Thanks. I will try and learn something from price action. Personally am used to relying to indicators and have been messing me up badly
never rely on indicators! only use them as confirmation for your analysis. Read the book, “Naked Trading”…it helped me a lot. You can get a free copy on pdfdrive.com,that goes for any other book also
Well, the trade idea i had, and could not open due to risk management, truly performed.
Here is how the chart looks like now.
Red line (dotted) - Stop Loss
Green Line - Entry
Blue Line - Final Target.
Risk: 66 pips
Reward: 112 Pips
Almost 1:2 R:R - ratio
The only downside (if we can call it that) is the fact that this lasted almost 2 weeks. But i keep forgetting that i am trading the longer time frames, so this is not a big deal.
The main reason why i could not take this trade is because i was already involved in a position with the EUR, and also because that trade which is still opened (EUR/AUD btw) is still not secure, meaning i have not trailed my stop loss to break even, or move it to a place where the risk is decreased.
What did i learn?
Well, if last week my lesson was patience, this week i have 2 lessons.
- Focus more on Daily and Weekly setups, not monthly, because i am limiting my self for time.
- Risk 1% per position instead of 3% in case i find another setup i want to have the option to open it freely, and not all worked up because the position i am already involved with has not yet been secured and i have to remain on the sidelines, like in the EUR/USD situation.
Not gonna dwell on the fact that i haven’t updated this for 11 days.
GBP/ZND - Daily Time Frame.
Here is what i am looking at:
Breakout from an infliction point to the downside, followed by a hesitation candle (today’s price action). The breakout candle could have closed lower, but it’s still valid.
I am hoping for a continuation move to the downside.
Stop Loss: 1.94674 (5 pips above today’s high)
Entry: 1.93087 (5 pips bellow today’s low)
The stop loss is 155 pips, which is a bit conservative, i am thinking that i should put it 5 pips above the 50% of today’s hesitation candle…what do you guys think?
Anyway, i will wait for today’s candle to close in order to setup my pending sell stop order. I am playing this one fully conservative.
Any way, if a get a railway tracks on this pair, which is now visible on D and W time frame, then i will enter in this position again.
Well, in theory i am great, but in practise i am not…instead of sticking to the rules i laid out in the previous post in entered earlier in the hope of getting a better entry, instead of waiting for the confirmation and…this is what happened, i got stopped out with a 500+ pip move to the upside…if i set out a pending order nothing would have happened, this is how i know i am not yet ready for big money in a live account.
NZD/CAD - Daily time frame, potential continuation of the downtrend.
Basically the bulls have not been able to regain for the past week, and on friday even a lower low was made. There is a fibbo level there as well, price is entrapped between the 30 and 50 SMA, and the last candle even closed bellow the 30.
Here is how the setups looks on the 4H
I marked this level since i believe this i is significant enough and it was broken.
My plan is to enter as soon as the market opens later in the evening, and my stop loss is placed just above the highest point of this sideways price action pattern.
Am i entering too early, should i wait for a breakout pullback continuation of this infliction point…i don’t know, but i will enter regardless.
NZD/CAD was a profitable trade.
To be very short and precises,i cashed out on 50% of the trade, and the other 50% retraced all the way to my adjusted SL to break even + spread cost
Here is a screenshot from my fx book:
It’s been a while since i updated my journal. Main reason is, i had an open position on EUR/NZD for almost an entire month, and there was nothing to do but wait.
Fortunately, yesterday evening at around 2 a.m in the morning, some positive news came out for the NZD which pushed my position in the profits, more than 200 pips.
I closed it at 210 pips in profits, or 4.13% gain on my account.
Luckily i woke up at 2 am (don’t know why) and once i saw that it has moved down, i trailed my SL to break even, than at around 10 in the morning, decided to completely close the position.
I am still hitting my head weather i should have kept it open until the weekly candle closed on Friday before i make a decision what to do, but the problem is i waited for 4 weeks for any kind of movement, and did not want to risk another month of choppy price action.
All in all i am rather happy with how things turned out.
Risk:Reward - 1 : 2.03
Bellow is a screenshot of the chart, and some stats from my fx book.
I trailed the stop loss, and the notebook where i have written down the original stop loss is nowhere to be found. But the original SL was 5 pips above the 50% mark of the pinbar that i based my trade on, on the weekly time frame.
On Monday (18/November/2019) i entered a short on AUD/JPY on the Weekly time frame.
This was a rather complicated decision, since i did miss the original entry signal (Pinbar) on my “Part Time Trading Strategy” ,- but i did manage to get an entry on the second strategy that i am trading "3 SMA Trend Following Strategy"
Here are the details:
Stop Loss: 75.730
Risk: 3% (162 Pips)
Take Profit: 71.108 (300 pips)
A very clear and visible descending trendline can be drawn on the Weekly time frame, with price making consecutive lower highs and lower lows. On the latest swing 2 weeks ago, we got a decent looking Pinbar, which unfortunately i could not trade because i was lazy
If i did enter, now i would have been an additional +40 pips in profit just from that
But, no point in punishing yourself for a missed opportunity, i just tried to find another potential setup.
So when i scanned through my charts for potential trends on the 3SMA Trading Strategy i noticed a trend signal on the same pair for the Weekly time frame, and this is where i decided to enter this trade, some sort of a second chance trade.
In this second chance trade i found a Fibonacci level, the trendline, and the dynamic area of resistance as a confluence of resistance coming together in one area, and i was confident that the bears are full commando geared up to defend this level.
p.s:the system is also showing a signal for a short trade on the 4H
I had two ways of entering this trade:
Wait for a BPC from the flag formation that was forming in the retracement
Click on the Sell button upon the first candle close bellow the 30 SMA (green)
I went for option number 2, not because it was faster, but because it was more simplistic, and if there is one thing that i like in my life in general, it’s minimalism.
The lower i was going in the time frames, the more evidence i found that this is going to be a full swing to the downside. But there is no point in zooming down, since i am trading the more significant charts from a time frame perspective.
One more interesting thing from a technical perspective is that price is currently flip flopping around the 74.000 major infliction point. As i am writing this, it’s bellow this level.
BTW, if a meassure the full potential of the previous swing, than this position has 800+ pips potential
But, i am not going to wait 3 months for that.
Managing the trade - Plan of action
Once price reaches the equal distance from entry to Stop Loss in profits, i will trail my SL to break even and exit half the position, and leave the other 50% to reach it’s full potential. I am looking for a 1:2 Risk to Reward ratio, or potentially up to 5% gain on my account.
I have a question for the traders here on baby pips, if any one wants to give me their opinion.
If we zoom in to the lower time frames (as i mentioned previously), on multiple time frames (D,4H,1H, M30) we can see that i can actually move my stop loss to 74.450, because that area more or less has been retested a few times, and it’s obviously a strong level of resistance.
By doing this i will significantly reduce my 3% risk, and could potently use the remaining risk to search for another trading opportunity,
What do you guys think, is this premature Stop Loss trail that i am considering valid from a technical perspective?
Please see this chart bellow, it’s on 4H and you will get a better picture.
Small update on my AUD/JPY short from the previous post.
I’ve trailed my Stop Loss to 74.400, which is just above last week’s high. With this i have significantly reduced my risk from 3% to 0.5%.
The main reason is sideways price action. Basically since i have entered this long term investment, price has been flip flopping sideways for two weeks now. This is not the type of price action i want to be involved in, so instead of closing the position at a very small gain, i decided to trail my Stop Loss, and give the trade very little breathing room. If it goes my way, great, if not, then i can take a hit of 0.5% of my account.
From this moment on i will be searching for new trading opportunities with the remaining 2.5% risk i have.
p.s: i am seriously considering increasing my total available risk to 5%, so that i can open at least one more position because i am trading the longer time frames. So if i am involved in a position with 3% risk, which is still the maximum exposure per position i allow my self, then i can also search for another trade and enter it with 2% risk.
Hmm…maybe i should have exited while in profits?
Jokes aside, take a look at whats happening on M30:
This is a textbook Breakout Pullback Continuation
And this is happening a few hours after i decided to trail my stop loss…this is why i am
The FOREX gods can be cruel
I closed my position at 74.185 - or -9 pips (- 0.14%)
I think i made a smart decision by cutting my losses, even though as i said in a previous post…i should have closed it at a small profit…
I think i finally understand how screen time and trading affects your performance positively.
It’s more like a feeling than anything else, you get in tune with the market and more often than not you are correct.
But, i can only speak for my self, i am definitely a conservative trader, and conservative serves me well. I like to think of my self more of an investor than a trader. I invest in a currency pairs and that’s why longer position suit me better.
I am not conservative when it comes to position sizing, because 3% is not a small chunk, and there are many successful and profitable traders out there who will tell me that 3% is more risk than i need. But i follow my mentor, and 3% is moderate risk, but my time-frames and conditions for entering are extremely conservative…and also my exiting policy is conservative.
For me risk management is as important as a high quality setup and maybe even more. Cause no trade can make me or break me, i just need to be patient and persistent.
GBP/USD exploded to the upside, and i did not take this trade on my primary account, since i was waiting for a setup on GBP/NZD.
The reason why i liked the GBP/NZD better mainly was the quciker Time Frame (Daily), while the GBP/USD was on the Monthly (even though more risky traders could have entered on the H4 for a tighter Stop Loss, and a huge risk to reward ratio)
The point is, instead of a logical, i made an emotional decision and i got punished out of an amazing trade. I mean, i did open the GBP/USD on my second demo account which if being used for testing strategies and etc.
I missed a really important clue, and this is why journaling and screen time are king when it comes to Investing/Trading.
Here are some things i missed:
- I had 2 trade ideas involving one currency (GBP, that were giving signals in the opposite direction - this should have been my flag to be a little bit more attentive)
- Instead of taking the signal on the longer time frame, i took the lower TF signal.
- I did not want to wait for 2 months for the longer TF position to be fully closed.
Here are some things i did correctly:
- I was not trigger happy
- Because i played it conservative, my GBP/NZD position actually never got triggered.
- Technically i should be more pissed of at my self because of this, but i am not. My current mind state is - i have other setups, consistency is key, this is a numbers game.
Happy New Year everyone.
I hope all of us reach our Forex goals in 2020.
I had one more position open in December which i did not update on this journal - it was a short on EUR/NZD which got me 3.11 % return.
My trading improved a lot in 2019, here is how.
(This is info from my main account which was opened on June 10, 2019)
Winning Rate: 52%
Account growth: 5.09% - in the last 3 months of 2019
All in all i took 25 trades, and 23 of those were shorts
Too many lessons to count. I believe 2020 will be my breakout year in Forex. Trading thought me the benefits of delayed pleasure, because basically i have been working for 5 years in order to get to this level.
I am eager to continue this process…
My bullshit filter for trading is really high right now. If anyone tells me they are making money from the beginning, they are liars…it takes time, patience, practice, making mistakes, learning from them etc. etc.
you’re right about that lol although I have met some traders that only took a year, or a little over a year to gain consistency. But that was after putting in a ton of hours studying and testing out strategies.
It’s 2020, and my first position was a loss.
Long on USD/CHF, but it does not matter.
I am also currently involved in 2 more position, which are gonna take some time to develop.
Long on EUR/GBP
Short on NZD/CHF
The NZD/CHF setup was spotted on both of the strategies that i trade, and the the EUR/GBP was a setup entered on a signal on the monthly time frame, so it potentially could be 2 months, maybe even 3 before i close it down.
Please excuse my “bone-headedness” does this mean long and short on the same pair or is it being long and short in the same base different pairs?
Yes it can do. But the occasions for opposing trades on the same base currency would be limited. Examples might be AUD/NZD and EUR/CHF, where these are often opposed in TA terms to the rest of the AUD/ or EUR/ sets. Less common with other base currencies.
But if for example GBP is established in universal bullishness, I would also take multiple long GBP positions. If EUR was universally bearish, I would take multiple short EUR trades. Trying not to see each trade as a unique incident, more as part of a “policy”. Risk management is still key of course.
is this what is called basket trading?
Yes, sometimes its certainly what I call it. The thing about a basket of trades is they are all opened pretty much simultaneously in the same direction regardless of whether the individual chart shows an entry signal. For me, the entry signal is the aggregated strength or weakness of the whole set of pairs based on the same currency.
At other times I take sequential entry signals off the individual charts and end up with a basket, though I wouldn’t then close all in the basket simultaneously, exit would be based off the individual chart in the conventional way.