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Ok yea, I don't know where you are getting your info from, low volume, etc.? Spend some time on FXCM.com, plenty of info there. From what I read briefly is that FXCM is one of the most liquid FOREX markets in the world, and it doesn't matter whether you are trading micros, minis, or full you are getting full liquidity of their market and their super tight spreads. I don't remember having any issues with spreads with any of the major pairs that I used to trade.
I will be going over all profit/loss including commissions when I start trading live. But I think that scaling 5-6 lots wouldn't necessarily kill your profitability in futures if that was all figured into your account size and trading plan. As your account size grows your contract number should grow based on the percentage of capital you are trading. Which is again why I have de-leveraged to hopefully take advantage of the full opportunity the market presents, while only risking a certain % of capital as I see fit via my trade plan. I hope this all makes sense.
One quick trade this morning before the wife went to work. Playing around with cumulative delta.
You can't see it on the screen but the first area of Hourly Support I was targeting was 1.1129. At the line that runs through cumulative delta, you can see a divergence where CD made a new low but the market did not. So I threw an entry on and just figured I would manage the trade from there, with an acceptable stop below the previous low. Got stopped out on the last third, but the market ultimately ran to target.
So I am convinced that I need to spend some more time researching CD around targeted areas and market confluence. Order flow seems to be quite important to long term successful traders, so I try not to ignore that kind of info anymore. And the divergences in CD along with price action, as well as when they are running together is starting to make more sense to me. I have to assume that is from my much upgraded knowledge base of PA since the last time I looked into CD.
Good example of CD divergences here around volume profile. On the left side of the chart we see two large bars down while CD spikes higher. Price action immediately after this spike reveals this was an intermediate low, and an important area to take profits. A re-test of this area to the right shows another divergence as again the market makes a new low, yet CD begins to trend higher. I'm assuming showing a lack of selling aggressiveness at this previous pivot. You can also see the LVN below the low supporting price.
You cannot see that the second test was with larger volume because of the very large volume bars at the first test, but there was also good volume at the second test as well. And I think this is important as large orders are coming in with very little reward, and market delta showing aggressive buy market orders absorbing that volume and reversing the market higher.
First chart shows a little context of current market structure. Current intermediate trend(hourly) was down, and my disregard for this while setting my profit taking locations today absolutely hindered the money I pulled out of the market. So definitely something to keep in mind going forward. I need to wake up a little earlier and spend some more time doing homework before I start trading. I need to spend some time also reviewing charts at night for at least a few minutes so that I can stay in tune with the market.
Some notes from my trade journal:
So far trading has been extremely calm. I believe there is a lot of wisdom in trading small enough that you can maintain proper risk exposure, and also small enough that it is not psychologically distracting through the swinging P&L. I do believe that through experience you can leverage more as your confidence in yourself and your trading plan grow. But I also think/now know that it can be a big mistake and financially as well as psychologically damaging over-leveraging as a beginner. I was just able to sit through a 15 point retracement calmly as I waited for the trade idea to work out, and now the trade is moving heavily in my favor. Six months ago I would have had so much anxiety that I probably would have exited the trade, and then screamed at the screen as I watched the trade work out. Talk about a 180. As the market moved against me, I rechecked context and the appropriate charts, and they told me the direction was correct and to sit tight.
Successfully traded profitably the first day and pretty happy with execution and trade management. Still a bit to be desired as I am intensely researching order flow and its application to reading price action. I read about it before, but I understand it completely different this time around. So I am in the process of watching webinars, and reading the thread on volume profile/footprint all over again.
Looking into eventually using some sort of performance analyzer like TraderVue, as there is no way I will hand document all these trades and scales individually in my metrics spreadsheet like I used to. I would much rather use that time more effectively. Looking forward to tomorrow!
Thicker arrows are entries, and thinner arrows are profit taking.
Not much to post on today, took one trade this morning and got stopped out after one scale out. Price action very confusing this morning and the news didn't help. So spent the rest of the day building new charts to help me see contextual development during the day. I guess I need to spend more time with larger charts when things don't make sense. A zoomed out perspective if you will. Hopefully tomorrow will be more trade worthy!
Alright, well my wish came true, much more trade worthy price action today. We opened up this morning out of balance towards the very high of the recent range. We were also at major support for the dollar. So when we tested those levels a couple of times and market seemed determined to move higher I got in. That is one thing I have learned is that you do not fight price action when it hits major S/R and does not break the short term trend. Chances are good for continuation.
News events caught me a little by surprise today so I spent some time factoring that into my plan. I should be watching these events closely, and anticipating how the dollar might react to the actual news, and also how that relates to my plan for the morning.
So we had been hanging out, out of balance since news hit this morning, and price was being rejected higher away from value as the developing VAH moved up. This is seen here as the thick blue lines.
Scale areas seem to be working out just fine, although I am thinking I definitely want to hold a larger piece of the pie for my discretionary and final exit. Basically when I do not want to be long or short anymore based on price action.
Larger picture of the trend
Contextual chart I developed yesterday, since I do not have access to TPO's currently this will have to do. But I am happy with it and offers the clear perspective I was looking for.
One more note via my edit: I have decided to ditch cumulative delta. For me it is a distraction, and inconsistent to the point that I cannot gain anything that is aiding me in profitability, in my targeted areas of trade. And I do believe that it has something to do with the market I am trading. I noticed it traded completely differently and much more in sync with the ES over the same time period I watched it for the EURO.
Alright so trading this week has been a little tough for me, I should be posting charts so I can visualize progress. But I have been slacking, so all I can do now is focus on being more consistent in the future. Although I have not been slacking on documenting my errors and progress.
One of the major hurdles I aimed to overcome this week was to simplify the complexity of my trading plan. I was able to do that through a new chart/chartbook, and it has really helped me visualize and react to my setups. Consistency is key going forward. I also had originally aimed to risk 2% of my account on each trade but I have scaled that back to half. So I am now risking 1% on each trade, with a 2% stop on the day. Until I am comfortable trading my plan consistently then I am very ok with this.
I have also decided to start scaling/layering into each position. This is a skill that I will build up over time, but I setup a few different parameters depending on the trade setup that help limit my risk/increase reward. It's a little more tricky than all in, but I feel that it is absolutely necessary.....for now.
So today was obviously a nice day to trade, and I must admit I was positioned right, but I did forget to set an alarm for the 10am report. So I got lucky. This is part of my plan and I must remember to execute as it is laid out. Ok now for some charts.
This is my new chart, and it incorporates all the contextual markers I need to see. I run the VWAP and session start from the 3am London open so I can see how we are trading into the U.S. session(I also have larger charts all the way up to weekly for my top down analysis). I also figured out how to manipulate the squeeze setting onto the indicator that sierra has for it, so that eliminated a lot of the lines on my chart. And in the last lower panel I am using moving averages from my time frames that I watch to give me a quick visual of direction and momentum. Yellow lines are previous day high/low. I also have the zig/zag on there to identify my swing points.
We had been trending lower and the hourly chart was breaking down so I took the first trade short out of consolidation. After a large move lower, the market failed to move lower on the second attempt so I started to scale out.
Since we were so close to hourly support/yday low, and the 5m squeeze trade failed to gather steam on the downside, this falls in line with the failed squeeze trade. So I started to layer in on the first pullback after the trend had changed. The 10 am report took us strongly to the upside. You can see the failed move down, and then back up above support. I exited the final position once the market started losing momentum. The last position is generally saved for my discretion when I have determined the trend is over. This exit was a little premature but I was ready to move onto other things, plus the move was very vertical which I always assume as unsustainable.
The account is up over 2.5% today, I am a happy camper
