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I enjoyed reading through some of your extensive trading journal. I am interested in starting Forex trading myself and am reading whatever I can on the subject. I ran across this link yesterday and read most of it (it's pretty short but full of Forex trading secrets and observations)
This is not the start of a thread for discussion. I found this on a thread at FF, read it and thought it might be usefull for some people. Experienced traders will allready know all of it. There will be an attempt to sell you something on page 26 but …
Went to BE after +20 pips in the first leg down. And yes the idea with the 2 part trades is to get a substantial winner very occasionally - my current stats for this are woeful up to now. Again the better the outcome in this trade's instance would have been to set and forget the trade and yes the 2 points deducted would be the position of the trailing stop.
I start at 10am UK time on Monday's so the down move was about in the middle of the predicted range by this time. The only other trade I could have taken was a long off the lower band, but this broke up very quickly on news and I did not get a signal to enter on.
The levels I had in place after doing my pre-session prep and game plan were a bit off today. The lower of these two bands was actually my upper band when I started trading (yesterday's high) and I was looking for shorts when price fell under and with ease of downward movement and decent supply coming in. After a low volume pullback and the MACD histogram rolling over I took the short with a 15 pip stop. As per my rule set I came to breakeven 5 minutes prior to a substantive news event (German ZEW survey) and was taken out for a breakeven.
The rest of the day was a bit frustrating as I had a read on the price action but just did not get a valid set-up to get on board.
After the change of behaviour with the demand coming in off the LOD I was waiting for a low volume secondary test of the spring off the LOD, but didn't get one. There after I had a couple of other long trades that nearly set-up but could not take them as not all the criteria were met.
I put in the upper band after demand came in off the LOD and that acted as a good level to work out the price action for the rest of the session.
I can already feel the benefit of being as close to 100% rule led, as opposed to the looser approach I was slipping into.
10/10 for sticking to my 'stop or target' rule today. 2 stop losses to report.
The first was very poor execution. The image shows where I had set my lower band after doing my pre-session prep. The strong supply wave drove into and exceeded this level at the London open. I did not adjust the band so was working of this rather than the LOD. I have no idea why I did not adjust it.
I then took a short thinking that there was a break of the ice and a low volume pull back. The price action preceding the entry was looking bearish to me. There was a great big upwave in the middle of the channel which took an hour to build and didn't push price up, there was no ease of movement and a lack of reward for the effort exerted. Following that were two no demand waves and some ease of movement down. But as I say the entry was above the LOD and this set-up should happen after a break of the LOD and pull back to the prior support.
So an execution error there. But then I messed up as I had noted in my game plan a red news event at 13:30 and my rules say close off 5 minutes prior if a trade is underwater. I missed this and the news spike took me out. I took a full stop when I could have taken a -1/2R loss.
The second trade was just about OK for rationale. We had a decent move down through support and consolidated. I took an entry off my MACD histogram with the signal line still showing a downtrend as we came into overbought in the trend channel. There were some signs of strength evident (a spring and lack of effort for reward on a preceding downwave), but the current trend takes precedence until there is a clear change of behaviour. That happened shortly afterwards and I was stopped out. I was itching to scratch the trade as I knew I had called it wrong after one price rotation, but I am focusing solely on developing discipline for setting stops and targets for this series of SIM trades. It was getting late and after 2 stop outs I called it a day.
A few notes to self today about trade selection and concentration. I have 3 more trades in this set of 7 SIM trades to show a profit and am flat after 4. But more importantly I mark myself 9/10 for not meddling with the trades once they are in the market. And that tells me I am accepting the risk and committing to my trade ideas better.
Could have done my job better today, but still happy with the progress.
Hi Mokodo, tough day yesterday for you. Hope you get something out of it. I wanted to ask about your entry rules because I'm still not definitely clear what triggers your entry. Your first entry was volume-based, right? I know what no-demand waves are, but I'm not sure what you mean by effort - is that purely high volume you're referring to?
Just my 2 British pence worth as well, I recognise (but might be wrong) a kind of over-compensation in you that I suffer from all the time. I focus on something too much (I'm thinking of your focus on not meddling with positions) and then I find that causes subconscious damage when I take losses but think 'that's good, because at least I'm not doing X'. The subconscious damage comes out as fear and excessive nervousness later on in different situations.
So I try to (and am not good at) reining in my enthusiasm to implement a new psych approach, to find the right balance from the word go. It's a masterstroke if you can get it right and more often than not I find myself lurching from one extreme to another. I don't know what your Inner Chimp says about it, but I'd love to know. I don't think there's an easy solution.
You can discover what your enemy fears most by observing the means he uses to frighten you.
