Gather round and laugh and cheer as I stumble from trade to trade in my journey to become a disciplined and profitable discretionary trader! My account is live with one hundred Aussie dollars. My goals are:
-To make 10 disciplined (following my plan 100%) trades in a row.
-To increase my account size by 30% by the last day of 2019.
My Trading Plan:
-Use weekly charts to identify a trend.
-Draw support and resistance
-Use daily chart to enter into the trend at a point which involves as little drawdown as possible.
-Use wide stops, placing them at logical points based off S/R.
-Maximum 2% risk per trade
-Take profit when trade approaches a S/R point, or appears to be turning.
That’s all I can think of right now, so let the fun begin!
The EUR/JPY short is the one closest to its stop loss at the moment. I made a very bad entry on this, right before the retracement. Its seems to be turning around for me, very slowly.
I’m being told by the TA that NZD/JPY is a good short, EUR/JPY almost as good. Good enough for me to justify the double JPY long view.
I’m steering clear of GBP pairs in general until the Brexit volatility calms down, but the GBP has turned more bearish than it has been for a while. In this trade’s favour is that it is long USD, which has also seen some strengthening, so both base and counter are rotating in favourable directions.
Took a short position in ZAR/JPY today, as you can see I am of the view that the retracement completed about 3 weeks ago and we are now headed to retest support at .6918 :
My NZD/JPY, and EUR/JPY shorts continue to go nowhere, with both sitting against me by 100ish pips each. Likewise my USD/SGD long is just sitting there doing nothing, about 70 pips against me.
For the BCO/USD trade and the GBP/USD trade, instead of moving my stop to breakeven, I moved it into profit by about 20 pips each. I guess I find this psychologically a bit more palatable. If I didn’t have a few trades in the draw down at the moment I like to think I might be adding to those winning positions.
One of my long time friends is the head of a prop trading firm, I speak on the phone to him about once a week. I think he has been trying to tell me gently for a while now that he doesn’t really think this is viable, and that I might be better off learning python. I’m not ready to just give up yet though.
Sounds interesting. Can the rules be strictly quantified? I am spending alot of time in forex testers beta tool, the visual strategy builder at the moment. It makes EAs out of module blocks. If it was 100% mechanical-ableable I could run backtests on it.
So e.g. today I am 5 out of 11, all approximately equal-sized trades, each with risk -1r. with a net profit of 3r. Pretty typical for middle of the day so far.
Yes, 10 majors on the platform set-up, so that’s an H1 chart and M5 chart each. Ditched AUD/USD and stock indices for this strategy as their margin not so good - 1:30 for majors, 1:20 for these others. Keeping busy.
I’ve decided to increase my position in short SGD/JPY as it has moved in my favour by 33 pips, and I am starting to feel confident that this trade might play out the way I thought that it would:
I don’t want to move the initial trades stop to breakeven, as it would only be 33 pips away from the current price. So instead, I have moved it closer, so that the trade, although not derisked, has had its risk cut in about half. I have said ok that half a risk left for this trade can now be spent on a new trade to increase the size. So thats what I’ve done. I haven’t added heaps to the size but I have added a little bit, so the overall SGD/JPY between the 2 trades I have open is still sitting at 1% risk. We shall see I guess.
Recently I closed some trades in profit, including the SGD/JPY shorts described above. This leaves me sitting on just my four trades which are still in draw down:
I added to my position in the GBP/USD during last week, which I’m now wondering might have been a mistake, as it has reversed a little bit. All four of these trades look like they should go in my favour on the weekly, but I guess I will just have to continue to have patience.
There is no doubt that I am clipping my winners off too early, and that is reflected in the low risk/reward and disposition scores, both of which should be at least equal to 1, but aren’t:
The usual practice is that traders don’t add to winners. They should.
If you do add to winners, the classic rule is as soon as your unrealised profit is equal to your initial risk. I do this by adding a second trade of the same size as the first, but many traders only add a second half-size trade, and so on.
As positions get larger, although its nice to see that your initial capital risk never increases it is painful to see a pull-back when you have several overlying positions and the decrease in unrealised gain can be a large cumulative number. This is a mental obstacle that many traders can never overcome but it is worth fighting: I am still fighting it all the time.
How things currently stand. I am finding that holding onto the EURJPY short is very fatiguing and saps away at my confidence. Still, I will wait. I opened a new EURUSD shot position recently also, as I felt it was coming to the end of its little four day rally.
