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Spot FX Day Trading: The Jigsaw


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Spot FX Day Trading: The Jigsaw

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  #231 (permalink)
Bridgwater, UK
 
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lifeguardsteve88 View Post
I noticed you use a 350 tick chart (I use a 500 tick), but are you using any minute charts to base order enties on as well? There was a huge volume spike at 10 and 10:15am (eastern) with a nice signal bar with a tail that came within 4 ticks of the previous days low at 10:15. Looked like a great long entry opportunity, one that I would have missed if I had only been using my tick chart alone.

Cheers!

I have a 5 minute chart up also for looking at trade activity. My feed is for spot so it's all tick volume.

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  #232 (permalink)
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Game plan today was low volatility range 1.3590 - 1.3545. By the middle of my session volatility had dropped right off, so, IMHO, there was a fair chance of a break one way or the other.

I passed on a long at 1.3568. There were rising supports and a good case that buyers were absorbing supply. This is a set-up that does not usually occur at the range edge, more typically in a price apex. These trades are riskier and I think, as my first live trade back after a SIM period, I just wanted a more friendly set-up to get me back into the swing of things.

Once price had taken out yesterday's close and high (creek) I was looking for a long as a pull back to the creek. I got in a little early, but my 10 pip stop saw off the MAE of 5 pips and then ran to +16. My first target was around 1.6620, the second a little further up. After a decent leg up supply came in hard and I was taken out for breakeven.

A good day. Trading real money again feels great and my discipline is sound so far. I have been using a flash card / playboard system to help me understand how I am making decisions in real time. It is fascinating to try to pick apart the factors and processes involved in discretionary decisions.

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  #233 (permalink)
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Game Plan today was reversal or continuation of the 90 pip drop off in the late asian session. That all happened before I was through my pre-session prep.

My lower band was at 1.3500 and after price ground into it there was enough of a case building to try a reversal. There were many signs of strength coming in, but not a single one I could point to which shouted 'change of behaviour'. I was happy with the potential of the trade and then dropped down to my LTF to find an entry. Again I think I jumped in one leg too early and could have improve by a couple of pips. MAE and MFE both 8 pips and the trade scratched for a BE after an hour or so, once we had failed on to hop across the axis line at 1.3520

I figured the trade was potentially good for 20-30 pips vs initial risk of 10

I have a reversal set-up and I figure the key in wait, wait, wait, wait. The playboard has to be completely one sided without any opposing signs of strength/weakness - and ideally an overt change of behaviour too.

But very happy with my performance today. Stuck to the plan.

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  #234 (permalink)
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Traded last Thursday and Friday, just didn't get trades away, several nearly trades but none that ticked all the boxes.

I've been getting really interested in decision theory and neuro-finance and what is perhaps happening right at the moment of execution (or lack of execution). Fascinating area and has given me plenty of food for thought and I'm incorporating a few techniques into my routines for the rest of the month to test them out.

I took a personality test and the assessment rang true on several measures, but most striking was how cautious the report stated I am. So I have been looking at ways to work with this. Some of it is lifestyle and diet related and others specific psychology techniques to turn up risk seeking behavior and turn down over-reaction to losses.

Personality Test Center - IPIP NEO five factor model of personality

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  #235 (permalink)
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Three losers, but all with half my normal amount of risk on.

Game plan today was range or expect a break as volatility has gone to a cyclical low.

The neat double top early in the London session that occurred right at the 50% of yesterday's upswing was the trade of the day. Too early for me and completely unknown if I would have spotted it realtime.

I was bearish as the ZEW numbers came out, but stood aside around the news and watch the price take a dive. I was tracking for a pull back to the ice level but that never came so I was looking for either a decent trend trade or a reversal later in the day.

First trade was just a clumsy mistake. The set-up was not formed and I jumped in. Operator error.

Second trade I was fine with. I put half the position on when I felt committed to the trade idea and then was watching for the completion of the set-up to get the remainder on. The set-up did not complete.

The third trade was a weird one. I was expecting a technical reversal to at least the 50% level of the downswing at 1.3525 most of the afternoon once we had put a base in. I had stopped for the day and had done some errands and family stuff, and then got a burning impluse to check the chart.

Pure revenge and I was fully aware of it. But I assessed the R:R and still thought it a sound trade so I put it on with a half sized position. Got tagged for the stop by a pip, but the target would have been made.

In light of my current issue this was a good day's trading (I am trying to become much more risk seeking). And I am trading live so have to deal with the sharper emotions that brings.

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  #236 (permalink)
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Fascinating how different it looks with your bar format.

Maybe you should count yourself lucky that you got burned jumping in like that after you'd finished - I get tempted similarly and have done it too but the psych prep work I do before and during sessions is absent, which is not good. If you'd got a winner, it might have re-inforced a bad habit.

One possibility would be to come up with a sort of 'instant' trading prep routine that you can quickly go through when you want to jump back in - a bit like Clark Kent leaping into a phone booth and coming out as Superman?

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #237 (permalink)
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Hi Adamus, as always, thanks for the input.

I took that last trade and am completely comfortable with it. Yes it was outside of my hours and I knew I was feeling a revenge impulse - but I was conscious of these facts and still was happy to take the trade. I f'ed up the entry, but that and the lost money is less important to me now than not taking a trade I had a strong intuition about.

I have sort of worked out why trading thus far has always felt so frustrating to me. It is the imposition of rules which get in the way of good trades, such as 'stop trading at whatever time'. If there is a good opportunity I should be taking it, not looking for reasons not to. I've kept some guidelines about set-ups, will not move a stop and will not exceed max loss rules, but apart from that I am planning to go after every sound trade opportunity.

Of course I may just go down in a ball of flames, but I'd prefer that than to never express myself honestly.

Sorry - rant over!

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  #238 (permalink)
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If you can do that, then go for it.

As far as the rule for trading within defined start and stop times, for me that is v. important because outside those times my levels of preparation and readiness to do the right thing are severely impaired.

I wish I had the freedom to completely immerse myself in the markets and the composure to be on guard at any moment to make a good trade - but I'm not. I read about Market Wizards and other traders who managed millions at Salomon Bros, or Soros etc. That though is only a dream. I have two small children - I would like to see Soros try to trade with that circus going on around him. You are probably familiar with it

PS I recognise the intent on your part to unleash your intuition, and I have the same intent, but knowing myself, it's too much to ask at this point. I see exactly where you are coming from though.

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  #239 (permalink)
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Didn't pull the trigger on a long, pull back to creek at 1.3533 at around 11am and then my data went screwy, turns out my internet connection was coughing. So missed the whole day getting it sorted, reloading data, blah, blah, blah

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  #240 (permalink)
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I stopped journalling to futures.io (formerly BMT) whilst I have been working on a few things. I have been locked in a battle between mechanical and intuitive trading, and been having some issues around trade management. Seems like the fog is lifting.

For the last few months I have had no doubt at all I have a strong method (for me at least), and I can identify great entry spots for day trading the Euro for swings of 20+ pips - or more for the occasional momo or full-on trend day. But I repeatedly sabotage trades. This was driving me nuts. How come I could be so confident in my analysis and then so doubtful?

I reviewed my journal and trade stats and found that the majority of my best trades are where I had to do something away from the screen. If I sit there I get involved and fiddle away the profit by choking trades off. It was all emotional bias. Enough is enough I said, let's see who this adversary really is. So I have been reading up on emotions, emotional bias regulation/management techniques, neurofinance, dopamine, serotonin, cortisol, automatic nervous system, decision theory, etc. My conclusion is that I am dealing with a mighty strong gorilla.

I built a HRV (Heart Rate Variability) monitor to get an understanding what my automatic nervous system is doing pre, intra and post trade and have come to the conclusion I am not able to make sound trading decisions with a live trade. My sympathetic nervous system activates strong emotional biases for me (figure it's just the way I'm built) and these affect my thoughts, decisions and behaviour. And even being aware of this (I can track the output in real-time) makes it only slightly easier to regulate, some of the influence is very subtle. My monkey is just too strong!! So I fight him no more.

I've been doing my prep and context analysis, tracking my set-ups, intuitively making entries with set and forget stops and targets and walking away. I have a chart alert that txts my phone as levels get hit and I babysit around event risk. But that is it now. I've also found that less screen time helps with 'clarity' and any intuitive trading urges can pop quickly to the surface without fighting their way through a mire of cognitive processes.

Know thyself!

I plan to maintain this journal weekly from now on.

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November 18, 2013


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