. We broke thru 20% equity for the first time. A new PB
Presently, my open trades are carrying 20% and my account is carrying 14%. The week just past saw a 10% gain. Although my account equity will fluctuate up and down, we are seeing a lot of growth which is the name of the game.

I am also finding myself more disciplined, 3 months on. Phsycology plays such an important role in this business. I am following the rules of my strategy closely and I believe this is key to successfull trading. . The market variables are unfathomable and the only constant is ME. Therefore I must remain constant and consistant in everything I do. I am gaining more and more confidence in my strategy as each week passes. I'm getting better, but I'm not even close to where I want to be.

Anyway, best of luck for the coming week, traders!

Enjoy the weekend,
Bullbear

One of the key to make money using Donchian is diversification through different asset classes. I hope you have done some work on it.

Thanks systematicfx. I studied this style of trading at school but I have never once heard it being mentioned "Donchian". Now that I have googled it and it's pretty much exactly the style I trade, I'm somewhat surprised that I could have missed it.... I will need to investigate further.

I agree with you that my portfolio could be diversified better. The difficulty I have is that I do not understand currency correlation all that well and how different pairs relate to eachother, barring the obvious of course. I try to keep my risk in check by not over trading and managing my stops as per my strategy. I'm learning the whole time and I guess I have only touched the tip of the iceberg.

Do you trade "Donchian" style? If so, how do you keep your portfolio diversified and have you been trading for long?

Thanks again for your input,
Bullbear

I use Donchian as part of my carry trade/ trend following strategy.
Donchian is one of the "famous" method use by trend follower/CTA. (like moving average, BB, Keltner or any other method)

Diversifying in one asset class is pretty difficult. One way would be to run it on different time frame.
Choose uncorrelated pairs.

What I do is ranking my pairs according to what I think of the perfect trend, perfect ranging market.
and they constantly move on the ladder.. and I usually choose the first x pairs to trade.

I do trade from 1989 in banks.

I dont use different time frames at all to be honest. My ability at this moment in time is limited to day charts only. I use daily charts to place positions but I take into account both weekly and monthly charts to determine trend in the market I'm evaluating.

I trade in FX, commodities and equities, as far as my broker provides. I do not usually trade in stocks outside of the US or UK as I do not have any knoweledge in European markets. Having said that, I do use the same criteria to enter any market, so I shouldn't be afraid to trade in these areas, but I do like to know something about what I'm trading.

Do you use other indicators alongside the highs/lows? At the moment, when I find an entry, I strictly stay in the trade until my trailing stop knocks me out. Are there proven indicators out there, in your opinion, that can tell you when to get out of a trend, sooner than the ten day trailing stop I use?

Thanks and regards,
Bullbear

Thanks
BB

Good evening traders,

Well the start of another week and it's been a quiet start at that. I have taken no new trades today nor have I positioned any new trades. There seems to be a theme developing with regards to Monday trading....I dont seem to get involved on Mondays! I am however, keeping an eye on EUR/CAD. I was previously in this market as it trended south. A slight pullback kicked me out for a small profit. Now as the trend continues south, I will position myself to get onboard again. Tomorrow morning I will go trade hunting and depending on my risk appetite, will position myself accordingly.

Talk tomorrow folks and best of luck for the week ahead.
Bullbear

I do use time based stop. If a trade does not move my way after a certain period of time I tend to tight the stop or close the trade to allocate the resource
to more interesting area. I use volatility take profit in case you have a 10 sigma move. I do have some limited risk per group of pair to limit exposure.

Hi Systematicfx,

Can you explain what you mean by "volatility take profit in case you have a 10 sigma move"? I would be happy to add some indicators to my charts to see how they play out alongside my own exit strategy. Build up my knoweldge base in this area.

Thanks,
BB

Good evening all,

Today I positioned a Short on AUD/NZD and another Short I positioned on 15 Sept on S&P triggered.

AUD/NZD has been trending south since the beginning of Sept, although on the weekly chart the market is ranging. I will keep an eye on the technicals, but the bottom of the weekly range looks like a strong support in or around 1.0610. This does not look like an overly strong trade but it fits my entry criteria and therefore I am positioned.

My Short on S&P triggered today at the 21 day low. This too is a slightly unusual trade for me to take in so far as the trend has been heading North on both the weekly and monthly charts. Generally I look for markets where daily, weekly, monthly are all going in the same direction. I never take a trade that doesn't meet my entry criteria however. This trade of course did and the reason I took the trade was due to the formation of the daily chart. The upward trend has been moving in waves and the waves have been getting deeper over the last few months. The depth of these cycles is in fact the only reason an entry opportunity presented itself. It confirms my initial analysis on the 15th.

Please ignore the lines on the chart. I read an article about why people put lines / shapes, etc on their charts to try to predict where a market is going. The red lines do touch highest highs and lowest lows, but the orange line, I put there for no other reason than to make the shape look symmetrical. I'm watching to see if the price hangs around this orange line. Just me learning. It has nothing to do with my strategical analysis and I have put no weight on this shape. If I had, I would not have positioned a Short.

Thanks and talk tomorrow folks
Bullbear