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

  #741 (permalink)
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ratfink View Post
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

Hi Ratfink
I'm wracking my brains trying to work out who or what DH is..... give me a clue!

Nice to hear that someone else isn't concerned with volume - seems that everyone is using volume, order flow and the DOM these days..

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #742 (permalink)
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Hey Adamus, he's right about the volume, that's because Forex is a dark pool market where 99% is traded OTC and currency futures represent maybe 1% of it. So volume in CC means not much, since they are just a hedge/proxy to the underlying OTC market. Order book is also just 5 levels, but you can use it still, even though not as good as in other commodities.

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  #743 (permalink)
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Adamus View Post
Hi Ratfink
I'm wracking my brains trying to work out who or what DH is..... give me a clue!

David Halsey, runs Emini Futures, Trading Strategies, Live Emini Trading Room & Trading Videos - Emini Addict, gives good grounding in trading the measured move system, for $29/mo its a great education in technicals, way above average imho. Directional opinions always as useless as the rest of the world of course but I give give him a 10.

Travel Well
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  #744 (permalink)
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2013-05-27 Monday sim trading session

Got to the end of the Al Brooks quotes.


forexfactory.com
 
Code
All Day 	GBP 		Bank Holiday 					
All Day 	USD 		Bank Holiday

Starting equity: GBP 94,367 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: Body still adjusting after shock of waking up early
Mental: good
Fatigue: probably OK
Higher Time-frame: I can't even decide if it looks like a trend on the weekly chart. I think it will have to be bearish, but only just and based on the weakness of the bull move from summer 2012 to Feb this year.
20 day volatility: 107 (10 year max 287)
20 hour volatility: 24 (10 year max 96)
Asian Session: Opened without a gap and made a big wide swing without reaching S/R, mostly down but finished on an upswing. Definitely not on holiday.
Pre-Session Summary: HTF trend, day's trend/range, Asian effect, price interaction at S/R etc summary
Pre-Session Psych Issues: Getting my mind into gear is the main problem right now.

Session Review

There was only one set-up. It moved up to the Asian high from the session start and spent the whole day looking like it was going to turn around.

It was just below the '50 level too.

I made 2 attempts to get short. I had to be lax with the exits, there was so little going on, I didn't have to worry about traps and so on.

The first attempt I had my stops just above the Asian high and I was thinking about reversing but didn't.

The second attempt didn't pan out and I guess I should have exited immediately. I also pretty quickly got the feeling that my stops at '47.5 were too low and that sticking with the position would require moving the stops above '50.

Had I done that, I would have bagged the trade but I was too unsure to do that. Typically contradictory - I should have bailed if I felt I couldn't handle the risk it required. However I stayed in, I guess I was hoping I'd get lucky.

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Set-up 1: -3.5 & -3.5
: -6 & -6
Total: -19

Lessons Learnt

Put the stop where you should, not where you're happy - or don't take the trade.

The best set-up today? none

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

Last edited by Adamus; May 28th, 2013 at 02:56 AM.
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2013-05-28 Tuesday sim trading session


forexfactory.com
 
Code
07:00 	EUR 	Low	German Import Prices m/m
14:00 	USD 	Med	S&P/CS Composite-20 HPI y/y
15:00 	USD 	High	CB Consumer Confidence
	USD 	Low	Richmond Manufacturing Index
18:00 	GBP 	Med	MPC Member Tucker Speaks

Starting equity: GBP 94,292 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: good
Mental: good
Fatigue: medium-bad
Higher Time-frame: I'm going to stick with my analysis from yesterday. Looking at the strength of the bull moves on the weekly, it's obvious that the bulls have slackened off. So what we have now is either a rally now up to say 1.3050 (it would be a surprise if it broke 1.32) or just a ragged bullish pull-back on the quite sharp sell-off from the beginning of this month, May, which looks ready to start selling off again. I think I'm leaning towards the bullish side.
20 day volatility: 104 (10 year max 287)
20 hour volatility: 13 (10 year max 96) I'm in shock that volatility could take such a tumble. My juvenile amateur mind like volatility.
Asian Session: an unknown force caused the quiet conditions to explode at 01:00 with a 21 point candle sell-off but it was soon made up by a steady trend back up. Slightly choppy with more tails and overlap than perfect trading conditions require, but good abrupt/rounded reversals mix and swinging moves.
Pre-Session Summary: HTF trend uncertain 50:50 but maybe up, day's trend so far down, price interaction at 1.29 reasonable. Near enough to the Asian high that a move in that direction v. probable.
Pre-Session Psych Issues: FOMO level: can see I'm missing a move right now and the needle on the dial is flicking upwards otherwise things looking well controlled. Sleep is not so bad because I slept longer than planned but have to sort that out, wanted to start at 07:00

Session Review

Looked like a nice trading day but it's the first real day I'm trying out a new routine, so I can trade the morning session.

My better half has started work today and we have to organise our work lives with the kindergarden, so the kids get dropped off at 09:30 and picked up at 03:30. We are going to alternate weeks - this week I have the early shift so I work early (trade the European morning) and she takes the kids to the kindergarden. This afternoon I pick them up. Next week, I take them in to the kindergarden, trade the US morning session, and she picks them up.

Sounds like a great solution but today was really chaotic and I got up totally late since my brain just refused to power up when the alarm went. And then it was as though the chaos in my flat was synchronised to the market.

OK set-up 1 I wasn't sure about so I stood aside. It looked like bar 185 just before 07:30 was leaving the set-up to take us up to the Asian high. It didn't pan out and immediately broke the micro-trend-line I'd drawn which looks to me like a decent way to exit the 1st set-up of the session, since it should have just moved straight up there with max 5 points retrace on any one candle. My theory - unresearched as yet - is that everyone expects the market to react in relation to the Asian session on most days. Either reverse it if near the top or the bottom, or aim for the top or the bottom whichever is closer if not near-by. Have to put some hours in looking at the history of it.

Set-up 2 is half-dependent on set-up 1's validity, i.e. it's the failure to head to the Asian high. I put in a second micro-trend-line which it broke with a bit of volatility and then headed south to make it my set-up of the session. I can't remember what happened but something was distracting me. Kids walking or crawling into the room to find out why Daddy wasn't eating breakfast with them, trying to sell me a home-made ticket for the theatre or stick a pencil in the dehumidifier, that kind of thing.

Set-up 3 was looking really good to break lower from 1.2905 but shouts of "scheisse" called me in to the living room. Apparently I should just keep my door shut if I don't like what I hear. That's German girlfriends for you.

The turn-around on set-up 4 would have been challenging but I had to put the furniture on the table because the cleaner was coming or Kid 2 caught his fingers in the door, can't remember which.

By set-up 5 I was resigned to the market being rubbish now since we'd had 4 good set-ups, but then the triangle I was playing around with actually started to look useful and right on 10:00 it broke out, but guess what, the cleaning lady needed paying and letting out of the house.

That left me with set-up 6 but despite my full power of concentration being available, I was too bearish, too hung up on the idea that we should at least see the bottom of the Asian range. It's difficult to turn around my bias in these drawn-out set-ups where it bounced along above 1.29 and coming back up from under 1.2900 at 10:15 looked like it could just carry on going sideways - which I'm very familiar with after trading yesterday's holiday session. Even having said that though, in hindsight going long there would still have got me 5 points unless I totally messed up the position management, because the range around 1.2900 was pretty much guaranteed to hit 1.2910 if not 15 at the ceiling.

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No trades.

Lessons Learnt

Need everyone at home to get used to the new morning routine every other week and allow me my work environment. Might take a while, but hopefully this week will sort it out. Don't know whether I took anything from the session. Obviously I'm flattering myself to think I would have got the ones I missed, but I need to make sure it doesn't feed my FOMO demon which is supposedly well under control at the moment.

Another thing which I noticed I'm doing all the time is looking left on the chart trying to find out what the market did in similar situations before. This is probably valid but I think I'm doing it all the time, way more than I should and I'm doing it because I never get around to looking through the historical charts. I just never get down to it despite saying 2 or 3 times a week that I need to do that for this or whatever reason. Go to do it. Got to find time.

The best set-up today? Set-up 2

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #746 (permalink)
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2013-05-29 Wednesday sim trading session


The Tao of Al (Page 407, Reading Price Charts BBB)
1 . Everything that you see is in a gray fog. Nothing is perfectly clear. Close
is close enough. If something looks like a reliable pattern, it will likely
trade like a reliable pattern.

I'm recycling these quotes from AB. Must check out his new books to see if he's done a new lot.


forexfactory.com
 
Code
08:55 	EUR 		German Unemployment Change
09:00 	EUR 		M3 Money Supply y/y
	EUR 		Private Loans y/y
10:30 	GBP 		MPC Member Bean Speaks 
11:00 	GBP 		CBI Realized Sales
12:00 	EUR 		German Prelim CPI m/m
18:00 	USD 		FOMC Member Rosengren Speaks

Starting equity: GBP 94,285 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: good
Mental: ok
Fatigue: poor
Higher Time-frame: long term bear situation and medium term bear too. That was a ragged bullish pull-back on the daily for the last ten days so this new bear candle should be the trend restarting. Alternatively just more chop.
20 day volatility: 104 (10 year max 287)
20 hour volatility: 19.5 (10 year max 96)
Asian Session: Quite flat and choppy with 27 point range, 3.5 points of volatility, around 1.2850. Bearish ending was quite smooth and flowing.
Pre-Session Summary: Bear HTF trend, so far today's range is sideways, not massively clear what price interaction at S/R is doing. Long term volatility slackening off again.
Pre-Session Psych Issues: still trying to contain the FOMO impatience.
Session Review

Not a good day, in hindsight more caution required. I identified that it was choppy early on but was biased short on the daily so not happy trading most of the long set-ups. Frankly neither was the market.

Started late again, having problems sorting the sleep pattern. I really would like to start at 07:00 for this session, well actually 06:50 would be ideal. That means getting out of bed at 05:50. I managed 06:20 today so I should be able to push it earlier quite quickly. The fatigue hit me a couple of times as well but I figured I can take a break after trading to help bring that under control.

I missed the early set-ups which all fed my demons making me impatient. I could really feel it viscerally, it is going to take some practice to get used to it.

Also I should have caught set-up 1, in hindsight it looks easy and I don't recall now why I missed it. Can't blame the family today. There were several good PA clues before it moved off.

I took a long time to let go of my bearish bias despite set-up 1 being a good long set-up and breaking the range ceiling. It took me a while to change my analysis from "normal range" to "choppy trend".

I got short on set-up 2 after a tiny shooting star candle which was nullified already by the 2nd next candle, so I bailed - caught 1.5 points of slippage on exiting. No obvious abuse of my trading plan or analysis, I was just taking very slim evidence of bearishness and I was impatient, that was definitely the FOMO showing. Unlucky with the slippage.

Set-up 3 was a Houdini trade where I should have been penalised 5 points but got out at break-even. Again, very slim evidence, just a slight bounce off the 20EMA and break of a previous 1-min high.

Not only was the entry a mistake - I should have adjusted for my impatience after the first trade - but I then adjusted my exit plan on the fly to allow me to take the heat instead of bailing. The PA was so bad it was almost a reversal trigger but I held onto it. Getting out at break-even was undeserved and probably stopped me adjusting my behaviour again. The PA on set-up 1 which killed that trade was enough to affect my thinking and should have made me wait longer for better PA entries and give the stops more room, but it hadn't got into my conscious planning before the entry, it only came out in-trade. Not effective trading.

I should have gone short out of this set-up but was destabilised by the 2 trades and stood aside.

Set-up 4 was really too quick. I should have had my stop ready to go long after the 2nd candle when I am allowed to enter, but I was way too slow on the procedure.

Set-up 5 was another double mistake. I entered too quick. The 1-min stall broke and I should have entered there immediately 3 ticks above the stall if confident or I should have waited until the candle high was broken - I did neither and also failed to plan how to exit and just bailed as the PA looked weak, at exactly the wrong point. I also had completely forgotten to bear in mind the intra-bar volatility which was obvious all session. I guess I can attribute it partially to FOMO, but the lack of planning makes me think I was getting fatigued at this point, I'm disappointed by it.

Set-up 6 ground along with chop for over an hour which gave me a chance to re-group. The only criticisms I have of that trade is that maybe I should have stood aside after all the chop, and that I held it after the doji on the 3-min chart at 10:39 which was a good point to bail at least part 1.

I also held too long again after the 2nd high near the target. On the 1-min chart, which I'd switched onto for timing the bail-out / adjusting if it hit the target, it was pretty obvious after the tiny bear candle that the market wasn't intending to hit 1.2900 in the immediate future, but I held for another candle and 2 points.

I was thinking that this was the end of the 1 hour candle and it might rally up to 1.2900 to close on or above. It didn't happen and that was my exit signal. Not tested as a theory - just anecdotal. Again not effective trading.

So the session was over and then the market rallied hard - strange since it is normally just choppy and quiet after 11:30 until 12:30. Raises the question whether I should have avoided a slow choppy session by standing aside, or if I was right to take the set-ups I did since that rally could easily have come earlier.

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Set-up 2: -4 & -4
Set-up 3: 0 & 0
Set-up 5: -3.5 & -3.5
Set-up 6: +4 & +3
Commissions: -6
Total: -14

Lessons Learnt

The FOMO is still causing problems, although not so severe as before.

I was aiming for 5 clear profitable days by the end of the month and that is obviously not going to happen now, so I'm going to review my trading performance critically. However I am not massively disappointed since I do detect some progress. In comparison with last year when I was trading in the same way and making similar mistakes, I now have a grasp of the psychology behind it and since the last few days, an idea that I just need to experience and accept the feelings and the error-making so I get used to it and can then do something about it in real time. I think that is going to take some more weeks to show any progress.

The best set-up today? set-up 1.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #747 (permalink)
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2013-05-30 Thursday sim trading session


The Tao of Al (Page 407, Reading Price Charts BBB)
2. Every bar is a signal bar for both directions and the market can begin
a trend up or down on the next bar. Be open to all possibilities and
when the surprise happens, don't question or deny it. Just read it and
trade it.


forexfactory.com
 
Code
07:00 	GBP 	Med	Nationwide HPI m/m	
09:10 	EUR 	Low	Retail PMI
????? 	EUR 		Italian 10-y Bond Auction
13:30 	USD 	High	Prelim GDP q/q
	USD 	High	Unemployment Claims
	USD 	Low	Prelim GDP Price Index q/q
15:00 	USD 	High	Pending Home Sales m/m
15:30 	USD 	Low	Natural Gas Storage
16:00 	USD 	Med	Crude Oil Inventories

Starting equity: GBP 94,254 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: alright
Mental: OK
Fatigue: poor
Higher Time-frame: Got to be bullish now for the push to 1.3000 and break-out or failure
20 day volatility: 105 (10 year max 287)
20 hour volatility: 22 (10 year max 96)
Asian Session: 50 point range and 4.5 points volatility. Trended upwards all session with nice swings, only a little bit of chop
Pre-Session Summary: Bullish HTF trend, bullish day's trend, good price interaction at S/R
Pre-Session Psych Issues: getting impatient as usual and also added fear that it's going to foobar my best attempts, and same with my inability to prepare sufficiently (e.g. sleep)

Session Review

Started late again, had stuff going on last night that meant there was no way to get to bed on time. This is not good. This is effectively saying, if I want to have friends round, if they leave late then I can effectively scrub a day's trading since I struggled to get out of bed at 06:30 which is an hour off target and even with an extra hour in bed I still had to crash out at 10:30 and missed a potential set-up in my session.

Set-up 1 was initially the interaction at the Asian high, but I came late to the party so I already saw a pretty firm double top, I just couldn't see a way in and it looked like the set-up was over. However it was really quite volatile and seemed to be making a fuss about breaking the mini-trend-line up from the low of the day.

On the 1-min chart this co-incided with a 3-line break (thanks @Cloudy ) and a doji, and also it came down under the 20EMA and a series of LH & LLs so despite not looking good it was in fact very good PA even though it then hung there for 3 minutes before breaking the previous LL just for the pain effect no doubt.

Stupidly I moved my target closer to 1.2950 rather than leaving it at 1.5 points above the zone I'd identified. Just got the execution on part 1.

Shame the market then ranged for the rest of the session until I practically fell asleep at 10:30.

Set-up 2 added evidence to my theory that I can't enter a trade at a set-up when I am carrying a position already. However the blame is also attributable to my fixed idea that the bounce of 1.2950 would be followed by a retrace up to 1.2960 and then it would revisit 1.2950 and seriously try a break-out at least - not just this one test.

That was wrong. I guess that I was suffering from a certainty that it was going to do that, so I didn't play the set-up as I should have. The initial touch that I was thinking of is always shorter, just one bar, a spike or tail - on the 1-min chart we had 7 candles in this set-up. Yes, it was false certainty - totally overrode my analysis.

Therefore I should have exited part 2 sooner, missing out on 5 points profit there.

And set-up 2 would have made a challenging trade to manage all the way up to the Asian high again. Would have had to make sure my stops were wide, according to the ranging behaviour. Could have used the rising trend-line on the day again - aah, hindsight.

Set-up 3 was on the mini-trend-line break as on the 3-min chart. It went nowhere but I missed it due to external interference in the form of my 1-year-old offspring. I was bearish still after the first trade, hadn't seen the bulls yet. It was also a range trade so I shouldn't have taken it anyway since the PA quality was not so good.

Set-up 4 was just slow and didn't give any triggers which I was looking for after that stall. Could have used a 3-line break on the 3-min chart but also that's not officially written into my trading plan yet. Plus I was getting tired and not seeing stuff properly.

I almost got short on set-up 5 on a pull-back with a doji break on the 3-min chart but at this point I realised I should be trading only the best set-ups and this was a pull-back on an intra-range trend so it didn't count as one of the best. I need to do this objectively though - this "best set-ups only" rule. It's in the trading plan but the wording is a bit vague, so I'll revisit that.

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Set-up 1: +17 & +6
Commission: -1.5
Total points: +21.5

Lessons Learnt

Have to turn up the dial on the domestic schedule, getting to bed to get enough sleep, not getting distracted by family etc.

Have to revisit the trading plan and write certain terms around taking only the best set-ups. Use Al Brooks quote.

Need to watch out for certainty bias on a price action level, e.g. this will happen, that will happen, not just on a bullish / bearish level.

The best set-up today? Set-up 2

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #748 (permalink)
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2013-05-31 Friday sim trading session


Deucalion, futures.io (formerly BMT)
My edge will be based on being there when such an opportunity comes and not having blown through my daily stop loss by playing when the market is in balance.


forexfactory.com
 
Code
No high impact events today

Starting equity: GBP 94,325 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$400
Daily full stop: -$600
Physical state: OK
Mental: OK
Fatigue: Slight improvement on yesterday
Higher Time-frame: Might be a range 1.28 to 1.32 or it might be a new leg of a rally. Got to be bullish.
20 day volatility: 106 (10 year max 287)
20 hour volatility: 26.5 (10 year max 96)
Asian Session: Really quiet except for a spike at 23:00. Range 27, ATR 3.5 points. Lightly sold off, not choppy.
Pre-Session Summary: HTF trend up, day in range so far, Asian effect bearish to start - seems unable to reverse Asian range upwards, price interaction at S/R difficult to tell.
Pre-Session Psych Issues: Impatience - getting less extreme.

Session Review

Bad day. Started badly and wasn't able to recover to anywhere near break-even.

I have a rule, don't trade if you are late for the session. I broke that one.

Set-up 1 was the S/R zone overnight just below the Asian high. I was impatient and had been playing dumb mind-games with myself trying to shake the impatience by deliberately making myself later. Didn't work, probably just made it worse, only solution was to not trade as per my trading plan which I had started ignoring from the word Go.

Set-up 1 put in a doji and then broke it - I made a late entry without following procedure as I was dealing with distractions - so I broke about 5 rules with that entry:
  1. Don't allow distractions
  2. If distracted take a break and repeat the psych visualizatino
  3. If detecting impatience, pause to consider if it is influencing my decision
  4. Don't chase the market, let it go
  5. On entry make a plan for exiting on bad PA

Not much use when you don't use them. The market cruelly took about 15 mins to stop me out - lots of practice at feeling pain.

Set-up 2 was back at the Asian low, looking for a break-out or failure there. It broke out with some very quiet PA, touching the R with 3 1-min candle highs before breaking upwards. I had a clear mini-trend-line on the lows but I ignored it when that was broken. I forgot to make an exit plan and the stops got hit.

Set-up 2 continued as the market bumbled around the 20EMA. I took another long quite well technically but still didnt follow procedure, didn't have an exit plan and failed to ditch the position on bad PA after the 1st 2 1-min candles said this was a fake BO. I wanted to wait it out, it was a range day though so far, not a trend, so that was another rule broken. I finally decided the PA sucked and brought in the target and stops to exit, got one of each.

Set-up 2 continued, and I caught the break downwards well but had my target set at the previous support which had gone - should have had it 5 points lower and it would still have been hit. Part 2 went back to B/E.

Set-up 3 highlighted another ambiguity in my trading plan. My rule not to enter until the 3rd 3-min candle is not specific enough. Here bar 227 dived straight through the previous low without stopping and almost reached the next support, but then came back on the next candle. This allowed me to start an entry on candle 229 which was way too early, but I can't say that I should have waiter longer, that's too fussy. Instead my mistake was to enter on a stop instead of convincing PA. By this stage of pain, I should have realised that I wasn't going to make any points just taking simple break-out entries like that. Fortunately I bailed reasonably well.

I didn't stop there though, I went for the pull-back option and took a good entry but blitzed the 2 point retrace after my entry so missed the move. Would have had to bail anyway but could have re-entered after the next pull-back, except got fazed by those 1-min candles in the pull-back formation all making little bullish tails.

Set-up 4 at 1.3000 - I was still trading despite the carnage - obviously driven on by risk-seeking behaviour after the losses and ignoring my sadly subjective rule to only take the best set-ups.

The '00 levels are notorious and I should have kept out of it but I didn't and I got lucky. Instead of coming back for a lot more interaction around '00, it moved on swiftly. The break-out pull-back was complete within 2 3-min candles and the next candle broke down further. I chased it. Well technically I didn't, I got in on a limit order where I should have got in on a stop if it had been alright to enter on this set-up at all. Good result, but bad technique.

Got a nice follow-through. Left part 2 for ages but it came back and got taken out for B/E instead of reaching target at 1.2950. I targetted the hourly 50SMA with part 1.

With set-up 5 and set-up 6 both pull-backs that both came back 2 points further than expected, I can legitimately claim some bad luck here. However as I said already, I hadn't been planning the exits and was letting them run onto the stops or just bailing at random. Both times here my decision to let the stops get hit rather than take small hits was influenced by carrying part 2 from set-up 4 still which stopped me from hitting the "close" button, forcing me to move the stops in if I wanted to bail. From that irrelevant detail, I decided not to bail. Need more in the plan there.

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Set-up 1: -9 & -9
Set-up 2: -5.5 & -5.5
Set-up 2: 0 & -4.5
Set-up 2: +4.5 & +1
Set-up 3: -3.5 & -3.5
Set-up 3: -2 & -2
Set-up 4: +10.5 & +5.5
Set-up 5: -5.5 & -6
Set-up 5: -6.5 & -6
Commissions: -13.5
Total points: -60.5

Lessons Learnt

I create my procedures for practically everything surrounding trading, and when I use them, it works. But then at least once or twice a week I just ignore them, sitting down to trade like I was some kind of trading god with no need for mundane crap like procedures written on pieces of paper.

Some have said that it's the methodology I'm using, and that is partially correct. It's difficult and if I'm not in the zone, it's a recipe for disaster. So I could simplify things. Bears thinking about.

In the heat of the moment, I can't remember as much as I need to, at this point probably because I'm still cramming my conscious memory with psycho-control info and there's no space left for market analysis. I need to make the psycho-control process subconscious and leave my conscious brain free to analyse. These psycho-control procedures on cards always have to be up-to-date otherwise I just skip them.

Even now at this point after the session I realise I haven't formed a concrete idea of how choppy or quick I should have expected the PA to be. One of the reasons I didn't bother with my entry procedure is because I need to update it. Maybe I should do that now before trading again, and save myself the misery of a row of dumb mistakes.

I thought several times about stopping to consider what was going wrong but my plan says do that after losing $400 which is 80 points, i.e. I have never reached that stage in my trading this year so it's way too high. More like $100 would be good -> change to the plan needed there. I could have done this error post-mortem and saved myself some more pain later.

There are more lessons in there but I've got enough medicine to kill an elephant already.

The best set-up today? set-up 3.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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2013-06-04 Tuesday sim trading session


The Tao of Al (Page 407, Reading Price Charts BBB)
24 . When you are about to take any trade, always ask yourself if the setup
is one of the best of the day. Is this the one that the institutions have
been waiting for all day? If the answer is "no" and you are not a consistently
profitable trader, then you should not take the trade either. If
you have two consecutive losers within 15-minutes or so, ask yourself
if those were trades that the institutions have been waiting hours to
take. If the answer is no, you are overtrading, and you need to become
more patient.


forexfactory.com
 
Code
00:01 	GBP 	Med	BRC Retail Sales Monitor y/y
08:00 	EUR 	Med	Spanish Unemployment Change
09:30 	GBP 	High	Construction PMI
10:00 	EUR 	Low	PPI m/m
13:30 	USD 	High	Trade Balance 
15:00 	USD 	Low	IBD/TIPP Economic Optimism
18:30 	USD 	Med	FOMC Member George Speaks

Starting equity: GBP 94,137 (sim)
Position size: 2 x US$50K
Max risk per trade: $200
Daily time-out: -$200 (now same as max risk per trade, i.e. one maxed out full stop could be enough)
Daily full stop: -$400
Physical state: Good
Mental: OK
Fatigue: Poor
Higher Time-frame: Bullish
20 day volatility: 109 (10 year max 287)
20 hour volatility: 26.5 (10 year max 96)
Asian Session: 25 point range, 3.5 volatility, quiet, not choppy, also not swinging, bearish, obviously just pulling back still.
London Session: Reversed Asian session straight away but put in only weak rally, swinging well, balanced rounded & sharp swing points. Considerable overlap and a bit choppy but not volatile.
Pre-Session Summary: Bullish HTF trend, weak bullish day's trend/range, bullish Asian reversal but difficulty breaking upwards from Asian high. Range day in the making
Pre-Session Psych Issues: I'm now using a 40 point loss trading time-out. I still have little idea why Friday was so uncontrolled. Despite mental prep work, I still went into it and was obviously totally unprepared - at least in the ways that would have helped. 1st rule "only take the best set-ups" I ignored. OK so now it's history, I can't remember any more about it than what I've got written down. All I know is that today feels much better.

Session Review

Weird S/R today with double bands both above and below the market. Looked like a range day from the start and turned out that way too. And choppy too.

Basically I realised that I am attracted to the opening of the European and then the US sessions not because I see great set-ups unfolding all the time but more like a moth is attracted to the light. The volatility just subconsciously draws me in.

Fortunately today instead of getting sucked in to an attempt to fit a set-up onto what was happening at the US opening, I just thought "what the hell is that" and waited. There was no hanging around building consolidation within the set-up zone so basically it looked like nothing.

My impatience to dive into the first remotely viable looking set-up was not so strong, in fact almost absent today. Guess it helped.

I guess with hindsight, you could say that at 13:00, it tried to go down and failed (down-up twins) and then tried to go up and failed (spike thro 1.3100) and then chopped up and down a little, consolidated for a while and set off south. Maybe there's an advanced set-up in there for later but it's not one I'm going to adopt now.

Set-up 1 came up as the market dropped back into the Asian range and pull-back. This was strictly a range day and I wasn't going to take a position unless it had some serious PA to back it up. This one looked like a great pull-back set-up until I entered and then it seemed only half so good - the selling was only half as strong as the buying in the pull-back had been (on the 1-min chart) and there was no surge downwards after the swing low was breached so I bailed.

Then it just got choppy and volatile for an hour.

Set-up 2 was ambiguous in both directions, as a break-out and a failure. The initial break-out was not right, it pulled back 4 points or so and then added on another 1 tick to the lowest low, and put in a doji with a tail going in the wrong direction. So it did look quite bullish but then it pushed down another couple of ticks and I figured a grinding sell-off was in the pipeline, with big retraces and small progress. Turned into a nice rally up to the 20EMA which I should have scalped as a failure.

The PA for set-up 3 at the 20EMA was a perfect bounce down off the 20EMA on the 3-min chart, including a bounce of a trend-line down off today's high i.e. since it then rallied - a trap, but on the 1-min it doesn't look like that at all and I just hesitated and missed the long entry.

I did the same with even less excuse at set-up 4. This was the kind of rally that you often get after a period of heavy chop has sent most of the traders home.

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Set-up 1: +1.5 & +1.5
Commissions: -1.5
Total: +1.5

Lessons Learnt

Risk aversion due to previous trading disasters (see Friday)


The best set-up today? Set-up 3

You can discover what your enemy fears most by observing the means he uses to frighten you.
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2013-06-05 Wednesday sim trading session


This is the same as yesterday's and it's the most important quote from Al Brooks for me at this point where I'm trying to crack it.


The Tao of Al (Page 407, Reading Price Charts BBB)
24 . When you are about to take any trade, always ask yourself if the setup
is one of the best of the day. Is this the one that the institutions have
been waiting for all day? If the answer is "no" and you are not a consistently
profitable trader, then you should not take the trade either. If
you have two consecutive losers within 15-minutes or so, ask yourself
if those were trades that the institutions have been waiting hours to
take. If the answer is no, you are overtrading, and you need to become
more patient.


forexfactory.com
 
Code
00:00 	GBP 	Low	BRC Shop Price Index y/y
08:15 	EUR 	Med	Spanish Services PMI
08:45 	EUR 	Med	Italian Services PMI
09:00 	EUR 	Low	Final Services PMI
09:30 	GBP 	High	Services PMI
10:00 	EUR 	Med	Retail Sales m/m
	EUR 	Low	Revised GDP q/q
13:15 	USD 	High	ADP Non-Farm Employment Change
13:30 	USD 	Med	Revised Nonfarm Productivity q/q
	USD 	Low	Revised Unit Labor Costs q/q
15:00 	USD 	High	ISM Non-Manufacturing PMI
	USD 	Med	Factory Orders m/m
15:30 	USD 	Med	Crude Oil Inventories
19:00 	USD 	Med	Beige Book

Starting equity: GBP 94,147 (sim)
Position size: 2 x US$50K
Max risk per trade: 10 points (both halves) / 1% real money account size
Daily time-out: -$200
Daily full stop: -$400
Physical state: Good
Mental: OK
Fatigue: Currently OK but no doubt tiredness will creep in
Higher Time-frame: This rally on the daily is weaker than the previous at the beginning of April. It needs to get some momentum going if it's going to survive. Otherwise getting choppy and consolidating.
20 day volatility: 107 (10 year max 287)
20 hour volatility: 21 (10 year max 96)
Asian Session: Range 31, ATR 4. Trended well, down and back up to finish high but got choppy waiting for European open.
London Session: Reversed the Asian session quickly with a sharp bearish move but then decelerated and looks a bit choppy, restricted to range.
Pre-Session Summary: HTF only slightly bullish below R, day in range, bearish Asian effect, price interaction at S/R good - only 3 set-ups this morning. Break-out attempts to be expected at upper range boundary into bullish rally, not so much vice-versa at range floor.
Pre-Session Psych Issues: will power vs impatience. Worked off the risk aversion from Friday now I'm free to control it or blow it. Best probability set-ups only, that means either a clear trend or a range boundary, or excellent PA. I can switch to Ninja's sim account to trade anything else. Tired again.

Session Review

No set-ups before the 13:15 ADP non-farm employment news since the market just stood still.

I would love to know who or what is driving the news-related trades. The bid-ask spread widens and a couple of seconds later the price leaps. The fact that the move is often completely reversed makes me think it's purely scalping activity since the higher time-frame position traders always have the last word. I often wonder whether traders like @xelaar can see a whole other dimension to the situation in the minutes before the news event from looking at the order book. Something you just don't get with forex and it's untradeable with IB's sim account.

Set-up 1 came in the aftermath of the news as the triangle formation broke downwards. Technically this wasn't a high probability set-up. Triangle set-ups are just something I've noticed myself and don't come from YTC PAT. This wasn't a gold-plated break-out failure - the movement around 1.3100 was just too much.

However the price action was undeniably great. It slowed right down and consolidated, made an attempt to go up and failed after 5 points, scarcely stopped back in the consolidation area, and then carried on down. I entered with a tight stop and a plan to bail on any adverse 1-min bar PA but didn't need to.

1st target was the Asian low, 2nd target was 1.3050 but it never got hit.

It looked like turning round and failing at the break-out, and here I lost sight of the plan to take only A+ set-ups. Originally it was good to go for a further short (set-up 2) which would have been a good set-up, but a short entry signal on the 3-min chart failed and it moved north - not such a high probability trade, although I could argue the PA was good. I managed the part 2 exit stop simultaneously with the 2-part entry, so it was a learning experience - I still found I was being a bit lenient about position management on the second position because I was dealing with part 2 of the 1st position leniently.

After the move up failed mid-range, I really was restricted to sitting and watching unless it put in some more irresistable PA. It did some weird stuff as the 15:00 PMI news came out but still no set-up.

The ugly chop after the news suddenly gave way to a beautiful trend which looked as if it could break out upwards at 1.3100 for set-up 3 at the end of my session but it then suddenly retraced way too much to allow me to predict a good sound break-out. I decided to go long after some ensuing good bullish action, but it was only sensible with really tight stops and that turned out to be justified.

Can't believe the sheer size of the futures.io (formerly BMT) 4th birthday offering. I could take the month off just to do training with all of that. Thanks @Big Mike.

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Set-up 1: +17 & +6.5
Set-up 2: -1 & -1.5
Set-up 3: +0.5 & +0.5
Commission: -4.5
Total: +17.5

Lessons Learnt

Still identifying surges of emotion but not acting on them initially - e.g. at seeing the big trend coming out of the ugly 15:00 trend channel. Remains to be seen how much impact it has afterwards, i.e. whether it adds up.

The best set-up today? the choppy trend channel break-out - as yesterday - where chop played out and gave way to trend

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