Daily candles price action trading journal

Hello, fellow traders!

I am new to forex, dove into it just in late 2017. Prior experience has been in “binary options” with all the bad habits inherent in this scam - lack of probabilistic thinking, too much attention to the patterns etc. :slight_smile:

From early 2018 I started reading some stuff on psychology of trading and looking into Nial Fuller’s website (free version) for guidance. Disclaimer: I am not promoting NF or anyone, it is just part of my story. So, at the moment I am trying to trade in the framework of his approach (see the description of the strategy below).

I understand some of the limitations of my current approach (and yet do not understand many more, I am sure). That is why the purpose of this topic is threefold:

  1. to be my trading journal where I expose my trades and motivation for them, both for the sake of discipline and specifically for the sake of feedback that I hope for here in BabyPips community (I do have my personal trading journal and will post it, but I believe that feedback would be essential for my progress);

  2. to be the place where I develop my thinking of trading, post some thoughts, some lessons I learned, stuff I read (including on BabyPips) and get feedback on that as well (however, maybe I will be posting more to other’s relevant topics, I don’t know yet);

    1. to be the go-to place for those I communicate with here on BabyPips, if they want to know what I am in trading.

So, my goal is to learn, develop and improve my performance.

Thanks in advance to everyone watching this and providing feedback!

The strategy

The following is the description of my strategy as I understand it.

I look at the end-of-day daily charts as the main reference to decide on entries. I look at weekly and monthly charts to get the bigger picture 4-hour and 1-hour charts to get into details.

Respectively, I look to enter trades that last from 1-2 days to more than a week and potentially several weeks (although, I have never been into such long trades yet).

Framework of analysis
As far as I understand, I am more of a position/swing trader. There are three elements to my trading:

I look at the trend and try to take trades in confluence with it.

I look at long-term support and resistance zones and try to take trades near them.

I look at three types of candle patterns. Those patterns are tailed bars (pin-bars, multiple pin-bars, multiple tailed bars etc., those also include “fakeys” - pin-bars or two candles showing failed break-outs) and inside bars (both the ones after big breakout candles for continuation and the ones that are multiple insides bars aka coiling inside bars for trade with the trend).

I also look at EMA 21 as dynamic S/R and EMA 100 and 200 for longer term dynamic S/R and trend.

Reflection: you see, I wrote a line on trend and a line on S/R and a whole paragraph on candle patterns. That means that I am still paying too much attention to the actually least important. Hope to deal with this issue with your help.

Trade entry rules
Within my framework of analysis I try to take trades when I see them at important S/R zones and with confluence with the trend. I enter with predefined SL and TP that I define basing on analysis of S/R zones.

If I see exhaustion of the trend I might enter against it given the presence of long term resistance and strong pattern signal. But I have not done that in 2019 yet.

As most newbies, I have trouble following my rules and periodically enter trades violating the rules. I will mark and discuss them separately.

Trade management rules
I try to exercise set-and-forget approach to trades. That is, after entering them with predetermined SL and TP, I would look at them once a day (at day’s end) and would let them run till SL or TP.

I might interrupt trades before SL/TP if they were erroneous (based on greed, revenge and other emotions rather than analysis) or if I see a clear signal against the direction of my trade at important S/R level. In the latter case I would probably try to look at the news to understand what is happening.

I do “pyramiding” on successful trades trying to strictly keep the risk under control. That is, when trade goes in my favor, I would only add to it at 2:1 Reward/Risk point by moving initial SL to the first entry point and placing the SL of the second entry at 1 Risk (1 R) distance from the second entry point (to keep my risk at 1 R). The third entry would then see the first SL moving further to lock in 1 R amount of pips, the second SL moving to lock in break-even trade and the third SL set at 1 R distance from the entry point etc.

Money and risk management
My account is tiny now (100$), but I treat it as if it is equal to 1000$ (being ready to top up if needed). Based on this, I define my Risk per trade (1 R) as equal to 1% of my account (10$). This leaves me with trading only microlots (0.01-0.05 lot) depending on how big the risk is in pips. I am comfortable with 100 pips risk which equals roughly 10$ for 0.01 lot trade. If risk is over 100 pips, I still put 0.01 lot and have to accept the bigger risk (but that never happens). If risk is bigger moneywise when I trade Gold, Oil, Indices, I just have to accept it and treat it as if it is normal.

I stick to measuring my trades in Rs and am prepared for 20R consecutive losses (though would not like to see my preparedness tested). That means that while I made less than 20R consecutive losses, I would still be placing 1 R trades in money terms (equalling 10$). To be honest, I do not know what I will do if I take the 20R hit. Probably, make a lengthy pause in trading.

I try to avoid holding more than 2 trades at the same time. And I also try to avoid mirror trades. That means, if I see AUD/USD and NZD/USD opportunities at the same time, I would rather choose one of the pairs than trade both. However, if I see AUD/USD and EUR/JPY opportunities at the same time, I would probably take them both.

I look at forex majors, oil, gold and major indices (DJ, SP, FT, DAX, AUS200).

That is what I trade. I have some tweaks to my entry rules already, handy for filtering out low probability trades. I will talk about them a bit later, when I reveal my results for the January-February trading.

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As any experienced FX trader would tell, to do better I need to factor fundamentals into my trading. Because price action alone is not enough. The trend, its strength, telling pullbacks and retracements from reversal of trend, understanding market sentiment - I have to do better at all this. That is my biggest concern right now.

For this reason here at BabyPips I am looking at Trading the Trend with Strong Weak Analysis and COT Report Analysis - a thread on market sentiment.

I also plan to look into the Alternative Technical Templates topic as it has very good feedback from community members. That’s it for now.

Would appreciate any comment.

Good post - it’s great to have a record!

NF’s site got me into this too. Though it took 10 years of being on his mail out list and the occasional dabble but now I am taking it a bit more seriously. I trade same as you as per NF’s (free) guidance.

Errm do you have mega leverage - if not you run the risk of a margin call with even just a couple of $10 trades on a $100 account as your actual account leverage will rocket.
Not sure which platform you use but on both OANDA and cTrader you can alter your position size so it matches your risk $ amount based on the stop.

Personally I feel that the whole high margin=bad, thing is now outdated (for traders like us) as position sizes can be adjusted in tiny steps rather than lots so the $ risk is managed but the risk of a margin call is greatly reduced. - Assuming people are using stops of course :roll_eyes:

I posted an A5 sheet that I made up in another thread that I HAVE to fill in for every trade - this has to be done in pen - and it seems to work well to stop any “off piste” trades, as well as giving me a record of “why” when I go back to fill in the result.

At the moment I am looking at the S/W thread for ideas as well as trying out an indicator Newbies.... Stop being befuddled by charts on a different platform - but flying blind (demo of course) on that one but it is interesting. However in the main I am just practising the 3 patterns, confluence, S+R and account preservation.

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Wow, @Wightpips, thank A LOT for your input! And I am very glad to meet someone who has been trading this approach for a significant period of time!

I got your point on position sizes, will check out whether this will be available to me (I will be moving to a new platform in March, provided by my bank in cooperation with Swiss Ducascopy).

I found your post with A5 checklist, very much appreciated!

Also, if you have a journal here or your own blog, please, post a link, I would be happy to cooperate and share ideas.

Ahh no. Only just actually started -took me 10 years to get round to it properly.
No journal yet. But I’ll be sure to pitch in here if that’s Ok.
What are you in at the moment ? I had a good run on Oil from the “Fakey” on the 12/2 - broke the rules and got out a bit early with a tight trailing stop but not by much, waiting for a re-trace.
Put a Buy stop entry on GBP/USD yesterday if that gets triggered as another fakey on a S/R line - bit dubious as it is over the W/E but I will not be around to jump on it if it runs.

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Oh yeah, that Oil entry was a perfect one! But I did not take it as I still considered the trend to be bearish while the price was under 54.2 for WTI. Gotta work with my understanding of trend more, cause I am kind of too conservative.

As for cable, I am staying out of it till the Brexit stuff settles down. Unless I see something really-really obvious and undeniable. And I do not now.

As of now Friday tailed bars on NZDUSD and NZDJPY seem to me very persuasively bullish. And NZDJPY also is on top of SW chart. So I am looking at it, but not yet sure, will post tomorrow. EURJPY seems to be bearish for me (especially with German GDP growth at 0%, heh), at important level as well. Will also consider that tomorrow.

So, on my trading in 2019. In 2018 I started trading live with axitrader with 300 account and I also had 100 leftover at my gdmfx account that I used for BO trading before. So, by the end of 2018 I blew almost all of them. This pushed me to reconsider my trading discipline which is why I am now posting here :slight_smile:

In January 2019 I started with just some 38 bucks left on my GDMFX account. So I used it for trading, but I looked at AxiTrader charts. I took only two major trades that month, EURGBP short from the huge fakey on 3 January and multiple bullish tailed bars at EMA 21 on Gold on 22-24 January. Per my strategy I started from 0.01 lots and adjusted entries to get near 10$ risk. Those two trades were successful, though I got out of both of them too early. I also made a couple of trash trades after that (winner’s bias, you know), but did not sustain substantial loss. Finished the month with 7% growth of account (that is, 70 bucks growth for 1000 account that I consider I have; on my actual account it was almost tripling it :slight_smile: ).

thank you for these posts they are very informative please keep them coming, one thing i really am bad at is analysing what i am doing. i tend to just do stuff and then forget about it so i dont learn from my mistakes. reading your posts are helping me.


thanks, @paulap, will be doing my best.

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Hmm I looked at the NZD/JPY trades as well, but I don’t see anything else except the tailed bar. I might be missing something but I can’t see any other evidence, though there is a slow (short term-ish) up trend. I like a bit more confluence with a S/R line clearly broken or rejected.

NZD/USD just looks a mess to me, it’s sideways with no strong channel (learning to stay away from that until I get more experience!)

Might be tempted into a CAD/JPY long term buy as that is trending, has a lot of headroom and is nice and tight for a low risk entry.

The EUR to me has the same issues as GBP - any major BREXIT announcement will send it drastically one way or the other - though a deal will be done at the last minute for avoidance of a crash out. Then there will be 2 years of speculation about the trade deal!. Though risk is risk and it’s fixed, so all the same if I lose by a wrong call or get caught out with an unexpected BREXIT announcement (or Trump tweet for that matter), its the “cost” part of the business.

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So, February has been a much more controversial month for me so far (for newbies after good month always comes the bad one, heh).
I made three major trades and a number of trash trades. I will not discuss the latter - I hope to eliminate them by obliging myself to post any trade here.
So, the first trade was a winner, it was NZD USD. I saw the bearish tailed bar on 3 February and took the short position. Then did some pyramiding and finished right at 0.6727.

Two more trades were losers. That was DJ on 8 February and CAC40 on 15 February. The latter was a daily pinbar at important previous support (that could turn to resistance, which was my bet). But the asset went higher and I was stopped out.

DJ was another story. On Friday 8 February I saw a nice pinbar forming on weekly charts at important SR zone. And I jumped in in the middle of the day. Guess what, by the end of the day DJ moved higher and I found myself trading nothing at all. Don’t know why I didn’t opt out of the trade immediately. So I was punished properly for this misconduct.

Finally, my last two trades were short NZD/USD and EUR/USD. I attach the screenshot from my journal for you to see them.

I also attach my detailed summary of statement for February. It has been a breakeven month so far.

So, currently I am in short on EUR/USD from double pinbar at 1.1331, counting on another leg to 1.1260 or further. Here is my journal entry about it.

So, I guess I am done with the history. And I will discuss news trades in new posts.

@Wightpips, agree with you on EUR. But I am still in EURUSD, as per my trading journal, see above. And there is a mirror trade on USDCHF, but I am out of mirror trades.

NZDJPY seems like has some room to go to 77-77.1. This tailed bar is off the EMA 21 and on weekly chart the last week looks like an inside bar after a big bullish engulfing candle on previous week. And also NZDJPY is a top SW pair. But I again fully agree that all this does not make this one an obvious entry. I consider placing a buy limit order somewhere near the lows of the Friday candle, at 75, to give it a try with lower risk. But I am still undecided on this.

CADJPY looks really nice indeed, but I just don’t trade this asset so far.

So basically apart from the short EURUSD I am in I stay on the sidelines. With this EURUSD I am also not sure as the entry is too close to the bottom, but I stick to it.

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That’s interesting - I am long EUR/USD - entered at 1.133 (right where your SL is) I was a bit late in this one, should have been in straight after the 15th pin bar breaking lower resistance -but had some sort of flu for the whole weekend so didn’t get in until the Monday 18th.
Never looked at the DJ30, still finding my favourites to study.

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For the record, my SL for EURUSD is at 1.14. Will be interesting to see how this works out :slight_smile:

ah, sorry, I misaligned your columns. Certainly adds a bit of extra interest!

So I just bailed on my EUR/USD trade, made 50 pips but really did not like the look of the daily close candle (28/2) or the 4hr. Usually don’t mess with a trade but not comfortable with this one.
Other than a long on GBP/JPY from a week ago (TWB’s system) I am out of the market .

Tempted to think I am clever enough to call the top of a 2 month up trend on the S&P 500 - but I know that is highly unlikely so staying out (or maybe a short stop order… :roll_eyes: )

Yeah, this one on S&P looks nice at this level.

I have been stopped out of my EURUSD trade, but I reentered after this big pinbar on Thursday, at 1.1400. My takeaway from the situation is that I should not look at signals at 38 and below Fibonacci level, cause that is too close to the bottom. Let us see how this plays out at 50 level with a clearer signal.

Otherwise I am out of market, but I have not analyzed the week yet. Currently reading a lot at the SW thread.

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Your entry bar was my early exit bar! I was thinking about shorting but I couldn’t find a S/R line at that level so to me it’s just a pin bar.
Then when I saw Friday’s candle I had the same feeling. If it was a clear signal then the world and his PA granny would have been shorting an obvious pin bar like that (28/2) and have pushed price way lower on Friday.
Instead, either it was not a good signal or it was but there is something else pushing the price up and the two cancelled each other out.
Either way I’m out of it until I have more of a clue!

Put a stop order on the S&P down at 2754 - cheapest way to be wrong - Will go long instead if it breaks the S/R I have at 2815 ish

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I like your thinking, @Wightpips, there is no use to invent a setup if it’s not there :slight_smile:
However, I stay with my EURUSD trade. Recent legs from 1.155 look to be something like lower highs/lower lows pattern with down movement getting stronger and up movement getting weaker.

The return of the price to 1.14 after the pinbar/fakey was a reaction of bears and bulls to the touch of the lower border of the 1hour ascending channel. It is covered here Chart Art: Bullish and Bearish Euro Plays With EUR/USD and EUR/NZD - BabyPips.com

Anyways, let’s see how this plays out :slight_smile: BTW, in terms of SW system this is not a good trade :slight_smile: