IronHeart's trading journal

Beginner Questions
41

Trade 13

USDCHF 28/07/2010 / 16:00 GMT

Counter trend - Long Trade

Here is the 4H time frame

Here we see the 4H candle with the arrow piercing the mid-band.

At this point, I’m looking for a CBL entry to go long.

15M chart

Dear oh dear oh dear…where did I go wrong…

The bottom blue line is the CBL.
The little blue arrow is my entry point.
The upper blue line is where I should have set my SL to break even.

My BE was set 2 pips too early, causing a premature exit from the trade from the retracement to my entry point.

Trade Statistics

Risk = 26 pips
Reward = 0 pips
R/R = 0.00
Max profit available = 25 pips (This is how far PA went before retracing)
Max R/R = 0.96
Trade Efficiency = 0.00%

End Result

+0.0%

42

Risk = 26 pips
Reward = 0 pips
R/R = 0.00
Max profit available = 25 pips (This is how far PA went before retracing)
Max R/R = 0.96
Trade Efficiency = 0.00%

End Result

+0.0%[/QUOTE]

I do not understand your trade, how can you finish to 0 with this job …
It is true that you came too late, but it seems to me that your upper line shows a profit of about = 10 pips.
Maybe I misunderstood your post.
You’re really well developed for input and it was good the Sto also gave a good signal, but you were late on the entry, as I understand it …
Continue to post, it’s very interesting, when I have free time, I’ll try to post a bit too, but right now not much time.
Sincerely, Didier.

1024×741

43

Hi Didier, this looks like a late entry but what I am trying to do is enter a 4H move, which is anticipated and entered from the 15M chart.

One of the conditions of my strategy is to set the break even when R:R reaches 0.5.

I only use 1 contract to maximise R:R.

On this occasion I set the BE too early, which was hit when price retraced just before heading back up.

I’m going to continue using this strategy until I get at least 30 trades, after which I can decide whether it’s worth hanging onto.

It would be great if you can keep posting here, your input is much appreciated.

<EDIT> P.S. yes, the SL point you’ve marked is just about where I set my SL. Usually 1 pip below the low.

45

Trade 14

EURUSD 29/07/2010 / 12:45 GMT

Counter trend - Short Trade

Here is the 4H time frame

Price goes above upper BB, with a contraction occurring on the opposite band. I think price will retrace before making a decision to go up or down.

15M chart

The long blue line at the top is the CBL.

The second blue line is where I entered this trade and the bottom blue line represents the point, which gives R:R = 1.0.

This trade went exactly as it was supposed to, providing ample opportunity for profit - but I had a different idea.

Given this week’s poor performance so far (especially considering backtest results), I chose to stay in this trade in pursuit of a better R:R.

I wanted to take profit at 29 pips, instead, this trade went in my direction for only 19 pips, enough to make a good 2.7%.

I got greedy, and I lost. This trade breaks even.

Trade Statistics

Risk = 14 pips
Reward = 0 pips
R/R = 0.00
Max profit available = 19 pips
Max R/R = 1.36
Trade Efficiency = 0.00%

End Result

+0.0%

46

[B][U]Update[/U][/B]

We are now nearing the end of week 4 and I don’t anticipate making any more trades until next week.

It has been interesting so far, I have found some personal limitations and some strategy related limitations.

This strategy provided more trades during last month than it has done so far this month. I will need to continue back and forward-testing to see if I can continue profiting using this strategy.

I’ll provide statistics during the weekend.

47

[B][U]Current Considerations[/U][/B]

Having taken many retracement trades over the past month, I have come to understand the kind of R:R’s I can expect and the likelihood of creating winning trades.

Sometimes it takes a lot of courage and a lot of patience to enter a retracement trade. So far, most of the trades I have made have gone immediately in my favour, with the median drawdown for all winning and break even trades being 0.42% (where 2% represents a loss).

By analysing results so far, I have been seeing better entry opportunities than the ones I’ve been taking (yes, entering even earlier!). My whole retracement strategy has been built on being able to enter very early and take a modest profit before the retracement ends. A modest profit by this method’s standards is a R:R between 1.0 and 1.25.

[B]I think I need to begin drawing some hard lines now.[/B]

I enter each trade with the expectation (hope?) that it will change direction completely and begin a new trend, creating R:R’s the size of 3.0+.

The probability that this will happen from a retracement trade is low, although I have seen it happen.

The best trades with the highest R:R seem to happen from squeezes, but sometimes PA is very volatile within the squeeze and never really gives a CBL you can be confident about.

One thing I have noticed for sure, though, I can’t use my current money management strategy (setting BE at R:R=0.5) from squeeze trades. If a squeeze trade goes in my favour and hits the opposite band, it usually comes back to hit BE before heading out into a bubble.

If I am to take these incredibly powerful squeeze trades, I need something else. The PSAR exit method is definitely the best way to go during a trend, but an extra protective measure is what I’m looking for. Something that won’t set a BE too early, and something that ensures the squeeze breaks out in the direction you desire. This may involve usage of a higher TF as well as a lower TF.

I’m currently testing this idea to find something that works for me. As soon as I find something I’m comfortable with, I will write up and post a new “Squeeze Trade Strategy”.

Until then, happy trading.

48

Trade 15

EURUSD 29/07/2010 / 16:00 GMT

Counter trend - Squeeze - Short Trade

Here is the 4H time frame

924×822

Just as the trade above, the 4H PA is failing break new ground and looks like it’s ripe for a reversal. One thing is for sure, there is some resistance around this area.

15M chart

924×822

Because PA is now in a 15M squeeze, I entered immediately at the CBL (OK, maybe just a little above it :D).

I don’t see any point to waiting for a close beyond the CBL in this case.

I really wanted this to roll over, so I had my eye on the opposite BB, but this never materialised during my time in the trade. I exited at the close of that doji candle on the bottom band. This is a perfect candle to draw a CBL on and try entering a long trade - I don’t think I will participate in that one!

Trade Statistics

Risk = 21.7 pips
Reward = 16 pips
R/R = 0.737
Max profit available = 24 pips
Max R/R = 1.11
Trade Efficiency = 66.6%

End Result

+1.47%

49

What’s up [B]IronHeart![/B]. First up it’s nice to see you’ve gained some positive pips after the spell of Break Evens. :slight_smile: Your strategy must be quite sound, for it is much better to be full of break even trades, as opposed to being stopped out! :smiley: With regard to your issue of having BE hit just before those lovely BB Walks, perhaps you may want to consider an additional contract(s); one for locked in profit, and the other to float around in the event that a majestic walk were to occur.

Your method of anticipating trades on the 4H and entering on the 15M has interested me since your presented it in [B]Tymen’s thread.[/B] It has resulted in my subconscious turning gears all throughout my sleep, and due to this I am trying to see whether something similar could be implemented in my Trade Plan. I will not be trading any more this week, as I will devote that time to studying your method of entry - it definitely looks promising!

Happy pipping!

50

Hey xXTrizzleXx, thanks for your message!

I’ve been trying really hard to end the week in a positive note! Thankfully, I’ve broken the break even deadlock!

In all honesty, though, winning rates of 40-50% for this strategy is normal, which is just about where I am now! The loss rate is supposed to be around 10-20%, with the rest breaking even. I’m hoping it will continue that way into the future as well.

The fact that you’ve taken an interest in my strategy shows that I might be on the right track, this means a lot to me.

It’s true that there are ways to increase R:R by entering early, this is exactly what I’ve been trying to do. But turns out this isn’t as easy and straightforward as I’d hoped.

I’m big on R&D and from what I can remember so are you, it would be great if we can work together to improve both R:R and our strategies through collaboration.

I’m sure we’ll make more ground working together than alone!

Happy pippin’ to you too!

51

[U][B]Week 4 Results[/B][/U]

Unfortunately, this is the end of my trading week, as I am super-busy tomorrow!

The week ended with 2 positive trade and 3 break evens.

By risking 2% per trade, the account has grown by…drumroll

[B]+4.46%[/B]

Total Account growth since inception:

[B]+14.89%[/B]

52

[U][B]End of Month 1 Statistics[/B][/U]

Total number of trades taken
[B]15[/B]

Winning trades percentage
[B]46.7% (7)[/B]

Losing trades percentage
[B]13.3% (2)[/B]

Break even trades percentage
[B]40% (6)[/B]

Average R:R of winning trades
[B]1 : 1.29[/B]

53

Nice going so far!

54

Great results IronHeart. Once again I’ll offer my two cents worth, just take what helps and leave the rest. Typically it takes 20 to 30 wins on a strategy to have high confidence in it’s potential, but results on this one are very promising so far. Just using the stats you’ve generated so far, I would project about a 450% annual return on investment, with minimal monthly drawdowns. The power of compounding is enormous. Compounding at the rate you have generated, or an increase of about 14% per month, with no monthly drawdowns, can turn $1,000 into $2.6 million in 5 years. The difficult part is having the patience to not push the system beyond it’s bounds and incur a nasty drawdown.

Of course you could always hope to do better, but I’d suggest you preserve this account and strategy and continue with it with only minimal well tested modifications over time. For a strategy like this, it will take about three months to establish a good baseline of performance and any changes would take about two months to evaluate. Therefore, I’d suggest any changes be tested in a side-by-side demo for two months before implementing them into your system.

If like mine, your creative fingers get itchy to do something even if it’s wrong, I’d suggest setting up a separate demo for side-by-side testing anything else of interest to you. Obviously, you never want to test in your good account. I currently have three demos running separately from my main account for this purpose, one testing a new entry strategy of my own, one testing Tymen’s PSAR-midband exit strategy, and another testing Tymen’s breakout entry strategy, which I’ve just started in a demo. Since I test these on longer timeframes, there is very little work required to trade these demos. I trade everything in those demos just the same as in my good live account, except for the one change I’m testing. That’s just my own method for keeping my creative urges from damaging my good account. Happy Trading :slight_smile:

55

That’s some great insight Graviton, thanks for continuing your efforts and for looking over my shoulder!

56

[B][U]Update[/U][/B]

Well it’s the end of Thursday here and this week/month has begun with 0 trades!

I’ve had a terribly busy week and will have an even busier next week!

Looks like the first two weeks of this month will see no trading in my account whatsoever.

Stay tuned for more trades whenever I can!

57

Great stuff, [B]IronHeart![/B] Anticipating your return to the arena! :slight_smile:

58

Nice job, IronHeart. I’m having enough trouble keeping my pips positive trading [B]with[/B] the trend! :o And your making good pips mainly counter-trend trading. Keep it up. I’m looking forward to your next winning posts. :smiley:

59

Hey guys! I am back to trading!

I’m still trading on and off due to other commitments but I’ve made some developments to my trading.

Noticeable improvements include a script that informs me when a trade opportunity has begun and a script that automatically takes me out of the trade given some conditions.

This means that I won’t necessarily have to be at my desk to monitor the trade, which is just great!

I wish I could bring good news about my life in general but at this stage, I just don’t think I can! :frowning:

60

Geez…also noticed I’ve been given a 1.0 star rating, taking the thread average down to 3.0…

…It’s just a trade journal guys, no need to be so…critical… :stuck_out_tongue:

61

Trade 16

EURGBP 16/08/2010 / 12:00 GMT

With trend - Short Trade

Here is the 4H time frame

OK, today brought 1 trade, a nice gift for a good return. The 4H PA hits the mid-band within a down trend. I think price will go lower, so I enter the 15M chart for an entry opportunity.

15M chart

1024×737

Entry was at the first close below the 1CBL. At the close, the stochastic oscillator is also bearish, giving my yet another reason to go short.

The only difference with this trade was the setting of a break even point, which was never actually set!

My testing has shown more profitability without a break-even, so I am currently implementing this idea (where possible).

Here’s a hint: doing this is a LOT simpler if you are not sitting in front of the computer!

Trade Statistics

Risk = 14 pips
Reward = 31.1 pips
R/R = 2.22
Max profit available = 31.1 pips
Max R/R = 2.22
Trade Efficiency = 100% :eek:

End Result

+4.44%