Here we go! A newbie trade and journey journal

[jseymour84]

All I can say is that @TradeViper has offerred you some very valuable advice on this thread so far and I suggest you read his posts again, looking at the principles rather than perhaps the detail so much and think about what he says.

I have a day off Wednesday next week so that will be what I am doing all day as well as developing a trading plan.

There are those I know who can trade the shorter timeframes successfully, @_bob and @TradeViper, both seem able to do that and @tommor is a trend follower which I can’t cope with psychologically. @Simple_Simon seems to be successful and seems to take the longer view as well, but I’m unsure as yet what his strategy entails.

More proof that the exact strategy doesn’t matter. This makes it difficult for me because I am the type of person that is always looking for the perfect strategy. Intellectually I know it doesn’t exist, but I still have to fight off the urge to jump to a new system every other day.

The positioning of teh stop loss is one of teh most important skills you can learn. Look carefully at that stop placement, ir seems to have been good, but maybe a little more room next tiime ?

It’s good to see that I am on the right track with my stop losses. I typically place my stops 5-6 pips above the previous high on my trading time frame. I figure if the price gets there then the trend has reversed and I need to be out.

Persist and learn

There is no other option for me - I have to learn how to do this. Failure is never an option once I make up my mind to do something. Not to mention I am sick of working 12 hour days for someone else when I can be working 12 hour days for myself.

[jseymour84]

Lunch time, which means time to take 10 minutes and look at the markets to see what is going on…

AUD/USD
Market has broken out of a trading range to the downside yesterday, but seems to have found another range with the bottom of first range acting as the top of the second range (on the four-hour chart). Sideways movement continues on the 1 hour chart, with no clear trend. Price is hovering near the mean of this secondary range, so no opportunities here.

EUR/USD
Broke above the range that price has been trading within since 10/26. Up move has been explosive and almost equal length to the down move prior to the range. I tried to play this range but was stopped out several times and missed this move. At this point, price is bullish to my eye, so looking for bullish entries on lower time frames. Hourly chart shows near vertical price move with no clear market structure. 15 min chart shows a brief period of sideways movement before another bullish move. Note to self: watch for retracement followed by double bottom to get long on this market.

GBP/USD
Currently ranging on the 4 hour chart, with bottom of range at 1.30466 and top of range at 1.33007. Price is currently at mean, so too dangerous to play here. Skipping hourly and 15 minute looks for this pair. Set alerts for top and bottom of range to draw my attention back here again when price should be better.

USD/CAD
Market had put in a double top on the four hour chart early this November, and then a bearish trend has ensued. I put in a long play at 1.27378 thinking that the market was going to retrace up to 1.27937 (foolish thought), and that trade is currently -12 pips. Market is looking like it might start ranging on the 1 hour chart following a retracement up and then failing to put in a lower low at 13:00 UTC today.

USD/CHF
This market just broke range to the downside at 13:00 UTC on the hourly chart. My first instinct is to look for bearish trend following opportunities, however, 4 hour chart shows uptrend that double topped, then moved into a range and broke to the downside. I still want to say bearish but not sure if market will find support at 0.99264 (previous resistance level that was violated prior to double top). No entry signals on the 15 minute chart so sitting on hands here and watching for a double top to form after a bullish retracement.

USD/JPY
Four hour chart currently in a range from 113.068 to 114.619 with price currently at 113.416. My gut is saying to be cautious about looking for bullish opportunity. Price has been trending down from 114.619 on the hourly chart since 11/6 which suggests to me that bears are gathering strength and bulls starting to falter. A double bottom exists on the 15 minute chart which is a bullish entry signal in my plan but I don’t have RSI divergence so staying out of this trade.

My Trade Rules for Following Trends
I know indicators are not popular here, but screw popularity. In my trade system, I must have these things in order to take a trade (which I was not following yesterday because I let the excitement of live trading go to my head):

1. Double top or double bottom after an impulse leg that violates structure level
2. RSI > 80 for the first top in a double top or RSI < 20 for the first bottom in a double bottom
3. RSI lower on second top than first top (or higher on second bottom than first bottom)
4. Direction of trade must match direction of trend on the four hour chart
5. Risk vs reward of 2 or more (Reward >= 2R where R = risk)

Entries are allowed anywhere between the close of the bar that forms a valid pattern completion and the neckline, provided that risk / reward is met.

Stops are placed above the highest high of the double top or below the lowest low of the double top typically by 6-10 pips depending on risk - reward factor. Target is the neckline of the pattern. If I am going to take a second target, then second target is at 0.618 retracement of the initial impulse leg that formed the first half of the pattern.

My Trade Rules for Range Trades
This is a simple trade. Buy at top or bottom of range via limit order. Stops are set to 10 pips outside the range, and target is the other side of the range. I allow myself a discretionary exit at the mean if price looks like it might reverse.

[anon46773462]

@Falstaff

@Simple_Simon seems to be successful and seems to take the longer view as well, but I’m unsure as yet what his strategy entails.

Just for the record, I am historically a day trader - that only started migrating to longer term charts earlier this year when I began trading oil.

I predominently traded from a 15min chart and only EURUSD. I prefer specialising in only one product (at a time).

I have only ever really used a mixture of MA’s and trade on a discretionary basis, looking at the so-called PA and the key factors that are prevalent at the time. In other words, I decide what I think the market is doing and wait for the MA’s to tell me whether everyone else is doing it - or not!

In my experience, the 15 min chart is good, and even better when combined with a higher TF such as 1H or 4H, and one can trade consistently well from it but it demands strict discipline, concentration and selectiveness in when to trade and when to leave it alone. Entry and exit levels are critical on this TF since the average move between signals can be quite modest compared with longer TFs.

By way of example, I have been expecting a drop in oil prices this week and the hourly chart started to show a “sell”. Having come to that conclusion I would then drop to a 15min chart to monitor my position “close up” for signs when to get out. This is my today’s oil 15m chart:

and this is the EURUSD 15min chart for today after it also gave a buy signal on the hourly chart:

The important thing here is that these types of 15min set-ups will not work consistently as stand-alone trading strategies at all times. In both these cases the signal was first given on the 1 hour chart that something might be starting here - and only then does the 15min kick in as a useful progress guide combined with a sensible stop level.

But these are just the way that I personally apply a short term chart. There are many variations, methods and techniques…very, very, many!

Sorry if I am distracting your thread progress here , I just thought I’d address the comment and got a bit carried away - as I am prone to do

[jseymour84]

Sorry if I am distracting your thread progress here

I look at this thread as more of a mastermind group where intelligent traders can help me become better by pointing out my flaws As long as you add value and include good explanations, feel free to post away!

[anon46773462]

where intelligent traders

Ahh! now there’s that problem again!

Regards
"Simple_Simon"

[Ben1987]

I am going to simplify your trade plan on following trends:

1. you use double top or bottom to enter a trade
2. If RSI > 80 or RSI > 20 you,ll enter a trade

Now you need performance metrics such as P/L, R/R and Winrate.

don’t compile so much, I am not a technical trader, but if I was, I’ll only keep three ideas maximum and then try to experiment with another trading system.

And have a goal by next 2018 that you will have 10 strategies on hand, you got 1 now, 9 more to go.

I am a fundamental and sentiment type of trader that looks at price action and only use technical analysis to direct my trade if I am uncertain or have lost track of what the market is doing. We both have different approaches in the market, I believe a fundamental and sentiment type of trader needs more on his trade plan because we aim to look at the overall picture of the market, whereas technical analyst try to look at patterns and you need a lot of different ways to enter a trade through indicators, if it is too strict, you’ll only be trading once every month haha.

Also, quick question is my circle spots and blue rectangle box considered double tops and bottom

[jseymour84]

@Ben1987

Also, quick question is my circle spots and blue rectangle box considered double tops and bottom

The middle circle would be. None of the other indicated areas would be.

A double bottom forms when price moves down, pulls back, and re-tests the same level without closing past it. So what you are looking for is an initial bottom, one or more candles that have a high and close above the high of your initial bottom, and then a second candlestick whose low at least meets the close of the first bottom but does not close beyond the low of the first bottom.

Here is a chart that illustrates the concept of the double bottom trade.

For me, the key to trading the double tops and bottoms is entering as soon as the pattern completes, then placing a stop loss 6-7 pips below the lowest low (or highest high) in the pattern. Of course, I also need the RSI to hit overbought or oversold and to have divergence (price hits same level on each test, but RSI does not) as extra confirmation.

I also indicate two targets on the chart. My goal is to get to where I can take out 2 mini lots and then close out 1 mini lot at target 1 and move my stop to break even to let the other mini lot run to target 2. At that point, the trade has no risk but opportunity for more reward as in the above example.

[jseymour84]

Nothing better than coffee and charts in the morning.

Analyzed the markets I am watching and there is not a lot of opportunity for me right now. I found a bearish trade on EUR/USD, and a potential setup forming on AUD/USD as it is moving up from four-hour support.

All my positions stopped out overnight. So far I am down to $94.80 in my account. I started with $100 so that means I have a realized P&L of ($5.20). Emotional and carefree trading cost me 5.2% of my account value. This is why it is important to have a plan.

Good luck to all of you out there who are currently trading, and to those who are still learning, don’t repeat my mistakes

[jseymour84]

And the bearish trade stopped out… that’ll teach for me trading against the trend at this stage of my development.

[TradeViper]

Hey J, did you write down the context and premise for these trades???

The Ever Watcher VIPER

[jseymour84]

For the EUR/USD trade I took this morning, yes I did

Here was my thinking on that trade (with charts)…

Market context: Price just exploded to break several structure levels, however, momentum seems to be slowing down as candles are starting to get shorter indicate less buying interest or increased selling pressure. I am expected a retracement before the trend extends to next structure level. EUR is strong against USD as a result of bad news for the USD.

Premise: I want to attack this trade. I want to ride the retracement down and then reverse position when retracement loses steam. If market double tops, I can get short to ride the retracement to previous consolidation range on the 15 minute chart. Once that zone is reached, I can get flat and wait for bullish trend extension, and enter when range is broken to the upside. If that occurs, I can take targets at retest of double top.

Execution: I entered short at 1.18365 with stops at 1.18599 and a profit target at 1.17838. Risk reward is favorable. Time of entry was 11/15/2017 06:48:40 AM CST.

Results: Market spiked up and stopped me out before moving down to my profit target.

In reflection, my stop should have been above 1863 instead of 1836. I knew I was going against the trend but that was because I felt so sure that a retracement was coming (and it did so I am counting that as a partial victory!). I also formulated a plan to attack that move and executed it. For future trades on this setup, I will probably use a 1 or 2 ATR stop instead of just setting my stop 6-7 pips above the highest high in the double top.

Edit: Needed to add that it is very frustrating to be right on an idea, but to botch the execution and miss the move. If I hadn’t botched my stop, I would be 35 pips into profit at this point and probably be looking to get flat as we are approaching the top of a previous consolidation range.

[anon46773462]

I want to ride the retracement down and then reverse position when retracement loses steam.

One very quick observation: in general, price movements in retracements tend to be more volatile and erratic than in the actual trend itself (for obvious reasons, I think?). This is worth taking into account in planning stop levels.

[TradeViper]

Yeah it happens, we went short before 8:30 at 1835, 21 pip stop, half size looking at 1800 as an exit, but we were not really planning to hold through the whole stop, it was only there to preserve capital in case of some crazy #s. We bailed at 16 pips, looking at the result, we would have had to hold through 26 pips of stop to make around 30, in the end we have no regrets, there is really no way we could tell how high the bounce up, if any, would be. We factor in time and support vs the stop size, you know that it is going to catch at 1800, now if we would have been at 1860 or so, then looking at the 1800 number would not have been that significant. Also we were looking for some movement higher, but the 15 min run up was too much time. It did form a fair double top, but my standard rule was not hit with this, so even though we were tempted we sat pat on a small loss. Again it happens, and that is why it is called speculation.

The Ever Speculating VIPER

[jseymour84]

It’s a good thing there will be more opportunities in the future Now to just get good so I can capitalize on them.

[TradeViper]

Yup the market will be here tomorrow Which is why preservation of capital is so important, can’t trade with no money.

Also that double top would have been a good trade at the bar close of the Pattern completion, 25 stop and around 40 tp. Sweet ride.

The Ever Sweet VIPER

[jseymour84]

Man, I am really tempted to get long at AUD/USD as we are hitting support levels, with a double bottom forming on the 1-hour chart. The 15 min chart doesn’t concur though (too choppy between the two bottoms), and it would be another counter-trend trade like that last one.

On the other hand, I can watch to see if price breaks below 0.7587 and try to catch the ride down to 0.7520. The downside to that trade is I would have to have a 20 pip stop to try and catch 63 pips. It’s a good risk vs reward matchup, but it really limits my position to 500 units. Also, there isn’t a strong reason to believe that price will break below and run at this point.

Time to put my hands under my seat and look for opportunity elsewhere.

Also that double top would have been a good trade at the bar close of the Pattern completion, 25 stop and around 40 tp. Sweet ride.

Sounds like I did a good job with that analysis then and just need to get better on execution

[jseymour84]

Welcome to Forex After Dark, with your host, Mr. Can’t Make Pips himself!

I am home from work and it’s time for another look at the markets before my evening day trade hours start.

AUD/USD
We set a new support level on the 4-hour chart around 0.75809. Price is still moving down so on the lookout for double top entry patterns on this pair. Hourly chart confirms the bearish bias. However, no where near close to getting a valid entry signal on this pair yet.

EUR/USD
This pair has just been eating my lunch all week long! Price looks to be retracing from a new resistance level at 1.1850 on the 4-hour chart. I am looking for price to retrace to around 1.1750 and if that level doesn’t hold, then the next level I can see offering support is 1.1650. The hourly chart is starting to show some upward movement. The 15-minute chart looks like there might be a potential double bottom forming at 1.1768 which might allow me to catch a small upward move as the market continues to retrace down. This pair is in play for tonight’s session.

GBP/USD
This pair is like that girl (or guy) from high school that has a great personality. You want to play here just to see what it would be like, but you certainly don’t want your friends to find out. Pair is still range bound between 1.30218 and 1.33101 with price hovering around the mean. This pair is out of bounds for this session.

USD/CAD
Bullish trend on the four hour chart, with price coming off 1.2664 support level and moving towards 1.2913 resistance level. The hourly chart doesn’t show as clear of a trend and looks more like a range then a bullish trend. It also appears that price is struggling to break above the mean of the range betwen those two levels. This is conflicting signals, so I am putting this pair in the corner for tonight.

USD/CHF
This pair is either reversing from its bullish trend or retracing. I can’t tell which at this point on the four-hour chart. The hourly chart is definitely looking bearish, but not sure if it is new trend or retracement. The 15-minute chart is a mess, so this pair is not in play tonight.

USD/JPY
I think this might be a pennant pattern on the four-hour chart. There was a large bullish movement up and then the market moved sideways. As the market moved it put in lows along 108.101 but steadily declining highs. I am thinking that this pair is heading for a bearish trend in the future. The hourly chart is in a range between 112.635 and 114.434 with price currently at 112.818 so if I do take a trade here it would be a bullish trade. No clear entry signals on the 15 minute, so this pair is not in play tonight.

So in summary, it seems like if there is any opportunity it would be on the EUR/USD pair. RIght now, I have a very limited range of techniques to trade off (just one that I am actually allowing myself to use), so I just need to accept that I won’t get a trade every single day. At least this gives me time to build my spreadsheet for keeping track of my trades and their performance.

[jseymour84]

So I took a stab at recording a video of my market analysis and uploading it to YouTube… be warned, it really sucks. Like I mean, really bad.

Feel free to laugh.

[Ben1987]

I liked your attempt at your market analysis!

My thoughts on EUR/USD based on your charts will be like this. I noticed you do not understand the importance of support and resistance and I think you should do some reading on it, overall well done.
This is my view on EUR/USD, and I believe it could be potentially a high probability trade.

My thoughts should only be used as a collaboration of your original idea, it can be either right or wrong.
Also, I do not trade EUR/USD, so it is better to take it as an idea.

[Kruger44]

Good luck to all of you out there who are currently trading, and to those who are still learning, don’t repeat my mistakes

Hi J, I’ve attached a Demon Finder I thought you or others might find of benefit. Complete after each trade to highlight which poor trading habits you are exhibiting the most - then kill that Demon!