I seem to be going from bad to worse this week. Over the weekend I decided I would look for the morning fake-out on the EUR/USD as well as my normal set-ups. This usually occurs around the start of the Euro and London session and is the break of the daily range that fails and tracks through to the other side. I have been noticing this for a while but over the weekend I read a paper that explained the phenomenon and it made enough sense to me to trade it.
The trouble with getting a new to though is that you ignore your normal toys while you wait for the shiny one to come out of the box. At least thatís what I did on the EUR.
I compounded this error with a GBP trade. I entered a retracement in the downtrend on a break down of the reversal bar Ė so far so good. Initially it went with me and I was trying to wind in my stop to the high of the entry bar but due to the 10-pip limitation of IG Markets I never got there. The foolish part was that I didnít even wind the stop as far as possible, which was only 1 pip worse than that. The even more foolish thing was I didnít try to close the trade manually when it went back through that and decided to Ďgive it a chanceí (What?? )
Eventually I took a 1R loss when I should have had just over a 0.5R loss. Given that my goal is to average 0.5R losses over all (currently 0.7R) thatís not particularly helpful.
That was a little better. In hindsight there was a fake out move on the EUR but I didnít see it at the time and itís not blindingly obvious even now (to me at least)
I did take a trade on what looked like a failed test of the range high but after some initial progress it started backfilling and news was fast approaching so I closed it for a scratch.
The GBP was offered most of the time I was watching. I find it hard to jump on board when it looks like one way traffic although there was a Ross Hook in there that would have paid off nicely depending on where you though the break down of the rise originated
Yesterday was one of those days where news clogs my normal trading time. I aim to start around 3pm and finish before 8pm. There were news releases at 3.15, 4.00, 4.45, 5.15, 6.00 and 7.00pm so no trades for me. I tend to check ahead these days so that I can plan to be out and about rather than get all cued up and then disappointed..
Last night my wife took me to a Hafla, which is a kind of belly dancing show where students from all over the place show their stuff. It was tough but someone has to do it.
My week finished with three trades completed. two losers and a scratch and I was down 1.5R.
It was a case of nearly there but not quite. I had set my target at slightly wider than my R as Iím trying to improve my win/loss ratio. In hindsight I set it just a little aggressively for this late in the trend which had already climbed just about150 pips. A 1R target would have been met but I ended up with Zip.
I count zero trades as losses because I have taken on the risk but got nothing in return.
Well, another day and another loss. Only 1 R but Iím quickly coming to the conclusion that trading 5-minute charts is a random exercise for me.
There seems to be a lot of noise in the lower time frames and given that I am not a natural day trader (I donít like watching charts tick by Ė it bores me witless whether I have a position or not) I am finding the whole exercise unsatisfactory. In the last 6 months or so I have traded every time frame from 15 minutes down to 1 minute and even tick charts of varying lengths. I generally find the same problems with all of them in that only my money management keeps me going but I never make any kind of consistent return. Iíll have a string of wins or losses and basically earn less per hour than if I were flipping burgers. I could happily cope with this of there was some sort of slow incremental build up of my account but that just isnít happening. I am not saying it canít be done just that I canít do it.
I intend re assessing my trading plan and I will most likely move to 4-hour charts along the lines espoused by Nial Fuller. This will line up more neatly with the long term rend following models I use for my Share investments and my SMSF.
This has been a long winded way of saying that I am not going to update this journal any more but I will probably soon start another one with a much more sensible name.
Thanks to those who offered helpful suggestions and those who read some part or another and hit the thanks button.
Cheers for now
The following user says Thank You to Nickemp for this post:
I look forward to your new journal, and maybe a bigger time frame trade method.
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The following 2 users say Thank You to Big Mike for this post:
If you listen carefully to Nial he'll tell you that the best signals come off the dailies . Hes right and theres no reason you cant anticipate directional moves watching 4H + tfs and enter on smaller tfs . Trust me when I tell you this is a good way to go , think of the longer tfs like a roadmap . Good luck and looking forward to the new journal .
The following user says Thank You to Eric j for this post: