Trend Following end-of-day Channel Breakouts by michal9

Trade #3 USDJPY works just fine. ADX(21) is still up, no changes there, I moved the stop just a little bit up, as I would find it hard to stand giving it all back.

Trade #11 USDCAD worked nicely. This was a ride the rejection rule setup. The rule tells me to close it all today at market on close. But it looks so promising that I closed 2 out of 3 microlots, and I left one microlot open, and moved the stop loss to last bar. Maybe it will give me some more. Anyway profit booked on this.

Trade #12 AUSUSD filled. Closed below previous 55-day low, so rejection rule does not kick on, so I stay on it. It is too early for a partial profit. i moved the stop loss to a bit above last bar.

I realized I missed a very nice and would-be-profitable ride the rejection rule setup on GBPJPY on Sep 8th. It gap opened below the channel, and then closed above it. So it was a RRR setup for a long trade!

Trade #7 USDCNH got filled. Let's see. Rejection rule is not in place because the channel line was declining.

Trade #2 EURTRY closed at stop loss, for a full size loss. Interestingly, it printed a bearish pinbar in the process, so now it will probably go down without me. That's OK. If ADX(55) turns up I will place another sell stop below the 55-days low. if this pair is going to make a big move, I will be on it. If it is going to shake me out for a couple of times, I accept this happens in the markets.

Trade #6 GBPCAD holds, no changes there. Retraced a bit, unfortunately. But hey, this is a "free trade" now.

Trade #9 USDNOK holds, looks like it may "want" to retrace a bit.

I am tempted to short EURUSD, but I decided earlier I will not chase this market, so I will stick to this. Also, ADX(20) is at a level of 60. Over the past 5 years EURUSD has seen such level only a few times, and it always preceded a correction. No, I am not going to get long it either to attempt to catch a falling knife or predict anything, but I think correction may be likely based on historical price action, and this contributes to my decision to wait. The perfect entry signal was on Aug 18th, but I started trading this system on Sep 1st, so I missed this one and that's OK.

EURGBP printed a ride the rejection rule setup today. A strong one this time. Evident penetration of the channel high. Strong bearish outside bar. But I will not take it. Stop loss is very far due to bar spread, so winning is likely small relative to risk. And there is this event risk on Scotland. Pass.

(new) Trade #13 XAUUSD short. ADX(55) has been raising for 3 days. There is a beautiful channel just below, it will happen to be a 71 days low. I decided to put a sell stop there. If it falls below this level, I will join and hopefullt this will trigger some momentum to follow through. And if not, I have a stop loss and I may even reverse on a rejection rule. Will see.

That's it for today, thanks for reading if anyone does ;-) (I certainly will re-read this at a time of journal review after 3 months of trading this system).

Trade #3 USDJPY continued to move favorably to my position.

Trade #11 USDCAD, the remaining 1/3 of the position closed for a small loss at a last bar stop. This trade is a net winner.

Trade #12 AUDUSD, moved favorably to 1R and I have just closed half of the trade for a profit of 81 pips. Half of the position remains open.

Yesterday's not traded idea of EURGBP short would-be a small profit today.

Trade #13 XAUUSD filled today, closed below yesterday's low. Technically speaking the rejection rule is not applicable because the 55-day low channel line was declining already, but I like the close is below yesterday low. It is also almost exactly at the previous channel low at 1240. I'd like it even more it it closed decisively below, but this is what it is. Trade is on.

I am glad I did not put a sell stop for OIL, which I wanted to do but market was closed, and it would be a loss today. Technically, there is a valid setup entry back into channel breakout today, but the last bar stop loss would be very far. I will pass on that.

(new) Trade #14 long Copper, ride the rejection rule setup. We have a false break of the 55-day low channel (i.e. penetrated but closed above). Note I did not have a sell stop order in place becasue ADX(55) was declinig, so I did not lose money on this false break. Now I will try to make money on it. Let's see. Stop loss below last bar low, exit tomorrow on close at market, entry was at market. Also, last bar is a long tailed one (not technically a pinbar but close), and two days ago was an inside bar, so we had a false break of the inside bar as well, which adds a bit of srength to this setup. The fact that ADX is basically flat and low also helps here, indicating there is no strong trand in place (and ride the rejection rule setup is kind of counter-trend).

Trade #7 USDCNH still open, at a small loss at this time.

Trade #6 GBPCAD I have just closed at market, unfortunately it gave back almost all of the profits and I am closing it as the ADX(20) turned donw from above 40, indicating a very strong trend got weaker. I made 15 pips on this half of the position and well above 100 pips on the first half of the position. Now I am flat the GBP and can put an order back into channel breakout, should there be a follow up to this downtrend.

Trade #9 USDNOK continued a favorable move, and allowed me to just now close half of the position for a profit of roughly 1R. Remaining half remains open as a "free trade". Profit is 706 pips, but this is becasue x-rate is 6.37, so this something like 100 pips on a pair where the rate is around 1.

OK, that's it. I will resist a temptation to put on a short EURUSD and short GBPUSD sell stops becasue I am already very heavily long USD, considering all positions above, and I need to be careful with having too many correlated positions. For the same reason I will skip the buy stop USDCAD which I could place today, in line with the system, although ADX55 is barely up.

Tomorrow I will do the review of the first two weeks of trading this system.

Trade #3 USDJPY continues to run. That's good.

Trade #12 AUDUSD does well as well. That's good to see. Makes me somewhat regret I closed half of the position yesterday. But this is the trade management system I use. It also turns lots of would-be losers into break-even trades, which is helpful, from psychological standpoint.

It hurts me to see that I am missing a great trend on NZDUSD.
Also the USDCAD buy stop which I considered yesterday, would be off for a nice start already. But I al already very heavily long USD so I should not overdo. Especially that, once USD reverses, I will experience equity drop on all USD long trades, not just USDCAD.

Trade #13 XAUUSD also moved in my favor today. But it is not yet time to take profits on half of the position. But I did move down my stop just a little bit - above the last bar - in line with the system rules.

I am so tempted to short the bond bubble. See Bund chart. But there is no trade according to my system. At least not yet.

Trade #14 Copper long, closed at time stop, for a small profit. This was a ride the rejection rule setup. And the setup rule says to close the trade on close of the following day. So I did.

Trade #7 USDCNH short, closed for a small loss. on a rejection rule. It has been two days and I did not "want" to go down, so I scratched the trade. It is Friday, it was not moving. and USD is going up accross the board, and even ADX(20) turned down. Very small loss.

Trade #9 USDNOK keeps working. Last bar does not look very indicative of further upmove, but will see.

I could argue there ther is a valid entry setup on Copper and USDCNH, back to channel breakout, but I am not convinced. There is plenty of open trades already, next week I may have less time to manage positions. But if the ADX(55) turns up significantly, I will join the trend, if trend appears. I will not miss it like I did on EURUSD and NZDUSD. To be fair, I missed it becasue it started before I started trading this system, but still.

ADX(55) turned down on SPX... another weakness element of this market. Now I surely will not place a buy stop above all time high. I am unsure to what extent I should ignore my fundamental bias vs. considering it. I am probably better off ignoring it. Any, in an even that SPX shows a strong continuation up, I will join.

(new) Trade #15 USDMXN long. Buy stop above 55 days high, plus a nice few pips, as a spread may be higher on this pair. ADX(55) is raising. It is a valid setup and I briefly visually backtested Channel Breakouts system on this pair over the last couple of years and it looks like it would be profitable. So why not try it? Although I am aware that this is another leg of my big long USD trade and short everything else: NOK, XAU, MXN, JPY, etc. That's it.

Although I cannot rule out the possibiliy of adding a small short EURUSD next week.

Have a nice weekend!

Summary of the first two weeks of trading this system, since I started Sep 1st, 2014. Channel Brekouts and Ride the Rejection Rule setup.

Balance result is negative 0.02%, so basically flat on a closed positions basis.
Equity result is positive 1.2%, incuding open trades, but this result may go down in case open trades reverse.

So more statistics in the screenshots from myfxbook or via this link.
One thing that looks very bad is that losers are larger than winners, but this is becasue most "winners" are not closed yet, only half of the position.

This is also a result of one position sizing challenge that I have. My EURTRY trade was a loss of almost $50, although the "target" loss I was planning was $25. But on EURTRY, even just 0.02 lots, for the stop distance I wanted to use, turned into $50. I knew it upfront and accepted. But this creates an unfortunate coincidence... my trades that are running perfectly made $25 per 1R, while I lost $50 on a loser. There are 3 options: ignore it and count on that fact it will average out, or increase position size on all positions to $50 loss, or skip trades where the loss would be more than $25 even with 0.02 size. What do you think? Losing $50 per trade is still acceptable for me, so I will probably do just that.

Overall the result of 1.2% in two weeks looks quite good, but of course I am very aware of random distribution of winners and losers. Also I was lucky that a couple of nice trends started last two weeks. I was also a bit unlucky that EURTRY losing trade was a larger loss.

As my 1R was around 0.5%, I could say that the result of around 2R. Anyway, this is still by far too small sample size to assess anything.

What we can asses if is I correctly executed the system. And I think I did quite well. There was one evident mistake, I closed AUDNZD one day too late, I missed the fact that ADX(20) turned down. Other than that I do not see evident mistakes. I see a couple of questionable trades I could do, and would be winners, but I decided against. I am very cautious not to over-trade, based on my earlier experiences. (I have never lost a lot of money, but experienced losing streaks of small losses). At the same time , this system relies on catching big trends , so I must make sure I will not miss any big move. Worst case I will jumpo in one or two days later, but I will follow the trends.

OK, plan for the next week: continue executing the system, flawlessly. Please wish me discipline and patience.
Thanks.

Very nice Michal, excellent thread. I think I'm going to try and turn this into an EA and back test it some. I look forward to reading more about your experience with the system in the future!

Thanks Nicolai, I will continue sharing my experiences with this system and I believe that turning it into an EA is a very interesting project. Indeed this system is so well-defined that you can consider it almost mechanical, as, as such, possible to automate.

I will be happy to help as you start working on this, so feel free to ask if you face any challenges in coding it. I do have some MQL coding experience as well, but at this time I will not invest the time that is needed to write an EA. Needless to say, if you write an EA for it, I'd be delighted if you share it, so that I could backtest it as well.

Backtest results would be very interesting to see. I personally would probably not trade it live using EA, for various reasons, but backtest and maybe even some optimizations, or just learning how the system would perform with some variations, would be very interesting.

This system's edge is fully exploited, I believe, if it is traded across many markets. It may be that this system has been a net loser on EURUSD over the past two years, but winner on other pairs and winner overall. And MT4 does not suppotrt portfolio level optimization, which is a bit of a challenge and needs to be taken into consideration.

With a EA it would be very easy and tempting to optimize 55 days channel, I mean optimize numer of days, but I am afraid this could be a curve-fitting. Not a good thing. Unless tried with walk-forward optimization, but even then I would see a risk of over-optimization. Anyway, it would be very interesting to see an optimization chart to see how it would have performed with different channel lengths... if this system is robust, and I trust it is, them it should perform similarily well with any channel length between 40 and 70. It could also be tested if this is better to put a buy stop 1 pip above channel or maybe 0.05*ATR(20) above channel, or alike. And my hypothesis that ADX(55) as a filter for entry and ADX(20) as a trigger for exit (if turns down from above 40) is a good thing, could be put to a test!


Anyway, good luck and let me know how I can help!

Today quick update... not much change... all open positions are still on.

I am very glad I exited USDCNH short manually, for a minimal loss, today it would have it its stop loss (for a would-be full size loss).
There is a long setup on USDCAD, but I am already enough long USD.

(new) Trade #16, short EURNZD on a ride the rejection rule setup. Broke through 55-high channel and closed below. Time stop tomorrow on close.

Technically there is also a short setup for USOIL and Copper, I mean I could place a sell stop, but... I am already heavily long USD and also last two days price action seems to be rejecting new lows. Standing by. In the worst case, I will join later.

Trade #16 EURNZD I closed the half for the minimal profit and decided to keep the other half and moved to SL a bit down, to last bar. I am bending the rule a bit, becasue I should exit full trade on a time stop, but last bar price action looks promising for some further move down. I hope I am taking a positive expectancy action here, to let this trade run for one or two more days. My backtests show that quite often a ride the rejection rule setup "works" only after a few days.

No changes to other trades. Gave back some profits today, dollar index showed a bearish bar, so may retrace a bit more tomorrow. Will see. ADX20 is still up on my long USD positions.

Trade #3 USDJPY continued to move in favor of my trade direction today. I moved my stop up a little bit, just in case of some emergency ,
not to give back 400 pips, but my system rule tells to keep it as is and exit at 21 days low or when ADX turns down from above 40. By the way, ADX is at 60 and, since 2008, it has been above 50 only 6 times. So, clearly this market has a property of being in a strong trending move, a move so straong that it rarely has happened in the past years. Of course it does not mean that I think it is about to reverse. I do not forecast at all. I follow my system. And I accept that I will likely need to give back a portion of open profits once this trend reverses. That's OK.

Trade #12 AUDUSD moved in favor of my open position today.

Trade #13 XAUUSD moved in favor of my trade as well and I have just closed half of the trade for a profit of a bit more than 1R, luckily. Now it is a "free" trade to "let the profits run" and nor worry about losing money on this trade anymore.

Trade #16 EURNZD hit the stop loss today, on its remaining half of the position. It is a net small loser. Now I wish I sticked strictly to my rules and closed it completely yesterday, as it was a "ride the rejection rule" setup, which has a time stop of one day. Isn't is a great learning? Well, it is an open question for me to what extent I should stick to the rules absoltely strickly in a totally mechanical way vs. some small minor adjustments. [trade history not shown on chart becasue it is after midnight and the platform shows current day only, sorry. But stop loss level was visible on yesterday's chart. ]

Trade #9 USDNOK continues OK. No change there. I note that ADX is at a very high level, too. Same as with USDJPY.

I am so tempted to short GBPUSD. It printed a bearish pinbar on a level of a previous gap, and previos swing low support, and in a downtrend. But this is not a trade of the system I trade here. I know what I will do, I will short it on a different account ;-) Although just before event risk... most people advise against. Maybe not. [just recording my thoughts if you don't mind and feel free to comment]

GBPJPY showed a major channel breakout today. It is not a trade I missed because yesterday ADX55 was not raising. Technically it is raising today, but should I enter this? I am already short JPY on a long USDJPY trade and tomorrow there is an event risk on GBP. I will wait, I hope I will not regret and in the worst case I will join this trend at market on Friday if the setup is still there.

And we have almost identical case on AUDCAD. Major breakout. Not a missed trade as ADX was not going up. And I am alredy short AUD vs. USD. Pass for now. This chart has two more interesting properties. 1. this downmove started with a false break of the 55-days high and a "ride the rejection rule" setup.
2. I imagine many people traded this pair long - two days ago, on what looked like a long tailed bullish bar at a support level in a long term still uptrend. A few months ago I would probably have traded it ;-) I will re-assess tomorrow the idea of placing a sell stop.

Lastly, Bund is slowly approaching its 55-days low and my sell stop will wait there for it, pending ADX filter which is still yet to turn up.

And, really lastly, EURUSD and USDCHF broke out of 55 days channels today as well, but for the same reasons as before, becasue I missed a big part of this trend (started before I started trading this method), and becasue I am already very long USD, I will pass it.

That's it.

[do not look at the last bar on my charts today, it is 2 hours after midnight already]

Trade #3 USDJPY continues OK. No need to exit or move the stop.

Trade #12 AUDUSD continues OK. ADX(20) still going up on both trades.

EURGBP broke down and closed below 55-days low. ADX(55) was yesterday and is still declining, so I am not on, but I will join the party if it turns up tomorrow, then I will place a sell stop below last low.

Trade #13 XAUUSD continues OK, retraced a bit, looks like I was lucky yesterday to exit half of the position at the good spot. Pure luck. But I followed the rules: profit of 1R was there so I exited half of the trade.

GBPJPY showed a very strong follow through today. Without me on board. Why? Two days ago ADX was declining. Yesterday ADX ticked up, but it was before Scotland referendum which happened today and I already had a correlated trade. I said yesterday I would join this trend today if it continues. And it did. But now it would require a very far last bar stop. And referendum results still unknown. And tomorrow is Friday and I will not be able to adjust my positions as I will be travelling. So I will wait till Sunday to reassess the situation. But in spite of all my rationalizations it is a bit hard to see a perfect breakout, myself trading channel breakouts and not being on board. But I am still long USDJPY.

I will not chase AUDCAD breakout either. I am still short AUDUSD. Next time, I will likely trade both correlated pairs on half a position size. Or choose just one and not regret of both worked

Trade #9 USDNOK gave back almost all its profits today. So be it. It is a "free trade" already. I am not moving the stop.

(new) Trade #17 AUS200, a ride the rejection rule setup. I will try to close it tomorrow from my mobile phone as I will be travelling. This setup exit rule is on close on the following day. Price broke 55-days low and closed above it. Also SPX is celebrating another all time high.

(new) Trade #18 long EURUSD. Also a ride the rejection rule setup. 55-day channel low was flat for 5 or more days, price broke it, but closed above. So it looks like a false break. So I will try to ride its momentum for one day. Exit on close tomorrow. Also the U.S. dollar looks like it may "want" to rebound a little bit after its big run, so let me try to join it for a day. The same setup is present today on USDCHF and USDPLN. But I will take just one, here against Euro. This position will also act a bit like a hedge for my other long USD trades. But this is a minor point. Key point is that a setup is there.

That's it for today.

My last two trades, long AUS200 and long EURUSD, trade #17 and #18, I closed manually both of them for a small loss on Friday afternoon, in line with the exit rules of the ride the rejection rule setup. Luckily loss was even smaller vs. if I waited for a stop loss to be hit on EURUSD. I was unable to take a screenshot.

Trade #3 USDJPY open trade continued to move nicely.

EURUSD in fact shows a setup back to the channnel breakout, but I will not chase this one.

Trade #12 AUDUSD also continued to move in the direction of my trade.

EURGBP showed a pinbar rejecting lower prices. But it closed a little bit below the previous channel low and it it a very strong downtrend, so I am not taking a RRR trade. Anyway markets are closed now.

Trade #13 XAUUSD, nicely for my position, closed below yesterday bullish candle low.

Trade #9 USDNOK, moved up a bit after Thursday's loss.

(new) Trade idea, short GBPAUD, on a very nice pinbar. The market is closed, so I plan enter it on a Sunday night. There is a price action setup on short GBP accross many pairs, but setup against AUD I like the most: it penetrated a long channel (134 days high), and it has a positive swap (in case I choose to keep this trade open longer in case it is profitable) and, most importantly, it is a proper RRR (ride the rejection rule setup). And my task here is to trade ONLY the CB (channel breakout) and RRR setups here.

That's it for current trades review.

Weekly review after week #3.

Balance shows a loss of 0.2%, on a closed trades basis.
Equity shows a gain of 1.6%, incl. open positions.

Some more statistics below, but... they are a bit distorted by the fact that my winning trades are still open and my losing trades are all closed.
Link to my fx book.

I feel OK about the progress so far.
It is still too early to assess the performance results, after just 17 trades.
My execution of the system rules, I believe is fairly good. No evident mistakes this week, at least I do not see any.
17 trades in 3 weeks... Did I over-trade? It is quite possible. Although, for each trade the setup was in place. There were just 3 new trades last week.

I am lucky becasue there is a "trending" market on a couple of pairs, and I am on it, so looks like I am enjoying a favorable market conditions at this time. But this also means that maybe the results should be better, so as to build a buffer for a time when conditons will be less "trending".

OK, that's it for today.

As planned,

(new) Trade #19 GBPAUD short, on a ride the rejection rule setup. Bearish pinbar protruding the channel high. But, just to add a bit of probability of winning, at a cost of lower R ration, I decided to place a sell stop below last bar low, instead of entering it at market. In case this market goes up from here, I will avoid a loss. Of course it may go down, just to trigger my entry, and then reverse directly to my stop. Anyway, I believe this is a setup worth trading.

With this, a new week starts. No other new trades. Last weeks positions remain open.

There is a trade idea on Copper, to place a sell stop on a channel breakout setup, and also on EUSTX50 there is an opportunity to place a sell stop on a ride the rejection rule setup. But both markets happen to be closed at a time I trade.

You may want to check out my blog, if you are interested. It is non-commercial, just sharing my trading journey and best resources I am finding or creating.

If anyone got to this journal recently and you are interested but unclear on what is a "ride the rejection rule" for example, please have a look at the first post, where the system is described in details. Thanks.

Just to check the roboustness of this system, for info, even though I do not intend to trade it in an automated way, I started developing this system, as an automated one, in Amibroker. It is more difficult than I expected. I already coded the entry method, and position sizing, and a temprary simple way of closing with trailing stop using ATR... it needs more work to code the rejection rule, Bishop exit, etc.

If anyone would like to help, please let me know via a private message. I can share the code and we work on this together. Would be interesting to see the backtest results. Of course, they will very much depend on a choice of markets... probably even more on that vs. on choice of parameters like channel size; at least this is what Covel books lead me to believe.

Anyway, initial backtest results, as one may expect, show very nice profits in years 2008 and 2013,and loses in other years. Evidently this approach "likes" the years of strong trends. But, this result is not meaningful as I have not yet coded the full system, just the entry and simplified exit, just to see "something". I trust this system and may or mey not continue investing time in trying to code it in Amibroker, will see.

That's it for today. Thanks.

Good strategy mate, subscribe.

Its working so well in demo I have just taken a live position using a micro account

@orionfx Thanks a lot, great to hear this.

@Stumpy1 OK, it is your decision. Thanks for sharing and I wish you good luck, and feel free to post some charts or your comments here as well.

While I am not recommending or suggesting anything, just FYI, my approach to qualify a new trading system or setup is to move to live only after being consitently profitable on demo or backtest, and, increase the position size very gradually, only after at least 3 months of being profitable on a live account.

Note that it has been only 3 weeks and less than 20 trades so far that I started this journal, and we enjoy favorable market conditions, so saying "it is working well" may be a little bit too early and optimistic. We do not know yet how it is working on a larger sample of trades.

I am saying this just to be open, honest and transparent. This trading approach, and my ability to trade it with high quality, while I trust both are good, it may or may not produce profitable results. Certainly it is my goal to be profitable. Let's see. I am glad to have "company". Thanks!

Today traders who traded a ride the rejection rule on SPX had a profitable trade. But I unfortunately did not catch this one. Although the setup was there. Sep 19th closed below the 55-days high. One could enter short at market on close, and close at market on close today. I was tempted to take it, but was a bit intimidated going against the trend on SPX.

USDJPY trade #3 is on, inside bar today with a bearish close, but ADX(20) is still going up.

AUDUSD trade #13 is on, continued a move in the direction of my trade today. ADX(20) is still going up, 20 days high is still far away, so no reason to touch this trade, just like with USDJPY, although it is tempting to start moving the stop. But I will stick to the system rules.

It is difficult to watch these perfect trends on EURUSD and NZDUSD continuing without me, trends I missed becasue they started a few days before I started trading this system. But I say to myself that I did catch the USD run against AUD and JPY, so it is OK. And next time I will not miss a trend like this.

EURGBP shows an interesting feature which makes it difficult for me to decide what to do. On one hand we had a bullish pinbar, but I did not trade it long (I am glad I did not) as it had a bearish close a little bit below the channel line. And today ADX(55) turned up, so technically there is a Channel Breakout sell stop setup below last low. But I am hesitant to do this, as this market seems to have been in a long downtrend trend for over a year now... maybe tomorrow... let me see the price action for one more day, after today's inside bar.

XAUUSD trade #13 continued. I like the bearish close. I like that there is still some space before next support. Anyway I am making no predictions. I just anticipate is will be psychologically difficult to give back a lot of paper profits on my open profitable trades, once the trends turn, and at some point in time surely they will.

Those who traded bearish outside bar on EURAUD have lost money today, assuming they had a stop above last high. (and it also has been a rejection of the 20 days high channel, I am glad I did not trade it; I trade rejections of 55 days channel).

Trading Friday's pinbar on DAX for a quick short trade would be profitable, just like the SPX trade I mentioned above but missed. I saw it. I did not trade it on DAX becasue it was just 20 days channel false break, not 55.

(new) EURCAD Trade #20. Sell stop below channel low, on a Channel Breakout setup. ADX(55) is up. I really feel like shorting EUR, so I will try to do this against CAD, as the setup is there. Interstingly, I missed yesterday's RRR setup on this pair (it broke the 55-days low and closed above the 55-day low) and it would be a profit today (for an exit today on close). Anyway, new setup is now in place, trend is evidently bearish, let's see what the market does.

I mentioned a Copper trade yesterday but the market was closed. Well, it broke out today and nicely closed below the channel. I will try to get in.

(new) Copper Trade #21. CB trade. ADX(55) is up. Sell stop below 55-days low. Stop loss last bar.

I am very glad that on Friday I closed at market manually my long AUD200 trade... today it would have ended up with a stop loss for a full bar loss. My loss was much smaller. It was a good trade (i.e. in line with the system, a RRR setup), a good losing trade.

USDNOK Trade #9 is on.


GBPAUD trade #19, is cancelled. I am so glad I placed a sell stop below last low vs. entering at matket! It would be most likely a loss. Now it is flat. Although, you never know, today there is an inside bar. this setup may still work, but the RRR method tells to close the trade on close on the following day so, if I followed it, it would be a certain loss. Nice to avoid a loss. A few months ago I am sure I would have pulled the trigger at market, and would have to face a loss today. At the same time, reality is that I bent a RRR rule a little bit by entering this on stop vs. at market.

That's it for today. I reached a max limit of charts per post, which means this is enough (but luckily all markets that I trade are covered ;-)

I like the USDJPY candle today... if I was not already long, it could be and opportunity to get long. Will I add? Not at this time. Pyramiding is not a part of my plan at this time. Maybe in the future.
AUDUSD continued to move down.
NZDUSD made a new 55-days low and closed below yesterday's channel low.
XAUUSD moved up and gave back some gains towards the end of the day.
USDNOK bullish pin.
GBPAUD , my short candidate from two days ago, broke above 55 days high. But ADX(55) is still declining, so no long. And. on a correlated front EURAUD also shows a declining ADX and not reached the 55-high yet and EURNZD... actually shows a RRR setup...

(new) EURNZD trade #22, ride the rejection rule. We have a false break of the 55-days high. Price made a new high, but closed below the yesterday's channel high. Entering short at market , stop loss above last high, plan to exit tomorrow at market on close. I have somewhat mixed feelings about this setup, but it is valid according to the rules. And a few recent RRR setups I missed, and they would be winners. Murphy's law may make sure this one will be a loser, but this does not matter. What matters is if this is a positive expectancy setup., likely deliering a profit on a larger sample of trades, and I believe it is.

This EURNZD RRR setup is not as "beautiful" as EUSTX50 short setup from September 19th... which I missed... and in hindsight it looks so "obvious"... adding here a chart for a learning and a perfect example of a RRR setup. In this case, the close was decisively below the channel high. While here with EURNZD is not so.

EURNZD Trade #22 closed, for a profit of 106 pips. This was a ride the rejection rule trade, with an exit method of "the following day, on close, at market". Executed. This eases my pain a little bit. Pain of seeing EURUSD goind donw day by day without me ;-)

EURCAD Trade #20 is cancelled. I cancelled the entry order becasue ADX turned flat. I enter channel breakout only if ADX(55) is raising.

Copper Trade #21 got filled. And shows a moderate loss , halfway to the stop loss. This is not good . Techncally the rejection rule is not in place becasue channel line was not flat for at leat 5 days. But I am tempted to scratch this, but... the market is closed. I will reconsider trading commodities. I really don't like it when the market is closed.

Other open trades moved a bit, rather favorably, today. No major changes.

(new) USDCAD Trade #23, RRR trade. 55-days high channel line was flat or declining for 5+ days, and it got broken to the upside, and closed below. This is the RRR setup. Entry at market on close. Stop loss above last high. Exit tomorrow at market on close.

Thanks for reading, feel free to share any comments you may have.

Down day on SPX. EURUSD continues its run down without me on board. So does NZDUSD. I will never again miss a trend like this ;-)

USDJPY trade #3, looks like the run stalled. And I noticed that according to the rules, I should have exited it manually on Sep 23rd, becasue ADX(20) turned down that day. So, to follow the rules and execute flawlessly, I have just exited the trade at market, manually. Luckily at the almost the same price as on Sep 23rd when I should have exited it. I need to keep a closer eye on ADX(20) on my open trades. There is a nice profit of 433 pips on this closed trade. (well, on the half of the position, for the first half the profit was much smaller).

Interestingly, because ADX(55) is still up, and the upper channel line has been flat for 5 days, there is a new entry back to the Channel Breakout today.
So, even though it is psychologically somewhat hard to exit a trade and place a new order at a "worse" price, I follow my system:

(new) Trade #24 USDJPY, channel breakout entry.

USDCAD Trade #23, closed at market for a loss. It did not get to a stop loss by 4 pips, but I decided to scratch this trade without hoping it would reverse. Interestingly, have I placed a sell stop below last low, it would keep me from this loss, just like a few days ago on GBPAUD trade I avoided. I entered at market instead of a sell stop becasue (1) RRR setup rules so dictate, (2) becasue the price Closed at the bar Low, I thought the sell stop would be triggered for "sure". I would not.

AUDUSD trade #12 continues to run nicely and , need to keep an eye on this, ADX(20) is still raising.

XAUUSD Trade #13, closed at market for a profit. Closed becasue ADX(20) turned down from above 40. Also the price action today was bullish and it rejected a new low. Just like with USDJPY, technically speaking there is an entry back into the CB setup, sell stop below last low. But I will hold on. Not much space before multi year support. But if it goes below it, oh I will get very short this market for sure.


(new) EURNZD long trade #25. CB setup. ADX(55) turned up. So I have a buy stop above last high. A bit above it to increase chances of avoiding a false break. And a stop loss is not below last bar, becasue it is a monster bar, but half its way, at a previous channel level. It feels strange going long EUR but the setup is here.

(new) EURCAD short trade #26. CB setup. ADX55 up. Sell stop below 55-days low.

Copper trade #21, I will leave it as is for now. Today's price action was in the direction of the trade. Although technically I should have closed it yesterday but could not as the market was closed. I will give it one more day to work out, as the price action looks "promising".

USDNOK Trade #9, closed at market, for a profit. I realizedI should have closed it on Sep 23rd, on ADX(20) turning down from above 40. This time I got lucky, I closed it at a better price than as if I closed it according to the rule. In spite if this error, I consider this was a good trade.

(new) GBPAUD Trade #26. Looks like this market has a hard time deciding if it "wants" to go up or down. But ADX(55) has just ticked up a little bit and , so, my buy stop is just above the channel 55-days high. I took just a 0.01 position as the stop is large, so I will be unable to scale out. So be it.

USDMXN long, Trade #15 got filled today. This entry order had been on for a while. And looks like I was rewarded with a nice breakout. Let's see. Too early to close half for a profit, at the profit is still below 1R, i.e. the stop distance.


Performance update from myfxbook: balance plus 1.28%, equity plus 2.18%. Too early to say anything, but surely feels better to be above the water ;-)
It has been almost a month and a risk is 0.5%, so this result is like 4R in 4 weeks. If this was to be a consistent result, I'd feel OK.

Thanks.