My road to successful trading

Hi,

It's been a while that I'm thinking about starting a journal and finally I decided it was the time.
What gave me the impulse?
This video:
Thanks to MarkChew who shared it in his thread: http://www.forexfactory.com/showthread.php?t=538457

It's time to become a successful trader

In this thread I will share everything I can about the process, the method, analysis, entries and exits and reviews. Everything is on the go, nothing is fixed and my method will hopefully evolve in time due to successes, failures and hopefully feedback from others.

What won't change is the foundation of the method I will use: Price action and VSA only
I'll trade the 5m chart taking intraday trades. I'll use h1 and higher TF charts to analyze what is happening, were are supports and resistances and were are potential orders that the smart money can take advantage of.
The ultimate goal is having an understanding of what's going on in the market (technically speaking) and use some mechanical entry to time trades.

The goals:
Become a successful trader, making a living out of it, be a respected trader, help others improving their trading, help others managing their money wisely

How to:
- Don't be scared, every trade is a possibility: to gain or to learn
- Face the mistake I make and fix them
- Results will come. Focus on the process

good luck on the journey and I think place a trade explorer of your trade is good idea.

Good Luck Since your thread is in journal, be sure you write like you are talking to yourself. In other words, teach yourself, and accept feedback from others, but don't try to coach anyone. I don't think that is your purpose, so don't fall into that trap. Often you figure out things about your chart when you try to explain it to other people, so ask your friends and family over from time to time and explain it to them and see what you discover.

I agree with trading the 5M chart, but the 1HR chart is too far away to be useful. It takes 12 candles on the 5M to make 1 candle on the 1HR. Do you think that is useful? You probably should refer to the 30M chart instead. It is 6 candles and should be smooth enough and reliable enough.

I would only do that until I was comfortable. Then move to the 1M chart instead of the 5M and use the 5M instead of the 30M. Same process, but with more trading opportunities, so more money. Your mind will try to trick you, but a chart is a chart. It doesn't matter the time frame. They all act the same. You might "think", or "hear", or "read" that a 1M chart has a lot of noise or whipsaw, but it is an illusion, lol. It is no different than any other time frame, just faster forming candles and more entries and exits. The same technique of trading the 30M chart with a 5M chart is done when you trade the 5M chart with a 1M chart. No difference.

It would be nice to know what tools you are using in case any of them are similar to mine so I can offer you alternatives, if desired. I see you mention price action, whatever that is, and VSA. What is VSA?

Good luck !

I think he may be referring to Volume Spread Analysis....

Oh, thank you. Huh. Well, that will be interesting since it is pretty much fake.

From my experience there is some value to it when trading stocks... but like everything in TA its very subjective.

Not sure how one can apply it to Forex though for the reason you mentioned.

I considered it vital information in the stock market. Not having it available in Forex is what took me so long to conquer this market. I had to invent a way to measure momentum. Took awhile though, a long while.

I'm not here to teach, since there is nothing to teach
I'll post charts and my reasoning because this is the purpose of the thread, expose everything to face the reality, keep track of mistakes and fix them.
For the same reasons I'll add the trade Explorer. This will put much more pressure on me but I think it is better. There is nothing to hide here. I think also that this is potentially useful in the long term if people can track my results and know exactly my way of trading.
I'm currently trading with a low capital base but I'm not embarrassed of it. I want to start my journey from where I am, there is no point in adding money.
I hope I'll have a chart to post within the end of the day.

I took two trades today and two losers.
It's been a choppy day and usually monday in my opinion is a strange day where smart money setup the movement for the week.
My first trade was a short on EU:


I entered at the break of the low of the No Demand bar marked on the chart. The reason to enter was that price, after creating an high vol area, went down to clear the last base/range on the left and then back up into the hv area. Going up it created a ND bar which to me, was a good entry short. Unofrtunately immediately thereafter volume arise due to the Draghi speach and i closed the trade two candles later on the upbar. I was aware of the news but, since it was scheduled half an hour later New York open and since I didn't see volume kicking in, I just tought that was one of those speaches marked as red but uninfluents. So I undervalued the news impact and I've been punished. Lesson learned.



The second trade I took was another short but on GU. In retrospective, I enterd too early. My reasons to enter in the trade were that price went back to Friday's HV area that could act as resistance, did a little climax (upbar on high volume) with not much progress from there and I entered on the break of the ND bar's low. I considered that two long bars before my entry enough to clear the previous base on the left, so that there was less support after my entry. Also, price during London session went back below round number, clearing the way down. Actually I think that the biggest mistake has been shorting when I had two big volume candles just below my entry and that the trend was pretty up when I entered. Not a good trade honestly, I could have been more patient.

So today I lost 12 pips on the EU short and 15 on the GU short. Not a good start of the week but no problem, every trade is a lesson. In money term, I lost 7.2 on a initially 74.2 account. I'm trading 0.03 lots per trade in a 400:1 leverage account. I know that I'm way too overleveraged but I did this choice to motivate myself, stay more focused and put some pressure on me but I'm pretty aware that this is not good money management. I'll deleverage when the account will grow up.

I asked my broker the investor password so that I'll be able to set up the trade Explorer.

First successful trade: short on eu



On h1 I considered as a sign of weakness that bulls trap going out of range/previous highs. The two candles were also below previous resistance although that resistance has already been tested so it's less reliable.



Price formed a bulls trap on m5 too and thereafter it printed a downbar on high volume that closed in the middle. Price then went higher to test how much demand there was in that candle. Going out from that HV candle it printed a No demand bar followed by an upthrusth on increasing volume. The break of the lows of this candle has been my entry. I closed the trade after price printed a candle that touched new lows and closed higher on low volume and after the news on EU, that formed an up bar that touched new lows but closed higher on high volume. I closed the trade because of the news but probably it's better wait and see the reaction before acting.

I took an entry short on GU that ended up in a loss



Price created a climax on top and failed to break it out with an upthrusth on low volume. I entered on the break of ND candle's lows. I exited at a loss on the break of the high of the day. Analyzing the trade, I think that I entered too early since price formed a range at the top of the high volume area of the day. It is a risky situation to go short against the volume.

hey , sorry to burst your bubble but you might be going in the wrong direction.

I took another loser Yesterday on GU:



I saw confirmed weakness after exiting from my previous trade. The candle that took me out was an upthrusth and rejection of new highs. This gave me a hint that GU was weak. I entered after a ND. Regarding the entry, I should have entered some candle later when price went below the range and then back up to test, that would have been the best entry since mine was still with price ranging. As a more important aspect and possible explanation of today's failures in shorting gu, trend was up and there was a sign of strength during the morning.



If the pair is weak, I entered with every probability too early since there was a bears trap during the morning that shaked out the range on the top so I would have been better waiting some signal of weakness on H1.

I think this is what Mark is referring about but please, correct me if it is not.

So far, not good, but let's see the positive side. The trade on EU was very good, although I closed it early for safety. I must work more on managin trades. I'm also noticing that my best trades are during the half of the london session while I'm having more difficulty in processing new information from the NY session. Gu was in a strong uptrend and trying to short it hasn't been wise. Despite this, if I would have closed the second trade at break even, this would have been a profitable day.
As Always, I'll try to keep the good things and fix mistakes.
This is a Marathon.

I took an EU long during the london session



Before London open, price went down and it has been rejected by yesterday's H1 high volume area. This is a sign of strength. After london open, price was in a nice uptrend without particular increase in volume. So I took position after the break of the highs of a no supply candle expecting a breakout of yesterday's high. I closed the position after that price has been rejected twice above round number. About the closure, I'll take a closer look at this kind of situations. In this particular case, trend is up and price has been ranging lately so we can expect good moves. Considering candles, the candle before the one that took me out was an upthrusth on high volume. The next candle was a down candle on relatively low volume. I therefore could conclude that the upthrusth was absorption of orders (since we can expect resistance there at round number and a natural increase in volume).
Definetly something to think about and take note.

I took a short entry on GU that ended up at break even:



A first signal of weakness was the news candle, an high volume candle that failed to break out. I then waited a trend reversal and, after that the second news of the NY session (Philly fed index) created another HV area and price, going up, printed a ND candle, I entered short. After price went in my favour, I move the stop to breakeven but i've been shaked out by an upmove. Incidentally, that upmove created another entry that I missed. I think that the second entry was a better one since price went out from the HV candle created by the second news and then back up Printing a nd. Since the trend is up on h1 and remembering my other day's trades, I preferred moving the SL to BE and take a conservative approach.

Today I took an EU long position after NY open:



I have nothing much to add to the explanation in the chart.

Overall, it would have been a good week without those two GU losses. On Thursday and Friday I was also more relaxed and I've been able to wait for the best opportunities. This is something good I must roll over next week.

I took one EU short today:



The test/no demand that triggered my entry was below the HV on the left and after a push down. Unfortunately the EU hit some demand just below and it took some time to fill that orders and continue below.

My initial take profit area was around the daily range low, which was in the area of the start of the last movement up



I made a mistake closing the trade too early without waiting relevant contrarian signals. I was just scared of the news and that price wasn' t making relevant way down after the breakout. The ideal closure would probably be just before the news at round number as initially planned.

I took one long EU today that ended up in a loss



Price tried to go out from HV area created by news. There was a possible entry also within the HV area after that price printed a NS but I waited the breakout for confirmation. I then entered long after a NS candle. I think that my mistake has been entering too many candles after the breakout so that, in the moment I entered, momentum was vanished. Ideally the test must be within 2-3 candles after the break.

Also, looking at H1 chart, there are some additional observations that I can do



The most importan is that I entered in potential supply area (previous demand) that has not been already tested and that price was in a retracement of a downtrend (there wasn't a base over base formation). Additionally, last H1 closed candle touched new highs but closed low on low volume.

Again, a losing trade is an opportunity to learn.