Finding my Edge (Trading Journal)

[RedEyeRishMan]

I’d like to start this off by saying I’d love for as much engagement in this thread as possible.

This thread will be limited to entries from my demo account and screenshots of PA with as much detail as I can apply. The purpose is to gain an understanding of what works and what does not.

Risk management #1 Priority. The goal is to not blow this account.

The account will have a starting equity of $5,000 USD as this is what I plan to have when I open a live account.

Develop an Edge #2 Priority. As I have no real market experience, I’ll be developing my edge throughout.

The basis will be PA in conjunction with supply and demand. Indicators will come and go as their only purpose will be to validate my theories. In order to understand market movement and PA no trades will be placed solely on indicators.

Make and Learn from Mistakes #3 Priority. There will be a TREMENDOUS amount of mistakes.

You will see and read things that might make you go, “He’s an idiot…” If you do, please comment and explain why. I’m here to learn and having experience to help me notice errors is sincerely appreciated. Along with making mistakes, nothing is off limits. I may experiment with different TF, currencies, RRR, trading sessions, trading styles, music while I trade , and possibly even news events.

In the quest to developing an edge I must experience WHY I should not do things, and WHY I should do others.

I am learning as I go. Things are always subject to change with an open mind.

Consistency #4 Priority. I have a tight schedule and a full-time job along with schooling.

Staying consistent will be very difficult. Finding that balance of trading and all that goes into it along with the rest of my life will be a constant experiment in itself.

Have Fun #5 Priority. Keep it fresh. Stay engaged. Further the passion to trade.

I have loved every step of this journey and refuse for it to turn sour whether I’m losing or not.

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You can follow the account through FF. RedEyRishMan’s Member Profile | Forex Factory

With that said, let the games begin. Cheers to success

[AkiyamaShinichi]

If you’re into PA, are you ready/will you be trading during Powell’s speech in roughly 4 hours?

[RedEyeRishMan]

I am torn. I considered a saddle trade.

I’ve been able to watch some high impact news events play out but I myself have virtually no experience trading them. I’ve heard buy the rumor and sell on the news.

I’ll definitely be watching. If I cannot properly identify the rumor or find myself completely clueless around the time, I’ll be sitting out.

We shall see.

[AkiyamaShinichi]

Good luck. What pair are you trading? Or do you trade anything and everything?

[RedEyeRishMan]

At this time USD/ JPY and EUR/ USD. Most of my analysis so far has been focused on these two so I suppose stick with them for now. This is subject to change though.

[RedEyeRishMan]

Had a pretty funny first interaction with the market.

I attempted a straddle on Powell’s speech. To those who were watching, it was LAME.

Attempting to pull off the straddle though at the beginning I failed pretty miserably. Entered in the wrong order twice and lost 0.28% of the account. Then finally figured out what I was doing wrong and closed out a short position for 0.28% back to original equity.

Won’t post any pics as the whole situation is mulligan.

Well, I’ve had a long day, but I was looking at a possible set-up I’ll monitor on USD/JPY.

[dushimes]

Feel free to consider backtesting. Look for similar setups in the past, see what happened and if the strategy would have been profitable.

Backtesting is a great technique.

[RedEyeRishMan]

Found a nice set-up on EUR/USD last night, ended diving in.

With price spiking the recent supply and conveying to me a nice decent down the channel I took the trade. Also, MACD telling me price may continue to ride slowly down and RSI looks ready to jump above 50.

Trade went almost picture perfect. Entry at supply and exit at demand.
Profit 1.66% of account.

I’m hoping to get a few more trades in before I put any sort of running short stats up here.

[playwiththegods]

This is an amazing start! I really like the title “Finding my Edge” and the priorities you laid out here.

@RedEyeRishMan

In the quest to developing an edge I must experience WHY I should not do things, and WHY I should do others.

Your determination to experience why you should and shouldn’t do things will no doubt lead to success while making the journey fun and fulfilling.

Such endless curiosity, wonder, and awe are what drives men to make incredible discoveries and achieve great things.

I’ll be here to cheer you on and support you in whatever way I can on your quest to develop your edge.

[RedEyeRishMan]

@dushimes

I’d love to get onto backtesting a strategy. My idea is as follows. Gain the discretion to make and execute profitable trades consistently.

Once I have this discretion that I understand at a core level, define and mechanize the whole process to remove human error.

Backtesting will be apart continuously.

@playwiththegods

It’ll be one hell of a road my friend. Glad to have you.

Cheers

[RedEyeRishMan]

Next trade in-line.

Play off my last trade I’m expecting price to keeping falling.

Stop is placed right at top of my determined demand zone as passing it would invalidate my idea. TP is 25 pips away at bottom of demand zone which is where I’m to the very least expecting it to drop. Also, entry is at top of price channel in parallel with price.

I’m curious as to other traders’ thoughts of a tight range on a pair that has recently risen or dropped. Do you believe this is also a common build of strain waiting to be released in directional momentum?

[chimmyfx]

Thanks for sharing! Appreciate your effort to provide detailed insights from your demo account. Good luck and looking forward to following along.

[tommor]

I like the methodical way you have set out what you intend to do, your Priorities in the first post.

But I have to say, “Develop an Edge” isn’t any trading strategy I have ever seen. As you say you have no real market experience so is it realistic or efficient to task yourself with inventing a strategy which gives you an edge?

There are hundreds of strategies out there ready and waiting for you, but they mostly fall into two groups - buy because price has been rising or buy because price has been falling. The rest is detail.

Sorry if I sound like a know-it-all, I haven’t seen everythin’ yet.

[RedEyeRishMan]

Hey @tommor

@tommor

But I have to say, “Develop an Edge” isn’t any trading strategy I have ever seen. As you say you have no real market experience so is it realistic or efficient to task yourself with inventing a strategy which gives you an edge?

There are hundreds of strategies out there ready and waiting for you, but they mostly fall into two groups - buy because price has been rising or buy because price has been falling. The rest is detail.

I’m glad you asked. I’ll explain the best I can, but I usually find myself finding it difficult to elucidate the way my brain works.

You’re absolutely correct, there are many strategies that if I continually used, I’d more than likely be able to be profitable. But what could I say about my actual understanding of the market? I suppose you could say I’d learn along the way as I learn the strategy.

From my perspective, strategies will need constant reformation and adjustment making as time goes on to ensure its adaptability in reference to the ever-changing market. I believe, and what I’m attempting to do here, that if I can gain a fundamental understanding of something like supply and demand, which are objective points in the market, regardless of the strategy used I can confidently make those changes and be consistently profitable.

Without that fundamental understanding, sure I could be profitable for a while, but not consistently nor for a long period of time.

My goal through this exercise is to create that fundamental strategy and encapsulate its core. Then mechanize it and have the ability and skill to keep it profitable.

I hope that makes sense friend

[RedEyeRishMan]

Sad to see but a worthwhile lesson.

My stop on my second trade of this week was WAY to close.

In the end I predicted price in the correct direction, so I am glad about this.

Total loss to account was -1.5%

With a RRR of 1:2 I find myself comfortable, but with increasing my S/L I need to shoot for a little bigger of targets. Maybe onto the H1 TF

[RedEyeRishMan]

[RedEyeRishMan]

Another loss.

Once again, predicted price in the correct direction. Stop too close as well again

We’ll have to see how many times I end up making this mistake before I well, don’t.

Thinking about incorporating some sort of engulfing patterns for signal, any thoughts?

[RedEyeRishMan]

Price has retested this middle level of demand off and on for quite some time. Recently broken through will recent demand become supply and drive price down?

Also curious on people’s thoughts on Fibonacci.

In my opinion if you draw enough lines on a screen price will eventually reach at least one.

There seems to exist more reasonable and definable reasons for a turning point other than this number sequence looks like a shell mother%)#(#*$%

Well, anyways, just wondering.

[RedEyeRishMan]

And I’m in on GBPUSD, looks like a smooth ride to lower demand

[Mondeoman]

@RedEyeRishMan

Entered in the wrong order twice and lost 0.28% of the account. Then finally figured out what I was doing wrong and closed out a short position for 0.28% back to original equity.

Congratulations on this effort. It reminds me of myself back in 2010. I went through this with about 280 trades until, after 9 months, I realized that I did not have an edge, and had lost about 13% of my (theoretical) account bank. I remember closing my MF global account (because my plan said if I had not demonstrated an edge within nine months, I was to pause close the real money, then revert to a demo account. Three days after withdrawing my funds, MF Global collapsed and many traders could not get their funds out. They and their accountants had “mislaid £100M of client funds”. Lesson learned - make a plan and stick to it. Wind forward about five years, that was my next foray into Forex. This time, I had a back testing strategy. I managed around 800 trades this time, and although my quarterly results improved over three quarters, I was still not generating a positive outcome. This time around I bailed out with a 23% drawdown on bank, but that was less money than the first time around. Again, I did not feel like this was a failure because I stuck to my plan. Third time around started in mid 2020, applying my investment knowledge of 25 years, and my trading knowledge of 10 years to a crypto currency portfolio. Third time lucky, I got in at the right time, and despite a market downturn Jan22 of about 75%, I was only briefly in losses to the tune of about 10%, and today my 2020 investment is up by 95%. I now have the confidence to trade and invest in crypto, along with a 2024 strategy that breaks down into three individual plans that cover long term allocation of 80% of the crypto portfolio, and short term (trading) of 20% of the portfolio into medium risk and high risk token allocations. The latter two plans are based on initial success in 2023 of gaining a 20X result and a 5X result on two very low market cap token trades, and I currently hold 8 such trades that have an opportunity to do 100X each over the next two years. I am not certain I will trade Forex this year. I am fully satisfied to just trade cryptos for the next two years. Best of luck with this planned participation. You are making all the planned moves I made myself, and with hindsight, I would recommend to anyone exactly what you have started out to achieve. I will be watching this post with interest.