Hikaros Trade Journal

[Hikaros]

Hello,

I am a relative new forex trader and I decided to open a journal so I can track/overview my trades/ideas and discuss them with other traders.
I am still trading in demo and I mostly trade EUR/USD. I am using price action strategy and I try to make 3 to 5 trades per week.

Here is a bullish bat I found traded last week. This is was my first high probability pattern I traded!
Q: Is this a legit bullish bat or I was just lucky?

NEXT WEEK PLAN

Reading next’s week news I feel that EUR will go up and USD will remain low.

Here is my technical analysis.
I want to buy at 1.23800 where the 50fib and the trendline lay. tp at 1.24500 and sl at 1.23500.

Please feel free to comment, make suggestions or ask questions.

Thank you for stepping by.

Happy trading!

[anon81929759]

@Hikaros

Here is a bullish bat I found traded last week. This is was my first high probability pattern I traded!
Q: Is this a legit bullish bat or I was just lucky?

and… here is a bat that i found on the internet

Now…
YOU WANT MY OPINION… ok

• DOES IT MATTER ?
  in case you don’t know the answer
  ANSWER = NO IT DOESN’T

because you’re a newbie, i feel you should know this.
does it matter if you see a flying bat or a bullish bat or a rising star or falling hammer or a maribozu, NO ONE CARES MATE, it doesn’t matter

WHAT MATTER IS … DID YOU MAKE MONEY and DO YOU KNOW HOW YOU MADE MONEY

now. if your response to this is going to be
“But Martin, i made money because i saw the bat , therefore next time i see the bat i’ll do the same”
IT DOESN’T WORK LIKE THAT MATE
Trading is not Rigid, it’s not a precise and exact science, you can’t say just because you see this now it will also happen in the future

My advice, … if it’s working for you… go with it,
but, i strongly suggest you forget the names and just remember what the market is doing, and i’ll tell you why…

When you remember the name of something, it means YOU ARE CONFORMING TO RULES THAT ARE GIVEN TO YOU
so… When a Bullish bat forms your mind is trained …IT’S LIKE THIS AND IT CANNOT BE ANY OTHER WAY
THAT’S INCORRECT

Whereas if you remember it your own way, Your brain goes through a process of learning and adaptation and in that process you learn more than just accepting setups

so… forget the names, for the most part they are just BS anyway
there is only 1 name that i think is worth remembering… DOJI that’s it
Everything else is pointless, Make up your own names

You might call this one, Metallica
and the upside down version of it that looks like a W you might call WASP

make up your own names mate , although you don’t really need names to begin with so long as you understand what the market is doing

now let’s look at this
THIS PROVES MY POINT… DOESN’T IT ?

@Hikaros

Is this a legit bullish bat or I was just lucky?

Well. what this tells us is

1. You don’t even know, You’re just associating patterns that are taught to you
   2 There is no such thing as luck, so… you were not lucky, Unless THAT’S WHAT YOU WANT TO BELIEVE. which is completely your choice
2. Tell me… what is a LEGIT BULLSHIT BAT… is there are fixed rule, No… so by that reckoning, it was not a Legit Bat because we can’t define a Legit Bat

at the end of the day, after all this crap,
YOU NEED TO ASK THE RIGHT QUESTION and that is

did i pick this Rally Up Correctly
the answer is YES

the only question beyond that is… did you mean to pick it or was it by accident or Coincidence.
My feeling would be that there was some level of planning
so, it’s logical to say… GOOD WORK, you picked it

but i would dispense with the names, they’ll just confuse you

be cool mate

[anon81929759]

Here is my technical analysis.
I want to buy at 1.23800 where the 50fib and the trendline lay. tp at 1.24500 and sl at 1.23500.

yeah… it look ok, thus far,
my thoughts are that it might come down as far as the next fib level , but i also believe it will go up again.
but yeah ok, this setup is not bad for now
good work

[tommor]

Martin, this bat is clearly an inverted hanging bat and is therefore a downtrend continuation signal. This presents significant overnight risk of price flying about and, if the pattern is prolonged, a high probability of shit up the nostrils for the unwary trader.

[anon81929759]

@tommor

a high probability of ■■■■ up the nostrils for the unwary trader.

Love it… hehe, BEST COMMENT EVER

[Hikaros]

Hello Martin,

Thanks for your response.
Truth is that I don’t memorise any names.
What I do is:
1)I measure the market with fib lines,
2)when a triangle is formed I look at my cheat sheet and I try to form the next triangle.

I can’t remember names. I just like geometry, measurements and Fibonacci.
Here is how I do it…

My cheat sheet for ABC patterns.
ABC patterns.pptx (118.6 KB)

TRADE UPDATE

Thanks Martin for your prediction about the upcoming trade. I believe you are absolutely right!

Strong Support at 1.23500 + fib 0.618 at 1.23400

Two senarios for the start of the week:

1)Buy at 1.23800 @ 0.5 fib
2)Buy at 1.23500 @ 0.618 fib

Now I wait to see which one will occur if any…

[Hikaros]

Hello tommor,

Can u show me where is my mistake??
What I did wrong?

[anon81929759]

when a triangle is formed I look at my cheat sheet and I try to form the next triangle.

i say… throw away the cheat sheet.

I can’t remember names. I just like geometry, measurements and Fibonacci.

that’s awesome… so you like Mathematics
well then work it out mathematically, don’t follow a cheat sheet.
ive been trading for 7 years approx
i’ve also had cheat sheets, they don’t stand the test of time,
however… working out the market behaviour and what certain movement MEANS is more valuable than a chat sheet that stays the same all the time… do you understand what i mean ?

[tommor]

What mistake? What I see -
You got a bullish bat pattern and went long. You made a profit.

What I don’t see -
I assume that you used the context of the pattern to influence the other elements of your plan for this trade - position size, capital risk, initial stop-loss, dynamic stop-loss, whether to scale in/out, whether to pyramid, profit target etc. etc.

If you made a profit without regard to these other factors, especially risk management, then you were indeed just lucky.

I do think success at pattern trading is less to do with what pattern you use, more to do with how you trade it.

[tommor]

Although possibly the big mistake is trading off chart patterns like this in the first place. But I am not qualified to say that absolutely.

[anon81929759]

Although possibly the big mistake is trading off chart patterns like this in the first place. But I am not qualified to say that absolutely.

but, nevertheless, you are correct

[Hikaros]

that’s awesome… so you like Mathematics
well then work it out mathematically, don’t follow a cheat sheet.
ive been trading for 7 years approx
i’ve also had cheat sheets, they don’t stand the test of time,
however… working out the market behaviour and what certain movement MEANS is more valuable than a chat sheet that stays the same all the time… do you understand what i mean ?

I am trying to understand, but…
So, mathematically speaking, how can I measure the market and understand the meaning of a movement without some established patterns??

[anon81929759]

@Hikaros

So, mathematically speaking, how can I measure the market and understand the meaning of a movement without some established patterns??

Formulate your own patterns based on FACT
Trading is basically Statistics, … Likelihood of something occuring or not, which translates into Risk management.

@Hikaros

I am trying to understand, but…

i know you are mate, I UNDERSTAND, i’ve been there, it’s like a brick wall… … right
ok… start like this
the most basic of tasks is to figure out DIRECTION

so… pull out Monthly , Weekly, Daily… H4, H1 M30, M15 , M1
on whatever instrument you want

and DEFINE THE OVERALL DIRECTION
and understand WHY you made this choice

see, here is the thing, Your mind is beautiful thing, the way it works, it will JUST DECIDE what direction it is BASED ON PATTERN RECOGNITION, but not the patterns that are on your sheet.

and it happens so seemlesly that you don’t even know how it happened
GET USED TO UNDERSTANDING WHY YOU DECIDE CERTAIN THINGS

now look
LET ME GET YOUR STARTED OK so you have somewhere to go from here

Rule 1. Piss of those cheat sheets they are useless

Rule 2. Keep things as simple as possible

let’s assume you trade EURUSD

look at this

Step 1. Define direction
you basically have 3 Multiple choices

UP , DOWN , RANGING

see how it changes depending on the time frame that you are on ?

Now here are 2 Basic concepts that you can use they are easy to understand
START HERE AND DEVELOP YOUR OWN TESTED THEORIES FROM THIS

ok… Lesson 1… USE SIMPLE LOGIC TO DETERMINE DIRECTION.
don’t over complicate it,
don’t argue with it
Just use simple logic… LIKE THIS

here is the Weekly chart

Now… Draw a simple conclusion what is the direction overall (keep it to yourself)
now, what is the immediate direction, I’m assuming you’re going to say, Martin it’s going UP.

that’s correct

now
STEP 2.

let’s draw a line under the rally up
and allow for some wiggle room , so don’t draw the trend line… RIGHT UNDER THE CANDLE… hehe ok

Now… is now fair to say that

1. if the candle does not break the trend line… IT MUST GO UP… that’s fair and logical… right ?
   so… THAT’S A SIMPLE RULE

another rule, ONLY TRADE WHAT YOU CONSIDER TO BE A GOOD DEGREE OF CERTAINTY,
don’t take long shots, trade LOGICALLY

another thing is
WHEN YOU DECIDE ON THE OVERALL DIRECTION, do not trade against that direction.
NOW. if you want to say , Martin what if there is a reversal… well… ok
but if that happens, then YOU RE-DECIDED ON THE DIRECTION. so then dont’ trade against THAT NEW direction… ok got it

now…
LOGICALLY… if it breaks the trend line
DOES IT MEAN IT IS NECESSARILY going down
ANSWER : NO it doesn’t

so for now… just use that concept of … if it doesn’t break the line it MUST GO UP… ok

now let’s look at this

the area in the grey box is A RANGE… a sideways market
when Market is ranging and you draw a box like this

LOGICALLY… ONLY 3 THINGS CAN HAPPEN and nothing else

thing 1. the Market can break out of the top side of the box
thing 2. the Market can break out of the bottom side of the box
thing 3. the Market can keep ranging FOREVER

Now… look at statisical likelihood

is THING 3. Very Likely to occur
ANSWER : NO
so… LOGICALLy it’s only temporary

so really you only have 2 decisions to make

now… should you predict it
ANSWER : NO You’re not a mind reader… ok
let the market do what it wants, and you adapt to it and prepare for both scenario’s

after a while you will find that your brain will identify patterns and how things move, don’t worry about it.

so now what you want to understand here is this

it’s useful to divide this box into 2 Like this (the Black Line)
then divide each half into halves again… (The Blue Lines)

Now here are the rules

BUY LOW
SELL HIGH
(no Duhhh hehe)
and there is a DO NOT TRADE area

they are as follows

so… NEVER ENTER A TRADE if you are in the Red Area,
Meaning… Above the Bottom Blue Line
or Below the Top Blue Line
aka… NEAR THE MID LINE

if you think the direction is going UP (as you think it is here) YOU BUY AT THE BOTTOM BLUE ARE
so… Below the Bottom Blue Line

if you think it’s selling, you SELL above the top blue line
Now, assuming you are doing short term trades, you may want to put your TAKE PROFIT here
anywhere in that box

the idea is… IN A RANGE (and you can test this)
price almost always returns to the mid line

if you BUY LOW and set your Take profit near the mid line or just above it (if you want to be gutsy) you are almost guaranteed to be taking in profit

so where does your STOP LOSS go… you ask

ok, it goes somewhere here
the red line

Meaning, if price goes against you. you have to accept your theory was incorrect and cop the loss
in this situation we are assuming that the direction is UP (and stick to your decision)
so if that’s the case
WE BUY LOW
WE PUT A LOWER STOP LOSS
AND WE TAKE PROFIT AROUND THE MID LINE

now if the direction is actually DOWN , then just cut your loss short. and re evaluate
it’s as simple as that

ok… so if it breaks out on the top side, like it is… DO YOU JUMP ON BOARD…
ANSWER : HELL NO… YOU MISSED THE BOAT… don’t try and jump on while it’s leaving, you’ll end up in the water with the sharks

YOU NEED TO PLAN WHAT WILL HAPPEN ok
if you missed it… YOU WAIT FOR THE NEXT ONE

now… what will happen with price where it is now… WILL IT KEEP GOING UP

another lesson
YOU NEVER KNOW WHAT’S ACTUALLY GOING TO HAPPEN, you just take educated guesses

so USING THIS RULE of identifying a range and dividing it into Quarters and understanding that price retraces to the half way line, and certainly to the quarter line

let’s look at the drop before range.

ignore the lines, i’ve just put the up their for now
just look at the box

ok… now lets divide it up again to get this

ok… so what ?? right ?

ok
now… LET’S TAKE A LOOK TO THE RIGHT SIDE WHERE PRICE IS NOW… shall we
let’s look what has happened

DO YOU NOW UNDERSTAND ?

do you think it’s a coincidence that price has returned the MIDDLE POINT OF THE DROP hehe

ok , so let’s apply those rules again of buying and selling

so… where will price go from here
well. IT’S AT THE MID LINE… so WE DON’T KNOW… WE WAIT for now
because the middle area is A NO TRADE ZONE

at this point here is the logic

if you think the direction is UP
you should have bought the trade when it was below the blue line, so you missed it

now, you have to wait for it to come back down again
or
if it doesn’t come down, wait for the next range period and re evaluate from there

if you believe it’s going to go down , then EVEN THOUGH YOU COULD ENTER NOW… DO NOT DO THAT.
wait until it gets above the top blue line, then SELL

WHY
What if it takes off you ask

well… if it takes off, you have a stop loss in place… right, Just outside of the ranging zone
but, HONESTLY… after a while, you will get a knack for picking the direction

and you might find that certain indicators (THAT YOU TEST) will assist you in this

you might also find that certain other pairs correlate with this pair and will help you make your decision

but FOR NOW

to Recap

Use this rule of LOGIC and Trend lines

so lets’ now do this

and now you can conclude the following LOGICALLY

on this time frame

• Price appears to be going up
• you want to BUY, which means you have to wait until it reaches the area below the bottom blue line
• now let’s assume that did buy in that area

you now conclude this

• Ignore all pullbacks UNLESS THEY BREAK THE RED TREND LINE, because unless price drops below that trend line IT IS IMPOSSIBLE FOR IT TO GO DOWN… can we agree on that ?

OK

Now. if you are selling, you wait for it to get into the are above the top blue line, but YOU WAIT FOR IT TO BREAK THE RED TREND LINE and obviously you put a stop loss outside of the grey box

now , lets’ say you didn’t get in on a BUY LOW
and let’s say this happens

imagine the blue line is a bunch of candles NOT A LINE… ok
so then you draw a trend line like this

now LOGICALLY can we agree that

• you would BUY LOW in the area under the bottom blue line
• you would also agree that IF PRICE BREAKS ABOVE THE RED TREND LINE, THEN it’s probably going up

now lets say this happens

ok, so can we agree that now, if price does not go below the top red trend line, then IT MUST GO UP

i guess so… right ? this is logical

now… question
DO YOU RIDE IT ALL THE WAY…
ANSWER : NO
YOU ONLY GO TO THE HALF WAY LINE and then take profit

now there is another way to maximise profit all the way up .
I’M NOT GOING TO SPOON FEED YOU (don’t take this personally)
I WANT YOU TO FIGURE IT OUT

so use these concepts as a starting point

forget the bats and the cheat sheets

Use Logic
apply the box to Break outs up or down
and apply them to range period

find the half way point
find the quarter points
decide the direction
BUY LOW
or
SELL HIGH
never enter in the middle

the reason is … if you are wrong, you will very likely get a chance to break even
however
if you were to sell just before the breakout to the high side, and YOU WERE WRONG, you’d now be in a lot of SHYTE and be trying to figure out WILL PRICE COME ALL THE WAY BACK UP

No, it probably won’t until you go broke

so… start there mate
this is basic stuff, i assure you

but, Put your stop losses outside of the box and whatever the pip count is… MAKE SURE YOU ARE NOT EXCEEDING 1% OF YOUR ACCOUNT BALANCE…so Adjust your Lot size accordingly

remember, DON’T PUT YOUR STOPS BASED ON A NUMBER, PLACE THEM LOGICALLY FOR LOGICAL REASONS. regardless of the pip distance
when you place a stop somewhere KNOW WHY YOU PLACED IT THERE

so… what do you think
IS THIS SOMETHING YOU CAN WORK WITH ?
can you build on this… ??

doing this creates safety and management
after a while, you will start to recognize patters and your cheat sheets will mean nothing… trust me

have a nice day.

[tommor]

I haven’t read Martin’s post but full marks for commitment and detail.

[anon81929759]

I haven’t read Martin’s post but full marks for commitment and detail.

@tommor
LOL…
Mate, … shows a total lack of commitment on your part… I’m dissapointed mate

nah… it’s just basic stuff really
no need to really go through it all if you already know it

if you don’t however, it’s very useful
simple, but very cool and works a hell of a lot of the time, so much so that you can pretty much base a strategy of it and develop something that gives you a high win rate
it may not always follow 1:1 Risk vs Reward, but who cares, because probability comes into it and then gives you a win rate so when you cop a loss, it’s not that big and you turn a profit anyway.

when i teach students, this is the first bunch of stuff we go through and they usually get a lot better in the next 2 weeks that follow

so… let’s see what happens

[tommor]

I know, I know, I know.
Its Sunday. I can’t do difficult stuff on Sundays.

[anon81929759]

@tommor
hehe
well. don’t do it monday, because Monday is Monday
wait at least until Hump day, but mate, if it’s not done by THURSDAY… oh mate, there’ll be hell to pay

on another note…
funny how that happens huh
i made this big post explaining the basics of high . low. mids and price action and then you have that bloke talking about that Nicola system thing which is basically the same thing.

how convenient that that post just showed up after i wrote this post… hehe

[Falstaff]

Basically what @Martin is saying is that on the weeklies it is in a good solid uptrennd, but on the monthlies - it is smack in super - high resistance !

Likely outcome - who knows but with dollar having been pushed artificially high for years - maybe it’ll pough through - eventually.

I’d be looking for a period of congestion around here, but probably tradable sized congestion.

What I’d also add is that the last 5 bars on the 4H chart relate to a Friday after a biggish up-week, so I tink some of that will be “The boyz” closing out for teh weekend with a decnt profit and maybe a few shorts in anticipatin of exactly that.

Where will “they” push it next week ?

Well working on “Max-pain” hypothesis, Bang it up, then brief congestion then drift it down a bit, up again and finally drop it like a red hot stone. (or a dead bat ? )

What news do we have next week ?

[anon81929759]

@Falstaff

Basically what @Martin is saying is that

Yeah… Basically
but it was more a place to start to experiment with instead of standing in front of a brick wall that you can’t get beyond because you’re out of ideas

but yeah… basically that was it

let’s now see where he goes from here ?

[Falstaff]

let’s now see where he goes from here ?

C’mon mate - I’ve had my guess - what’s yours ?