Follow one man as he attempts to learn the art and science that is trading the volatile, confusing, sometimes frustrating, but always interesting foreign exchange market.
Congrats on starting a trading journal @ospreyk! Good luck! 
@CoinLady… thank you! I hope to update at least once a week. The idea here is to get my thoughts down on why I’m doing whatever craziness I’ve decided to do, so ideally I’ll post whenever I make a trade.
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That’s also how I’m going about it. But sometimes I also post what I’m seeing even if I’m not entering a trade. Just in case someone visits my topic they’ll be able to comment if they see things differently. 
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On the USDCHF pair I’ve gone short @ 0.96504. My rationale behind this trade is that the USD has been struggling for over a month now, having fallen nearly 300 pips since mid-August. Price formed a doji in what had previously been an area of support and that I hope will now serve as resistance.
The fundamental picture for the USD has a FOMC rate hike already baked in to price so I expect (hope?) that the bearish action will continue.
My stop loss is the last swing high near 0.9700 with a target of the last low near 0.9540.
We’ll see how this plays out!
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Adding this thread to my watchlist!
So… this trade absolutely did not go as planned. The dollar rallied hard post-FOMC announcement against pretty much everything. My trade stopped out for about a 50 pip loss.
I followed up this losing trade with another loser on USDJPY…
I saw what I hoped was an outside bar at an area of prior resistance and the dollar just blew right through it. That was about a 40 pip loser.
On the positive, I set my stops and I lived with them by resisting the urge to push them further into a loss or even cut the trades early (which could save a few pips, but reinforces the misguided idea that I can predict what the market will do and undermines confidence in my decision to set the stops where I did).
I don’t feel too bad about the loss on the USDCHF trade as I traded with the trend. Perhaps the only thing I could have done differently was refrain from trading with the knowledge that the Fed would be making an announcement. Of course the challenge there is that there is often economic or monetary policy news. The news is what generates volatility that provides opportunity for traders; to not trade around news is to almost not trade at all.
To trade is to accept that there will be losses, so I accept this.
On the other hand, the USDJPY trade was a bit of an unforced error. Given that the longer term trend had been up, it may not have been a wise decision to short. By the same token price encountered previous resistance and hesitated. Perhaps waiting another candle for follow through on the potential reversal would have helped. Again, to trade is to accept that there will be losses, so I accept this.
For the month of September 2018 I had a loss of 3.2% on my account against a goal of gaining 5%. I had 9 trades, 6 of which were losses for about 216 pips against 3 gains for 128 pips. This is a part of the process. Losses will come but I will learn from them and use them to get better.
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Can’t say I haven’t done this! Need to break this horrible habit.
The important thing is you’re taking the time to reflect and do a retrospective! It’s inspiring how you’re not being emotional about this, you sound pretty level-headed. Good stuff.
Thank you @purtle, that’s about the best encouragement I could receive. It was an emotionally challenging month; 3 of the first 4 trades were winners that were quickly followed by losses that erased gains and put me in the red for the month.
I just have to believe that I will get better the more I do this and that these losses are lessons for the journey.
With that mindset, no doubt you will!
@purtle I’m just doing my best to love the process. There is no destination, only a journey.
The last week wasn’t as I’d hoped. I had 2 trades, both of which resulted in losses of a combined 123 pips. The second trade was a short of GBPUSD that actually went my way to the tune of 55 pips before reversing and hitting my stop. While I’m disappointed in this I think I did a good job of following the longer term daily trend. What hurt me in this instance was the US payrolls which I could have easily avoided trading in front of. I think the value of patience in the face of important news events is what the market is teaching me with this loss.
So, now we’re on to this week. Yesterday I shorted USDCAD as it pulled back from the 1.30 level. Today price reached near that level again and pulled back, so I feel a bit more confident about this one. Its in the direction of the longer term trend, the risk:reward ratio is in the neighborhood of 1:2.5, and @bigpippin called out this setup.
I’ll keep you posted!
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I’ve heard it said that “the best laid plans of mice and men often go astray.” My trades of late are the embodiment of that idiom.
USDCAD ran through the 1.30 level today and through my stop at 1.3020 as well. I honestly don’t think this trade was a poor one. I’m sure there’s a lesson in this; I just need some time to find it.
So I think I’ve had 8 losing trades in a row at this point. A break from trading is probably in order here. 
No more trades this week while I do some research into price action approaches and get ideas on implementation.
I know I’ll get better at this, so I’m just going to enjoy the learning process. 
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I saw an interview with Stanley Druckenmiller recently and he said that when he’s trading and he’s “hot” (keeps winning), he keeps trading but when he’s “cold”, he avoids it and takes a break. So maybe you’re on to something here.
Enjoy your break! Looking forward to new posts when you return.
This is also my mindset. I’m treating everything as just part of the process of learning and my trading journey.
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Right… if you’re losing a bunch I figure it must mean that you are out of sync with the market, so you should probably figure out if your approach is wrong for the market conditions, just plain ol’ wrong, or if you are revenge trading. I’m thinking I was in the 2nd category, just plain ol’ wrong. I was trading against the trend and not waiting for price to react in relation to support/resistance areas. Hopefully I’ve learned my lessons
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We’re all on a journey through life… the best thing we can do is enjoy the lessons we learn along the way and find a means to help someone else with our experience.
That’s all we can bank on but it’s not the end of the world if we have to learn the same lesson multiple times - at least in trading!
I’m back! I didn’t realize how long its been since I last posted, almost 3 months!
Since then I’ve signed up for a trade coaching/system, found it to be too time-consuming, quit that, and did a little soul-searching.
I’m ready to start again in the new year. A couple of improvements I’m making:
- Using correct position-sizing
- Following trends
- Using proper risk-to-reward ratios
- Using a journal to capture what I saw at the time I took the trade
I was taking losses that were way too large (i.e. 5% of the account) which is a surefire way to take myself out of the game before I learn anything. So I’m going to correctly size positions by maintaining a maximum risk of 1%. My goal is to keep things as simple as possible by only taking trades off 4 hr charts in the direction of the prevailing trend or within bounds of a range (keeping in mind support/resistance levels as identified on the daily charts and looking for consolidation on the 1 hour charts). I will only take trades where at least a 2:1 risk/reward is feasible.
I intend to “paper trade” this week and see what it looks like before going “live” next week. I know a week isn’t much (particularly a holiday week), but this new approach is restrictive enough that I’m not worried about overtrading.
I’ve been reading “Market Wizards”, a classic book on investing wherein successful professional investors are interviewed and their trading and investment principles are shared. Many of them employ a trend-following approach, albeit on much longer time frames than I will be working in. The concept is the same though: reduce risk by going along with where the market already seems to be going and winning enough along the way to pay for the inevitable losers when the trend changes or doesn’t continue as expected.
I’ve had one paper trade work out so far, a short on USDCHF that gave a 3:1 winner.
So, that’s my plan. We’ll see how it goes in 2019. Until then, Happy Holidays!