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Trading spot fx euro using price action

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  #391 (permalink)
 Big Mike 
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Adamus View Post
More losses today.

I realize you didn't ask for advice, so feel free to ignore me.

I would suggest trading less often as step #1. I would also suggest limiting yourself to only one direction per day (long or short, but never long, then short, then long, etc).

I find that most traders get torn to shreds when they quickly switch from long to short in one day. This is usually driven by really small charts where it looks (visually) like you are "missing" a lot if you don't often swing long/short and back and forth.

Last (#3) try not to change too much too quickly.

But if the above agrees with you, you can keep your current methodology but just trade less often by deciding ahead of time after doing your homework before you place you first trade, do you want to be long today or short? And then either trade that direction, or not at all.

Obviously it is more complex than that, for example you can't just decide to be long at 8am and keep firing off longs all day in a hugely down trend day. So you would need to define up front what a day would look like in order for you to accept that long was the wrong call for the day.

Anyway, hope it helps.

Mike

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  #392 (permalink)
 Adamus 
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Just beginning to learn how to deal with stops in terms of where I put them in relation to candles on the bar chart.

If a doji appears or a big tail that suggests strength against my position, I should put the stop 2 or 3 pips away from the extreme of the candle rather than "just wait and see" and then bailing when it looks terrible, which is my worst weakness at the moment.

Pretty simple stuff, can't believe I've been doing this for months and haven't figured that out yet.

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  #393 (permalink)
 Adamus 
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Big Mike View Post
I realize you didn't ask for advice, so feel free to ignore me.

I would suggest trading less often as step #1. I would also suggest limiting yourself to only one direction per day (long or short, but never long, then short, then long, etc).

I find that most traders get torn to shreds when they quickly switch from long to short in one day. This is usually driven by really small charts where it looks (visually) like you are "missing" a lot if you don't often swing long/short and back and forth.

Last (#3) try not to change too much too quickly.

But if the above agrees with you, you can keep your current methodology but just trade less often by deciding ahead of time after doing your homework before you place you first trade, do you want to be long today or short? And then either trade that direction, or not at all.

Obviously it is more complex than that, for example you can't just decide to be long at 8am and keep firing off longs all day in a hugely down trend day. So you would need to define up front what a day would look like in order for you to accept that long was the wrong call for the day.

Anyway, hope it helps.

Mike

Hi Mike,

all advice exccept the most extreme abuse is welcome. Let me explain why I want to trade more frequently, as opposed to less frequently as you are advising.

There are only so many setups per day that I identify in hindsight following my rules. Actually the setups are easily identifiable in real-time, the problem is taking them and not hesitating. It's true that there can be reasons not to take a setup and to stand aside, but it's not so often. Once when the market went dead 2 hours before non-farm payrolls a couple of months back, that would have been a reason to stand aside.

But I feel I have to have definite reasons to take an entry or not. A lot of the time I am not taking entries for no apparent reason and I'm missing out on the big wins.

I've tried taking entries only when they are begging me to take them and it often turns out that those are not the big trades of the day.

I feel I have to be more aggressive, so that (a) I get a shot at most of the trades that I'll see in hindsight and (b) I'll learn faster!

Also re long vs short - a couple of the setups I take are reversals - when price fails to break-out or breaks out and reverses at an S/R level. So it's in my rules to go counter-trend sometimes.

Take this setup on the right-hand side of the attachment - this is a pull-back trade in respect of the bigger trend - the bull rally. In theory, price has failed to break out at my S/R level and is now in a retracement probably back down to the previous lower S/R. It reversed at R and is putting in lower highs and lower lows, so according to one point of view, it's trending down on this chart.

I suppose though I am doing what you recommend to a degree, because I wouldn't try to trade a pull-back on this bear trend - it's counter-trend for the day. I'll trade a pull-back on the day's trend - although that's not defined by any MA - not the daily MA, nor the MA on the chart. So I won't go try to trade pull-backs going short at the moment, so yeah I get your point and I do that. Mostly. Except for the reversals at S/R levels.

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  #394 (permalink)
 Adamus 
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Losses just like yesterday but with slight improvement.

5 trades, all losers, 3 were acceptable losses where I did what I was meant to do. 2 were poor full stops where I hesitated at key moments and allowed the market to get to my stop.

Just as bad as the losses were the missed setups which range from likely decent trades to some that might only look possible in hindsight.

I spent too much time looking at the market wondering about possible triangle formations or ranges when I should have concentrated on the S/R levels that I had.

I need to do a lot more training to be able fire off the entries at the points that I see in the setups instead of hesitating and missing the opportunity. Many times I observe the market and think, if it would make a little retrace down there and come back it would be the perfect entry - but the market just leaves the setup without obliging - and without my entry.

Not a good day mentally, forced myself to work through the fatigue barrier early on after having a bad night but didn't cope very well. Should have done much more psyching myself up to help me focus better. Instead I answered emails and programmed NinjaScript and made coffee, instead of watching the screen. I need to put this in my process - ask myself if I'm suffering fatigue and loss of focus, and if so, either quit then or do some pysch work.

Work for tomorrow - edit and re-print my Focus action affirmation statement.
- need some more motivational material too
- replay several of the setups that I missed to drill into my brain the entry procedure without hesitation

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #395 (permalink)
 Adamus 
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Post-mortem for Friday:

First the first time even with hindsight I can't really see any opportunities or setups that I could have got a decent profit out of during the morning session.

With my skill level obviously my attempts ended up costing me a bit although the kosher entries could have all be scratched for B/E or a little better.

4 trades in the morning - 3 valid and well-managed, 2 setups missed (the only ones that were profitable typically) and 1 error on my part confusing the setups.

7 trades in the afternoon post-NFP sell-off: 4 valid, although not all well-managed exits, 1 obvious big winner missed, 1 other missed too. 3 erroneous entries.

I felt again that I had improved slightly - although the one big winner I had cost me so much mental energy seeing it through to the target, ithad me seriously worried afterwards. The constant urge to exit and lock in that profit in case it disappeared, and the strong feeling that the market was just never going to let me walk away with a winner, both made me feel like I'm some kind of coward. I guess I haven't had much practice at letting my profits run recently.

Besides allowing the market to hit my full stop unnecessarily twice, I made two other more basic errors.

The first was where I hurried into a trade without doing any checks (the first trade after NFP volatility hit town) - that makes mad with myself because I should be doing these simple checks at the start of every 3 min candle when I'm in or expecting a setup.

The second was a loss of focus where I let myself drift off. I don't know what happened or why but I should have had my alarm clock ticking and I should have refocused every 15 mins at least. I need to be much more deliberate about what I do when that alarm goes. The problem is, I use it for a break, to get up and stretch or go and get a coffee, so when I come back to the trading screen I don't necessarily re-focus, I just sit down, distracted by the chart's latest move instead of telling myself to re-focus. There might be a simple solution but I'll have to come back to that, I'm too frazzled to think about it right now. It seems like a conundrum - how can I focus on focusing when I'm not focused?

So more goals: (1) go through the order entry check list at the start of each 3 min candle when in or expecting a setup, and (2) manage my focus technique better

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #396 (permalink)
 thewardiknowof 
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Could you please clarify for me how you are getting all your S/R lines? I also noticed there are different colors. You have a lot of S/R lines and I am having difficulty understanding how you are coming up with all of them.

Ward

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  #397 (permalink)
 jmont1 
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Big Mike View Post
I realize you didn't ask for advice, so feel free to ignore me.

I would suggest trading less often as step #1. I would also suggest limiting yourself to only one direction per day (long or short, but never long, then short, then long, etc).

I find that most traders get torn to shreds when they quickly switch from long to short in one day. This is usually driven by really small charts where it looks (visually) like you are "missing" a lot if you don't often swing long/short and back and forth.

Last (#3) try not to change too much too quickly.

But if the above agrees with you, you can keep your current methodology but just trade less often by deciding ahead of time after doing your homework before you place you first trade, do you want to be long today or short? And then either trade that direction, or not at all.

Obviously it is more complex than that, for example you can't just decide to be long at 8am and keep firing off longs all day in a hugely down trend day. So you would need to define up front what a day would look like in order for you to accept that long was the wrong call for the day.

Anyway, hope it helps.

Mike

@Adamus , can you post your checklist so it can be reviewed to see what your thinking is?

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  #398 (permalink)
 Adamus 
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thewardiknowof View Post
Could you please clarify for me how you are getting all your S/R lines? I also noticed there are different colors. You have a lot of S/R lines and I am having difficulty understanding how you are coming up with all of them.

Ward

I have to admit sometimes I just throw that chart up there for the record knowing other people will find in near impossible to read it.

The S/R chart is the 60 min time frame, and I identify all the swing highs and swing lows that might get price action today - a swing high is 2 bars with lower highs followed by a bar with a higher high followed by two more bars with lower highs. A swing low is the same with lows.

Those S/R lines are green.

I also mark all 00 lines in green, e.g. 1.3200, 1.3300.

Then I don't look at the 60 min chart again, I switch it to 3min - of course my S/R lines stay on the chart. When I identify significant intra-day swing lows and swing highs, I add the S/R line, colored turquoise.

I also add the Asian high and low in turquoise.

Sometimes this method of finding S/R levels is not so good, especially during periods of multi-day consolidation - so I might experiment with other things, like the 6E volume levels.

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  #399 (permalink)
 Adamus 
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jmont1 View Post
@ Adamus , can you post your checklist so it can be reviewed to see what your thinking is?

I don't think you meant to quote the message you did quote because you don't mention which checklist you are talking about - I have several.

This is my entry checklist (the last one I mentioned, I think) - it's shorthand basically so it might not all mean anything to you. "Trading mode" is the mental state I have to be in. "Principle" is some Lance Beggs YTC PAT stuff you would have to read up on. "Setup" is "which setup?" - yes sometimes I don't even know what setup I'm trying to trade.

· Trading Mode
· Chop vs Trend
· Principle
· Setup
· With-trend or counter-trend?
· Confirm the weakness
· Where will the trapped traders bail?
· Expect success – scalp or swing?
· Expect failure – stops?
· Targets
· Check R:R
· Order!

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #400 (permalink)
 jmont1 
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Adamus View Post
I don't think you meant to quote the message you did quote because you don't mention which checklist you are talking about - I have several.

This is my entry checklist (the last one I mentioned, I think) - it's shorthand basically so it might not all mean anything to you. "Trading mode" is the mental state I have to be in. "Principle" is some Lance Beggs YTC PAT stuff you would have to read up on. "Setup" is "which setup?" - yes sometimes I don't even know what setup I'm trying to trade.

· Trading Mode
· Chop vs Trend
· Principle
· Setup
· With-trend or counter-trend?
· Confirm the weakness
· Where will the trapped traders bail?
· Expect success – scalp or swing?
· Expect failure – stops?
· Targets
· Check R:R
· Order!


I meant to quote that message because it is asking you to evaluate your assumptions.

First off, just to admit I am not overal successful in trading, primarily through some of the same issues you are facing. Your checklist(s) may spark benefits in me or allow me to provide hard won advice to you.

Is your checklist that simplistic (not a diss.) Do you actually have a document or spreadsheet for these many checklists? Do they link so an answer in one will be noted in the others? I like the idea that they have interdependencies.

The primary one that seems to simple is “Setup.” Another one that looks like it would belong as part of a spreadsheet would be “where will trapped traders bail?”

Do you have a spreadsheet or automated checklist?

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