Well, I got beat. I took myself out of the market now (just a little bit ago). Basically the USD corrected just too much. JPY surely is no help. And some scalping earlier (london beginning) with the EUR didn’t go so well. This is looking like a losing week for me. I did make 85 pips on GBP yesterday. That just softened the crash some. At around -6%. So today will be a sit and wait day. Maybe tomorrow (fri) there will be some “take profits” to have. I’ve just been looking at our recent posts this week. Rookie, I feel you. I’ve been wondering about what’s going on with the trends lately. They just keep changing. So, do I just blame my trading on the market? Or do I need to do some adjustments? Been thinking about that a lot lately.
One thing I’ve been pondering, about a temporary strategy, because of yesterday (GBP), would be to capitalize on a real slant. I mean, after the news with the pound, if I would have gone short with them across the board, would have made many pips. 85 with USD, I got. But what if I was with them with all the others? Because the trend (even longer term trend) got skewed up much because of that development. So then maybe I could watch for a major sentiment shift and switch to that. And that would be a shorter term strategy.
This week has been tough for me as well. I’ve tried to adjust my plan as week progressed but either way it didn’t go all too well. There has been sentiment change with some pairs, and my attempt to trade the news failed miserably.
You know what Mike, I thought about it if trending methodology is going to work in this market condition. But I’ve reached a conclusion at least for myself, I think I was overtrading. When there wasn’t a high probability setup I forced myself to place trades that wasn’t going to end well from the beginning. I dismissed market sentiment all together and at times my bias was wrong.
Think it all over , if you too may have been overtrading. I just went through my charts and I’ve spotted these to be trending on daily TF.
One flaw that I’ve noticed in my trend trading method was that I should be paying close attention to medium to high impact data releases on pairs that I’m going to place a trade I wouldn’t keep my trades open like Mastergunner its a lot of risk in this market condition with much uncertainty as soon as it hits my target I’ll take profit and close and if there should be another retracement before trend continues I will enter again. I’ll try to fade the news especially high impact data releases.
I know what you mean. I did not enter any trades today either. I sit and wait. That is the best I can do. 6% is a lot. Maybe your position size was too large.
It is sad to say but you have to blame your trading. I did not do that in the beginning. I blamed the market. And wanted to take revenge. Do not do it. That is the worst that can happen. If you can take a suggestion, do something that helps. If I lose a bigger one I always go running. And a very long distance. For me it is the medicine.
The other part is going short GBP everywhere when it goes south. Well, I have done that and still do that sometimes. Be aware of the risk though! You have to calculate risk together for the positions becuase it is based on the same idea. If you go everywhere vs. GBP with lets say 0.1 position than your risk is 0.7 position altogether because there will be quite some correlation in the moves, especially in the short-term.
And my latest “golden trade” what you should probably not do. It is the HUF trades. It is since a longer time but they are in affect. As they say: never scale into losers! I did it in a huge way. I learn from it. Never did it before, once is enough I can tell you that. Not becuase I am losing, in the long-term it will go down. However I am in a huge minus and [I]it uses a whole lot of my margin[/I]. I can either close the trades, take the loss and give up the gains when it goes down or give up the margin chance to make better trades.
I just wrote these down to learn from my mistakes, do not do the same and see that everyone makes mistakes. Just do something that helps.
well, I think you are on the right path! Losing is bitter, for me for sure, but you already found one of the reasons (overtrading). I know this problem too…
The problem with trending is that the best is when you catch it on the top. If you catch it in the middle you are angry that you missed the big move. However I believe we are in some reversals and we all see it is not easy to catch the top.
I do see guys that both of you try to do scalping. I have a simple advice to you that can be profitable. Regardless what is your indicator and how you use it, only do scalping in the direction of the main trend! I know, every person is different and there are experts for retracements. However it is a good start I think and going in the direction of the main trend you just increase your chances!
Heads up, clear you mind and sit out or make good trades. But do not force them!
Looking at your setups, I think half of them about ok, for the other half I have no idea if I was forced that trade which direction should I use. EUR/AUD setup I find especially difficult. NZD/CHF seems for me also quite stuff. EUR/CHF I do not even see a trend besides scalping. I do not know who your refer Mastergunner but always have a stop loss!!! Do not ruin yourself. I do not have sometimes and earlier paid huge prices for it. Also at this time because scaling in into the losses. But it does work sometimes also quite good when you are not stopped out on spikes!
I had a huge trouble with overtrading when I first started, by huge I mean my account got blown out. It taught me a very important lesson about money management, which FE was touching on in his response to Mike.
I’m going to share Larry Willias’s formula for money management, he is an authority on the topic and traded the COT report as well. It is possible that Briese had one as well and FE could share it with us.
The formula, in case you did not know about it, tells you the maximum amount of lots you can trade.
well it is funny. After a couple of hours I wrote to you, I actually forced a USD/CAD long trade. Then some time later I got a valid signal for NZD/USD short. -2 and +1 pip is the current standing. But I think I just take tomorrow a day off like you. I wait and see if we just see here a risk on action or some correction. I do not want to get into bad trades.
However I have to say the are/were reversals today! We can have a look at the USD pairs and how the different currencies acted vs. USD. It might tell us how the current sentiment and strength of the currencies are:
[B]NZD, CAD and JPY[/B]: all three had continuous gain vs. USD but gave almost all of it back.
[B]AUD[/B]: difference between AUD and other comms: it gained just like the others but held onto those gains.
[B]CHF and EUR[/B]: very sudden gain and exactly as fast loss. Just like yesterday. Probably it was the best setup to trade today.
[B]GBP[/B]: no action at all.
I might look at the thread in the morning or at night, besides that all the best for you and see you on Saturday with COT analysis.
before I am away from computer, here are the non-commercials net positions for silver and gold for the past three month. Like yesterday, I marked with red and green the extremes, which are only looked for the three month, therefore are not accurate trading signals.
Free Report by Gary Kamen, Education Director for Commodity Research Bureau
Get It Now: Learn How to Analyze the NEW COT Report like a Pro.
For Futures, Options and FOREX traders.
No matter how we tell ourselves loss is part of the game, it still is hard to swallow those losses and get back to trading with confidence after consecutive losers.
Philip you sure have had your lessons! I see why you’ve been cautious narrowing down your setups. Slow and steady. You will get there. Don’t rush.
I think I will get back to my old approach placing one or two high probability trades a week if there’s more of course I will try to seize the opportunity I tried range trading, its just a lot of stress and a lot of hit and miss especially with all these pairs that we’re working with. I prefer trending method better less stress and if all things align, market sentiment in general /COT data/ in the absence of any key data releases it just runs smoothly if your technicals are accurate.
I was looking at PA FE, EUR/AUD could go down one more leg until it hits 1.42 given the weakening EUR in fact it already is down , I’m looking at it to close below 38.2 fibs. I do it as Mastergunners I wait for confirmation. I used to go after tops and bottoms and after reading his almost whole thread Ive realized what I was doing was pointless and waste of time trying to pick tops and bottoms. You can find his thread on showmethemoney swing trading I think. Very good stuff there. Check it out if you’ve got time.
EUR/CHF I agree there isnt any apparent trend going on , but there might be some development in weeks to come downtrend at least two legs down so I’ll keep a close eye on this.
NZD/CHF had already two legs down since july 13 /about the time when CRB index went down I think thats when commdolls headed down as peterma mentioned/ I think what we’re seeing now on daily time frame is a retracement I’m looking for it to go down probably next week.
That makes the Comms on top for Thurs. +9.
So for the week the total tally is ----Comms +22.
Look at wed and thurs. Compare. It’s almost a carbon copy!
Ok. So…who wants to bet that the Majors are gonna be on top fri??? I just can’t imagine that the Comms will out do the Majors on Fri. Remember that the Majors took the last 2 days of the week for the last few weeks. NOW…since we know who will be on top, let’s just simply make a day trade a Major against a Comm. Or how about ALL the Majors against All the Comms. I’m thinking that result will be in the positive. The edge is gonna be there for the Majors. PLUS there’s gonna be some major profit taking.
If I’m wrong, then I’ll lose.
We’ll get it guys.
We have much to talk about, over the weekend. (I know I do)
before I am off for today I thought I reply very short for everyone:
[I]rookie[/I],
I agree with you that it is difficult to catch market tops and bottoms. If we get most part of the move it is already good. I also think the best you can do is to folllow your own rules which work for you the best. Other systems work for others and your system works for you. We discuss sentiment here and you use it on your own advantage with your own rules.
[I]Mike[/I],
great thinking. You have the nuts to do it, I am very interested in the outcome. However as you wrote about your losses, do not overtrade yourself! Maybe make some setups on demo account or on paper. Just do not risk now your boat on it! I like the perspective how you approach and before the week I would have not thought the comms are capable to win this time. However it seems like a maximum of 3 streak is in the cards.
[I]Philip[/I],
is it only a 13 pages document? I do not know if I got the right one but it looks short. Share your thoughts after reading! By the way, I need help from you. I checked the site and find COT for everything besdies the currencies. Can you send me the link for currencies or navigate me on the site? Thanks
[I]peterma[/I],
hmmmm if I traded it, I would only go on a retracement vs. the GBP if it came out positive. What is your medium term view on Cable? Do you trade the news also if you think that it is against your fundamental bias? I just asked because as I am dovish on Cable I feel uncomfortable to go long with it in any case. I am interested on your strategy for today!
It is a matter of perspective. In 2 respects. First, in how I am determining trending on the chart. Second, in how far out I am taking the picture. That’s why I will have a longer term and a shorter term view. And by combining the two I weed out the more probable ones.
Technically 6650 is important, price seems to have reacted there.
Longer term I still figure 7000 will be re-visited. Today I would be surprised if the news is negative, if it is then that would represent a shift in the long term outlook for GBP.
So yes, a buy at present levels would seem a possibility, but not just because price has fallen recently.
If a buy then a longer term trade could be the case, the numbers as always will dictate.
Update: - Oh well, as expected, may give the bulls a little confidence for the session.
One last thing, on the geo political outlook, I wonder is there a shift in the Russia/Ukraine scenario.
Is it the case that Russia is adopting an end game strategy - the aid convoy seems to be legit, the resignations in the separist movement, the toning down slightly by Putin in his last speech.
Just wondering is there the glimpse of an end to this conflict, let’s hope so.
ForExchange
Open the find/search web page and type this “Commitments of Traders Financial Traders”. You will find a subsection with currencies under that title.
I’m yet to read the pdf you provided as I’m currently reading a book on volume spread analysis. I will read it over the weekend though and give you my views.
Peterma
Good call on GBP. Unfortunately its not in my portfolio for this week. I’ll look for a sell of a retracement next week or the one after. I really hope you are right about the 1.7 call because I’d definitely sell it from there.
The surprising thing for me today is the Euro’s reaction to the news. This could a valid fade for today if any one trades the news. If it does close higher today it could be a nice sell for next week. Althouth I’m mainly looking to trade a reversal or long-term pull back in the Euro in the coming months.
You would be the hero with that call at least for me and for my trades! I am reading a lot of news too. I do not even want to imagine what that would mean for my exotic currency pairs (in a positive way). I would lose then with my USD trades vs. NZD, AUD and CAD but it is nothing compared to the win with the others.
Let’s hope first for the lives of hundreds of thousand of people who have no electricity, water and are in danger and when they are safe then I can take the pips.
Yeah, good news. I got in like a few minutes before time. “phew” And it’s going up. Then I just checked our site here and so glad to here your report on them. Thank you. Maybe I will hang on to the 4 GBP’s I got going north. Just for today though. I have them against the 3 comms plus JPY.
I like the perspective how you approach and before the week I would have not thought the comms are capable to win this time. However it seems like a maximum of 3 streak is in the cards.