My Position Trade Journal

Mission Statement: To try out a new position trading strategy that I am creating. To identify losing trade mistakes and to learn from them. To highlight emotional trades based on impulse or greed with a view of stopping these.

Where I am at the moment: Trading on and off for a few years. Read enough to sink a ship. Now I wish to become consistent and analytical about my trades.

The Plan: To begin with, I will look to take at least one position a day, though this may be a pending order and will depend on the instrument that I am watching. As positions open, I can then look to diversify my portfolio. The aim to to make pips not £'s. £'s come with pips naturally.

Risk Appetite: I am looking at 1% risk. for me on MT4, that is 0.01 lots. As I progress, I will leave the option to increase this to 3% on some trades but no more.

Balance: I am using a demo account for this with the assumption of a £500 balance. In reality there is 100,000 in the account though, this is being ignored. and only £500 is being used. (I have requested my broker reduce this, unsure if they're able too).

Community interaction: This journal is for me to be self critical. That being said, I am more than happy for people to comment, critique, offer advice and suggestions. I will take every bit of help I can get. Please note though, I am trading a strategy so, it may be that I hear what you're saying but I may trade it my way anyway to see what results I would have gotten. I am happy to discuss / share anything that happens as a result of this.

One request though; I will post screen shots / summaries of my trades before the trade goes live where possible and all trades will be linked to my trade explorer which is public. I request simply that comments are useful / constructive.

Outside of that, I hope that it can also be helpful to someone. I have no idea what this is going to look like in a few months time, but here goes!

I will post my first trade up tonight. Let me know if you wish me to include anything.

OK. So first trade being disciplined. Being honest with myself, I've had a few trades with this strategy so far that have done really well. My main issues are:-

fear of loss. moving my stop loss up to close to price to make sure I close out with as many pips as possible. This is inevitably closing my trade due to volatility and I lose the pips that take me down to the SL to begin with. So, the idea behind this journal is to remind me to be disciplined and be critical of my habits that are effecting my trading.

Second issue is trading out of boredom.. Now luckily, I don't suffer from this to much. However, the instruments I've been watching lately have been a little flat this week, so I've tried to steal pips and this isn't working for me. So this is a reminder to stop!

Right. Now that that's out the way!

I've started a new explorer with 500 in so that I can get realistic stats for this account. I will be trading this on a live account once I have a little data so for now its a demo.

Date: 14-May-2015
Instrument: EUR/USD
Time Frame: 1 Day

So, Euro is a pair I've avoided for awhile; like most currency traders, I started with this pair, left it alone for awhile and thought I'd revisit it. Attached is a chart with some technicals attached to it.

What I am currently seeing: About middle of April we saw the Euro start to rally against the dollar. This has continued right through May. Yesterday saw a close above the 1.131 (23.6) from a very strong bullish engulfing pattern. This continued again today and is currently sitting just below a resistance level of 1.142(ish).

The bullish sentiment is further displayed by the ascending (damn spelling mistake on chart) triangle. This level has only been tested once, though it is very bullish at the moment.

I've added in Stochastic indicator too. Now I'm not massively aware of how this works yet, this will be a work in progress. In the meantime; this for me is adding to the bullish sentiment and I am not taking the current results as over bought. I may bring fundamentals into this later on but for now I am keeping this technical to start with as I've not been watching this pair for very long.

Conclusion: Bullish Market. If price breaks resistance I have a pending buy stop order at 1.14710, risk 1% stop loss 1.138. Reason for this stop loss (maximum risk tolerance). I am not setting a TP; I will be looking to trade up to the next fib level, then I will move the SL to below the day close. Though, this is subject to change depending on results.

If I'm wrong I have a sell stop set at 1.13129 - this is below the support and also below the fib level (23.6). If this is triggered, I will be targeting the support trend line with similar SL rule.

END

Date: 15-May-2015
Instrument: GBP/JPY
Time Frame: 1 Day/1Wk (todays candle is excluded from analysis due to market still being open)

To add context to my views I have included a 1D and 1WK chart.

What I can see: On the one day chart there is clear bullish pressure over the last few weeks. This in part has to do with weak data from Asia and the UK general election allowing the to make some nice gains. We have also have a clean break above a resistance level at 187.000. However, this bullish movement seems to be stalling. The price has been ranging since Mondays bullish break of the resistance of 187.000.

It would seem that we're at an area of indecision as far as price is concerned. Here are my reasons to why..

On the 1D chart there is a slight divergence forming. I spotted this a few days ago, Though it is starting to not look as bad as I thought it was going to be. Though it is clearly visable and would suggest downward pressure. This followed by the fact price as failed to break and close above 188.500 suggests that we could be in for a correction/reversal. Unless anyone can suggest a reason why the price would continue to rise from a fundamental point of view, I am seeing bearish sentiment here.

Now, I have attached a 1WK chart. The reason for this is it gives a bigger picture view of what might be happening. We can clearly see that there is a fully formed double bottom. In fact, we are at a point now where price has reached the neck.

This is interesting; if price breaks this level we could see a continuation to the bullish moves that we're currently seeing. However, being objective, the leg up was weaker than the leg down and there is clear sideways movement. Next week will be interesting!

Since I have to trade the price action and not my opinion I have :

Buy stop set at 188.700 Stop at 187.714 (reason for stop is max risk tolerance 1%)
sell stop set at 187.004 Stop at 187.963 same as above

Oh, I'm away next week on holiday so I wont be back til the following Monday. Please feel free to comment. Am I right? Wrong? close?

Couldn't help myself..

On holiday and I logged in to see what the price was on the pairs above since it was a flat market for me Friday and Monday.


Nice to see both trades are now open on the short side. I don't have access to a pc so have to watch on mobile.. time to ride the wave I hope...

Ok,

Quick recap:

EUR trade went well, bounced around after it opened at about 100 pips profit. Had to pay to hold position open for 2 days which kind of made holding it pointless. Will need to reconsider this; it may be cheaper over all to close trade and pay spread to re-enter the next day.

Overall, fundamentals caused the drop on this pair though, not as sharp as I hoped in the breakout. It has fallen more over the last few days. Due to annual leave I've not been able to trade this.

GBP kinda reversed quickly after open, closed out at .5% manual stop. grabbed a few pips on another trade, overall weak. Price is seeming to struggle with the weekly double top and is unable to break. Will watch this pairs price action and see if I can plan another trade today.

in conclusion; technicals were ok, could have been better. May need to enter earlier if unable to hold position. Or, take what I can then re-enter at another point.

Will play with this and work out what is better for me..

Suggestions welcome

Hi Talzus, do you trade technical or fundamental ?

I am trading based on technicals and price action. Though, I try to plan in fundamentals too; this is my weakest area however.

Date: 04-june-2015
Instrument: GBP/JPY
Time Frame: 1 Day/1Wk

Hi All,

Been awhile since I posted. I guess one a day is a stretch. I will try and be more consistent, though I needed a little time off.

As far as this pair is concerned; we've seen some bullish movement over the last week or two. Some Dojis forming near the 189.50 mark. I half thought it would start dropping. I struggle to understand the fundamentals of this pair. Maybe someone can correct my understanding. I will post it shortly.

From a technical point of view; this week we can see some very bullish candles, volatility has been on the high end of average, though bears managed to push the price back down from 191.6x/5x. Seems to be a short term resistance. I can't explain why this is a resistance level, I've looked over historical data and I don't have data that goes back far enough. Anyone explain why?

Likewise, I see some soft support at 198.85x ( I would buy this bounce but currently my broker is charging a 15pip spread?!!)

OK so entries.

Buy stop at 191.804
buy limit at 190.502

Reasoning: Normally, I have a sell stop but I've decided not to. I dont see anything that is trend breaking, there are also HL on the daily and the neck of the W has been broken.

The limit order is set due to short term bearish movement confirmed by the bounce off the 191.5/6. If price continues to fall to the TL and assuming there are stop sweeps, I hope to pick up a few more pips.

Otherwise, the bullish move continues, breaks the resistance at 191.5/6 (30 pip gap incase of spikes).

I am interested on peoples thoughts of my entries. Please feel free to comment. I am also interested if people share my views or not.



Also, my understanding of fundamentals on this pair. If U/J is bullish and G/U is bearish then G/Y is bullish? to basic?

Good luck Talzus!

Haven't been trading this pair since it went well past my expectations around ~187 and has been extending up since then

Bear in mind that BoJ has announced that they will stop selling yen so we could see a period of consolidation/ranging/confusion between 191 and 181 before there's any good movement on this pair

All the best!

Thanks Alexpi,

Nice to see you again

Normally, I have pending orders in both directions. That way, I have have to be 'right' all I have to do is manage which ever position opens first and close the one that didn't open.

Spikes/stop sweeps have triggered these in the past though, the spikes tend to be 25 to 30 pips from what I've experienced; I just increase my limit order by that amount and see if it makes a difference.

This time round though, I have no sell limit. Mainly because I was to tired to stay up any longer. Secondly, it is very unlikely that the market would drop that far within my trading plan to trigger it...

That being said, I will be watching this closely over the next week. If it becomes more bearish this sentiment may change.

Friday is a good day for fundamentals, lets see what we find out..

Alexpi, I'm happy for you to jump in and post charts of what you see also if you like? I learn quicker when I can bounce of someone. If its just my thought process without challenge, I don't know if I'm right or wrong!

I'm learning not to predict, but to see what the market is doing instead! its very insightful when you let go of your preconceived ideas.

T

Mistake 1: Planning a limit or stop order on a friday is a bad move. I now have to hold the position over the weekend or close...

Lesson learnt.

Recap: GBP/JPY

As Alexpi said, this pair has ranged over the last week. Much to my surprise, (really, it does still surprise me) price tanked. It dropped like a rock in water. For future reference, if PA shows weak bullish movement I will set the stop order a little higher. Buying on the resistance point was a bad move and amateurish. #slapself.

Ok, so 2 valuable lessons learnt this week!

That being said, it wasn't all bad. I happened to read a thread here by a guy called Fti. One thing that I picked up from his thread is how to aggressively rescue a position. Let me fill in some background here. Normally I set a trade, set my stop loss depending on how much I want to risk based on 1% of my balance. So, £5. What this would mean is if the market goes the wrong way it hits my stop loss and I have to revisit what I thought I saw... The idea is as long as I make 3 or 4 good trades I can be wrong once in awhile..

From my understanding many people do this the same way!?

I have now come to realise that this is a bad idea... a few reasons:-

1 - Stop hunting - aint it annoying. they hit your stop and it then spikes 80 pips in the way you thought it was gonna but you're out of the trade at a loss!!

2 - Volatility - I'm not in front of my PC. so I don't have the added benefit of watching the market. Some days are more volatile than others. if my stop is set via a max pip loss threshold I run the risk of stopping out on a range.

So, my new stops will be based one of two things. 1) previous daily volatility or; 2) a catastrophic stop. In short, enough movement for price to move with the exception of I don't want to lose a most of my account.. I will play this out and see if I get better results. If I dont, or the losses are to great, I may go back..

Insight welcome.

How I rescued the position:-

Well, as you can see by post from about a week ago; I set the stop order right up by the daily close and a limit order close to the TL. Market was bullish so I didn't mind it being a limit order. In honesty though, I was behind the bulls.

What happened next. Well, rock in water. I was more than 200 pips in a loss. Well outside my R:R and by all accounts I should be out of the trade. Price fell right to the TL n hit my Limit Order. (WOOP, aint I glad I set that now).

However, I wasn't out of the trade I was losing a shed load of pips and in a new trade with my Limit order......

So the rescue.

We're now ranging and recovering the position that is miles out. Once I noticed price was starting to become bullish again I opened up a few new positions, scaling in around 20 pips apart, just a few times. Didn't want to compound the issue and just haemorrhage my funds. I was fairly confidant that over the last few weeks everything has been bullish and this was simply just a case of not being able to push the price higher any longer.

As price continued to raise up back toward the resistance level, I slowly scaled out of my position reducing my overall risk and locking in some of the profits.

To conclude: - I managed to lock in a 6% return over the last week from letting this trade run with some micro management. The risk was a little outside my comfort zone and I dont really want to find myself in that position very often. The aggressive rescue worked but, I'd not like to bet on it happening very often especially with the added position size needed to recover. Though, I am happy I am 6% up than 2% down.

Any thoughts, please shout up.

Date: 04-june-2015
Instrument: GBP/JPY
Time Frame: 1 Day

So Guys,

What next?

Weekly chart shows the same as last week. in fact, the price is kinda right where it was a week ago today.

Learning from my first lesson. I am not placing any orders for tomorrow. In fact, I want to watch and see what happens with a view of re assessing this on Monday. Decide where to go from there.

What would you do?

Where would you buy or sell?

Tomorrow will be interesting; Price has to move.. so looking at the chart, it either breaks the resistance or falls to the TL again. The trend and resistance lines are converging. As you can see in the chart it would either have to break the trend and range, fall or rise.. (aint it always like that?!! )

Anyway, the point I was trying to articulate is; if the trend line breaks over the next few days and we enter a range, I may plan some range trades. We shall see.

I'm waiting for the trendline break on Daily and if it's a strong penetration I will set a sell limit at the green line. I'll be looking to hold this for a while if it does happen.

A trendline break is an OHLC candle completely below the trendline.

Hi Alexpi,

Thanks for the post, I like your charts!

Why are you setting (would have set) a sell limit? you would short the bounce?

I have re-drawn your chart, hope you dont mind.

The circles highlight two every strong bullish moves to the resistance zone. This created an ascending wedge. The red candle between the circles would have scared me a little, though, I may have gone long on the spike to the trendline if id have caught it.

why would you short this chart?

Hey Talzus, cheers. I took the template from another trader since it's a pretty cool template. Can share if you want

Reason is that if it had broken below the trendline (especially below 189) we would have had a great short signal.

Such strong uptrends make price rebound hard back up when sell signals are given. My sell limit would have been at 191.5. That didn't happen regretfully

Ahh, I see! Thank you.

Please do share the template

ahhmm.... how silly am I?? Still dont know what is Fundamental & Technical trading?? already 3months in FX trading

Okzz... found something like that in Investopedia:

Fundamental: Fundamental trading is a method by which a trader focuses on company-specific events to determine which stock to buy and when to buy it. Trading on fundamentals is more closely associated with the buy-and-hold strategy of investing than with short-term trading. There are, however, specific instances in which trading on fundamentals can generate some nice profits in a short period.

Technical: In momentum trading a trader watches for signs that a stock is about to "pop", that is, undertake a significant uni-directional price movement on high volume for a sufficient period of time, which enables a profit. By virtue of watching the momentum line, the momentum trader has already engaged in technical analysis by examining stock charts for signs of the breakout. But the technical indicators used in momentum trading are only the tip of the proverbial iceberg; they are only a small sampling of the wide range of chart and graph patterns available to the technical trader.

Okzz got some idea... seems like Fundamental is based on News & Info about companies & bla bla bla.... but Technical is based on Indicators means Predictions

Am I right? Plz clear me out

Its quite simple.

Technical trading or technical analysis is a process of looking at price action and historical price to determine potential price movement . As an example, if in 2014 price struggled to to break a key resistance price, lets say its 1.50 and the current price was 1.45. One would expect 1.50 to provide resistance again. This is a crude explanation but I hope it helps.

As for fundamental trading, That is just trading market sentiment or news. So, as in the above example, if everyone was watching the 1.50 price mark but a key monetary policy came out, lets say interest rates moved, price would then move with it. This would be news driven.

A good example is the last friday of every month. watch the Euro as USA releases key data and the price will shift with it