Bitterseatrader's Journal

Trading Discussion Trade Journals
1

Hi All,

Thought I would update this post for 2013,

I’ve been trading since January 2012, I consider fundamental drivers and market sentiment before trading a currency pair and stay aware of economic announcements. Once I have formed an opinion on the underlying drivers of a currency I analyse charts using price action, Japanese candlesticks, chart patterns, support & resistance (trendlines & channels), Fibonacci Retracements (Major and minor), currency correlations, and to a lesser extent I make use of RSI, stochastic and divergence.

I am a Swing trader who occasionally Day trades. I am looking to develop my day trading skills further. I have been known to scalp but do attempt to avoid. Scalping is a skill that I do want to master but at a later date.

I trade all major and minor currency pairs but some pairs I disregard given the currency correlation and lack of movement / volatility.

To mitigate much of the emotional side of trading, I utilise trade and money management. The majority of my trades have an account risk of 3%. However I am willing to risk up to 7% (possibly higher) but never more than 10% for the right swing trades. I will never risk more than 3% on a day trade. Once a trade has begun moving into positive territory, I will move my SL to BE.

My goal is to be profitable, supplement my income with trading and finally trade for a living.

Bitters

2012 - My first trading year review

[B]2013 - January Trades:[/B]

[B]Failed or BE Trades:[/B]
Trade 1, Trade 2 & 3, Trade 4, Trade 5, Trade 7, Trade 8, Trade 10, Trade 11, Trade 13, Trade 14, Trade 15, Trade 16, Trade 17, Trade 18,

Trade 19 - How to lose all you’re profits from January

[B]Successes!:[/B]
Trade 6, Trade 9, Trade 12,

[B]Comments[/B]
Interesting, out of the 19 trades that I took in January only 3 (15%) were correct. No wonder trade 19 was my big downfall, on average I am wrong 85% of the time. On this basis if I was to use the same level of risk on each of my trades, closing after a 30 pip move and taking profit after a 100 pip move I would consistently be losing cash. However, the above does not take account of how many of my trades were BE in January which was a majority. I am going to do some analysis around my losses, wins and BEs. It would be interesting to see how often I was right but my entries were poor or SL was too tight.

[B]2013 - February Trades:[/B]

Feb 18th - 24th Trade Setups

[B]2013 - March Trades:[/B]

Trade 1,:mad:

[U]…[/U]

Me - November 2012:

I’ve been trading for around a year, I base my trades on support / resistance, fibonacci, candle stick formations, and use RSI and Stochastic indicators. I am generally a day / swing trader but have been known to scalp on occasion.

I am primarily a technical trader but I pay attention to the fundamentals to support my trades. I love the comdolls and prefer the AUD/USD, NZD/AUD. So that means I care about Chinese data, Non-farm payrolls, RBA cash rate decisions etc.

My background is Corporate Banking and I am studying Economics and Accounting at Uni so I have a natural disconnect to large numbers. What I mean is, a $100 negative or $1000 negative position doesn’t really bother me because I am constantly looking at company balance sheets, cash flow models and seeing large numbers moving around. This has helped me deal with the emotional side of trading (I believe).

I had a net loss for the month of October and after examining last month’s statement it’s clear that my biggest flaw is a lack of patience. This leads to higher gearing and forcing tighter stop losses. In addition, I often over trade when the market is slow and start scalping the lower time frames. After having three positive months of trading, I lost a chunk of my capital in a very short time and I am now forced to slowly build it up again.

I’ve been a big fan of Babypips for a while now, so I am thinking of posting my trades here as a sanity check and updating my progress as I attempt to rebuild my account.

I am starting this journal so I can monitor my mistakes along the way and hopefully help me become a full time trader and achieve financial success!

2

Since I absolutely shot myself in the foot last night trading the Draghi speech, I’ve decided to take a break this Friday by throwing down a couple of beers, focusing on my “paying” job and fighting the Forex battle another day.

So here is the trading highlight of my week:

At 13:30 GMT we were able to listen to Draghi at the monthly ECB press conference. After having a very successful albeit drawn out trading week I decided to gear up for one last big trade. I was going to trade the news and jump on market momentum to bring in some easy pips. The problem with this strategy is guessing how the market will interpret the different comments made in Draghi’s speech from both the outset and after it has time to digest the news.

The EUR/USD dropped to 1.2817 on the back of Draghi’s comments only to rebound back up to 1.2850. I went short on the EUR at almost exactly 1.2817, the very bottom before the bounce. As a result of essentially gambling I lost 25% of my trading account. Ouch!

Besides the fact I went against my trading rules, I also traded a market that I have less experience with and have been prone to losses in the past. Suffice to say, it’s a shame I fell back into bad habits so soon after painful October. Luckily, I remained disciplined for the first four days of the trading week and my net loss for the week is “only” 6% of my original capital, still its a shame.

First four days of smart trading:

AUD/USD trade:
Swing trade
Long or Short: Long
Entry Point: 1.04094
Profit Point: 1.0467
Trade Explanation: Jumped in with a tight stop off the back of the RBA’s decision not to cut rates and the breaking of the 1.04 level. Market momentum and the status quo maintained in the white house helped to push this trade higher. I moved my stop past break even when we touched the top of rising trend line.
ROE: 57%

EUR/USD trade:
Swing trade
Long or Short: Short
Entry Point: 1.28104
Profit Point: 1.27400
Trade Explanation: Pure technicals on this one, I don’t generally watch the EUR/USD but I had an alarm set for confirmation that the uptrend was broken. When it went off, the setup looked right so I took a position. I closed it yesterday before the ECB meeting and BOE rate announcement to take profit. Why did I get back into this market??
ROE: 70%

Other trades:
A couple profitable scalps and a few day trades on the AUD/USD and Gold boosted my position.

Conclusion:
Wiped out more than a week’s worth of analysis and solid trading with conservative positions and “patience” for a gamble. Why would I do this? I dont know maybe I wanted the glory? I know I was tired (had a uni assignment due this week) or perhaps I am prone to gambling. This isn’t the first time that this has happened, I generally get knocked down and than I am forced to be conservative to rebuild my account. Once I get back up I want to move things along more quickly.

Anyway, next week is a new week and I am going to take it slow. I really don’t want to make a post like this again.

Bitterseatrader

4

Ok here’s my first trade of the week.

GBP/USD trade:
Swing trade
Long or Short: Long
Entry Point: 1.5875
Profit Point: 1.6000
Stop Loss: 1.5800

Trade Explanation: GBP/USD has been in nice down channel for a couple of months now. I am entering right on the bottom of the trend line with the expectation that we will get a bounce back to 1.6000. RSI and Stochastic indicators are showing oversold on the daily chart and getting close to oversold on the weekly. I can’t access my MT4 account but we must be close to a Fibonacci support. Weekly chart shows that this has previously been a supportive area for the pair.

121112 GBPUSD.jpg700×485 46.6 KB

5

My spot to short the pair is at 1.5950

gbpusd post .jpg700×245 21.4 KB

6

Guys,

Still waiting on the daily close but it looks like we have a doji forming on this pair. This suggests confusion about the direction in the market. Add this to the oversold stochastic, and my initial analysis still stands that we should get some sort of pull back to the 1.06 level.

However, I am in two minds about this trade, there has been solid resistance in the 1.5860 - 1.5870 level and I believed yesterday’s CPI data would be the push we needed to get this trade moving, however that wasn’t sustained. Next lot of data will be the GBP quarterly inflation report and some US retail sales data.

Fundamentals - Not really impressed with higher inflation in the UK and will be interested to see what the GBP quarterly inflation report has to say.

I am considering closing my trade at break even and waiting for the more conservative short position?

7

Hey mate, nice chart!

Yeah that’s a sold entry point, I was originally thinking of doing the same at around the 1.06 level (depending on my exit of my current long trade). It’s definitely the trade with the better risk : return and I generally prefer trading with the trend.

8

[B]Comdoll trades![/B]

I am looking to trade some of my favourite currencies, the comdolls! I’ve been watching the NZD/JPY rising trend line and with the current weaknesses in the Japanese economy, we should have the Yen losing some of its value soon.

Check out Big Pippin’s blog: Daily Chart Art - November 14, 2012 | Forex Blog: Pippin Ain’t Easy

I am considering going long on one or more of the following: CAD/JPY, NZD/JPY and AUD/JPY for a short swing trade.

Bitterseatrader

9

141112 - GBPAUD.jpg700×569 51.8 KB

In 6 weeks we have had a consistent down trend on the GBP/AUD pair. I want to get a piece of this action but I am wondering if were also overdue for a pull back…

We had a beautiful head and shoulders pattern form on the 01/11/12 and this was the most opportune time to take a position, unfortunately I was focusing on other markets and missed this one.

Stoc and RSI is showing oversold on the Daily, however we have room to move on the weekly and maybe (given the past history) this is the best chart to focus on. I am thinking of taking a small position and letting it ride for a couple weeks, I generally don’t do position trading well but this seems like a good place to start.

:wink:

10

AUD/NZD trade:
Swing trade
Long or Short: Short
Entry Point: 1.27829
Profit Point: 1.27000
Stop Loss: 1.2820

Trade Explanation: AUD/NZD hidden divergence spotted on the daily chart with a higher high and a lower high. 1.28 has also proven to be resistance in the past.

EUR/JPY trade:
Day/Swing trade
Long or Short: Long
Entry Point: 101.462
Profit Point: 1.03.12
Stop Loss: 100.00 (parity)

Trade Explanation: Stochastic is showing oversold. In addition, I think we should be expecting weakness in the YEN fundamentals over the coming months. But I am not looking to stay long of this pair for an extended period given EUR zone weakness and YEN being the “safety” currency of choice.

CAD/JPY trade:
Swing trade
Long or Short: Long
Entry Point: 79.697
Profit Point: 81.20
Stop Loss: 78.76

Trade Explanation: Recent weakness in the YEN and I think this will pair will remain range bound in the short term.

GBP/AUD trade: (very small position)
Swing/Position trade
Long or Short: Short
Entry Point: 1.5194
Profit Point: 1.5000
Stop Loss: 78.76

Trade Explanation: Following the trend and I think we will see the move downwards continue although I am weary of a pull back. If this breaks through the 1.50 level I will aggressively sell this pair.

12

141112 - NZDCAD.jpg700×523 47.2 KB

Look at that beautiful rising star on the weekly NZD/CAD (dont remember seeing that!). I’ve shorted this market with a very small position but will be looking to short further… very soon. Expecting we might have some pull back after the dive this pair just took. But for now I am in this market and will monitor more closely.

Bitterseatrader

13

Just attempted to scalp AUD/USD at 1.0365, hoping for the trend line to hold and I went long. It didn’t so I am out which resulted in a small loss to my account.

Lesson on the day/week: Stick with the trend. When we have a potential trend reversal / change wait for confirmation before going against the market.

Side note, my broker didn’t action my stop loss. I watched the stop loss order disappear just when price hit. Luckily I manually closed the position as price continued south. The support team was very helpful by telling me to call another number. - Watch this space.

14

Trade has come positive and looks like the hidden divergence and overbought stochastic indicator has proven correct! I have now increased my position on this trade to my normal trade size.

15

bummer on the sl not kicking in :(.

16

CAD/JPY - Profit taken at 81.038 for 100% ROCE

17

Profit taken at: 103.527 for ROCE of 200%

18

Both trades may have more steam left in them but I need to finish a UNI assignment and refuse to look at another chart till next week!

AUD/NZD trade is going strong and I’ve moved my SL to breakeven.
NZD/CAD trade is just barely in the green.

Bitters signing off!

19

Weekly review - 12/11 to 17/11/2012

Total number of trades: [B]13[/B]
Net ROIC: [B]52.5%[/B]

Trades with gains: [B]10[/B]
ROTC: [B]+82.6%[/B]
ROIC: [B]+58.2%[/B]
Trades with losses: [B]3[/B]
ROTC: [B]-18.9%[/B]
ROIC: [B]-5.6%[/B]

Breakdown of Trades with ROTC:

AUD/NZD: Breakeven stop hit - 3% gain*
AUD/USD: Stop loss hit - 25.1% loss
CAD/JPY: Profit taken - 152% gain*
EUR/JPY: Profit taken - 185.6% gain*
GBP/AUD: Closed - 106.9% loss
GBP/USD: Closed - <1% gain* (scalping includes one loss)
NZD/CAD: Closed - <1% gain*

*Trade includes more than one entry/trade. Not separated because same trade rationale used and increased position taken. In addition scalps have been combined when appropriate.

ROTC (return on trade capital) - For use in this journal only, represents the margin required to enter the trade. The idea been that the capital becomes restricted and can not be used to make another trade. Hence, return on trade capital employed to make the trade. Calc: Return on trade / individual trade capital.

ROIC (return on invested capital) - For use in this journal only, represents return divided by the total of all margins (invested/restricted cash). Calc: Return on trades / total invested capital.

Ultimately I want to make more money than I invest, and account for the opportunity cost of trading forex. But the analysis above also shows how well I managed my risk/losses.

20

we’ll done my friend.

21

Thanks mate, lets see if I can be consistent! :slight_smile:

22

[B]AUD/USD[/B]

[B]Direction up or down? [/B]
Technical analysis on the daily would suggest that this pair is going to drop, we have broken the upward trend line and after a brief pull back to around 1.039 – 1.041 this pair should continue south. Then again, the Aussie hasn’t been its usual self at late. After examining the weekly chart, the AUD/USD has been travelling sideways in the 1.02 – 1.05 range since late September, and between parity and 1.06 since June of this year.

[B]Fundamentals:[/B]
So what are the fundamentals, the Australian economy remains one of the least impacted from the GFC and ongoing Euro debt crisis. Healthy demand for commodities from China has continued to assist the Australia, (even if China demand has declined) although other areas of the economy are suffering.
Australia’s resilience to date and high cash rate have continued to fuel demand for its currency, pushing it above parity and keeping it there. Recently we have heard that the RBA is printing money in order to combat the high Australian dollar (selling to central banks). The RBA’s actions might be new but demand for the Aussie from central banks is not, the Aussie on central bank balance sheets has been rising for some time now.

[B]Other considerations:[/B]
The Aussie is a risk currency so any change in risk appetite impacts the Australian dollar. When Europe fails to pay its bills or when the US’s unemployment rate increases the Aussie falls.

[B]Conclusion:[/B]
What does all this mean? <Shrugs shoulders> I am not sure where this pair wants to go and I think the range we have been stuck in since June says the market hasn’t decided either. Thus, I am of the opinion that any trade should be short term only and I am not sure that I like this pair anymore. :slight_smile:

[B]Trade:[/B]
I am considering shorting the AUD/USD pair at the 1.04 level, however I am well aware that the RBA’s minutes is due to be released tomorrow. With that in mind, I am considering waiting and trading the outcome. If the RBA minutes are overly dovish than we can expect the pair to head south, however if the status quo remains unchanged maybe this pair will push on North, in which case I am leaving the Aussie alone for now.