My Trading Log

I’ve been doing different things for a long time to keep in shape. everything from the gym to kickboxing and floorball. Currently it’s the gym and running.

I was thinking about something while running today. It’s a bit off topic really, but.
Ever think about how the get rich quick crowd is almost exactly the same as those overweight, out of shape people that invade the gym every spring for a few weeks and seem to think they’re the strongest there ever was. They lift much heavier than they should, run faster than they should.
Then after a few weeks they either just tire of it and quit or they injure themselves and quit.

It’s just like forex trading isn’t it? The know it all newbies that constantly come here with their big egos. Then they stay here for a while until they’ve blown their accounts and in the process usually drawn some other gullible poor sods with them.

A sound mind in a sound body comes to mind. We need to have stamina in everything we do in life. If we do, we usually succeed sooner or later. That sort of patience is obviously an unusual commodity in people. Quitters never win, not in the gym, not in forex, in fact they loose everywhere in life.

I know from my own experience with people that it’s often not the smartest ones IQ-wise that succeed in life, but rather those that stick with things until they make it.

Very Good Post :smiley: Not off topic at all, Sometimes people need reminded that quality of life is not one thing [B][I][U]MONEY[/U][/I][/B] . But the whole package including health mental and phsyical… it is easy to sum up .

( When you Feel bad you do bad , When You feel Good You do Good)

So Trade Insperation Not Desperation. Like In sports be the ball…:eek:

I also believe a lot of people do not realize the power of meditation they see it as some type of mumbo jumbo. When in reality it is just a way to unclutter your mind and focus on the task at hand…

Sorry rambling again, Hope your never ending education is starting to pay off for you… Have a Nice Sunday.

I had planned to analyze a few pairs, but there are just 24 hours in a day. I did have a look at this pair though.

There’s a nice supporting trendline starting early march. It was violated for a month between mid April to mid May. After that it regained it’s role. Until now that is.
Price rose continuously until it hit the resistance zone beginning at 1.6625 and stretching about 100pips up.
Since reaching this R line price has been moving below it and testing it since early June. On July 2 price moved down and through the supporting trendline on high volume. Friday 3rd saw the trendline becoming a resistance trendline.

This means that I’m short biased on the pair and when I checked with DailyFX (only after doing my own analysis) they share that bias and they’re also bearish on the fundamentals.

Therefor I’m placing a short trade on this pair with a stop at 1.6520 and a TP at 1.5940 (that may be changed later depending on what the market does).
Let’s see how it turns out. The chart below is a daily chart with the trendline and two S/R zones, bars at bottom are volume.

Please exercise your own judgment before jumping in with me. I’m not the forex God yet, although I’m working on it.

Taking a closer look at this pair shows us that it’s in the process of bouncing of the support trendline which has been in place for quite a while. The pair is also in the process of rising out of the SR zone it’s in as of this writing.

Drilling down to 4H, we see that volume was high during the bounce giving it some further credibility.

But wait, let’s look again at the 4H chart. Doesn’t the last months price action resemble a head and shoulders pattern, or at least a double or if you will, a triple top? This then suggests that we may be at the very brink of breaking through the neckline.

We have some conflicting signals here and therefore it’s best to stand aside for now. The Yen is currently strong across the board which further increases doubt as to whether buying Pounds against it is a good idea.

Maybe in the close future we’ll get some guidance as to which direction we want to trade. Zooming out to weekly doesn’t really make it any clearer for me.
Going long here would then mean that I’m short on GBPUSD and long GBP/JPY. That’s essentially the same as being long USD/JPY…

Daily chart (daily hasn’t closed yet)

4H chart

Today the pair has been moving steadily lower after first breaking clean through and then testing the 1.6180-1.6240 Resistance zone yesterday. As a result yesterday was a doji more or less, looking a bit like a dragonfly.

I decided to sit on hands and today the market apparently in it’s infinite wisdom decided to move price lower. As I’m writing this price is 1.6132.

I’ve decided to trail the SL to 1.6340 as this is well above the current weeks high and should be safe. If it gets hit i no longer want to be in the trade.

TP unchanged for now.

Also, today has shed some light on GBPJPY which I was uncertain of. GBP weakness coupled with JPY strength is producing a break of the support trendline. The move has been so straightforward that there’s not yet even been a retest.
I guess that is enough to give me a bearish bias on the pair. I’m however not going to trade it. I’m in a learning phase and I’m happy to manage the open trade.
Right now practicing on analysis and my method takes priority over trying to catch every trade.

The daily candles still have about 80 minutes to go, so there’s always the risk that something may happen, but I’m not staying up late tonight (again) so I have no choice.

I decided to take 1/2 profit at 1.6025 which is approx +250 pips from trade start.
I made that decision because of the BOE rate decision tomorrow that might upset the market.

Maybe this is inexperience and I should sit tight, but it felt right to reduce risk somewhat.

I’ve also moved SL on remaining lot to BE.

Lately I’ve been looking at a couple of threads over at FF regarding basket trading.

Seeing how the strength of the major currencies (USD, EUR, JPY and GBP) influence the entire forex market, getting a handle on the general [I]individual[/I] strength of each of the currencies in a pair you’re looking to trade makes a lot of sense.

That said, going about it isn’t quite as straight forward, unless you have access to a live Globex futures feed or something like that. Flipping through a bunch of USD pairs for instance doesn’t seem optimal but may still end up as the best choice.

Other possibilities is to use heatmaps, maybe checking out the LFX indexes that Liteforex offer, checking Globex data on Timingcharts or using a MT4 indicator I found which claims to show the individual currency strength through some calculations. COT reports and the like can also give clues.

It’s an important subject since you really don’t need much more than a good handle on the individual strength of two currencies to be able to get a high probability bias.

Lately there’s been a popular thread here on BP where the thread starter uses a basket approach which, as I perceive it, basically works by trading on simultaneous USD and JPY strength or weakness against other currencies. That specific method isn’t for me, but I think that the approach is sound.

I’m looking at some different ways to do this individual currency analysis and how to fit it in with my general approach to trading which is now indicator free with tick volume as the only exception. Preferably I’d like to continue to keep away from fundamentals for the time being and base it on TA.

Just updating briefly to mention that my remaining position was stopped out at BE today after quite a rally.

If time allows I’ll analyze and post more on GBPUSD later tonight.

Good thing that I took 1/2 profit earlier.

This isn’t going to be in depth. It’s sleep time really before tomorrow’s last work day before the vacation.

Below I’m posting two charts, 4H and Daily views with S/R zones I find to be relevant along with trendlines.

As mentioned in the previous post: SL being hit on remaining lot means I’m currently flat on the pair.

Any which way I look at it, price now seems to be locked in the ranging zone again. USD showed weakness but held it’s ground against the JPY.
I have no clear bias on GBPUSD in the short term. I’ll wait to see how it interacts with the trendlines and S/R zones I marked out.
Right now it seems to be stalling after its rally today and some retracement would be expected.

To the downside I’d be looking at price action around the S zone 1.6180-1.6240. Both a bounce or a break would be tradable if price action is clear. A break might see the falling trendline retested and/or the next S/R zone.
To the upside the old rising now resistance trendline and/or the above R zone might be tested. As far as i can find, there’s no real obstacle on the way up there.

Taking a look at EURGBP and GBPJPY, we can see on the 4H charts that GBP is right at resistance on both pairs (well, actually EUR is at support on EURGBP, but then again that’s the same thing huh)
Using the basket approach, we might gain some clues as to GBP continued strength by what happens on those pairs, while also keeping an eye at USD strength across the board.

As I’m realizing, performing proper technical analysis isn’t done in 5min a day, at least not for me. But quality takes time.

Currently I’m to uncertain on the bias, so I’ll stay sidelined and wait to see which direction price decides to go. A few months ago I would probably have stared at the chart until i found a trade, so not chasing trades is another thing I’m learning.

Daily view

4H view

This is an ongoing exercise for me, analyzing and finding potential trades. It’s just coincidence that it happens to be GBP I’m looking at right now. Normally I’ve used to follow EURUSD the closest and I intend to track several currencies, not just GBP. Due to lack of time this one currency will have to do for now.

Let’s see what happened today. Yesterday GBP showed strength and rose across the board. When I did my analysis it had stalled at R levels.

Today GBP has bounced on those R zones/levels and as I’m writing this, it seems to be winding to a weekend rest at S levels.

Here are some charts:

Notice how price went down into the S zone and formed those long wicked candles right at the bottom. It will be interesting to see which way price breaks out of the zone and what strength seems to be behind that breakout. Judging from the long wicks, on a really short term I’d lean towards a bullish bias on GBP, but only for the very short term. Medium term bias is undecided until the breakout occurs.

Price bounced off of the R trendline coinciding with the R zone. It went down and is currently stalling and showing signs of turning which might mean the formation of a higher low.
Either price will again move up to test the R trendline, the outcome of said test will then decide the bias (and may offer a good risk to reward trade), or price will not form that higher low but continue to decline, in which case I’d wait for it to interact with the S zone below before trying to find a trade opportunity.

Here we see something interesting. The trendline here was violated much deeper than on the other pairs, suggesting that EUR is weaker than USD and JPY.
Price did however break back above the S trendline eventually but is now back struggling at the very line which also coincides with a S zone.
The hint of relative EUR weakness makes it a poor choice if we want to short GBP and an interesting choice if our bias on GBP was bullish.
We should of course always try to match the weakest with the strongest to improve our odds.
As I’m uncertain about GBP bias, I’ll stay sidelined and watch. If that bias turns bullish for GBP, maybe EURGBP could be a good choice (unless of course EUR has strengthened by then…)
Medium term bias on this pair will of course be influenced by in which direction and with what strength price breaks out of the current zone.

As we can see, this is just half the analysis. The same analysis needs to be made for the other currencies USD, EUR and JPY. Only then do we get the full view.

Volume has been pretty decent this Friday, so todays bearish moves by GBP can’t be written of as light volume market maker manipulation.

In conclusion, GBP bias is uncertain, but might be made clear(er) early next week as price decides to break out of the congestion zones the GBP pairs are in right now.

I’m going of for some vacation mid next week, so I’m not sure how close I’ll follow forex for a while ahead.

I’m a smart guy. Trust me, I really am.


I’ve just about had it with Microsoft Windows Vista now. Thank God for backups. I was forced sic! to reinstall my almost brand new computer back to factory settings. Everything wiped clean and gone, if it weren’t for backups.

I’m not stupid when it comes to computers, in fact I’m better than most. But Vista SP2 defeated me.

I’m now seriously (really seriously) considering switching to Linux/Ubuntu. I’ve been thinking about Linux for some time and this was just one Redmond annoyance too many. I can’t swallow their crap anymore.

I’m going off for vacation now, so there won’t be anything done trading wise or computer wise until I get back.

This was completely off topic, but I am sooo pissed right now! :mad:

Ahhh what a depressing thing it is to come back to this weather we’re having in Sweden. Just came from 30-40 C and sunny home to 20 and cloudy and rain all day.

The trip was great, so enough moaning.

I’m looking forward to catching up on what’s been going on while I was away. Firstly though I have to reinstall everything and so on. Right now i don’t have MT4 since I’m still enjoying the Vista SP2 fun.

You do have to love Microsoft, for the techies out there: guess what happened when I reinstalled Vista back to factory settings?
It changed the partition sizes! GAHHHH
That’s what I’m trying to fix right now…

I don’t think that Bill Gates has heard of KISS :eek:

I’ll be posting on topic later when I get up to speed.

First off, welcome back! I hope you had a good trip!

I switched to Ubuntu a couple years ago on all my computers except the laptop that I trade with. I love it, except for the fact that MT4 refuses to work correctly on it.

There are all kinds of tricks and apps to make Windows software run in Linux (WINE, Cedega, VirtualBox, etc), but MT4 absolutely refuses to run correctly on Linux no matter what I do!

It’ll run, but it will lock up randomly and you won’t know it until you happen to notice that the price stopped moving. :slight_smile:

Just be aware of that before you switch over. I can run state of the art computer games on Linux (World of Warcraft runs better in WINE under Linux than it does in Windows!), but I can’t run MT4… Go figure. :rolleyes:

It is done!

Windows is gone from both of my computers. I started with the old one as my guinea pig and it went very well.
I installed Metatrader and that also worked well. No crashes or freezes. I thought for quite a while that it had frozen and you’ll imagine how stupid I felt when I realized that it hadn’t frozen at all - it was just that the markets had closed for the weekend… talk about tunnel vision…

Today I said bye bye to Vista on my new computer (which btw was still chewing around SP2 without managing to install it - unbelievable)

Thanks to the cheap people at Fujitsu-Siemens another bonus is that I’ve gone from Vista 32bit to Ubuntu 64bit. For some inexplicable reason the Fujitsu people apparently didn’t think that they should install 64bit OS on a 64bit processor…

That’s all history now and it almost brings tears to my eyes running an OS that’s lightning fast, doesn’t want to reboot all the time, doesn’t actually need antivirus software (difficult for a long time Windows user to fathom!), etc.

This is how it’s supposed to be!

I’ve been a chicken for much to long, 15+ years of Windows will do that to you, but I’m really glad I finally took this step.

Tomorrow these computer issues will be over, just have some smaller things left to do, then it’s back to forex.

Phil, I don’t know how long ago you tried MT4 on ubuntu, but using the latest WINE and Winetricks, it seems to work fine (for my needs anyway). Though I’ll admit I haven’t precisely tested it extensively. So far so good.

Now that you mention it it has been a while since I last tested it, so it’s very possible a WINE update has fixed the problem.

I’ll give it a try next week and see if it works now on my computer as well.

OK. Vacation is still in my head so don’t expect any brilliant accomplishments tonight.

I thought I’d start by analysing the GBPUSD pair again since that’s what I did just before vacation.

I’m trying to construct something that might be used as an analysis template for these posts. Tonight we’ll just take it as it comes however.

GBP strength recently. Looking at the Globex futures Weeklies, we see almost a doji with an upper wick that’s longer than the real body. Volume was average/slightly above.
All of June and July has been spent in what resembles a distribution phase.
GBP futures therefor at least suggest no strength for GBP.

The USD index. Last week was an inside bar and it looks like the USD index might be in the process of forming a saucer bottom. Also COT seems to suggest that traders can’t get much shorter on the USD index - ergo the index might be poised for a upwards move.

So, taken from these observations, I would have a slight bearish bias on the GBPUSD pair. Let’s see what the charts can tell us.

Starting with the Weekly chart for GBPUSD (all screenshots captured 2009-07-26)

What we can see here is that last week formed a bullish bar, but with a substantial upper wick. We can also see that a higher high than the week before was formed, but that price closed within the range from the week before.
Also worth noting is the volume peak which corresponds to the first week in June. This candle suggests heavy selling by smart money, and after that price has gone into and remained in a range - distribution going on?

OK, let’s move down to the Daily time frame:

Here we can observe that price is so far respecting the support trend line. We also notice that price hasn’t been able to challenge the high from back in June. And the last two daily candles look pretty bearish, don’t they?
As for high-low pattern the up trend is still valid, but the now expected formation of a higher high seems to be in danger.
Trend on this time frame is unclear.

Let’s move on down to 4H:

Now it actually get’s interesting huh?
High-low pattern is valid for an uptrend. But. What are the options here?
Well, as we know price can either go up or down or sideways.
Let’s think about the down possibility:
If price breaks through the weak S zone I’ve marked out just below we have an immediate threat to the higher low pattern. If such a break should happen, I’d wait and watch how it interacts with the S trend line.
Either buy the bounce or sell the break if it’s a clean break with a close below. In either case good Risk to Reward is possible thanks to logical positions for the SL.

If price just goes sideways, well then it’s also going to hit the S trend line in a little bit and we shall decide what to do if that happens, depending on how it plays out.

Well, what if price decides to move upwards then? In that case I’ll stand aside aka sit on hands, and wait for price to interact with the R zone I’ve marked out above (1.6660-1.6744).

So to conclude:

If price moves down and bounces off of either the weak S zone or the S trend line, I’d be looking to buy (mind though the overall bearish bias)

If price moves down and makes a convincing break and close below the S trend line, I’d be looking to sell

If price moves sideways I’ll wait until it interacts with the S trend line

If price moves up I’ll wait and see how it interacts with the R zone above.

Until either happens, I’ll stand aside.

Like the title says I’m still on vacation so things aren’t moving at light speed.

GBPUSD haven’t done anything much today. Sideways movement basically.

I’m going through the six pairs that I intend to trade (the crosses between the four majors; GBP, JPY, EUR and USD - I don’t consider CHF a major btw)

It takes time to go from the top down and mark out S/R zones and draw trendlines. Luckily it’s a one time task. Then it’s just a matter of adjusting and maintaining it.

I’m also in the process of creating a very crude template for the day to day analysis.
I’ll try to, no promise, to be finished with these preparations tomorrow and then it’s time to restart my trading with the intention of doing everything right this time. I’m still fighting with small issues such as, should I risk 2.0% per trade, or should I risk 2.5%. We’ll see…

I’ve at last worked out the final things on my money management.

I’ll risk no more than 2% per trade and my weekly stop loss limit is 6%, meaning that if I should lose 6% in one week then there’s no more trading for that week.

This then gives that the max number of simultaneous trades is three.

I will be trading the Daily time frame only, although I might look at the 4H when doing my analysis.

My weekly target is a 1% return on capital (ROC). Using compounding this corresponds to roughly 60% in a year.

To achieve this goal I have to make a net of one winning trade every two weeks - just one winner more than the losers (I know that isn’t 100% correct math, but it averages out in the long run).
I believe this should be possible. If things go better than that, then great, but just 1% per week is my goal.

My goal is now to start using this thread for the purpose it was originally intended. I know I’ve written this exact thing before… but this is it.
I plan to post my analysis with charts etc every night at around 21-23 GMT, which is the two hours before Alpari starts a new Daily candle, mind that these are approximate hours.
It’s no promise, but I’ll try to do this every night.
In these posts I’ll write everything I see and post the trade setups I identify.

I guess I’d better repeat the fact that I am very far from a guru, specialist or anything like that. I guess the most accurate description of my forex trading competence is “serious amateur”.
That’s my way of saying that there’s no guarantee at all that the trades I pick aren’t all losers.

I’ve been sitting inside all day in spite of the nice weather (by Swedish standards anyway…), so I need to get out for a while now. I’ll post again later tonight.

I’ll be posting later than planned tonight due to better half wanting to rent a movie.

The International - a thriller about evil banks :smiley:

I’m going to go through the four majors, one in each post.

First post will be update on open positions. None such yet, so that post is left out tonight.

In every post I’ll analyse that currency against the three others, so there will be some repetition.

In the final post I’ll write the setups or lack thereof