My Trading Log

Trading Discussion Trade Journals
85

LOL o99016

you sidestepped my trap so diplomatically that im truly impressed by your peaceful manner.

I will figure that someone who can prove that ability if asked and is not selling anything, might be someone worthy of listening to, even if he speaks strangely at times.

after all, on the way to becoming “capable” in forex, one will study MANY methods and ideas, pick and choose the ones that apply and modify to fit as one sees fit.

THANKS for the information and I am preparing my “state of the fx men” address as i post this !

think of me as a Cramer character and not a Kudlow ! ! ! ! !

the differences are what makes for all the fun, or we couldnt trade at all !

enjoy and trade well

mp

86

Last few weeks, I’ve gone through a lot of data by hand, calculating what fractals alone would do for you.

Even with a risk to reward of 1:2, it turns out profitable. In fact, better risk to reward causes trouble with a much increased amount of losing trades. On Eur/Usd anyway.
Approximately 75% wins the way I tested it.

Problem is that it’s difficult to find a good profit target. I used a portion of the ATR, and it worked. Still, it didn’t feel optimal.

Conclusion would be that fractals are certainly useful, perhaps most of all as a confirmation that a trade opened is progressing well. Another trouble with fractals is that more than a small part of the move will have passed before the signal is triggered.

Work continues on trying to find a good method of trading. I’m looking through indicators again to try to find a few that will be useful in conjunction with candle reading and respect for S/R levels.

CCI is interesting, but the formula is one of the less easy to intuitively understand. Apparently it signals when price is at an extreme, from a statistical viewpoint. In other words, it says that a reverse toward the mean may be imminent.
I’ve always been fond of Bollinger bands - they’re nice to look at simply. But I find that for me at least, it’s hard to trade well using them. Since I would like some sort of volatility price bands, I’m looking at Donchian channels instead. Stochastics may also fit into the method as it is right now.

I’m planning to look to for signals from CCI together with Stochs and a valid candle formation to trigger a position and then to seek further confirmation and maybe partial PT with a fractal break and perhaps even a close outside the Donchian channel.

I intend to keep to the KISS principle and I’m well aware that trading can be performed quite well with nothing but price action, but I’m thinking that this may be a good trade trigger. It’s not quite unlike James’ IB/OB and stoch method after all.

Quite tired now in spite of an eventless day at work. Frustrating that the sharpest brain capacity is all spent by the time I get home to work on this. Well, then you could of course say that maybe my employer deserves something in return for the pay… :slight_smile:

87

hey guy

google “barrys support and resistance” or TRO’s same thing and use that

coupled with wht you are gonna use and the LRC (SHI) its all laid out for you

mp

88

:slight_smile:

keep your nose firmly set on that scent trail & explore the powerful simplicity of this principle further :wink:

have you eyeballed this cute little price action play at all?
http://forums.babypips.com/show-me-money-daytrading/18918-40-80-pips-daily-eurusd.html

if you’re looking to keep your research & analysis as simple as possible you might also want to give this the once over. Again, look beyond the actual layout of the strategy & see if the concept/framework fits in with what you’re seeking.
http://forums.babypips.com/free-forex-trading-systems/8595-trade-v-formation-system.html

not a lot beats simplicity when push comes to shove!

89

Thank you for your input, I value it highly!

Had not seen the trade-v-formation thread before. Shows quite well how powerful simple concepts like a valid candle formation along with S/R can be.

James’ thread is one I’ve visited and revisited many times.

I guess that i’m in the level of development now where I know how to perform, but still feel an emotional need for a hand to hold - such as CCI and stoch

I’m hoping to start somewhere around here and as confidence (hopefully) grows, I’ll be able to remove my “aids”.

Tymen coming back to Babypips was a blessing as that brought me back to where I began, candlesticks.
Trading isn’t just a science, there’s some art in it. To me, candle formation will be the foundation to build upon with S/R and for now also some other “aids”.

Best regards

90

Haha, I just had to cut and paste this wonderful criticism of the MACD:

Those inclined to count how many pips can fit on the head of a pin might wish to tweak their MACD in an attempt to make it even more predictive. This is a bit like feeding a variety of performance enhancing drugs to a snail and watching to see whether its meandering trail will bend just a little more to our liking. But would it help us to know where the snail is going next? No, we won’t have a clue, and the snail probably won’t either.

I found it here, hope I’m not violating the link policy:
Candle Sheds More Light Than The MACD

91

your candlesticks or bars are simply a reflection of the psychology playing out.
you could do an awful lot worse than building the heartbeat of your strategy, & matching them up, with levels & zones that have previously displayed reactionary behavior.

markets (participants) are pretty much creatures of habit, as you�re already beginning to discover.

use whatever you feel is necessary to complete the task. Eventually you�ll realize all you require are your candles or bars & a couple primary levels/zones as reference points.

good luck!

92

Hi Jimmymac
Could you expand on what you call ’ reactionary behaved levels and zones’ and why they should be considered reference points.
I read somewhere that these levels and zones were to be avoided or is it for that reason they are reference points.
Thanks

93

He�s referring to the key areas of support & resistance that the price action consistently reacts to during the continual ebb & flow of the money carraroe.

It�s all contained in the 2 threads which Tess started:
http://forums.babypips.com/free-forex-trading-systems/19076-technical-templates-2-a.html

As this is mh�s own personal trade log if you have any further generic questions which require clarification, feel free to post up on the TT2.

I�m mindful of the fact he might not wish his trade-log notes to be veered off track with unrelated material.

Bear in mind we�re not around now until early next week.

94

I found two links to part one and two of a experiment done some time ago. After reading through the two threads, it becomes crystal clear how important money management and risk level is.

Thank you Tymen for posting these links!

The short of it is that the user bazooko carried out a test where he every day flipped a coin to decide whether to short or go long and after some time trading this way with proper money management, he ended up with a small loss. In fact, considering that his trading direction was literally decided by chance, his results were what should be expected: a small loss which could be attributed to the spread loss plus that his experiment would have had to go on for much longer to yield statistically valid results.

But in the end his “system” gave about 50% win rate. I’ve seen several so called systems that manage to do worse than that. Often they’re stacked with indicators and rules and what not.

If we want to say that we have found a good way of reading and trading the forex market, the least we should be able to expect then would be a win rate substantially above that of pure chance.

Here are the links, they make for interesting reading and bazooko has an amusing style, so it’s well worth a read. It may change one’s perspective a bit.

http://forums.babypips.com/newbie-island/2946-let-do-experiment.html

http://forums.babypips.com/newbie-island/4253-let-do-experiment-part-two.html

95

On a side note, there seems to be a conflict being fought on several threads here on Babypips.

The reason for fighting is whether indicators are useful or unnecessary for trading.

I am not interested in this fight at all, I’m not on this forum to flame or troll or throw dirt at other people who choose to go about trading in a different manner than me.

After all, there are many ways to skin a cat. (not sure this expression in English is correct, not my mother tongue. I trust you get the idea though)

If people are truly here to learn how to trade - don’t let yourselves get drawn into these energy-traps. I try to use my energy for what benefits me, and partaking in sandbox fights certainly won’t make me rich. So I stay away from that.

I’m not old, but nor am I that young anymore, so this is something that the experience of life has taught me - don’t waste energy at things you don’t benefit from. This is 100% free advice :slight_smile:

96

Last post tonight.

It has taken time, but I think that I have found a good way of trading, a method or style.

I feel like I used to when I was studying for a exam (we just had one per semester so they were BIG). After many nights of studying hard, I used to reach a state were I knew that I was done. Going back and rereading or trying to fit something more in would have disrupted the order in my head.

So often I would just enjoy the last days before exams and not study a word. I never failed once.

That’s sort of how I feel now. Of course there are more semesters of forex learning coming, but I’m feeling pretty done with the current one.

This has been a winding road, but now I feel ready for real to start demo trading without straying to add or change my method.

There are some practical problems left to resolve though, the biggest one really is my limited possibility for screen time during work days. I’d like to trade off of 4H or 1H, but this may prove hard. If so, I might trade daily along with lower time frames in the evening, reason being that I want to test drive my method as much as possible before starting to trade live.

I’m feeling slightly hesitant about spelling out the method I’ve devised. Mostly because I’d feel a bit stupid if it turns out sour. Second, It’s mine, mwahaha just miiine. Just kidding really. Well mostly anyway. But the feeling is there to be honest.
Strange that this never bothers those kind people selling you their super duper systems for just X$, price going up next week… could it be because you’re their only REAL income…?

I’m not sure what to do. Maybe I’ll forward test it for a while, and if it works I’ll post it.
One thing is for sure: I will never ever ask anyone for money or the like.
And I’d advise extreme caution when dealing with someone who suddenly does. Turn and run would be the smart thing to do.

97

my forex friend,

allow ONE moment of utmost seriousness to crawl into this, as you are talking about the H1 and the H4 and from a PRACTICAL (read NOT THEORY) point of view, please understand that both of those timeframes REVERSE at least once per 24 hour revolution of this sphere we live on.

what that means is “invariably” if you have an upside signal for the H4, the silly sucker will reverse on you, often going right back to support to form a double bottom ----- once that is accomplished, the danged thing starts BACK to its intended trend direction, and on normal momentum days, that reversal will usually definitely change between 5 and 6:30pm, edst !

now, during the “overnites” the currency will wiggle and dance, retrace its little mad mind out BUT we are sleeping and not seeing any of its shennanigans, and so we simply wake refreshed with a lot of pips handed us !

what mp refers to as the “overnites” are simply H4 trades taken in the afternoon, usually after 5pm rollover (edst) assigned a tp point and at midnite, the tp point is upgraded because of the midnite candle that formed. NO, he doesnt look at the shape of the candle cause he already knows which way the trend is heading, but needs that final information to be able to set his tp.

just a note on the behavior of that timeperiod so you may profit the most you can — and once again, in the spirit of mp, PLEASE EXAMINE this before you depend on it (we know it to be true, but thats the mandatory disclaimer !)

a good revolution is needed every few years

che

98

Just a quick update:

currently reading a book I’ve only sifted through earlier: Steve Nison’s Japanese candlesticks

For me of course, a part of the foundation for my trading, so I don’t know why I didn’t get to this earlier.

Highly recommended for anyone interested in candlestick trading

99

Another quick update.

I’ve decided to remove CCI and Stochastics and just go with Bollingerbands, S/R and high quality candle formations.

I choose to do this for two reasons:

  1. They didn’t greatly change anything. In fact, sometimes they would have made me miss good trades where a high quality candle formation existed close to a outer Bollinger Band.
  2. Removing them increases display area for the price chart.

Number two is not unimportant. I just use one screen, and adding CCI and Stoch dramatically lessens the quality of the price chart.

I’m really beginning to itch now to open a live account. I think I need to get my feet, or at least toes, wet now.

Demo trading is fine, but psychologically it will be a major difference to go live. Until I’m live I won’t really know what kind of trader I am, so it’s time to take the next step.
I’m printing out all the legal papers tomorrow to read, and then I’ll probably get around to getting myself an account.

100

I printed out all the legal papers from Alpari last friday.

Now I’ve read it through I have to say - wow!

Basically what it says is that I’m selling my soul. However, I’m quite sure that the legals look the same for all companies, so it’s nothing against Alpari.

There are many noteworthy paragraphs and I’d recommend anyone thinking about opening a live account to really read the papers through first.
It becomes clear that this is RISK capital…

Somewhere in the papers, it even says that Alpari has the right to give different quotes to different customers, so let’s not have any illusions about retail forex trading, shall we?

I’m still set on doing this though, I’ve been demoing for quite a while and I feel it’s time to move into reality, where I’m sure things will be wildly different.
Learning to survive in the real forex world, so to speak, is something I expect to be a much harder challenge as my psychological flaws will haunt me in a way demo trading can never simulate.

In the worst case I’ll look at this a learning fee.

101

o990l6mh: Is your chosen broker a Market Maker (Deal Desk) ?

102

Yes, they are indeed

I’m not sure an ECN would be better though, they probably have similar terms and conditions. This is just guessing though, not knowledge.

103

In my opinion, I think it’s best to use a ECN or STP broker, definately not a Deal Desk Market Maker broker. I think this way because they [U]control[/U] the market to a certain extent, stop hunt, and various other things. It would be worth your while researching in full the different type of brokers, and how they operate, before choosing one

I researched this for a while and found that even though ECN’s and STP’s may have variable spreads, they can still be just as profitable, and more secure to trade with

I haven’t read all of the terms and conditions of the various brokers, but knowing the above I feel better trading with a ECN or STP broker

Just my opinion

104

I do agree, but i haven’t been able to find any that seem to be the real deal. Except MB Trading.

I’d really like to go with them, especially as they’re going to offer MT4, but they currently don’t pass the new capital requirements, so maybe in the future, not now though.

Alpari has a good reputation, offer micro lots, based in UK which is nice for me as a European, offer MT4. ( Trust me, I have nothing to gain from saying that!)
And they’re not trying to hide anything, which I also like. With some other brokers it’s hard to find the terms and conditions. Probably because they don’t really want you to read it.

If only GFT offered micro lots, I’d probably choose them instead due to better software and somewhat lower spread.

So I agree that a true ECN is preferable, but today I find none that fulfils my conditions.
Brokers that claim they’re STP - beware, many of them are not really.