xXTrizzleXx's Trading Log

Beginner Questions
1

[B]Hello all,[/B]

In preparation for making the step to a Live Account, I have decided to start a log documenting my Trading Plan and progress in a Demo Account. I am perfectly aware of the shortcomings of a demo account, regarding the limitations it will have on my psychological development, as I am not trading real money, but I will ensure that I will open a demo account with the [B]same amount of capital[/B] as I will open my Live Account.

A Trade Plan is an essential component to the success of any Trader. As such, I will outline my exact Trading Plan, addressing issues such as Position Sizing, Entries and Exits. My Trading Plan was influenced heavily by the teachings of [B]Mr. Tymen Wortel,[/B] who has been so generous of his time to educate us all in this thread, entitled, “[B]The finest in trend trading[/B]”.

I know that it is important to stick to one’s system, and I firmly believe that I have the discipline to do just that. I welcome any comments, criticisms and praises you may have, as it can only serve to bolster my Trading Plan and enhance my development as a trader.

2

xXTrizzleXx’s Trading Plans

Markets
Several currency pairs are chosen to increase the probability of detecting trades.

The currency pairs traded for both Trading Plans, are:
-EUR/USD - $10/pipStd.Lot
-GBP/USD - $10/pipStd.Lot
-AUD/USD -$10/pipStd.Lot
-GBP/JPY - $10.91/pipStd.Lot
-EUR/JPY - $10.91/pipStd.Lot
-USD/JPY - $10.91/pipStd.Lot
-USD/CHF - $8.70/pipStd.Lot
-USD/CAD - $9.69/pipStd.Lot
-EUR/GBP - $14.58/pipStd.Lot
-GBP/CHF – $9.02/pipStd.Lot

The DNA Method (High Win:Loss) - Version 2.4

Position Sizing
A strategy using 2 contracts will be used for all trades. Each contract will be no more than 1% of the account balance, as evaluated at the beginning of each trading period, which is 1 month.

Time Frame
The 4 Hour Timeframe will be traded.

Entries
[ul]
[li]Two Bollinger Bands are used, one with Standard Deviation set to 1.0 and the other set to 2.0.
[/li][li]Entries will be made employing a system which uses an Orthodox Count Back Line method.
[/li][li]Only begin drawing the CBL from candles which close between the Outer Bollinger Band and the Standard Deviation 1.0 Band. If the CBL extends too close to the Middle Bollinger Band, then cut it in half.
[/li][li]Bollinger Band bubbles and squeezes will not be traded, until Point P has been reached, as they reduce the Win : Loss ratio. Point P is the point where the retrace of Price Action hits the Outer Bollinger Band, as seen below.
[/li][/ul]

816×449

816×451

821×453

821×452

Images courtesy of Tymen!

Entries must be made IN THE APPROPRIATE DIRECTION. If you want to go long the price action must come up to your CBL, and if you want to go short the price action must come down to your CBL.

If you are unsure whether a Bubble or Sausage has not ended, sit the trade out!

Stops
[ul]
[li]At first, an emergency PCI Stop Loss is set which is exactly one candle length beneath (above) the Count Back Line extreme candle. It is exactly the same length as the extreme candle.
[/li][li]The low (or high) of the extreme Count Back Line candle is noted, and only when a candle CLOSES beneath the low (or above the high for short trades) is the trade canceled at that price. Thus the low (or high) acts as a dynamic, unofficial stop loss which takes precedence over the PCI Stop.
[/li][li]The candle which stops out the trade may be used as criteria for another CBL.
[/li][/ul]

Exits
[ul]
[li]The middle Bollinger Band will be the site of TP 1 and TP 2.
[/li][li]When initiating the trade, set the Take Profit target immediately at the present height of the desired target Bollinger Band. Monitor the trade, and if price hits the Bollinger Bands before the Take Profit lines, close the trade (since the Bollinger Bands are repainting indicators, and can move).
[/li][li]EXIT ALL TRADES BY THE MARKET CLOSE ON FRIDAY!
[/li][/ul]

The Macro Method (High Risk:Reward) - Version 1.0

Please note that this Trade Plan is still under construction!

Position Sizing
A strategy using 2 contracts will be used for all trades. Each contract will be no more than 1% of the account balance.

Time Frame
The Daily Time Frame will be traded as a reference time frame, with entries being made on the 6 Hour Time frame, as the home time frame. At least a year of the Daily Time Frame will be used to gather trade analysis information (in simple terms, determining the direction of the prevailing trend)

Entries
[ul]
[li]Two Bollinger Bands are used, one with Standard Deviation set to 1.0 and the other set to 2.0. The Zigzag indicator may be helpful here.
[/li][li]If the prevailing trend is down, only enter SHORT. If the prevailing trend is up, only enter LONG.
[/li][li]Entries will be made by drawing a 2 Candle CBL on the 6 Hour Time Frame, when a candle closes in the region between the Standard Deviation 1.0 and the Outer Bollinger Band. This may correspond to the present peak of the Zigzag indicator.
[/li][li]Bollinger Band bubbles and squeezes can be traded.
[/li][/ul]

Stops
[ul]
[li]The initial stop, is the usual high or low of the 2 Candle Count Back Line.
[/li][li]After the first major retracement, as on the 6 Hour Time Frame, the stop is shifted to the Fibonacci Ratios 76.4%, 61.8%, 50%, 38.2% and 23.6%, with each successive retracement. A candle must close above (or below) these Fibonacci Ratios to count for a stop. The technique for drawing the Fibonacci is presented beautifully by Tymen in this thread, here.
[/li][li]The Zigzag indicator may again be helpful in determining the major retracements (to assist in drawing the Fibonacci Lines).
[/li][li]The candle which stops out the trade may be used as criteria for another CBL.
[/li][/ul]

Exits
[ul]
[li]The exit of the first contract will be the touch of the opposite Outer Bollinger Band.
[/li][li]When initiating the trade, set the Take Profit target immediately at the present height of the opposite Outer Bollinger Band. Monitor the trade, and if price hits the Outer Bollinger Band before the Take Profit line, close the trade (since the Bollinger Bands are repainting indicators, and can move).
[/li][li]The next exit, for all other contracts will be at a significant breach of the appropriate Fibonacci ratio.
[/li][li]These trades will not be closed by the Market Close of Friday.
[/li][/ul]

Important Information
[ul]
[li]An uptrend is defined as a series of higher highs and higher lows, while a downtrend is defined as a series of lower highs and lower lows.
[/li][li]The Daily Time Frame is used to determine the direction of the prevailing trend, by drawing trend lines in conjunction with the Zigzag indicator.
[/li][li]The trend-line will have to be redrawn, when it is significantly broken.
[/li][/ul]

Significant breakage will occur when in:

A downtrend, a series of higher lows begins to form, eventually leading to a low closing above the trend-line.

An uptrend, a series of lower highs begins to form, eventually leading to a high closing below the trend-line.

[ul]
[li]When significant breakage occurs, stay out of the trades until you can determine the direction of the new trend.
[/li][li]In the event of a breach of the trend line, which does not satisfy the criteria of significant breakage, simply adjust your trend-line to incorporate the breached area. (I know this sounds vague, but perhaps when I give a few examples, it will become clearer).
[/li][/ul]

3

xXTrizzleXx

Great to see you post your plan.
I look forward to seeing your progress
Good Trading

Jack

4

[B][U]Intended Goal[/U][/B]

The intended goal of my trading is to beat the annual percentage return offered by Commercial Banks. I intend to double my account when I go live within the time-frame of [B]1 year.[/B] I think this is a realistic goal, which can be achieved with just 6% growth per month. If I surpass this goal, then all the better for me! :slight_smile:

5

Many thanks for the well wishes. I vow not to disappoint you! :slight_smile:

6

Looks like a great setup for a plan and like the pair selection. In pairs you may want to think about switching UJ for CadUsd as it has better volatility.

Here’s a link that can help you find volatility for pairs: Forex Volatility - Mataf.net

7

Thanks for your input, Hordane! :slight_smile: I will definitely consider implementing it to the Trade Plan. The link you have provided is also invaluable - I shall Bookmark it now!

For tonight, there are no set-ups. However, the fact that I am not in an open position does not mean that I am not trading, for it has been said countless times that being in no position [B]is a position in itself![/B] I shall let the market come to me and fall victim to my well-placed CBL’s, and hope that it co-operates with me! :slight_smile:

8

xXTrizzleXx, great to see you starting a journal for the Tymen’s thread. I will be looking forward to watching and learning from your experience. I have a couple of questions for you…

Q1) What time do you start trading for the day and which time do you stop trading?

Q2) Which timezone are you located at?

Q3) Do you look at any other time frames then the 4H?

Q4) What is the average time you hold a position?

I’m new to this forum so I’m sure I will have more questions if you don’t mind.

Thanks,

9

[B]Hey there, PIPhanger[/B]

Q1) What time do you start trading for the day and which time do you stop trading?

School has just finished for me, so I do not exactly have rigid times for beginning and ending trading. I usually open my charts as soon as I get up, which is usually about 10:00 AM in my timezone (GMT -4; I live in the Caribbean) which is just in time for the second FIFA World Cup Match for the day. :slight_smile: I then browse through the charts for the day, anticipating set-ups, and noting which pairs to keep an eye on, until I fall asleep anywhere after midnight.

Q2) Which timezone are you located at?

I am located at GMT-4.

Q3) Do you look at any other time frames then the 4H?

Although I have been told it is sensible to look at a higher time frame, and trade in its direction, [B]I do not[/B] look at any other time frames but the 4H, as I have been advised by [B]Tymen[/B] that this method is stand-alone.

Q4) What is the average time you hold a position?

I would say that the average time it takes for me to complete a position would be about a day, usually less. I am however prepared to hold a trade for up to one week!

I look forward to more of your questions, and happy pipping! :stuck_out_tongue:

10

Scouring my pairs just after a great match between Cote d’Ivoire and Portugal, I managed to be just in time to open a trade on the [B]USD/JPY[/B] pair. Personally I am not too much of a fan of this pair, and it may need to be replaced in my pair selection.

The candles I have used to draw my Orthodox Count Back Line are highlighted in the red Box. Since the CBL was so close to the Middle Bollinger Band, it was then cut in half, and entry was made at 91.33. The PCI Stop Loss was placed exactly one candle length below the extreme candle, but as according to the Trade Plan, the [B]low[/B] of the candle will serve as a dynamic stop, and the trade will be closed once a candle closes below it.

Take Profits 1 and 2 will be made when the Price Action hits the Middle Bollinger Band. I do not prefer to hold off Take Profit 2 in search of the Outer Bollinger Band, because too many times the trade retraces, and results in the trade being stopped out, leaving me with only TP1.

[B]And now, we wait![/B]

11

My first demo trade has been successfully closed, and now it is time for a post-trade analysis.

Entry was made at [B]91.35[/B] after adding spread, and closed at [B]91.45[/B]. This trade was a [U]disappointing[/U] trade.

The first part of my disappointment stems from the fact that the entry is not in exact accordance with my Trade Plan. If I traded according to it, then my initial entry should have been one the white candle [B]BEFORE[/B] the black candle I entered on. This trade should have essentially been a missed trade.

The second part of my disappointment, which accounts for the majority of it, is that I did not close the trade in accordance with my Trade Plan. While checking on the trade, I noticed that it was very close to the Middle Bollinger Band - 2 pips away to be precise, and then it began reversing. I abhor seeing a winning trade turning into a losing one, and so closed the trade as soon as I saw price moving away from the Middle Bollinger Band. However, [B]this is not in accordance with my Trade Plan[/B] and deep down, I have the feeling that the Middle Bollinger Band [B]will eventually be touched.[/B] I will monitor the chart for when this occurs, and I believe it will firmly ingrain in me that I need to be firm and resolute, and not [B]be afraid to let the trade go against me[/B].

Aside from that, the trade was closed with a profit, and any profit is good profit! [B]10 pips[/B] were earned on 2 contracts for a total of [B]20 pips[/B]. Not a bad way to start the demo account off.

Happy pipping to all!

13

That’s a great start Trizzle, no drawdown on your first day and in positive pip territory.

14

Thanks for the encouragement, Hordane! Also, thanks for that link to Tymen’s latest lesson - it’s loading as we speak! :slight_smile:

As expected, the USD/JPY trade did proceed to hit the Middle Bollinger Band. I am not crying over the missed profits, but simply placing this here to remind myself that I need to stick to my Trading Plan, and not be afraid to let the trade go against me. I need to accept the risk of uncertainty, and take comfort in the fact that this is a high probability entry method, and as such the trade will move to my desired Take Profit, at least more than half of the time. This is my edge, and I am going to exploit it! :wink:

15

Before I fall asleep, I have seen a potential trade for which I have set up a Pending Order. This potential trade is on the USD/CAD.

The candle I have used to draw the CBL is highlighted in the red square. I am confident enough in my Trading Plan to set and forget this Pending Order, and will check on it when I wake up in the morning.

Happy pipping to all!

16

After a disappointing match between Spain and Switzerland, I checked my charts to see Trade 2 completed.

Entry was made at [B]1.0281[/B] and the trade was closed at [B]1.0302[/B]. This trade was a [U]pleasing[/U] trade, due to the fact that it adhered strongly to my Trade Plan. Two contracts were closed at [B]21 pips[/B] profit each, for a total of [B]42 pips.[/B]

I will now briefly check the charts to look for any further opportunities.

Happy pipping to all!

17

I will be watching USD/CAD to see what it will do in the next few minutes as the candle opens, as I seem to have spotted a potential long trade. I also happened to have a potential “aha” moment last night, and it is that although the market is [B]random,[/B] certain patterns consistently produce results which are statistically significant. The only way we can exploit the statistical significance of these patterns in the market, is by acting upon them in a systematic, predefined, unwavering manner - the exact goal of a Trading Plan.

At first, I did not place too much emphasis on a Trading Plan. Being able to recall information reasonably well, I thought it would be simple enough to just “remember my plan”. However, putting into writing does have a profound effect, and reading it ever so often, ensures that it is firmly inculcated within the subconscious. I just have no idea why writing it has such a prolific effect.

18

Below is a potential trade set-up, which I have seen on the [B]USD/CAD[/B] as I mentioned earlier. The candle which has been used to draw the CBL has been highlighted in the red box. Since it is so close to the Middle Bollinger Band, it was then cut in half to effect a good entry.

I have accepted the risk of placing this pending order, and will now wait for the ebb and flow of the market. :slight_smile:

Happy pipping!

PS. I [B]am[/B] using a stop-loss, but it may not be shown since it is below the field of view of the chart.

19

After doing some reading on the Psychology of Trading, I came back to see Trade 3 completed.

Entry was made at [B]1.0258[/B] and closed at [B]1.0280[/B]. This was an [U]ok[/U] trade, as it adhered somewhat strongly to my Trade Plan. I am a bit concerned that I had to move my Take Profit slightly to adjust for the changing Bollinger Bands (since it is a repainting indicator), and I am wondering whether or not to incorporate this into my Trade Plan or abstain from it. Overall, two contracts were closed for [B]22 pips[/B] for a total of [B]44 pips.[/B] I am now watching my favorite pair, “The Beast” in anticipation of a possible set-up.

Happy pipping to all!

20

Below is the following set-up I have observed for my next trade on my favorite pair, “The Beast” - [B]GBP/JPY[/B].

Entry was made using the candle highlighted in the red box. Since it was quite long, it was cut in half to effect a better entry. The target will be the Middle Bollinger band in this trade.

[B]Now we set and forget the trade, and allow the ebb and flow of the market to take its course.[/B]

Happy pipping to all!

21

I awoke this morning pretty early, in preparation to watch the match of Argentina vs. Korea, and found Trade 4 had been completed.

Before I went to bed, the trade had almost hit my stop-loss, and so I thought that waking up should see me stopped out of the trade. However, I was pleasantly surprised to find out that the trade had reversed, allowing me to bag some tidy profit. As it adhered strongly to my Trade Plan, this was a [U]good[/U] trade. Overall, two contracts were closed for [B]61 pips[/B] each, for a total of [B]122 pips.[/B]

I shall now quickly scan the market for any opportunities before the match begins! :slight_smile:

Happy pipping to all!