Okay...here it goes

So I started this forex thing with $2800 about four months ago. At the moment I'm at $670 left in the account (I bottomed out at $250). Why? Raw, unadulterated, stupidity....that and a complete lack of self control. To summarize, the thought "awww heck...why use a stop loss?" has been my undoing .

Money management and self control are the holy grail of forex....and I haven't been drinking from that cup....mostly I've drowned myself in the toxic waste of greed .

Nice, picture, huh?

So, now what?

Well, the upshot is that I have a pseudo-system (mostly elliot wave stuff) that seems to work okay on my currency of choice (NZD/USD), if I just sat down and ran with it rather than second guessing it. So, I'm starting this thread mostly to embarass myself, in public, into following it....The upshot: please kick the crap out of my "predictions" and scare me into using stop losses. So lets get to it:

NZD/USD has recently been really nice for elliot wave analysis (assuming I'm doing it correctly). I'm posting a daily chart and hourly chart to show where it stands. From the dailys you can see a very pretty five wave impulse starting on July 1 and ending early September. Now we are either switching to an ABC corrective cycle or (if the five wave cycle was from a larger C correction, a new five wave impulse starting a new cycle). So we are either in a downward A or 1. Doesn't really matter as either of the two should be comprised of five subwaves.

Looking at the hourly chart you can see the first three subwaves are pretty much done (two green boxes and the red corrective circle). Note the really nice five wave impulse patterns comprising subwaves 1 and 3, and a clear abc corrective for subwave 2. (I should point out subwave 3 is why the account is currently at 670 rather than 250). So...whats the prediction?

One of two things seems possible: the most likely is that we start subwave four, a corrective wave with the associated wave pattern. Possibility two, though, is that subwave 3's sub-sub-wave 5 (god I need a larger vocabulary) isn't finished yet, and will, itself, be fairly extended.

Yup...for those of you paying attention, I just predicted that either (A) USD-NZD will go up or (B) down.

After the end of last week it just seemed like the downturn was out of gas. So I'm leaning heavily towards (A). But, should it breach last weeks low significantly we'll know that we're in pattern (B)....which in many ways would be more profitable. Thus, my guess:
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We will enter corrective subwave 4. It should retrace towards 0.6415-0.6420 or so (to be equidistant with subwave 2). I'tl have subwave structure, probably bouncing off of 0.6400 at least once before burrowing through. This should take about a day give or take. So, come Sunday I'm gonna enter long at around 0.6380, stop at 0.6350 and take partial profit at 0.6410 letting the rest ride with trailing stop.

After we breach 0.6415 we should be looking for subwave 5 to kick in. Assuming the subwave four Fib divides the entire move, that means subwave five should be heading from 0.6415 to 0.6314 in a five wave pattern. This should happen by Wednesday if all goes well....if I'm right about (A) above I'm gonna play this move pretty agressivly...we'll see.

Of course, if I'm right about both of these moves I'll eat my couch....without mustard.

Oh....if we happen to be in prediction (B) hold on to your hats because NZD should plummet to 0.6330 pretty quickly and the subsequent sub wave four correction and five move are gonna be choppy as hell.

After a nap it occurs to me that another possibility is that this correction will have a 3-3-5 subwave structure. So its possible that the A wave is done. In this case we're starting a 3 subwave B-wave. It'l still go up as predicted, but I'm gonna be watching the subwave structure of the upward movement closely. If it has three subwave structure, then its most likely as I predicted before, a 5-3-5 correction. If it has a five subwave structure then were probably in a 3-3-5. Either way, the play today is to long USD-NZD at around .6380 and hold on until .6410, take partial profit and ride the rest with a stop loss at .6350.

NZD-USD just gapped lower. I got in at .6376...actually I tried for a market order when it was .6360 but it didn't get filled until 76...crap. Stop at .6350 as stated. At the moment price dropped again to 0.6360 area...crap again. But oh well. I'm long NZD-USD. If it gets to 86 I might use the profits to cascade the bid and get out at the inevitable bounce off .6400, looking to re-enter lower. We'll see.

Of course...given my track record I fully expect this thing to set off my stop.

I dont trade this pair but I'll be following ya and yes, i will kick your butt if you dont stick with your strat!! What you said about money management and second guessing your system rings true. Spot on.

Great......... now someone has upstaged me on the politically incorrect avatar scene.

good luck with your system.

I think you're doing fine if your 'initiation' into trading has cost you only about $2200 so far.....Stick to the basics, it's all you need.

I just got stopped out.....waiting for this move to be over to figure out where in the wave cycle we are....clearly I missed something.

Hey, I would suggest this to anyone that is having trouble. Only trade 1 or 2 times a week ... IF THAT! Wait for a clear set up. Watch the gbp/usd for example run around 160 pips give or take a few without a major retrace along the way. Then wait for it to stall out on a 15,30 min chart. Then take the opposite position. Your TP should be about 15-25 pips. It works about 4/5 times for me. The other times you will have to average in a bit after about 50 pips more added to the run. Work back to a moderate loss and accept it if you are nervous to hold.

What I am simply saying is dont rush things. Make a safe 50 pips ever 2,3 weeks.. perhaps even a month. It is much better than losing money.

That first bit of advice KJay maybe should've occured to me a while ago. Most of the time I kinda have an idea what the wave structure is like, and I play those, and bam....a loss. But sometimes I'm 99% sure. I really only should play those that I'm sure about.

Thanks for the link EA....I will be digesting this while waiting for a move I'm more positive about. Maybe it'll keep my itchy trigger finger from hitting the mouse button for a while .

i just lost more than half of my account(REAL)!!!!!!!
i did so fine on demo for about 6 moths and in my firts trade lost over $900,i´m feeling so self-insecure of my judgment on making a trade, but i have to gain self-confidence to take over the winning trades again,,,keep up,we´ll get there.

I did great on the demos as well...seemed like easy money.

And then reality.

Having said that I'm either too smart or too stupid to give it up.

At the moment I'm leaning toward the latter.

I think your main goal should be to preserve your capital, and NOT to make money. Just convince yourself, and you should do fine.

So I'm looking at NZD-USD after sleeping on my loss and, hey, what'dya know....theres my correction to 0.6415.

Crap....had my stop loss at .6450 and the ***** thing bottomed at 0.6441 before shooting to my target.

Actually, I should've seen that coming. Wave 4 fib divides, usually, the movements. Assuming that the bottom of last week was the end of wave five put wave four way off fib dividing the entire move. On the other hand...as it stands now, 0.6440 puts wave 4 at an exact fib division.

Great....hindsight is 20-20.

At the moment NZD-USD is at the 0.6410 level. The correction (or new impulse, depending on 3-3-5 or 5-3-5) is going through its first cycle. In either scenario there is going to be a third wave to the cycle. I'm gonna wait for that before jumping in again. In the meantime, I'm gonna be looking for another filter to combine with my method (i.e. vegas) that will help me with more solid triggers.

Hey Rincewind,


Totally agree with u about money mngmnt and self control being the HOLY GRIAL of the Forex (trading) world.
We could have a 100% efficient system to enter good trades but a weak self control and MM will trash it.

Anyways, I wish you the best luck on your trading and hope your quest for controling emotions takes u to a profitable trading level.
Also, if you are interested I have a thread on the journal section about applying a financial plan to our trading, so we can have clear objectives to fullfill. If u want you can go there and read about it.

Bye

Apparantly a number of readers have found my avatar offensive. I will be changing it at the moderators request.

Apologies.

Okay....I'm fairly certain the second leg has bottomed out. Now we're moving to the third leg of the move, again, upward. We've also got a couple of hammers on the USD-NZD hourlies, so down is looking unstable at the moment. Upshot: I'm back in long, and looking to run up to 0.6425-0.6430. Stop at 0.6375.

No efex....I'm not all in this time.

LOL!!! Your new avatar is hilarious! A perfect picture of how the market treats us....if we let it.

Keep up your great journal and self analysis. I don't see too many traders who have the courage to be this honest with themselves. Hang in there Rincewind and you'll do all right!

Dial

I Agree! It's awesome!

Geesh.... some animators are talented.

I like Dials analogy. LOL

Rincewind,,,,good 4 you,,,,,,we have to keep trading ,,,we´re on this and we have to let time tell as if we`re good enough to stay in this bussines.


WE´ve learned the worst way,,,BUT WE HAVE LEARNED.

I'm still in (brushed up against my stop) and the third wave looks like its moving on up. At the moment were at 0.6400....might take a bit to push through but it should get there.

For the moment I'm watching this wave closely. Its either a c-wave of a correction or a third wave beginning the 1 of a new b-cycle (see my earlier charts.) If its the latter it should have a five subwave structure. If the former, then we should expect wave 5 of the 5 wave a structure.

I'm kinda leaning towards this being a b-wave. But honestly don't know if thats because I want it to be a third impulse going to 0.6450 rather than a c correction crapping out at 0.6420 or so. I'm gonna take partial profit at 0.6415 (assuming it doesn't just bounce off 0.6400) and let the rest ride with trailing stop.