Today is the first day of accountability. I am going to document my progression as a student with the hope that this thread holds me accountable for my trading and studying. Moving forward all trades will be demo trades until otherwise mentioned. All my trades will have a goal, and I hope that slowly I can progress as a student and develop a trading plan that works for me. This is a commitment to myself and I will not give up. Nothing is easy, especially forex speculation. This thread will be a multi-year commitment and I am very excited about what lays ahead.
This week I will be demo trading the EUR/USD. I will trading support and resistance with the daily high/lows and previous week high / lows. I will place 20 pip TPs and SLs. At this point I will not concern myself with market direction or sentiment. I would like to thank Inner Circle Trader - his contribution to this site and fellow traders is incredible. Also, thank you Sweetpip and Wrtm_19 for being kind enough to respond to my private messages. I can’t thank you all enough.
Previous week high: 1.3809
Previous week low: 1.3421
Previous day high: 1.3613
Previous day low: 1.346
The prior weeks high/lows are too extreme at this point to be seen on the chart. I have placed order buy and sell orders at the respective prior high / lows. Lets see what happens.
I would like to suggest you something what I learnt from other traders.
Those are above rigid numbers. You have to determine your SL according to market conditions. For you TP is strongly suggest at least 1:2 risk/reward ratio.
Lets say you have a system what has 60% succes rate. I have a system it has 30% succes rate.
Your SL is 20pips and TP is 20pips.
Your trades are the following:
20 pips gain
20 pips gain
-20 pips loss
20 pips gain
20 pips gain
20 pips gain
20 pips gain
-20 pips gain
-20 pips loss
10.-20 pips loss
total: +40 pips
My system has 30% succes rate but my risk:reward is 1:3(my SL is 20 pips but my TP is 60 pips)
-20 pips loss
-20 pips loss
-20 pips loss
-20 pips loss
-20 pips loss
60 pips gain
60 pips gain
-20 pips loss
-20 pips loss
60 pips gain
total: +40 pips
So I made the same amount than you at the end with two times worse system succes rate than you.
Which system is easier to understand and master? Yours or mine?
Hey, Pandras. I completely agree with you. Right now I am trying to train myself to focus on areas of support & resistance, and I am just going to start by looking at daily high / lows along with prev week high/lows. Every week I will add areas I will look at for support/resistance. Thanks for the comment!!
Todays trades were set up as buy and sell at the previous day high/lows and previous week/high lows. The prior weeks high/lows were too extreme to be seen in the image above. My buy order was executed at the prior day low of 1.346 and stopped out for a loss of 20 pips. What I am taking away from this is that price seemed to respect this level once it went below this line. On more than one occasion price attempted to pierce this level but was unable to do so. Finally, around 11:00 EST price made a sustained move up and stayed above the level for the rest of the day.
In the above chart I see that this same level provided a moderate amount of support / resistance in the past week (yellow ellipses), and might be a level of interest if I was actively trading the EUR/USD.
Ok, todays high/lows have been marked on the chart and just like yesterday I have buy / sell orders placed at those prices.
I might be able to only post every other day as this is very time consuming and makes me appreciate how much work goes into some of the threads on this site. I am going to get very good with paint I can tell you that. I might need to consider getting another monitor too.
Ok. Above is the result of my trade from 11/22/11. My sell entry was placed at the previous day high of 1.3540 and seen in the first yellow ellipse. My TP was taken the very next candle for a quick 20 pip profit. This same level was retested later in the day and offered another opportunity for a quick profit.
The image above shows the results of the 2nd retest. From just looking at the bounce at this level it appears the 1.3540 is a significant level of resistance.
From the previous two posts I am quickly learning that previous day high / lows are significant levels of support and resistance especially when they have a history of support / resistance at those levels.
Above is the trade setup I have set up for Friday, November 25th. Once again using the high / lows from 11/23/11. Buy order at 11/23 low with 20 pip TP / 20 pip SP & sell order at 11/23 high with 20 pip TP / 20 pip SL. Have a great holiday everyone!!
Not even knowing that there was going to be any trading activity today my order buy order that was set up for Friday ended up being filled today and hit my TP two hours later. You can see that the market just recently tested this level and has bounced north. This week has been a serious lesson for how strong previous day high /lows can be as support and resistance. 2 wins with one 1 loss this week just trading previous day high / lows. I’ll take all the fake money I can get.
The trade I have set up for tomorrow is shown above. Still just trading the previous day high / low. I have added an indicator called fractals which is helping me identify swing highs / lows. As you can see in the price action price has already tested the previous days high and has bounced south for what could have been an easy 20 pip profit. Because the high has already been tested I have only placed a buy order at the previous day low of 1.3208. I have also changed by stop loss to 10 pips for a risk reward of 2:1.
So while I was doing some ICT studying I noticed that the EUR/USD was approaching the previous day high which I did not plan on trading. I had put a fib from the previous high to the swing low before my entry hoping to sell at the .618 retracement level as it converged nicely with the previous day high. I was stopped out almost instantly; however, the close of the candle was much lower which I interpreted as indecision. I decided to enter another sell and lucky for me it made the move down - price tested the .786 retracement and then moved down - TP at the lower yellow ellipse. I know from reading / watching ICTs material that SLs should be placed above nearby S/R levels. In this case I think I should have placed the SL above the .786 level, which would have allowed me to TP without my first order being stopped out. No trade for tomorrow - just some more studying for tonight.
So I got home late Tuesday night and I was looking to get in a trade. After all, trying to learn this forex thing, and I can’t learn without some practice. I looked at the daily and 4hr looking noting significant support / resistance levels, and by noting I mean briefly reviewing. I reviewed the daily and 4hr for market flow and both indicated up was the right direction to go. I then zoomed to my 15 min chart and noticed the are inside the yellow ellipse seemed to be providing nice support, and resistance previously. Took two buy orders @ 1.3320 with 15 pips each trying my hand at scaling my order. Well… price stopped me out for a 30 pip loss and brought me back to even with the account. Lessons learned:
Don’t trade for the sake of trading
I never looked for convergence as ICT recommends - Look for it
Be more thorough with my anaylysis of higher timeframes.
Looking to take a trade tonight/tomorrow morning since I have the time to do some proper analysis. Start the month on a good note. :20:
Here is the trade I have set up for tonight/tomorrow.
Above is the daily chart of the GBP/USD. It looks like the cable is in a descending channel as indicated by the purple lines. The blue lines indicate levels of support / resistance which I identified. Market flow on the daily is currently buy as is market flow on the four hour and one hour time frames.
Above is the 15 min chart I have up right now. I have drawn a fib from most recent swing high and low and currently I am looking to follow market flow and look for a buy order b/t the .618 and .788 retracement levels. Also I have added pivot points to my 15 min chart and my buy area fits nice with the PP.
I am looking to buy @ 1.5670 with my first TP at 1.5700. I have the 2nd half of buy order TP around today’s NY high. Stop loss is placed @1.5655.
Winner winner cable dinner. I was able to get just about 40 pip profit from this trade before I closed out. Lucky for me the pair fell off the table shortly thereafter. I had my TP set at the previous day NY high and I was looking for the pair to test the 1.5750 level which was today’s R1. The Non-farm Payrolls was released today and I was completely oblivious to it; that definitely needs to change. This report creates volatility, end of story. Moving forward I need to pay attention to the major reports attached to the pairs I am trading. Also, ICT mentioned that profit taking and book balancing takes places on Friday. Traders are not looking to hold positions into the weekend, and I think that may have contributed to the dump off.
Below is the 15 minute zoomed out. When price fell off it found support at a previous area of support. That would have been an awesome area to TP if you were able to play the short. Gotta love support/resistance.
