Hey babypips community!
I am relatively new to this forum.
While I have read a bit, I have never actually posted.
Anyway, I started my ‘forex education’ in the School of Pipsology a few days ago.
To keep me motivated and track my progess, but also to get useful tipps and comments from more experienced pipsologists, I have created a daily diary.
I would be very greatful if some of you would check it out and give me their opinion :).
Daniel
Why not post your diary on here, you’ll get better input on a daily basis.
To be honest, I didn’t think about it. But I guess I would also be spamming the forum too much? Especially if I upload between one and five 3mb pictures every day.
I might open a thread and only post the analysis wih a link to the blog post though. That might actually be a good idea.
Thanks for pointing it out! 
EDIT: Or I might just as well use this one.
EDIT2: Right, as my diary is obviously considered advertising, I can only upload my pictures as attachment to future posts anyway.
EDIT 3: Ok, I’ll make this my first diary post then.
Basically, as I said, I started trading about a week ago. My education is mainly the school of pipsology, youtube videos and the books:
John J Murphy - Technical Analysis Of The Financial Markets
Robert D. Edwards, John Magee, W.H.C. - Technical Analysis of Stock Trends, 9th Ed
as well as
Reminiscences of a Stock Operator
for motivational purposes.
I am trading on a daily chart as I am working around 60 hours a week now because of civilian service and part time work alongside it. So I always leave home at like 6:30 am and come home at like 7 to 8 pm.
Currently I am watching XAUUSD, GPBUSD and EURUSD.
While the former were rather uneventful, I went long on the later, so I’ll focus on that.
After coming home from work I immediatly checked the charts. There wasn’t much activity.
EURUSD
I bought a 0.01 lot of EURUSD yesterday, because it bounced of the first support line and gave me some signals that it might go up for a short length before it proceeds with it’s downtrend.
Today I lost some pips on my EURUSD trade as price went down to test the second support line. However, it couldn’t penetrate it. The hour chart shows how it bounced of the trendline and is now pending in the support area. I decided to buy another 1k lot to decrease my average buying price a little. My S/L is still sitting a little below the second support line.
The daily chart clearly shows that price was unable to close below the support zone. Also yesterdays the doji as well as todays hammer candle signal indecision in the market. So while the general trend is still down, I hold on to my long trade to take out some short pips.
The other pairs were relatively uneventful.
GPBUSD closed below the SMA50 support line in the four hour chart. However, RSI is moving towards the 30 % zone, signalling that it might soon be oversold.
XAUUSD is strill pendling between the 23 and 38 % retracement lines.
I guess I will have to wait and see.
EURUSD:
There has been a lot of action in EURUSD over the last day.
Remember, that I bought 1k EURUSD yesterday? Well, it has done fabulous. While it was rechecking support, I decided to buy another 1k lot. This brought my average entry nearer towards the support level.
At Work:
After waking up this morning, I immediatly checked the charts on my phone (MetaTrader is also available for iOS, so you can trade wherever you want). Prices had already reached resistance and turned round (nice doji right there). Also RSI showed an overbuy signal. Therefore, I decided to cover my 2K for a profit of 62 pips. Not bad for my first ‘real’ (ie. not playing round with the GUI, trade).
As prices were still going down, on the next candle I decided to short the market. I kept checking MetaTrader during work. When RSI finally showed an oversell signal, I checked the daily view and saw that prices were right at a support level. I also got some nice dojis right there. Therefore, I decided to cover for a 79 pip profit.
All in all a rather profitable day.
However, I also messed up twice. Once, directly after covering my long positions, I shorted the market. However, as price moved against me, I decided to get out and watch the market. Only to see prices fall a few minutes after. So I went short again. This cost me roughly 2 pips.
The same thing happened after I covered my short position. I went long on the market only to see prices go against me. So I went out and lost another 7 pips. After this I decided to stand buy and watch the market a bit. As a time was nearing where I couldn’t conviniently work and watch the market at the same time, I decided to leave it till I get home.
While this brought me in a net profit of (62+79-2-7) 132 pips, I wasn’t really satisfied. The two losses should not have happened. Obviously I let the market take over my thinking. When I saw losses, I covered, despite my better judgement. I’ll have to work on this!
At Home:
When I got home I checked the charts, again. EURUSD had fallen, and closed, below the second level of support. There was also a lot of uncertainty on the next candle, displayed by a doji which retested support. So, I decided to go short again. My stop loss was placed just 20 pips above the lower level of resistance. This is a necessary precaution as I am going out, watching the soccer (Germany vs Italy) tonight. While, I will still check the markets from time to time, I do not want to check only to see prices have risen far above the resistance zone.
General:
Concerning the other pairs, XAUUSD and GPBUSD are both moving towards a support line. I made a screenshot of the lines and will try to keep track of them on my phone when I am out.
such a beautiful images about the past… those are good when you are teaching your strategy
How about calling live trades and tell us you rationale behind them??
And since you are so proud of your profits, why don’t you show us your myfxbook?
As you can read in my post, I have opened a short on EURUSD, which is still due.
I only trade daily and four hour charts at the moment. So I am sorry if I can’t update you on my trades every few minutes.
As you can also see in my post, I am not proud about my profits. I just state them as they are. In fact, I am rather devastated, that I let the market control my trades and didn’t believe my better judgement.
I can certainly send you a screenshot of my trade history, however, only tomorrow evening, as I am downtown at the moment. I doubt it will tell you much, other than is stated here. 132 pips with a 1K lot, translate to 13.2 USD. I also have around 200 loss because of earlier trial and error stuff (i am demo). This you can also see in my first post
EDIT2: When I was out watching the match, I decided to play around some with lower timeframes (a demo account is for trying out different things after all…). After having an initial profit of 13 pips on that EURUSD trade, I got out at a 7 pip loss. However, I was able to cash some short term trades on both EURGPB (6 pips) and GPBUSD (16 pips).
This showed me two things:
Anyway, I closed all my positions. As not one of my pair shows clear signals, I’ll leave it till tomorrow.
EURUSD Weekly analysis:
Well, the week is over. I learned a lot this week. I made some profits, I made some losses. But overall, the week was on the positive. Since the markets are closed now, I thought I’d make a new analysis and see where the pair might be moving next week.
The longer view:
The shorter view:
Great Analysis! Please keep your diary going 
While this is a bit off topic, I think it is still very relevant to trading and that’s why I am posting it.
Two days ago, I lost 1300 Eur with matched betting.
This amounts to abou 10 % of my savings.
Why did I lose it? Because of human error (this is actually the only way to lose in matched betting).
I set my bets up wrongly and didn’t double check them.
I do not blame the game or anyone else.
The only person to blame is myself.
Needless to say that I was devastated when I saw what I had done.
I pondered the last two days what I should do about it.The result I came to is to withdraw all my money in my betting accounts, put them safely back in my bank account and leave matched betting for a while.
Why do I not try to win back the money, now that I am wiser?
Well, this might very well be possible. If I would try to win it back, I would have to risk more of my savings. True I might win it all back, but what tells me that I might not screw up again, now that I have done it?
This does not mean, that I will never try to get it back. Just not now, when I need that money for my education.
In retrospective, I think, it was good that this happened. This event taught me is [I][U]not to risk money you cannot afford to lose[/U][/I]; no matter how small the risk is. If I think of all those people who have gone broke by trading, it was good that I learned this lesson now. While the loss is dear, it is small compared to what I might have lost in the future. In a way, I guess, I should see this as tuition paid. Every lesson you learn in life has a price. I should be grateful that I only paid 1300 Eur for a lesson this valuable.
I think this lesson was a vital part of my forex education, and thus worth posting.
Sorry, if I bored you with it 
It has 30 degree Celsius outside. So, as the markets are closed today, what else could I do then sit in the garden, drop into the pool and educate myself about Forex. Basically, I like to go over material that I have already studied again and again. In my opinion this is especially useful. After all, I should first master the basics before moving on to more advanced stuff. What does it help me if I try to trade through Elliot Wave if I can’t trade on the basics?
A source that was especially useful to me is this video (please feel free to delete it, should this also violate the rules. However, please note that I do not have anything to do with the video. I just felt it was useful to me and therefore thought I should post it.):
TNA 1 = Technical Analysis Tutorial Candlesticks - YouTube
look for major support and resistance levels.
look for shakeout candles (morning / evening star) and dojis at support and resistance levels
- buy at support / resistance / trendlines
- put s/l below support / last shakeout wick / 2nd level of support
- take profit level to next resistance
(i might be able to do that with a stop limit order, just set it at the level you want to enter, set the s/l and your target and wait for it to be triggered on a retest)
I will still read up on more advanced stuff, but this is what I try to get right first. Also, I might open a second demo account to try to apply this stuff to intraday trading. The more experience I can get before moving on the better.
My current positions are:
GPBUSD
In terms of the GPBUSD, not much has changed. I took some time to analyze my trade a bit further and change some colors on the chart. This is what I came up with:
As you can see, it just ranged abit today. It went down to the next level of (weak ?) support and bounced of it. During that bounce it retested resistance. You can also see, that my entry is quite a bit away from the resistance zone (green vs red circle). I now realize that I could have taken this bounce as an opportunity to get my average entry closer to the zone. However, I still think that I have taken a reasonable risk / reward trade.
Nevertheless, this is something I will have to practice in the future.
a) Scaling into positions and
b) getting my Entry closer to s&r levels.
Overall, I am still bearish on the pair.
EURUSD
This pair has moved moved in my direction, so not much to say here. It’s moving towards a minor support line. However, I do not think that this will hold.
I am still bearish on the pair.
What I did was adjusting my stop loss down a bit. So while it is still above my entry, it does not need to be quite so high anymore. If the second line of support is also broken, I’ll adjust it down again.
My new positions are:
My new pairs are the EURAUD and the NZDJPY.
EURAUD
The EURAUD has been in a down trend for a while. However, there are a few factors that made me buy the pari:
I think if I look at the risk vs the possible reward, it’s well worth it.
The first level I’ll have to watch out for is the short term down wards trendline.
NZDJPY
This pair has been ranging for years, as such it is a great pair to trade in my opinion.
Atm it is quite near a strong resistance zone. This zone is intersected by a down trend. Also a doji is forming right at the zone. Therefore I sold short close to the resistance zone. This will give me a great risk / reward ratio.
TL/DR
I know this have been two very long posts. Therefore, here a short summary:
I have 4 positions right now:
What I have learned during taking these positions is that I need to get my entry closer to s/r.
This can be achieved by
a) Scaling into positions and
b) being more patient
I really need to work on part 2. I catch myself entering a position prematurely because I am afraid to miss the trade.
However, I also feel that I have already learned a lot. I still have several years of learning in front of me. But compared to what I knew about the markets before, I learned a lot already. Before moving on to more advanced techniques, I first want to put my aquired knowledge into practice. After all, I can read all the books in the world, only trading will teach me trading.
A video to keep me motivated:
Motivation for Success: Uncomfortable vs Exhaustion - YouTube
[B]EURUSD[/B]
Basically the support has hold (never underestimate the power of the SMA 200). Had I been home, when it happened I would probably have covered my position with a 10 $ profit. But I just saw this when I came home. However, on the one hour chart stochastic is already in the overbought area again. So I’ll just wait and see. Worst that can happen is I see it break resistance and I am out with a minor loss.
[B]GPBUSD[/B]
Still ranging in the area of resistance. Stochastic also still shows over 80%. I’ll keep this pair short and wait and see.
[B]EURAUD[/B]
I got stopped out and the pair is moving down along the trend line. Stoch is still near 0%, however. I suppose it will go at some future point. I’ll keep an eye on it. I now think that it might be better to just wait for it to touch the upper trend line and go short; in the direction of the trend. Instead of going long against it.
[B]NZDJPY[/B]
Broke the trend line and triggered my SL. However, it tested resistance several times on the one hour chart and couldn’t break it. I’ll keep an eye on it and wait if it goes down again and closes below the trend line again. If this is the case I go short again. Stoch is also still in the overbought zone.
Other than that there is not much to say right now. Patience is key. No new trades at the moment.
EDIT: I also created another demo account and tried doing some intraday trades. This is good because I can actually do the trade and sit it through from start to end, even with my limited timeframe. What I learn here, I can use on my other account and transfer into my style of trading. So this is a great booster to my learning curve. It doesn’t matter if I win or loose. I learn, that is what counts.
Also I found a great video about patience:
Eric Thomas - YouTube
This is what I really need to work on.
EURUSD
Right, today was a rather eventful day.
EURUSD rallied all the way down to the 1.23645 support line and bounced of it (1 hour chart).
So I decided to take my profits and watch it. If it goes any further, I can still reenter…
You will also notice that I changed my chart setup again. I am still experimenting with this. Right now I can’t decide which layout I like better so I use both in a mixture. Black is certainly better on the eyes though.
Profit: 263 pips or 26.3 $ (pips sound more impressive :P)
GPBUSD
Basically GPBUSD did the same. With the exception that it found support and went up to test the previous resistance area. Instead of covering, I decided to put my stop loss just above the new found resistance and see what happens.
After all, there is quite a bit of potential left there in the long run:
Nice work,
Thank you!
I try my best, but I have still a lot to learn
GPBUSD
I got stopped out on this pair today. I could have set my stop loss a bit higher.
However, despite that mistake, it was a rather good trade, I think.
I kind of like the risk / reward on this type of trades. While I may lose 30 to 80 pips on a trend reversal, I can make a lot more. If you give me a few of those to trade every month and I win only half of them, my balance would still be far into the positive :).
Weekly Summary
I did 4 trades this week:
So, while I won only half of them, I still made a nice profit overall: 31,54 USD.
Once I start trading bigger lots, this could actually be a nice gain :).
Of course I still have to learn a lot, first.
New Trades: NZDJPY
I learned from my mistake. Once I got stopped out, I waited for it to hit the upper trend line. Now I have shortened this pair IN THE DIRECTION OF THE TREND, instead of against it.
Reasons for trade:
EDIT: I thought I’d also share the H4 chart so that the setup becomes a little clearer. I like to use the Daily chart for trend spotting and use the H4 / H1 chart for entry and exit points.
EDIT: I decided to put my stop loss above the upper level of resistance in case of a re-test of resistance. While this means a bit more risk, it also means that I won’t be stopped out by a shooting-star so easily. In the case of a retest I would also add to my position to get the average closer to the resistance level.
EDIT: I think I also like that new color scheme from the last picture. It is not so bright that my head starts spinning when staring at it for too long (like white does) and it is not so dark that I think I am on a graveyard (as black does). So kind of a good compromise I think.
Well fellow peeps, it’s weekend. The markets are closed. What else is there to do than to educate oneself?
I started reading “Alexander Elder - Trading for a Living” today and I love it. It focuses more on the mass psychology of the crowd behind the markets. This puts another dimension to ‘the markets’ and takes them for what they really are. Furthermore, it reflects on some of the things I learned (and am still learning) in McGee’s book, because it takes them up and sets them in context within our time.
I also found a nice forex report generation tool (no affliation with the link, I just post this because I found it useful.):
http://www.earnforex.com/report-analysis
What it does is it takes your MetaTrader reports and analyses them even further (ROI, etc.).
When reading the babypips forum, I stumbled across a superb thread:
http://forums.babypips.com/newbie-island/39634-pure-price-action-dummies.html
It kind of takes the same approach to trading that I do, buts has a bit more depth to it.
So I will read through the thread and see if I can find some valuable information to implement in my trading.
For what it’s worth, it reinforced my belief of KISS (keep it simple stupid). So I will continue to follow support and resistance, trend lines and candle stick patterns for several weeks before even thinking about moving on to Elliot Wave etc.
Today I looked at a weekly chart of EURUSD to get a sense of the big picture.
Reasons for watching this setup:
The first thing to notice is that the general trend is DOWN. This is clearly shown by lower highs and lower lows (see upper red trendlines). What I did was draw one trendline along the congestion area and one on the extreme high points. I would not consider the trendline borken if it closes above the congestion area. However, this is the point where, in my opinion, price is most likely to bounce off. This is nicely stated in Elder’s ‘Trading for a Living’. Congestion represents the crowd, highs only a few individuals.
The next thing to notice is the major support line. It was broken on the way up and retested before moving higher. Furthermore price already bounced of the upper support level on the last decline. To make it a valid downtrend this decline must close at least in the yellow area (remember: lower highs and lower lows…). If it doesn’t something might be wrong.
Also prices move in a very steep channel line towards this support zone. From what I understand, this signals that the trendline is likely to be broken.
Add to that that Stochastics is in the oversold area.
So all these are signs for a possible rally to the major trendline (as shown with the green arrow).
However, it should also be noticed that the major trend and the major support form a descending triangle. This might be a signal for a possible breakout below support. This would also confirm the downtrend (lower lows…). Price could then decline towards the last major support line.
What to do?
I will wait for a sign that prices bounces of the support line. As I have learned from previous losses ‘The trend is your friend’ and ‘Never trade against the trend’, I will then wait for it to hit the upper trendline. If this is the case and price bounces off, I’ll be ready with a sell order. This is also a very reasonable trade in terms of money management. I can set a very tight stop loss just outside the higher trendline, or a more conservative one above the last high. Once price moves below the upper support line, I’ll move my stop loss just above it. This makes sure that a) if price goes further down, I have a better stop loss and b) if price bounces off support, I take my profits. In case of b), I’ll repeat this whole process. After all, a descending triangle will most likely be broken to the downside at some point.
Possible loss / profit:
From the upper trendline area to the bottom support area, it’s about 5000 pips.
From the neckline to the bottom support area, it’s about 3000 pips.
The stop loss could be placed just above the second trend-line, about 250 pips.
How did I feel when I discovered this?
Very elated and proud. However, I MUST NOT let my feelings take control over my actions. This is a very rational trade setup. It will take weeks to months to years to unfold. I must not enter the trade prematurely just to satisfy my feelings. If I do that, I become a sucker. I must become like a machine when trading. Emotionless.
Hey folks!
You may wonder, why I didn’t post the last three days. Was I busy in work? Yes. Did my leisure time keep me away? Yes. Was that reason enough not to check the charts every day? No. In fact I did check them every day. However, there was nothing worth posting about. As Livermore already stated ‘No man has reason enough to trade all the time’. So I watched the markets and waited.
However, that is only part of the reason. The other is, that I am currently coding on an mql script that lets me calc risk / reward in pips, dollar and % of equity terms, based on markers on the chart. I find this particularly useful, as it is easy to use before a trade and, let’s face it, noone actually wants to calculate all this stuff automatically before every trade. It also calculates the maximum lot size I could trade based on my entry, stop loss and maximum risk in % of equity. Nice thing! (I still need to finish it though… :P)
Anyway, back to the charts.
NZDJPY
Maybe you remember that I still had an open short on NZDJPY. If you don’t, it doesn’t really matter, that’s why I tell you now :P. During the last days it continually went up and down, so I didn’t bother. However, today during work, I noticed a strange setup on my phone:
As you can see it went down about 120 pips from my entry and was trading just above support. I supposed it would form a rectangle and breath for a while. So, since I couldn’t tell exactly what would happen, I decided to take my profits and watch and see. After all, if you are not sure, you should not be in the markets.
Well, I just came home and see what happened:
Yap, it went a little further, nearly tested the second support and bounced back up. Lucky me. Let’s see, what will happen to this in the future.
Well, as there were no good setups on the daily charts, I decided to switch accounts and try out scalping (remember I have two demo accounts, one for messing around and one for “working”).
Basically I saw an intermediate down trend on GPBUSD and shortened. Only to have the market go against me. I covered, at a loss of 2% of my equity. However, it then moved up and closed below the upper resistance, so I entered again and lost another 1.5% of my equity. All in all 35$ minus.
The problem was that I did not stick to the rules I had setup for my longer term trading.
Ie.: I shortened BEFORE the candle closed. That was a fatal mistake. However, even worse, when I saw the candle close above resistance, I didn’t cover immediatly. Instead I waited and had hoped for it to go my way. Only when Price reached a new high, I decided to get out. I should have walked away then, but I didn’t do it…
I realized that, in order to survive scalping, I would need to think quicker and act faster. Also I need to stick to my rules.
