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Trading spot fx euro using price action
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Trading spot fx euro using price action

  #731 (permalink)
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Week 20 Review


Adamus View Post
Since I restarted trading in March this year, I've been allowing my stops to get hit on the full only as a last resort and/or I consider it an error in hindsight. My goal is to get out of a trade on bad price action or have my targets get hit. Letting the market move back onto my stops is always to see points go down the toilet.

Yet the strategy is to put the stops at a position behind the set-up zone where the market should never go if the S/R level is to hold or break or the pull-back is to revert into a trend or whatever the premise of the trade is. That allows for the initial trigger to fail, and when price stays in the set-up zone without hitting the stops, a second move or even a third can still be captured by the trade.

So I've got a conflict of purpose in my trading plan. OK, so I could say that the stops are not designed to allow me to leave a trade open to catch a second or third trigger if the first fails, but just to act as a last resort. But I look at past set-ups and I see how often I would have got my targets if I'd just left the set-ups to play out. That raises the question whether I should only be bailing on really bad PA and I should have more patience with PA where the price is just going the wrong way.

At this point I don't know but the important thing at the moment then is that I don't get confused and that I stick to the current plan, even though I haven't written it into the plan. Guess I'll have to do that now.

And then just to prove my own inconsistency, I read in my own notes re the week before last:


Adamus View Post
Lesson Learnt Last Session

If I enter on a low probability set-up, then any sign that the promising price action is not going to play out is reason enough to bail out straight away. If it's a higher probability set-up, when the price action turns negative, it might still be worth staying in.

This means in the area of my brain between the certainty of knowing what's in my plan and the borderline of recognisable uncertainty, there's a situational territory where I'm dangerously free to make dumb decisions.

The only logical way to combat this is to define what to do when I detect my own uncertainty, lock it down and write it in the plan.

So what I'm describing inconsistently above is, firstly that I try to bail on every occasion of bad PA and that my initial stops are only the exit of last resort. But then last week I had said earlier actually, if I'm dealing with a high probability set-up, I stay in the trade when PA goes against me after my trade.

If I have a strong bias that the market's going to go one way out of the set-up, and it's in the right position in the market in terms of trend or S/R levels, then entering on a PA signal and seeing that signal have no effect means I just entered too early. If it goes too far, yes it was a failure and I'm trapped.

If I'm going to make a rule to formalise this then I've got to go back over some history and check out a significant number of set-ups where the first move doesn't pan out into the trend I want.

You can discover what your enemy fears most by observing the means he uses to frighten you.

Last edited by Adamus; May 20th, 2013 at 06:28 PM.
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SammyD View Post
In the past I tried to count legs to predict turning points but it was too random. It worked sometimes but not enough to give me an edge. I pay attention to it sometimes when I'm in a trade. For instance if I've been in a trade that's had three legs in my direction I will be alert for signs that I should exit. Conversely, if I'm in a trade that I believe is correctly with-trend but is going against me, sometimes I will try to hold for two legs- I will leave my initial stop loss in place but won't advance my stop. Who knows if there's any to this. At times it is spot on and others it is severely off. One of my favorite Al Brooks' quotes is," Nothing works all of the time but everything works some of the time."


Adamus View Post
Haha, yes that could be one of ten axioms of trading.

In mechanical systems trading but hopefully / probably not to such a fine margin in discretionary trading, you only need a 51% probability in your favour.

For me, I don't really look for counting legs for turning points either, but rather expecting two legs after a crucial decision point which can be a failure. For turning points, I've been mainly looking for weakening of trend which eventually ends up into a general breakout pullback. Agreed about the 51% probability. Then one just needs to refine their trade and stop management to profit from the setup if one has already established their set of setups each of which the trader already believes in their minimum 51% probability.

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  #733 (permalink)
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2013-05-20 Monday sim trading session



The Tao of Al (Page 407, Reading Price Charts BBB)
35. Never cherry pick because you will invariably pick enough rotten cherries
to end up a loser. Either swing trade and look to take only the best
two or three of the best setups of the day, or scalp and take every valid
setup. That, however, is the more difficult alternative and is only for
people with very unusual personalities (even more unusual than the
rest of us traders!).


forexfactory.com
 
Code
00:01 	GBP 	Low	Rightmove HPI m/m
All Day	EUR 		French Bank Holiday 					
All Day	EUR 		German Bank Holiday 					
18:00 	USD 	Med	FOMC Member Evans Speaks

Starting equity - sim: GBP 94,520
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: hungry day. cold.
Mental: no time to prepare anything really, so under pressure there.
Fatigue: bad.
Higher Time-frame: this morning's small rise has already broken the trend-line I put in from the peaks of Friday 2 weeks ago on the hourly chart. The daily still looks seriously bearish.
20 day volatility: 106 (10 year max 287)
20 hour volatility: 22.5 (10 year max 96) - still looks like it's on the way up
Asian Session: 31 point range, 4 points volatility. Opened up, sold off back down again and more, and the re-rallied to close up. Bullish I guess. Quite trending, lots of sharp reversals, some choppiness.
London Session: Quite bullish, no Asian reversal, but range-bound and quiet, holiday noticeable. Looks like it was pretty evil for anyone trading. Lots of false moves.
Pre-Session Psych Issues: uncertainty in the markets is a given but uncertainty in your trading plan is directly related to it. The goal is to reduce the uncertainty in my trading plan but that requires a lot of work, which is what I'm meant to be doing at this stage of the game. Any uncertainty in trading plan means don't take that set-up. I'm seriously behind here since I haven't completed my weekly review yet. I really shouldn't rush this since I'm not quite sure what I did wrong today but I don't have the option to take ages overanalysing it.
Pre-Session Factors: quiet day at least in Europe, probably a normal week.
Bearish HTF trend with possible trend-line break on the hourly.
Earlier sessions today bullish but ranging.
Normal session 12:30 to 16:00

Session Review

Set-up 1 was just above the S/R zone I have there between '50 and '60, it's trying to break upwards and failing, so that makes it a break-out failure - although this is something to puzzle about, whether it's still a break-out failure now that it's doing it for the second time.

As the market pushed downwards through the zone, I realised that this is something I see a lot of, so I guess a scalp would be in order with the target at '50. Will have to go over some history and if all is as I think, alter my trading plan to add this as a set-up.

Set-up 2 is the break-out failure from '50, but it fails, and quickly. First of all it shoots up across the zone almost reaching the other side (and I'm thinking this is right for a scalp again as for set-up 1), but then it stops short and gets choppy, crawling the rest of the way up to break-out the top again.

Set-up 3 is the brief break-out at the top of this zone and I realise as I'm looking at it that I can't just mechanically switch to and fro like this when it has crossed the S/R level 4 times now.

Same applies to set-up 4 and set-up 5

I recognised the ranging behaviour when I started the session. I knew it was a holiday. I think at some point I thought, I need the screen time, I have to trade today. If I want to get 5 out of the next 10 trading days in profit, then I can't just trade because I need the experience. I should have switched to the Ninja sim account instead of using the IB account. This has to be put in the plan - make a decision according to market conditions, not according to whether I need something like practice. Then trade accordingly. Make this decision after the analysis. Put it under "Session details".

Anyway, I entered long in the illusory set-up 3 and got totally caned again by slippage. The ticks from IB show a 5 point gap and it started right where my stop was.

Set-up 4 was not just more interplay around this S/R zone at '50 to '60 in a small range, it was also a bounce off the rising trend-line, and while I noted the line and got it on the chart, I was too bearish because it was under the S/R zone, so I didn't consider the bounce, I just went for the break-out.

Set-up 5 was a bad place to enter, a point below the 20EMA. Just the right place to get trapped. I should enter earlier on this type of trade - if it is valid to consider anything from this set-up.

Set-up 3: -11.5 & -12
Set-up 4: -3.5 & -4
Set-up 5: -1.5 & -1.5
Total: -34
New equity level: 94,399

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Lessons Learnt

Can't trade days like today and count them as real trading. I shouldn't have traded. Random decision at the start of the session. Can't do that again. I lay the blame on my state of fatigue. I almost fell asleep during the pre-session prep and just went and got a coffee and carried on. Such a state of exhaustion is apparently equivalent in effect to being too drunk to drive. This is a real observation, not an excuse. Next time when I feel I need to sleep, I will. I used to do that before but the way I've been brought up, having a sleep when I'm meant to be working is lazy and it got to me, and this time I tried heroically to manage, and failed. Another axiom of trading: don't listen to anyone else's opinion. So consider me lazy, weak, unmanly, whatever - I'm not going to trade while in a state of fatigue.

The best set-up today? can't pick out any as useful although the set-up 4 was really a big swing low, a trend change.

You can discover what your enemy fears most by observing the means he uses to frighten you.

Last edited by Adamus; May 21st, 2013 at 07:10 AM.
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  #734 (permalink)
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Week 20 Review continued...

If I'm going to make a rule to formalise whether to hold or fold when a PA-based entry doesn't pan out, then I've got to go back over some history and check out a significant number of set-ups where the first move doesn't pan out into the trend I want.

What I need is a database of my set-ups so I know straight away which screenshots to check out. It's not as though I have any spare time but I guess if it takes 10 mins extra everyday it will start paying off quite quickly. I should obviously keep track of what kind of day it was too, range / trending / against the higher time-frame trend etc.

Edit: this is a psych issue. I keep catching myself wasting time doing stuff like this when the going gets tough. Rather than face the music, I divert myself with some kind of apparently worthy task that I need to do. Stupid. I've got more than enough structure in my journal and notes and screenshots.

as part of my weekly review what I've noticed is that I keep promising to go back and look at historical charts to check out whether this or that worked in the past, and to date I haven't done so a single time. I also need to write up my 5 favourite set-ups of the week, as part of this weekly review. So far I've only done 1 single set-up, and I've done 3 weekly reviews. If necessary, I'll have to take time off trading to do it.

The idea of writing up my favourite set-up from each day is that it helps me identify the best trades. In an ideal world if I could restrict myself to 5 great set-ups per week, I expect I could make a living income from it.

You can discover what your enemy fears most by observing the means he uses to frighten you.

Last edited by Adamus; May 21st, 2013 at 06:41 AM.
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  #735 (permalink)
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2013-05-21 Tuesday sim trading session


The Tao of Al (Page 407, Reading Price Charts BBB)
36. Beginners should only take the best trades and either scalp or swing.
It is difficult to watch a screen for two or three hours at a time and not
place a trade, but this is the best way for beginners to make money. If
your overriding goal is to make money, this is what you must do. If you
do not, then you have other goals that are interfering with what should
really be your only goal.


forexfactory.com
 
Code
07:00 	EUR 	Med	German PPI m/m
09:30 	GBP 	High	CPI y/y
	GBP 	Med	PPI Input m/m
	GBP 	Med	RPI y/y
	GBP 	Low	Core CPI y/y
	GBP 	Low	HPI y/y
	GBP 	Low	PPI Output m/m
15:00 	USD 	Med	Treasury Sec Lew Speaks 					
16:30 	USD 	Med	FOMC Member Bullard Speaks 					
18:00 	USD 	Low	FOMC Member Dudley Speaks

Starting equity: GBP 94,389 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: OK, allowed food today, not cold.
Mental: Reasonable
Fatigue: Bad. As bad as yesterday? Not sure yet. Doesn't seem as bad at the moment.
Higher Time-frame: It added to the trend-line up in the Asian session then broke it downwards later. It's making a pull-back from the support around end March / start April swing low. So outlook today ambiguous.
20 day volatility: 105 (10 year max 287)
20 hour volatility: 18 (10 year max 96)
Asian Session: Volatility 4, range 40 - a bit more volatile than normal. Trended well with 50/50 mixed abrupt/rounded reversals, reasonable flow and not so much chop. Finished up after bouncing off bull trend-line.
London Session: Reversed the Asian session, broke the hourly bull trend-line nicely, retraced to it and then sold off again. Also interacting messily half-convincingly with hourly 50SMA. Bearish for sure.
Pre-Session Psych Issues: not to trade when uncertain of the plan (currently happening 75% of the time....)
Pre-Session Factors: HTF bear trend in pull-back, day's trend bearish, making new lows. Yesterday's holiday possibly making things quiet still, but Asian session was active so maybe not.

Session Review

OK no charts today. I messed up the first set-up big style as is my way and decided to stop. Currently examining the wreckage to see if I can salvage a silver lining from it all.

It was a chain reaction. Two parts of my psyche that should never come together met in the middle and achieved critical mass. Melt-down was quick. But seriously it was a chain reaction.
  • Was busy this morning revamping my journal template here (isn't it great now? - another example of doing something apparently worthy to avoid doing something I don't want to do, like sleep-inducing prep work)
  • Made myself late trying to get it just perfect (also had printer problem - thanks Windows)
  • Started late, swearing at myself for being late again
  • Didn't notice that I had deleted the reminder at the end of the template which tells me to do the psych prep routine to get my mind warmed up before trading
  • Was so hasty because of being late that I didn't think about psych prep routines and just started trading
  • The market up to that point had put in fairly quick interaction at the S/R levels and swing points
  • It was currently putting in a decent looking set-up after rallying a bit off the day's low
  • I skipped through the set-up checklist, knowing that I was missing out analysis and psychological fail-safes
  • I was too slow to get my stop in the market to catch the break-out failure as it pushed down from the resistance provided by the convergence of the Asian Low, the 3-min EMA, the hourly SMA and I figured if it wasn't that, then it was always a pull-back on the sell-off that I was selling
  • I decided to take the chance that the support level immediately below at 1.2850 might turn it
  • I didn't put any thought towards whether I should bail quickly or slowly
  • I saw the subsequent 1-min candle after the break-down candle retreat and break above the break-down candle but I moved my stop into it anyway and entered short
  • The PA was poor, knowing that the PA S/R interaction today was brief, I'm surprised I didn't think about bailing at all
  • The conversation on PandaWarrior's thread about stop placement was still going round my head
  • I initially placed my stops well but then pulled them back as the market approached them in gross violation of the plan only with the thought that if I left them there, they would get hit
  • I totally failed to bail out on the obvious failed failure candle, as the break-out pull-back panned out into a rally
  • I was conflicted about my exit strategy after reaching no conclusion in the last couple of days about what exactly my initial exit stops are for
  • I also had thoughts of being patient with the bad PA to see if I could get out at a better price, which I could have done but I have no written plan for how to get out of a losing trade at a better price so I ended up getting stopped out

Lessons Learnt

Best to stop immediately if I can't get it right.

I'm going to write a time-based fail-safe into my plan. If I don't start my prep work 1 hour before my trading session is due to start, i.e. starting 11:30 today to start trading at 12:30, then I can't trade. I don't allow myself the privilege of messing up another trading session. I'm going to put a timetable on the wall like at school -

11:30 Start prep work
12:10 Get drink / food ready for break
12:20 Do psych prep routine
12:30 Start watching market

Did I do anything right? Well the entry wasn't so bad, and the trade would have been a trivial -2 points if I'd not lost all sense and reason.

So what was the problem? Initially it was FOMO, I was way too hasty to get trading and catch the set-up, and then the chain reaction carried on. I got swept past several virtual key points, completely missing:
  1. repeat your 'entries' action statement as you go into a set-up
  2. repeat your 'exits' action statement as you check an entry execution
  3. make a quick plan for bailing out right after you get in
  4. don't listen to anybody's trading plans but your own (all those voices on the PandaWarrior Chronicles...)
  5. afterward is the time to change plans, not during
  6. be certain about what is in your plan (I still haven't got a convincing, well-defined plan for choosing between stop placement and PA-based bail-outs)

I can't say I know how to deal with this except to avoid the initial trigger. I can identify my limitations and try to avoid them as astutely as possible, but why i can't stop the sequence of thoughts or lack of thoughts, reactions and counter-reactions, I'm not sure. Theoretically, it's like walking through the wrong door. I should be able to turn around and go back through it rather than walking on into unknown territory. The heat of the moment is too hot, and the instant of decision making is too short. Instead of considering what I'm doing, I'm falling back on counter-productive subconscious decision-making processes.

I don't find time for 30 seconds of deliberation during a bad trade because I am already in a state of agitated impatience. Seeing the market move a point a second in one direction induces a type of panic in me. The more I fail to make headway towards becoming a profitable trader, the worse the impatience gets and the more I fear missing out when I see the market moving. The more I panic, the more I fail.

It's a vicious circle and I have to find a way to break it. I think the structure that I'm putting in place in terms of self-management and self-improvement should provide the key but still the progress at the moment is tortuously slow.

You can discover what your enemy fears most by observing the means he uses to frighten you.

Last edited by Adamus; May 21st, 2013 at 12:21 PM.
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  #736 (permalink)
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2013-05-22 Wednesday sim trading session


The Tao of Al (Page 407, Reading Price Charts BBB)
37. Discipline is the single most important characteristic of winning
traders. Trading is easy to understand but difficult to do. It is very
difficult to follow simple rules, and even occasional self-indulgences
can be the difference between success and failure. Everyone can be
as mentally tough as Tiger Woods for one shot, but few can be that
tough for an entire round, and then be that way for a round every day
of their lives. Everyone knows what mental toughness and discipline
are, and everyone is mentally tough and disciplined in some activities
every day, but few truly appreciate just how extreme and unrelenting
you have to be to be a great trader. Develop the discipline to take only
the best trades.


forexfactory.com
 
Code
09:00 	EUR 	Med	Current Account 
09:30 	GBP 	High	MPC Meeting Minutes
	GBP 	High	Retail Sales m/m
	GBP 	Med	Public Sector Net Borrowing
All Day	EUR 	Med	EU Economic Summit 					
10:33 	EUR 	Med	German 10-y Bond Auction
11:00 	GBP 	Med	CBI Industrial Order Expectations
12:00 	GBP 	Med	MPC Member Bean Speaks 
15:00 	USD 	High	Existing Home Sales
	USD 	High	Fed Chairman Bernanke Testifies
	USD 	Low	Treasury Sec Lew Speaks
15:30 	USD 	Med	Crude Oil Inventories
19:00 	USD 	High	FOMC Meeting Minutes

Starting equity: GBP 94,311 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: OK
Mental: Don't know. Still no solution to control psych issues like yesterday
Fatigue: Bad still, probably have to sleep
Higher Time-frame: big pull-back on the sell-off, but pull-back is slowing. Range day probably.
20 day volatility: 104 (10 year max 287)
20 hour volatility: 21 (10 year max 96)
Asian Session: range 33, volatility 3.5, lots of bullish pushes early, then went flat and choppy with sharp reversals. barbed wire, right on the 3-min 20EMA.
London Session: reversed the Asian session quickly making it look bullish but then just ranged with chop, putting up a big spike at 1.2950 to reverse back down.
Pre-Session Psych Issues: Trying to keep impatience under control but still be quick
Pre-Session Factors: HTF says a range day is in order, morning session was bullish, so looking at some more action to get past 1.2950. Holiday on Monday hasn't carried over with a thin market. Some danger with Bernanke testifying at a random point during his speech things might kick off (after 15:00). Also Existing Home Sales has high alert at 15:00

Session Review

Sanity prevailed. Admittedly I made an entry as the clock reached 16:10, my cut-off time for the end of my session, which in retrospect was more due to the devil on my shoulder than the angel on the other.

Made a strict new start on time for what feels like the first time in my life.

Set-up 1 should have been more obvious to me as a TST set-up. That just means "test" but it's got to be an abbreviation to fit in with the rest of the YTC PAT set-ups. Nothing to do with Top Step Trader. It rallied up but slowed right down and eventually just touched the S/R zone and turned back. It even stalled nicely to make set-up 2 which let the stragglers on board before pushing down 10 points. Didn't hit target but didn't catch it so didn't have the challenge of managing an exit I was actually bullish up until the little gravestone doji. I was thinking disconnectedly and for some reason had this stall as a second set-up, a pull-back on the rally, so I missed the opportunity to enter this as a test set-up to go short.

Set-up 3 was convincingly bearish right up until bar 314 @13:57 but I stayed on the sidelines because I started thinking the volatility was something to do with the US opening range. I know very little about the US opening range except that it has something to do with the open outcry pit. It never worried me before but I was being ultra cautious today. I switched accounts from the IB sim account to the Ninja sim account and decided to trade it like that - I entered well and kept a tight stop to keep the R:R even - justified considering the PA today - aiming at a first target at the next support which was hit on the next bar.

It was a relief not to mess up the first trade.

Set-up 4 was a break-out pull-back at this S/R, right below 1.2950 so again I went with tight stops again and again it worked. I was more lax with part 2 in an attempt to avoid this retrace, but the next bar warned me that the 15:00 press release was due so I had to bail anyway. Turned out that this particular rule which I made up just last week just cost me 50 points

However to look on the bright side, that would have been a really bad lesson to learn if I had stayed in and netted 50 points.

The rest of the session I tried like a demon to find a way in, but couldn't. I missed one chance I think, but the one I took was right at the end of my session and I was uncertain whether to take it - I moved my entry stop away from the market but got hit anyway - lesson: just cancel it, man.

So I then had an entry and the session was over, so the new end of session rule kicked in - get out if not in profit or set a stop & limit bracket. So I got out.

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Lessons Learnt

Don't panic with orders - if in doubt, cancel an entry order, or change an exit order to a market order. No further thought required.

That Al Brooks quote at the top - so true. It took a lot of effort to keep everything under control with those big bars printing on the screen. There really is a direct link from my eyes to my lower brain stem which signals every time I see a bar that's twice the normal ATR. I need to find a way to break down that connection.

The best set-up today? the one I didn't number, the pull-back on the bear at 16:10

More inspiration: a guy in Florida wrestled with and killed an 18ft python - respect!

You can discover what your enemy fears most by observing the means he uses to frighten you.

Last edited by Adamus; May 22nd, 2013 at 07:13 PM.
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2013-05-23 Thursday sim trading session


The Tao of Al (Page 407, Reading Price Charts BBB)
38. The second-most-important trait of great traders is the ability to do
nothing for hours at a time. Don't succumb to boredom and let it convince
you that it's been too long since the last trade.


forexfactory.com
 
Code
02:45 	CNY 	High	HSBC Flash Manufacturing PMI
08:00 	EUR 	High	French Flash Manufacturing PMI
	EUR 	Med	French Flash Services PMI
08:30 	EUR 	High	German Flash Manufacturing PMI
	EUR 	Med	German Flash Services PMI
09:00 	EUR 	Med	Flash Manufacturing PMI
	EUR 	Med	Flash Services PMI
	EUR 	Low	Italian Retail Sales m/m
09:30 	GBP 	High	Second Estimate GDP q/q
	GBP 	Med	Prelim Business Investment q/q
	GBP 	Low	Index of Services 3m/3m
11:05 	USD 	Med	FOMC Member Bullard Speaks 					
13:30 	USD 	High	Unemployment Claims
14:00 	USD 	High	Flash Manufacturing PMI
	USD 	Low	HPI m/m
15:00 	EUR 	Low	Consumer Confidence
	USD 	High	New Home Sales
15:30 	USD 	Low	Natural Gas Storage
20:30 	EUR 	High	ECB President Draghi Speaks

Starting equity: GBP 94,317 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: could be worse
Mental: not good
Fatigue: bad, still carrying on. Maybe do no trading, just watch, if it doesn't improve
Higher Time-frame: Yesterday looks starkly bearish on the daily but expected more selling than this today. The hourly chart is pointing at a test of support today.
20 day volatility: 107 (10 year max 287)
20 hour volatility: 24.5 (10 year max 96) still looking like it's rising
Asian Session: Range 33, ATR 4, certainly a bit active, tried to sell off but came back up in one long dip. Trended reasonably smoothly with some tails and dojis, reversals mixed sharp / rounded
London Session: didn't start exactly at the high but reversed the Asian session down and quickly back up and then fought up to 1.2900 with some ugly choppy bits, not much rounded stuff, lots of overlap, decelerating after half-way point.
Pre-Session Psych Issues: just maintaining a grip on impatience / FOMO / leaping in
Pre-Session Factors: HTF trend says down but up so far on the day. Two high impact news events at 13:30 and 15:00. Fatigue not good, probably need to interrupt session

Session Review

Today was another exercise in patience.

Set-up 1 just before the US start showed signs of bearishness and I thought it might be about to turn back from 1.2900 but it did the opposite and stormed up through.

That gave me set-up 2 and after the initial volatility eased off after the big BO bar, it was pretty clearly bearish but knowing that the high impact US news was coming up, I figured I could just scalp the push down to '00 which worked out great except that I forgot to put my 2nd target there too and it got hit on the way back.

The news made it whip about a lot but it then basically settled down into a consolidation with giving any set-ups - it all looked way too unpredictable.

After the slow grind downwards from 15:15 to 16:00 I convinced myself it looked like it was about to head down out of the zone. I entered just above 1.29 with the expectation that under 1.29 it would pick up momentum, but instead it just touched 1.29 and came back up. What would Al Brooks be saying to me about that? Did I have the discipline and patience to avoid all but the best set-ups? No I don't think so. Looking at it in hindsight, I'm not sure. I guess it was just excusable, maybe deserving a caution as opposed to the demand for full-blown repentance.

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Lessons Learnt

I can control myself and my feelings of missing out. It's FOMO - although I prefer to call it the feeling of missing out, now because it's not fear - no matter how great it is, it will never make me soil my trousers

I've been telling myself that I need to conquer this feeling, but someone said to me just today, you can't conquer it, or rather he said you shouldn't suppress it, you have to accept it. I have to accept it, live with it, know it and make allowances for it.

I must have felt FOMO on at least 5 seperate occasions today - at the candle that sank the potential bear move from set-up 1, at the news reaction candles after 13:30, on the 14:27 candle that broke the high of the day, on the news reaction candles after 15:00, and not least on the big move up to 1.2950 after my session was over.

In fact the feeling kicks in while I am still in set-ups if I just visualise how price might break out, especially when the set-up zone is big and I'm avoiding an entry because it's too high risk and too close to 50:50 chance.

The best set-up today? set-up 2 if I could have it without the news event on the next bar

You can discover what your enemy fears most by observing the means he uses to frighten you.
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Plotting resistance level from 2013-05-09 at 1.3100

How????? Too much action around the level for me, yet it looks simple. Too big.

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Adamus View Post
How????? Too much action around the level for me, yet it looks simple. Too big.

Some (non) random lines for you to ponder...... have a great weekend, get some health.

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DH helped me to see a part of the jigsaw and no, it's not a Holy Grail, but there aren't many paths that help so much.
The last thing you need for forex is anything to do with volume. Time, time, always screen time...

Best Wishes

Travel Well

Last edited by ratfink; May 24th, 2013 at 12:29 PM. Reason: typos
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2013-05-24 Friday sim trading session



The Tao of Al (Page 407, Reading Price Charts BBB)
39. Work on increasing your position size rather than on the number of
trades or the variety of setups that you use. You only need to make one
point in the Eminis a day to do well (100 contracts at 1 point a day is
seven figures a year).


forexfactory.com
 
Code
07:00 	EUR 	Med	GfK German Consumer Climate
	EUR 	Low	German Final GDP q/q
08:00 	GBP 	Med	MPC Member Fisher Speaks 					
09:00 	EUR 	High	German Ifo Business Climate
09:30 	GBP 	Med	BBA Mortgage Approvals
11:00 	EUR 	Med	German Buba President Weidmann Speaks 					
13:30 	USD 	High	Core Durable Goods Orders m/m
	USD 	Med	Durable Goods Orders m/m
14:00 	EUR 	Low	Belgium NBB Business Climate

Starting equity: GBP 94,315 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: Good
Mental: Fine. Feel my IQ rising as I write here
Fatigue: Amazingly got some good sleep last night
Higher Time-frame: based purely on the last 5 days, I'll go with bullish today. Good chance we'll consolidate here though.
20 day volatility: 109 (10 year max 287)
20 hour volatility: 24.5 (10 year max 96) - staying up
Asian Session: Tried to hit '00 but failed then rose choppily - 35 point range, 3.5 points ATR.
London Session: no attempt to reverse Asian bullishness, carried on up trending well and for the so-called quiet period after 11:00 it bounced up and down making out a range almost. We'll see.
Pre-Session Summary:
Bullish HTF trend, bullish day trend but maybe now in range, no Asian effect, good price interaction at S/R
Pre-Session Psych Issues: tons but all well documented earlier. Just following the plan and not getting impatient or hustled by those big candles.
Session Review

Started on time again - second day in a row. Major achievement. The discipline starts with the first glance at the chart.

Set-up 1 didn't come up until the market had retreated below 1.2950 and looked like breaking the level which it duly did without any complication. I screwed up the exit on part 2. Part 1 target was already hit and in fact this was now set-up 2 so I was looking to enter again - but this proved too much for a trader of little brain like me. I saw it was looking bearish so I pulled the part 2 stop down to the top of the set-up zone, but put it smack on top of the highest candle instead of my usual 1.5 points away. Pretty stupid considering the ask is always a little bit higher than the candle. Can't believe I forgot that. It messed up thinking for the rest of the set-up so I missed the next move.

Set-up 3 was pretty much as good as 1 and 2 but I missed it again. Not sure what the problem was now. looks great in hindsight, even if it didn't reach the target.

I was back in gear for set-up 4 but got trapped and bailed - although it would just about have missed my stops if I'd cared to take the heat and then would have had the pleasure of managing my way out of the ensuing chop.

Set-up 5 has got to be my set-up of the day, not because it was good or the resulting trend was so good, but in fact the opposite. This has got to rank as the ultimate difficult set-up and ensuing trend for a difficult but perfectly tradeable position.

I should have caught set-up 6 from the 1-min chart but I was getting confused, getting worried too much by the 3-min 20EMA (totally without reason). I guess this contributed to the poor entry on set-up 7 which I tried to back my order away from, stupidly, like yesterday. It rushed down and hit my entry stop while I was still debating whether to enter or not - part of the reason to enter was FOMO, no doubt. It was a trap, and the scalper pushed it straight back on the same 1 min candle practically into my stops and in fact at this point I was panicking and hit the exit button twice and reversed. So I bought the top and sold the bottom of that candle.

I managed to banish the demons again and figured set-up 7 was still good for a trend. After the consolidation broke and I got in though, instead of looking like a good sell-off was going to unfold out of the break-down of an obvious range, it suddenly looked like a wide choppy grinding down-trend. I held back from bailing as the bear candles slowed down and a bull bar reversed up. Fortunately it started looking like a weak rally straight after that and I figured I could hang in there if it kept underneath the down-trend line I put on the chart.

Took some heat for once and had to keep telling myself it was only the weak hands that would bring their stops in too close. That was so tough, making myself keep the stops well away from the market, but I managed it and it paid off. Target 1 got hit pretty directly, but the market spiked down to touch my target 2 limit order without executing it, so I hit the bail-out button after it retraced 5 ticks. Although that was the right thing to do since it was the end of my session, I wasn't thinking of that and was basically very happy to get out.

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Set-up 1: 8 & 3.5
Set-up 4: -2.5 & -2.5
Set-up 7a: -5 & -5 & -1 (overfill)
b: 9.5 & 16.5
Total: 22.5

Lessons Learnt

Very emotional session without messing it up too bad. Kept telling myself, I can take this - just have to sit there and take it.

The best set-up today? set-up 5

V 30,565

You can discover what your enemy fears most by observing the means he uses to frighten you.

Last edited by Adamus; May 24th, 2013 at 08:01 PM.
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