Ben's Trade plan, Trade Journal and analysis

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Trade journal 17/11/17

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(Profit)

New Trade - I still believe that the market is ranging and the move above the resistance level is a fake out. Based on the past economic data, the Australian economy is seen bearish and a support was turned into resistance, therefore, the market is trending in a lower market already which is bearish. And bulls will get exhausted.

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Trade Journal 17/11/17

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(Loss)

I did not expect it to try to attempt to test the previous highest candle and therefore got stop.

My new trade - red star and aiming for a downtrend to test the old major support.

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Trade Journal 18/11/17

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(Profit) & (Loss)

As I was out, I thought it was a good opportunity to long on the yellow star, however, I was incorrect and wasn’t able to really look at the graph clearly since it was on my phone and when I got back home, noticed it was on a huge downtrend. Therefore, decided not to make any trades, while I am out because i cannot make a clear good judgement over the phone.

Today, my plan will be to revise my trade plan and implement ideas i learnt this week.

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Trade Plan for next week 20/11/17 to 24/11/17

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Research Section (D & W charts)

  1. Market Phases– Accumulation, Advancing, Distribution and Declining (every month, next time is 1/12/17), need to look tomorrow, do it for gold also.
  2. Map the trend to provide more visibility and a better long-term perspective on the market.
  3. Focus on AUD/USD (note that other economies will affect the AUD/USD also) plus look at gold since it influences price movement and other commodities.
  4. Get a rough idea of market Sentiment (bullish or bearish, overall view) – dailyfx & Fxstreet
  5. Look at next week’s economic events that are happening for the week, every day, and road map it.
  6. If I went past an economic event, look at the previous events and see how the market reacted and gathered the relevant news.
    a. https://www.dailyfx.com/calendar
    b. Forex Economic Calendar
  7. If not, listen to Bloomberg radio before the economic event to get a slight idea where the market is going, understand market sentiment and fundamentals.

Trade entry section (M15 & H1 Charts)

  1. Only enter a trade minimum 15 mins, depending on my interpretation of the news. If it is outside the spectrum of the economic event, use eyeballing. ( Traders’ expectations - Bullish or bearish, bulls or bears exhausted through price action and stochastic, think of other technical tools to input)
  2. Once I have determined the impact of the economic event, base my trade on it. Consider making buy and sell orders.
  3. Some considerations I have learnt from my journal, before my trade look at support/resistance zones to enter my trade for high probability trades.
    a. Make S/L and T/P lines to see whether it is a high probability trade, put into consideration market sentiment + fundamentals (longer term) and trending or ranging market.
    b. Look at price action and ask why trader’s thought the currency was worth that much. Use support/resistance in line graph mode, trend lines and channels.
    c. Use candlestick formations to see where the bulls and bears are being exhausted and consider trader’s perspective (short term)
    d. Use technical analysis such as stochastic, MACD and moving average to see how the market is trending or ranging.
    e. Question whether the bulls or bears are exhausted, determine this through price action and candlestick formation
  4. Note, do not enter a trade before an economic event because it can go either way, close trades 1 hour prior, only trade after the event.

Once I figure out whether I am in a trending or ranging market, I will use the below trade strategy and analysis style.

Trend strategy and analysis plan (M15 & H1)

  1. Note that 12:30 AM every day in AUS is when New York and London session collide. In these periods volatility tends to increase, and research from past economic events has already been considered.
  2. Use economic news as a trend starter and determine whether it is bearish or bullish.
  3. If a trend starts without an economic news booster, then consider using the below options.
  4. Use Moving Average to determine where price is heading. Need to re-read babypip’s section.
  5. Use RSI + MACD for a trending market learn about divergences
  6. Find Support/Resistance and also consider that trends usually break these.
  7. Experiment and learn more on trend lines.
  8. Experiment and learn more about OBV technical tool.
  9. Use ADX to determine the strength of the trend.
  10. set higher S/L + T/P, risk-reward ratio

Ranging strategy and analysis plan (M15 & H1)

  1. Good times to implement a range strategy would be when economic news and trends have bypassed or visible minor/major resistance/supports. Could look at Bollinger bands to determine it also.
  2. Find the support and resistance lines and find the range, use support and resistance zones. Look at (M15, H1 & D charts)
  3. Enter trades in these zones for high probability trade.
  4. Technical tools to consider - RSI, CCI or Stochastic to see whether it is overbought or sold.
  5. Use Sell and Buy orders to enter trades.
  6. Consider risk/reward. (have lower expectations of P/L, therefore create good entry points with high probability + S/L & T/P.
  7. Use Bollinger bands to determine when the market trend is ending, find other technical analysis also. Once the range market ends, then switch to trend strategy.

Risk/Reward Section

  1. Execute Entry, S/L, T/P and exit point.

Notes to consider to implement into trade plan

  1. Might need a mapped out long-term analysis trade plan.
  2. Work out my money management strategy + risk/reward and how to play with leverage and my capital.
  3. Need to work on my risk/reward section.

That’s quite a nice one !:sunglasses:

Thanks :nerd_face:, it’s a ever growing trade plan.

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Trade Journal 20/11/17

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I looked at the economic events and found out it’ll be a quiet day; therefore will be focusing on price action.

I mapped out my long-term perspective of the market, without the gold market perspective which I will consider reviewing after my trade entries.

The long-term trend overall is bearish for AUD/USD.

At the moment I am looking for possible future support and resistance levels that could be turned into high probability trades, which I have execute buy entry and sell entry for the day.

Currently there is no trend that have started, there is a squeeze on the Bollinger band, if I am reading it correctly, need to revise on it. Looks like a fake out.

The market looks like a ranging market and the price action currently looks like it’s going to head upwards to test a old support level and rebound. (blue star, will be my sell entry)

MACD is currently in a crossover, moving average on an uptrend, stochastic is around the middle.

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Trade Journal 20/11/17

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(Profit)

The price action currently indicates that the current resistance which is the yellow line is actually the resistance level and there is a chance that price will go lower, this could be a possible high probability trade.

I took a smaller profit than usual, however, it is not always possible to know where the market is heading.

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Trade Journal 21/11/17

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(Loss)

As I keep progressing, I make the right judgement on how the market is going to move, however, I cannot judge when to put my entry points, S/L and T/P. It’s going to take a while till I perfect it.

If I waited a bit longer and let my MACD and Stochastic be aligned with the price action, then a good trade could be possible.

I have also been considering changing my trade approach by following the likely higher volatility market, listening to Bloomberg radio and economic events to provide me leads.

This will allow me to make my trades more interesting, learn from my mistakes more and expand my learning exponentially.

I also need to consider to make my technical indicator section more specific on my trade entries.

I have to be more patient, and believe in my views on the market.

Indeed. It turns out that the ‘what (direction)’ is the easy bit; it’s the ‘when’ and ‘where’ that mess us up!

As an aside, are those Bollinger Bands I see on your chart? If so, how are you using them and what are your settings? I’m a huge fan of Bollinger Bands, personally, having even put down some cash to buy John’s book. Always interesting to see what other people are doing with them.

Hey,

I use the default settings for my Bollinger bands and I use them to find possible trends and possible squeeze spots. I am finding Bollinger bands more useful when markets are more volatile.

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Trade Journal 21/11/17

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EUR/USD 11:30 AM AUS time

I currently traded on the idea that there was a Bollinger band squeeze aligned with 2 crossovers from my Moving average and MACD plus there is a major support i see. I ignored the fact that Stochastic indicates it is oversold and will test whether this strategy can be viable.

1 Like

Wow - I got 42 Pips out of the upside earlier, then wandered off for the day except I popped back a few times to see that orderly drift taking place - too slow to keep me interested, but hey Having read this - I’ll be ineterested in future ! :sunglasses:

1 Like

Damm, nice! I wish I caught that.

I wish I wasn’t focused on AUD/USD at that time, I started to notice other markets had higher volatility.

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Trade journal 21/11/17

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As I look at my trades which are on together gbp/usd & eur/usd, they tend to move in correlation against the us economy. The only game changer between gbp/usd vs eur/usd is the difference in economic news, therefore, I’ll need to make my trade plan apparent to this new notice.

Also, taking this further, I got it from a babypips member and he states:
Currency-pairs are all either directly or inversely correlated, and it’s easy to increase your risk-exposure without realising it.

Which I am agreeing on, learning how to trade the news is vital.

I think you are on the M15 chart? John Bollinger suggests that when using BB intra-day that you reduce the period to about 15, and the deviation to 1.8.

I tend to ignore the second suggestion, as John trades stocks, which are less volatile. However, I have found shorter periods a huge improvement. Put another way, your current BB setup is taking into account price action from 5 hours ago. Is that really relevant on the M15?

Conversely, a 15 period BB on the M5 is only looking at data from 2.5 hours ago, which feels about right. I’d probably give a period of 16 a try on the M15, which gives you a 4 hour look-back (John is also a proponent of indicator periods that make sense or are significant, and 4 hours is half a trading session).

Feel free to ignore, but moving to a 12 hour period on the H1 chart significantly improved the quality of my signals.

2 Likes

Hey, I just tested your idea and I can actually see the Bollinger squeeze on the shorter timeframe which will make my technical analysis more useful when using Bollinger Bands.

Thank you.

I’m glad you found that helpful. Speaking of period settings, John also has some suggestions on how to set up your ‘supporting’ indicators. He’s discussing this is terms of the Money Flow Index that he uses, but it applies to any confirming indicator, especially the oscillators.

We’ll use the basic Bollinger Band settings of 20 periods and ±2 standard deviations. To set the MFI parameters we’ll employ an old rule: Indicator length should be approximately half the length of the calculation period for the bands. Though the exact origin of this rule is unknown to me, it is likely an adaptation of a rule from cycle analysis that suggests using moving averages a quarter the length of the dominant cycle. Experimentation showed that periods a quarter of the calculation period for the bands were generally too short, but that a half-length period for the indicators worked quite well. As with all things, these are but starting values.

Bollinger, John. Bollinger on Bollinger Bands (p. 157). McGraw-Hill Education. Kindle Edition.

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Trade System for next week 27/11/17 to 02/12/17

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Trade Plan requirement section (Every Monday)

  1. Road map the economic events weekly, consider my limit of 3-5 trades to prevent overtrading and make a timetable on the ones I want to trade. This will allow me to review my trades, give higher probability trades, trade journal better and incorporate my P/L, R/R & performance metrics better to get ready for live trading.
  2. Use the mapped out section plus research section to gather fundamental and sentiment of the market.
  3. This trade plan will allow me to add in performance metrics against R/R & P/L, most importantly review my trade and prevent overtrading.

Mapped out section (D1) – review this section every three weeks.

  1. Use two demo accounts, one for long term and one for short term.
  2. Trend currencies AUD/USD, EUR/USD & GBP/USD, Range currencies are AUD/NZD & EUR/CHF.
    a. Find major support/resistance. Use line graph.
    b. Find ascending, descending or horizontal channels
    c. Use Elliot waves. (need to learn) Further my learning
    d. Use Fibonacci lines. (need to improve on)
    i. In order to apply Fibonacci levels to your charts, you’ll need to identify Swing High and Swing Low points.
    ii. Fibonacci Retracement | Know When to Enter a Forex Trade - BabyPips.com
    iii. Fibonacci Extensions | Know When to Take Profit in Forex - BabyPips.com
    e. Use pivot points. (need to learn)
  3. Consider the Market Phases – Accumulation, Advancing, Distribution and Declining
  4. Map the trend to provide more visibility and a better long-term perspective on the market.

Research Section (D1 charts) – Every Monday

  1. Look at the news on babypips, Dailyfx and Fxstreet before trading. Gather Intel. Keep myself updated what is happening in the finance world.
    a. Consider the news to look for good opportunities.
  2. Watch Youtube Forex analysis from other traders for the week.
  3. Look at economic events weekly and consider my 3-5 trades and road map it.
    a. Find out which economic event has high impact and see the time it starts.
  4. Focus on AUD/USD, EUR/USD & GBP/USD – other economies affects each other.
    a. Look at gold, commodities and stocks eventually.
  5. Get a rough idea of market Sentiment (bullish or bearish, overall view) – dailyfx & Fxstreet.
  6. If I went past an economic event, look at the previous events and see how the market reacted and gathered the relevant news.
    a. https://www.dailyfx.com/calendar
    b. Forex Economic Calendar
  7. If not, listen to Bloomberg radio before the economic event to get a slight idea where the market is going, understand market sentiment and fundamentals.

Trade entry section (M15 & H1 Charts)

  1. Enter a trade only 1 hour after an economic event and close 1 hour before.
    a. I will only enter a trade outside of an economic event, if only, I have not met my trade plan requirement of 3-5 trades a week or my drawdown or profit target has not been met yet.
    i. If it is outside the economic event, consider the impact and what traders’ expectation is whether it is bullish/bearish or bull/bear exhaustion. (Price action).
    a) Secondly, use technical analysis such as MACD, Stochastic, Moving average, Fibonacci and support resistance as secondary inputs in your trading idea.
    b. Do not touch the trade after 8 hours or when a high impact economic event will likely change the market sentiment/ fundamentals, only S/L & T/P can be changed.
  2. Some considerations I have learnt from my journal, before my trade look at support/resistance zones and Fibonacci zones to enter my trade for high probability trades. (Line graph consideration)
    a. Make S/L and T/P lines to see whether it is a high probability trade, also consider market sentiment + fundamentals (longer term) and whether it is trending or ranging market.
    b. Use candlestick formations to see where the bulls and bears are being exhausted and consider trader’s perspective (short term)

Once I figure out whether I am in a trending or ranging market, I will use the below trade strategy and analysis style.

Trend strategy and analysis plan (M15 & H1)

  1. Note that 12:30 AM every day in AUS is when New York and London session collide. In these periods volatility tends to increase, and research from past economic events has already been considered.
  2. Use economic news as a trend starter and determine whether it is bearish or bullish.
  3. If a trend starts without an economic news booster, then consider using the below options.
  4. Use Moving Average to determine where price is heading. Need to re-read babypip’s section.
  5. Use RSI + MACD for a trending market learn about divergences
  6. Find Support/Resistance and also consider that trends usually break these.
  7. Experiment and learn more on trend lines.
  8. Experiment and learn more about OBV technical tool.
  9. Use ADX to determine the strength of the trend.
  10. set higher S/L + T/P, risk-reward ratio

Ranging strategy and analysis plan (M15 & H1)

  1. Good times to implement a range strategy would be when economic news and trends have bypassed or visible minor/major resistance/supports. Could look at Bollinger bands to determine it also.
  2. Find the support and resistance lines and find the range, use support and resistance zones. Look at (M15, H1 & D charts)
  3. Enter trades in these zones for high probability trade.
  4. Technical tools to consider - RSI, CCI or Stochastic to see whether it is overbought or sold.
  5. Use Sell and Buy orders to enter trades.
  6. Consider risk/reward. (have lower expectations of P/L, therefore create good entry points with high probability + S/L & T/P.
  7. Use Bollinger bands to determine when the market trend is ending, find other technical analysis also. Once the range market ends, then switch to trend strategy.

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Trade plan

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My current trade plan for the week, 27/11/17 – 2/12/17. Find some news to see market sentiment and fundamentals on these economies.

Economic event table date/time AUS time

Date/Time – Currency, Economic event, Look at technical tool box to make appropriate strategies.
28/11/17 – 21:00PM
EUR/USD EUR OECD economic outlook
29/11/17 – 12:30AM
AUD/USD USD Advance goods trade balance (OCT)
30/11/17 – 12:00AM
EUR/USD EUR German Consumer Price index
30/11/17 – 12:30AM
AUD/USD USD GDP (QoQ) (3Q s)
30/11/17 – 12:00PM
AUD/USD CNY – swift Global Payments CNY

Relevant news + Bloomberg radio consideration – to consider market fundamentals and sentiments.

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Trade Journal 27/11/17

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  1. Trade number 1 (1 hour chart)
    a. Currency AUD/USD

  2. Economic event consideration, close before 29/11/17 – 12:30 AM

  3. Open trade at 4:40PM 27/11/17 AUS time

  4. The AUD/USD has a bearish sentiment and fundamentals

  5. Risk reward ratio – 3:1

  6. Spread amount 1.5pips

I entered a trade based on keeping it on till 29/11/17 12:00AM, roughly before the news release of USD Advance goods trade balance (OCT).