My Baby steps in Trading

[anon97156012]

Hi everyone, I’m new to trading though I’ve done a few demo trades while learning. I finished the school of pipsology and have watched several YouTube videos. Now that I’m comfortable with my level of knowledge and the tools, I’ve decided to start trading a demo account.

The purpose of this journal is mainly to get feedback from more experienced members and those who are new as well and would like to share their perspective and ideas, or to ask questions.

My goal is firstly to make the habit of logging my trades and trading plans. I’ve only done it once, and it’s helped me metaphorically run a straight line instead of running in circles.

[tradeforex077]

Hi,

Welcome. Glad to hear your demo trading first to get a hang of everything. Keeping a log of your trades is a must! You have to analyse and go through your trades every day or every week. So what strategy have you decided to go with?

[top1markets]

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Open, monitor and close your first position

[anon97156012]

Thanks for the reminder, tradeforex077. Things like reviewing past trades are things I could easily forget unless I make a habit of them or set reminders.

As for my strategy… I’m not sure how to explain it yet, but I’ll share my first trade soon. It was successful but I think I made some mistakes. If you could take a look at it and tell me what you think, I would appreciate it.

[anon97156012]

Here’s my first trade. I know it’s a little messy, I have to work on making things easier for others to understand.

Pair: AUD/CAD
Date: January 2, 2020
Position: SELL/SHORT
Size: 1 micro lot/ 1,000 units.

Indicators: MACD, RSI, and Stochastic. All on default presets.
Timeframes: 1D, 1H, 5M
Plan: Drawing lines to establish support/resistance zones, and using indicators to help decide whether to sell, buy, or walk away. Entering a trade only with enough confirmation and room for profit. Risk/reward ratio should be at least 1:2.

Execution:
Looking at the 1D chart:
RSI at 51, heading down fast - sell signal
Stochastic going down from overbought - sell signal
MACD about to converge and head downwards - sell signal
Price is going down from a new recent high, a reversal could be in play.
There’s a well-defined support zone, that’s a potential take-profit target.
I drew more support/resistance lines to visualize other points of entry/exit.

Looking at the 1H chart:
All indicators here say buy, price is at a recent lowest point.
I could only identify one resistance zone, a potentially better entry. But it would take time to get there. I decide to get in now. I ended up trading the 1D chart. It felt like a safer trade.

Looking at the 5M chart:
Indicators were not much help. Price is ranging.
I drew lines, there was room for a better entry. I waited for the price to go up only one level before opening my position.

After getting in, I set my stop-loss above the 1H chart resistance level. It would prove my idea wrong in the short-term, and despite trading the 1D chart, I wanted the trade to close the same day. Looking back, I think that was not a good idea.
I set a take-profit on the 1D chart’s next support level. I wanted to close only half my position and let the other half run for the next support, but my position was too small to close half. I left, checked periodically. Later price did bounce within expectations, so there was a better entry, after all. My take-profit got filled early the next day. Profits were about 40.3 pips after taking out the 2.5 pip spread.

My takeaway from the trade is that there were some mistakes. There’s room for improvement. I wanted the trade to open and close fast which is not what happened, that ended up being a swing trade. I thought there would be a lot more noise on the 5M chart but it was surprisingly workable. I’m still not sure what to make of the discrepancy between the 1D and 1H charts with my execution of the trade. And this trade was completely based on technicals. I shouldn’t rely on just that, I think.

Any feedback is welcome!

EDIT: I think I should probably discard the Bollinger bands since I don’t use them, or maybe am using them incorrectly. Also RSI and Stochastic are somewhat redundant in my opinion. Well, it doesn’t hurt to have extra indicators.

[tradeforex077]

Unfortunately I dont quite understand the strategy because it’s discretionary. The daily, 1hr and 5min will have different trends within them so not sure how you will bring it all together. Just make sure your TP is atleast 1:1 risk reward compared to your SL. Because it’s all dependent on what you think when you look at the chart I wouldnt he able to test it and you may not be able to test it either. Having said that, it could still work but how would you have the confidence in it when you go through a string of losses? Is it worth only using daily and 1hr as your stop losses are on those timeframes anyway?

Looking forward to seeing more trades and watching you develop your strategy.

[anon97156012]

My idea with the time frames was to use the larger one for overall market direction, and not to trade it. It would serve as an indicator for me. The middle time frame would be the one I actually trade, and the smaller one would be to find a better entry when possible, to catch a few more pips.

That didn’t really go as planned. I borrowed the idea from the babypips lesson on multiple time frames. Maybe I should go back and read that section again. There’s a lot of room for improvement.

Thanks for the feedback! It helps a lot, specially this early on.

[anon97156012]

EDIT: This trade went wrong for several reasons (In my opinion). I made a mistake when drawing a support line, used only technicals, and I used the 200MA incorrectly and the timeframe of one hour is too small for the amount of data on the chart to be reliable, same goes for the 200MA. Original post below:

Here’s my first trade for today.

AUD/CAD
Limit buy at 0.902
SL: 25 pips below
TP: 65 to 85 pips above

On the 4H chart, I drew a diagonal support line that was too weak and used it as a stop-loss which got me stopped out. After reviewing the trade, the ideal stop-loss should’ve been at 0.897, a step below the lowest horizontal support zone I drew. In my opinion, the trade is still valid with that minor correction, and I think it’s a good time to enter the trade.

If I were to take it again, I’d buy right now and set my stop-loss at 0.897. My take-profit would be at around 80 to 100 pips, somewhere in the orange zone more or less depending on how price moves on its way there. I think it could be a good trade.

[anon97156012]

I started using the Moving Average indicator set to 200. I think it has been one of the most useful indicators to me so far. I also changed some of the colors in my charts to make it easier for me to see on the dark background, and I’m not relying as much on oscillators and instead am looking more for support/resistance levels, and once that’s taken care of, i’ll look at them to see if there’s anything relevant.

I have a few more trades open, and some pending orders. But I think these trades will take days, so I’ll share them once they close or expire. Also, I noticed I’m doing swing trades instead of day trades which was my initial plan. I think I’ll try trading smaller time frames next to see how it goes. But so far I’m comfortable with trading the 1H chart, even if it takes days for these trades to close.

EDIT: Made the mistake of having a bunch of trades open and most of my orders either didn’t execute or got stopped out (buying AUD). Not necessarily a bad thing, but I think I should be more careful choosing what trades to take. I’ll try to stick to 4H/1D charts for the time being, even if it means taking fewer trades. I’ll use the spare time to read books or learn more about the markets somehow. I’ll continue to share more trades as I go.