EU trade closed for break even due to correlation
GU closed for +30 pips
audcad long also closed for +30 pips as price is
likely to move down 46 pips. I have placed a buy limit order
just under that to go long again at a lower price
at the time of writing this all made perfect sense
rationale is price way above bands on both H1 and H4,
with engulfing candle screaming to go short
but interestinglyā¦
price is way below bands on both D1 and weekly
screaming to go long ( which is why I was previously long )
No real contradiction here ā¦ market is bullish and I will
hope to resume the upmove after the pullback
hopefullyā¦
Seriously nervous now
I just feel, thanks largely to Elijahās input, that
I may finally be on the right track
Much of the last year has not been wasted
I have for example resurrected my Market Profile
indicator. when using it before it served no real
purpose, but along with supdem zone indicator
it really makes targets stand out as obvious -
and exits are critically important
I was doing ok on D1, but trades can drag, and
time is money and profits can be severely limited
Iām extremely nervous trading M5 as I have
never had consistent results
at the moment it seems I can do no wrong
I donāt fear my luck will run out, I fear that luck is not
relevant here, that Iām actually seeing exactly what the
market is doing!
if I could succeed as well on M5 as I do on D1 I will
be facing major psychological issues, I can sense that
already
fear of success is every bit as a reality as is fear of failure
so Iām staying calm and trading M5 on demo for a while
the EU I closed on live but traded on demo. it hit TP
at demand zone
I then saw that price was well below bands on all TFs from
M5 to weekly!
I canāt walk away from that!
So I went long on M5 at demand zone and added on at 38.2%
retracement
I have noted supply zone on M5, Market Profile Median Line on both
M5 and H1, and have set TP just under all of them
I have a strange confidence that I have never had on M5 before
but apart from current open positions I think I might need a break
until Monday. its all getting a bit too stressful
Itās only the very short time frames I find stressful. I
will hope to get back to them next week
In the meantime on H1 to D1 itās business as usual
Iāve used one or two trailing stops where Iām not too
confident, so there is still a chance of a good profit
with little to lose
this screenshot is interesting
when price deviates from bands it invariably reverts
and crosses through to distal band
as we see I wasnāt expecting that to happen in this case
and set TP at Market Profile Median line
the reason is because price hadnāt moved out of the yellow
box zone. such situations may still be tradeable but usual
rules donāt apply, in other words, look for the nearest
likely target only, not furthest
as we see, sure enough price is reversing from that target now,
and although it did spike up to just about hit median band,
I would expect it now to confine itself to proximal to median
lower section of the bands. I would be surprised if it pushes
much further than that
all the action started within the yellow box, and noting the
contour of the Market Profile I just donāt see price progressing
much beyond the nose formation, and given the resumtion
of the downward slope of the bands, adds weight to that.
I am trying to get this down to be as mechanical a formula
as possible
It doesnāt work the same way on shorter timeframes, Iāll
get back to that next week
but working on H1 and above, the next higher TF must
be confluent, and TF after that, must be either confluent
or neutral but never opposing
for example, if price is well below the bands on H1 and H4
but price is above bands on D1, the higher time frame will
likely dictate the direction
on the other hand, if price on D1 is within the bands, itās
effect is more neutral
recognizing a vaild set up is easy. price will move toward the bands
and if it doesnāt, then you simply go in again at the next supdem level
exit is where more discernment is needed
Providing that price has deviated quite suddenly and significantly
from both bands AND the yellow market profile box
then TP1 should be the largest lot size ( but still small ) it will
almost certainly be hit
indeed, if you are extremely risk averse, you could just trade
TP1
TP2 would be just before vicinity of central band or MP Median line
as arrowed in screenshot and should be half the position size of TP1
TP2 will nearly always be hit
Live account up 8% this month, I donāt think Iāve
hardly ever been in profit on a live account before
With very modest lot sizes on the larger time frames
it doesnāt now really feel much different to demo
I would dearly love to make 10% this month, but of
course you can only take what the market gives
so far, I havenāt seen a real problem with DD so much
as stagnation, I noticed this week long periods
of lull, when nothing hardly moved at all.
and then suddenly everything bursts into life
10% per month would be great if it was consistent
I was actually doing very well on the M5 strangely enough
If I could refine that Hybrid system purely as a supplement,
even as little as 2% per month might make an 8% month a
10% month, or even better,
a 10% month becomes a 12% month
now that I do like the sound of
but I want to try to integrate the shorter time frames very
gently and gradually, and not get stressed and blow
everything
I have had cause for reflection over the weekend
I am now just 60 PLN short of my 10% profit for the month,
I have made 820 PLN profit real money
for me, that is a phenomenal result.
so, looking back over the last few posts, I sense some of
the old madcap musings creeping back in
āare there any kinks forming in the STR straight line?ā
ā how long does the nose of the market profile extend?ā
āhow long is a piece of string?ā
you get the idea of what I mean.
the basic system that has finally made me real money
is trading the divergence of price from the bands
the supdem zones are extremely helpful
the confluence of the higher time frame is a wise precaution
but that really is about it
Einstein said, ākeep things as simple as possible, but no simplerā
over the weekend I did some strategy testing on M5
Disastrous!
the bands just repainted beyond belief, so effectively
price never returned to them
this band system does not work on short time frames,
other systems likely do, but not this one
the saying goes āif it aināt broke why fix it?ā
Iām doing very well on H4 and D1 so āacting in my
own best interestā, I must put my focus on what
I know is working
( update: as I write I am now just 40 PLN from my 10% profit )
so, although I like market profile, and it is useful on H1
and H4, it doesnāt seem to work on D1, whereas supdem
zones work consistently well on all time frames
so I will endeavour to keep things as simple as possible
ie ā trade the set up, the whole set up, and nothing but the set upā
then simply ārinse and repeatā
this is now my third successful month, I must be doing something
right. but this obsession with tweaking, refining, will likely
be my downfall - āsnatching defeat out of the jaws of victoryā
sometimes, a set up on H4 looks good, maybe far above bands
and paused at a supdem level. invariably it will return
to bands and usually plough right through them.
but sometimes when you check D1 the confluence is
just so powerful
it may be that price is not far from bands, but reacting to
a supdem level, but the bands are in a steep downward
slope
this is seriously as good as it gets in forex trading, in my
experience at least.
sometimes you look at an open position and you see the ink blot
situation, the optical illusion where price seems definitely to be
reversing, then you look again and it seems definitely to be
retracing. you check on HTF and you see the same ambiguity
if you are already in profit, just take the money, quit while
you are ahead!
donāt stay in, hoping and praying you will get lucky, there
are enough non ambiguous trades to invest in
so when in doubt get out! Iāve found this principle has
served me very well last few weeks
Another lesson Iāve learnt is very hard to believe
I know some guys (and girls) do very well, making
over 20% per month, but risking as much as 5%
each position
Iām still not quite sure how Iāve managed to do so well,
risking a paltry 0.2% each position
I presume because losers are so minimal that the
gains soon add up
I think I could safely go in with 1% risk and make 5x profit,
but just one disaster would be psychologically devasating.
You must trade stress free, and that does necessitate very
small lot sizing.
but be sure of one thing it does quickly add up!
1 Like
@Jerome32 are you using any type of automated take profit?
I know @rrram2 will use a 5 pip trailing stop loss once his trades are positive by a certain pip amount. I donāt recall the exact parameters but I did read in one of his posts that he does use trailing stop loss in this fashion.
Perhaps something to consider fwiw.
Great job! Inspiring! Iām looking forward to going live myself,
KC
Just standard TP order in MT4, and trailing MT4 stop of usually 50 pips
on Daily time frame but I wouldnāt say a trail is a big feature,- if Iāve made enough
profit and it actually looks like there could be more Iāll use it
All the best when you go live
I hit my 10% earlier but we still have a week to go
and there is no guarantee it will just go up and up
but what I am noticing, is when I am trading in a level headed
way and not making stupid mistakes, a pattern is forming
Because I typically have a basket of trades, I donāt seem
to get much of a problem with DD, at least not at the moment
what seems to happen is that the market generally seems
tread water most of the time, and then you get a sudden
surge which is where the profits come from
Most of the time there is nothing to do, like doldrums,
there is just no movement at all
I am hoping that I will exceed the 10% level, even if
only to 12% or so.
Iāve done my calculations, and to my absolute amazement
modesty definitely pays
even making single digit profit per month, under 10%, and risking
just 0.2% per trade, I should make almost half a million
in 24 months and 1.3 million in 36 months, at least if
the last three months are anything to go by.
Risking 2% per trade, I should theoretically make half a million
in just ten weeks - or possibly blow my entire account
I much prefer a slow and very steady equity curve, like the
tortoise and the hair.
I donāt mind if I average as little as 5% per month, because if
its consistent it would be brilliant.
I might try to reactivate my FXbook, although in the past it
completely wrecked my demo accounts, but I suppose I
could still trade webtrader in an emergency
Congratulations on hitting your target!!
Clint addressed your thoughts exactly when he was interviewed by the BPs.
"If you could give just one piece of advice to newbie traders, what would it be?
I would urge newbies to learn the power of COMPOUNDING modest, but consistent, daily profits ā and, then, letting those profits grow exponentially to build wealth.
_There are three elements here: _
modest profits ā donāt take huge risks swinging for the fences;
consistent profits ā this means accurately following a trading method which has a high win-ratio; and
compound profits ā let your profits accumulate in your account; and, as your account grows, increase the size of your trades in proportion to the size of your account.
If you can consistently AVERAGE a net profit of just 20 pips each day, you can earn an average 1% increase in the value of your account each day, while trading with no more than 5:1 actual leverage, and limiting your risk to less than 2% on each trade.
_A steady 1% increase per day _
= a little more than 5% per week (compounded over 5 trading days per week)
= a little more than 24% per month (22 trading days per month)
= almost 1,000% per year (240 trading days per year, allowing for vacations and holidays).
_Where else can you legally make 1,000% per year on your initial capital, without taking extraordinary risks?"
KC
Honestly, that should be pasted on every traderās wall!
Looking at myfxbook was mainly demoralizing - overall 35%
down which isnāt true at all. myfxbook have classed the removal
of 3,000 bonus as a loss, it wasnāt a loss, it was the new FCA
leverage rule that resulted in all bonus being removed.
I think bonus ( as much as 100% on every deposit ) is as helpful
as credit card companies awarding you VIP Platinum status where
you have an extra 100,000 at your disposal, or more if you want,
just ask and it will be given
except in reality they are giving you nothing except a false sense
of security, devoid of any financial reality
that truth cost me $50,000 in credit card debt
Of course, if your motive is to eventually claim the bonus
that might be different, but believing your inflated, fictitious
bonus margin is your own money can cause you to become
similarly delusional.
Clint, above, is so on the money
so, I will need to close my account and start again, probably
transfer all my funds plus extra deposit over Christmas
when I wonāt have any open positions
then from January myfxbook will actually provide useful information
even now myfxbook reckons 80% win rate, some of these 'losersā
are less than 1 pip loss!
in fact, under normal circumstances I donāt seem to get losers,
the only real losers were during the transition from demo to live
so I think I should be in a good position to closely follow the
advice above - and that was the overriding number one
piece of advice
One very profitable swing trader never trades swiss
pairs.
I unfortunately made the assumption that he was caught out in
the SNB fiasco of 2015
but Iām starting to see something interesting on these pairs
Iāve only had one decent winner on a Swiss pair!
about 30 pip win cadchf that took about 7 days
also two small same day 10 pip wins that look like scalping
are in no way representative of my strategy
but of all my very many winners Iām not seeing any sign of swiss pairs
set ups on swiss pairs do always win but the following screenshots
are very disturbing
in the first example,usdchf entering at bullish, engulfing candle
I would have had a very good win, but it took 67 days to mature!
I have also arrowed what I would have hoped to have seen, price
hitting distal band in 3 days - not 67!
or take chfjpy, apart from a one six day win, which is long enough, trades
would have taken between 14 - 30 days to hit Distal band
or cadchf between 21 to 35 days to hit distal band
I really donāt want to wait a month to hit targets, Iām seriously considering
removing all swiss pairs from Market Watch, they are just dead wood
@Jerome32 thatās a very interesting observation. In the other direction are there one, two or three specific pairs you have found work exceptionally well with your strategy?
KC
Thatās an extremely good question. I donāt know,
but I do have a trading history so I can find out
I have now removed all Swissies. they canāt seem
to ever just go up and down, all that ranging is
probably just the antics of the big players, and
that doesnāt affect the eventual result but my patience
does have limits and I donāt want margin tied up
when I can be in and out on faster moving pairs.
but another revelation - I thought metals were pretty good,
Iāve done very well on demo gold in the past
different system, different trader
the reality is, over past few weeks Iāve had just one win
on Gold, in which I made a jaw dropping 2 pips profit!
Silver appears just once in account history for a 9 pip win
Silver seems to be much like the Swissies but Gold seems
ok in hindsight, Iām surprised I seem to have missed so many
setups. I will keep Gold for the time being but ditch Silver
and all Swissies
so concentrating on the top producers might be a good move,
but something else needs to be done end of monthā¦
where Iāve cautiously closed the trade, in most cases price
continues for another 50 -100 pips
so need to know if I should hold out for more, or just cautiously
settle for small, very safe gains
the answer isnāt obvious
Iāve made 887.00 last three weeks. a nice round 1,000,00 by
the end of the month would be a tremendous psychological
boost
It looks like my dream of 1,000 profit for this month
may not happen.
On the contrary, things are looking very bad at the moment
with just about every position turned against me
but that doesnāt mean Iāve made a lot of mistakes
Mondays can be awkward, wednesdays and thursdays often
see targets hit
I think I will sum up each of my positions, which may help when
I review the trade in a week or two.
at the moment I have miscalculated on USDCHF from last week
I went short when price was above bands, and noted that price
hadnāt gone much higher ( continued next post )
IMPORTANT NEWSFLASH
I just checked the charts to comment on USDCHF and noted
something that has had a profound effect on me emotionally
and psychologically - I was 900 up but everything started to
fall apart this morning ( including my whole life seemingly ), in
other words when the bottom seems to fall out of the market,
the bottom falls out of my world!
this is such a startling and critically important observation -
my emotional equilibrium is directly linked to my equity
The goal is complete nonchalance, not looking to any given trade,
or any given day, week or even month, but just knowing the
numbers will play out in my favour over time
At least I have identified a major stumbling block.
I was a heartrending 200 down at one point, but now just
20 down and likely soon be green again.
but Iāve got to steel myself to take the rough with the smooth.
There is a very good chance my balance may be up 1,300 - 1,500
this week, but it might retrace considerably before that happens
the following screenshot was really getting to me! I could see all
my hopes and dreams of last week evaporating before my very eyes
as my profits were plummeting
I am still an emotional trader, and now as I just checked my balance,
Iām back in profit again - and feeling pretty good
but if my equity now went down as little as -50 it would affect my mood
and weāre not even talking dollars! just Polish Zloty!
well this is the point of a public journal, just get it all out in the open
I would so like to say I feel an inner sense of relief at this valuable
insight into my psyche
but no, the unvarnished truth is that Iām just relieved that Iāve got
my money back!
so the two screenshots are named drawdown and reprieve, and
reprieve pretty much sums up how I feel at the moment
ok, neurosis aside, getting back to my USDCHF trade,
I had somehow doubled the position size last week, probably
in a moment of overconfidence
price then went against me.
I donāt see a big problem at the moment, I am short, and price
hasnāt been able to above the present level since February,
and we are well above daily bands, and above weekly bands.
so price will cut through both daily and weekly bands for a good
profit, I am confident of that. but before swiissy makes a big
impulsive move on the daily, it is quite likely to consolidate
in a range for two months, - before itās last big move down
and up, it was consolidating for ten weeks between June and
August, so itās good to be informed.
the bands are moderately sloping up which I donāt see as being a
problem.
the swiss pairs are just slow, and I see no need to trade them,
faster moving pairs are preferred, so this will be my last CHF trade
and I will be doing well to close before Christmas!
KC mentioned identifying the best producing pairs, its a great
suggestion but much easier said than done
should I pick my most profitable pairs Iāve traded? No! because
the amount of profit was not determined by the pairās characteristics
but more by my greed, fear, and often pure carelessness
In the future that would be the best criteria,
but for now, a good test would be to see how many set ups occur
on each pair. I will check that later
as a rule, I think yen aud cad gbp nzd feature well.
but I donāt want to be too restrictive
Iāve got a provisional business plan which Iāve implemented
as of today.
I think all open positions more or less conform apart from
swissy discussed above
If price is significantly above or below bands it is a set up
regardless of slope of bands and I will risk 0.1% as price
invariably cuts through even adversely sloping bands
no add ons as that can be very stressful when price turns
against you. - except limit order when price moves a very
long way from entry
where price is above or below on both daily and weekly
and there is a slight slope in your favour I will go 0.3% risk,
reason being, this is not a set up that will very easily
result in a loss, hence 3 x confidence.
where price is above or below on daily and weekly, and
there is a steep slope in your favour, as GBPJPY below,
I will go 0.5% risk, as these are the very strongest trades of all.
of course price can still jig about, but if its well above a strong
downward sloping bands, be sure price will cut down through
the bands.
You could be selective and just trade these 'banker bets, but all
set ups win and all profits add up. so lot size i determined by
confidence, so that when there is big drawdown, I see the strong
slope and am not fazed.
similarly on adversely sloping bands, when I see drawdown
I just see how mimimal the potential loss would be even if
bands move against me, although, even with adversely
sloping bands, price usually cuts right through regardless.
Position sizing is far more to do with addressing psychological
factors that might cause me to otherwise panic, and close a
position before it had time to mature.
the screenshot below is named utopia, price is well under
steeply rising bands so I have traded the maximum 0.5%
risk lot size ( you could trade higher but Iām doing fine
keeping risk minimal )
for example, if it hits TP I will make 456.00 on one trade
alone, so my desired 1,000.00 amassed from dozens of trades,
could easily become 1,500.00 from just one extra trade.
the rationale is that these bands are not bollinger which respond
to volatility, so that even if price goes considerably against me,
that is the BEST case scenario, because price will hit a limit
order and I will make far more, as you can see in the screenshot.
but supposing price doesnāt return?
that would be an extremely relevant question on the lower time frames
but on daily, price and bands cannot simply diverge for very long, and steeply
climbing bands will not easily change course. price will return to mean
before that happens
that is the premise upon which this entire system is based upon
also I will add, that I have inserted missed weekly pivots for added confidence
Did you know? that weekly pivots are always hit? so if a set up is in the
direction of a missed weekly pivot you are theoretically guaranteed to win
although price might go thousands of pips against you in the meantime
so its good psychologically, as price is invariably drawn to weekly pivots,
but obviously you need the bands, and as you see below, the bounce off
supdem level, way under a steeply rising bands are what are really indicating
profits within two weeks or so.
ok, here are my open positions as of 29th October. All on Daily
time frame
USDCHF
this trade is already a few days old, and as you can see,
Iām expecting a lot of stop hunting before the next big
impulsive move down. it could well drag on to Christmas.
I also note itās inverse EURUSD isn;t so hot in terms of
snappy impulse moves. If I ever take any more EURUSD trades
I think I will only target central band as it cam also take several weeks or
more to hit distal band
