Price Action Swing / Position Trading Journal (No indicators, Just Patterns ,Candles & Fundementals)

Hi Babypips Family

I though I would create a journal for myself and others who are not sure about what trade to take so I will be posting my ideas here, my mistakes and things that I do well and things that I dont. I have been trading for a while (more that 2 years) but I hardly post on Babypips although its home page is one of the resources I use in my trading and just wanted a platform to hold myself to account for the trades that I take as well as you guys can hold me to account for the trades . which is why I put this thread on a public platform such as babypips.com
Since this is a swing/position trading journal there wont necessarily be daily updates but we will be updating on a weekly basis.
Most trades will be for a duration of about a month or longer obviously depending on market conditions .
Most of the trade ideas will be based on a combination of economic and technical information
I trade the majors , crosses , commodities , indexes ONLY so thats what will be discussed most of the time in this thread
Keep trading simple therefore there is a less of a risk of mistakes

THREAD OFFICIALLY STARTS ON THE 1ST JUNE 2018 COMMENT IF YOU IN AND LETS DO THIS!!!

RULES FOR POSING IN MY JOURNAL

1)If you want to comment on something or share your trade idea in relation to the pair,commodity or indices please make sure that your statement is accompanied by a chart so as to illustrate you point or dont bother at all.
2) Please treat everyone with respect and remember that this is my journal and the title explains the technique so dont post irrelevant information , but you can post your technique and charts here as long as you dont use indicators or just MA as indicators are formulated on price anyway.
3) Lets all keep to English in the comments
4) Please if you want to ask something or comment please make you made your way through the Babypips school of pipsology first to make sure its not covered there so we dont repeat ourselves**
5) Lets make pips!!!

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The day has finally arrived lets look at a very interesting commodity we are looking at WTI OIL A.K.A US OIL , now as we know according to news that OPEC , more specifically Russia and Saudi Arabia are planning on increasing production and are due to make a decision this month of June , not to only make up for a loss in Iranian oil due to sanctions, but also due to pressure from non oil producing nations more particularly the developing nations such as India , Brazil and China that are worried about their own inflation and global growth as this will most likely impact negatively on their economies

Another factor driving the oil price down has been the strength of the USD as a strong USD is negative for commodities such as oil as the price of oil is quoted in USD and it means that oil and other commodities become more expensive for countries to purchase oil as they first have to covert their local currency into USD as well as increasing production of oil in the US with the US adding more and more rigs to their production

One last thing that indicates a bearish trend when it comes to oil is the commercial net longs on the COT report that comes out every week has been dropping for 8 straight weeks!

As you can clearly see on the chart price peaked near the $73 mark and has been dropping ever since the news about an increase in production came out , it took a bit f a pause (we all know markets don’t move in straight lines) and formed what seems to be an inverse pennant on the daily time frame and the rule with this pattern is that a breakout will be as long as the pennant handle and also it will be in the same direction as the pennant handle( also know as the impulse)

As a result of the above mentioned analysis I am looking for WTI oil to move further south towards the $60 mark in the near to medium term future , which also happens to be a zone of major resistance on the daily , weekly and monthly chars.

Let me know what you think guys

Happy Trading :grin:

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UPDATE ON THE TRADE

OPEC has raised the output levels but they they haven’t explicitly stated by how much they plan to raise the output by with some economists speculating that that it would be between 500 000 - 700 000 barrels of oil instead of the expected output increase of 1 000 000 barrels. Prices shot up on these news on June 22 and I pulled the trigger and closed the trade as factors that made me enter the trade were looking rather blurry. I made a ± 30 pip profit which is not bad at all

I am still looking to sell WTI oil but I will wait for a better entry point I will wait for the market to retest the $73 Dollar mark and look for reversal candles/fundamentals to place my sell orders but for now I will be sitting on the sidelines , the USD is also looking vulnerable due to trade concerns so this should also boost commodities , mostly OIL and GOLD.

I will continue to monitor this set up over the next few weeks to look for another bearish entry as crude markets remain tight and pressures on global growth and how it is affected by a high oil price still exist and the expected increasing demand for oil in the second half of 2018 would also be an influencing factor .

Remember the aim of trading is not to be right 100% of the time but to ensure that you wins exceed your losses and don’t be afraid to change your mind when the trade goes against you or where market conditions change as I have done with this oil trade

Happy Trading :grin:

I would like to restart this journal of mine that I started on Babypips many years ago, I have come leaps and bounds as a trader since then and I would like to share my trading style and document my trades for myself and the community to critique so that I can become an even better trader.

Starting today I commit to using this trading journal as my primary trading journal where I will post all my trade ideas as well as post a weekly update on my trade ideas, the psychological challenges that I experience while in the trade, and the lessons that I learned at the conclusion of the trade, whether it is a winning trade or a losing trade.

Happy Trading FXMK :grinning:

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General Market Conditions

1.YIELDS

The yield inversion trajectory has been downward since 2022 and since early 2023 the yield has been inverted meaning that the US Economy has historically been on the backfoot when the yields are inverted and is usually followed by a recession in the US Economy within the following 18 months , this environment of declining long term interest rates and increasing of short term interest rates is known as a Risk Off scenario where we expect the USD to gain strength over most major currencies and as well as a decrease in stock market returns.

2.US DOLLAR
Since about January 2021 to about September/October 2022 the USDX which tracks the strength or weakness or the USD against a basket of currencies has been on a tear and moved higher and higher until the market peak in In September 2022, after this period the market has pulled back significantly into a range from that point until the present moment, where the Dollar index is just consolidating moving between 2 points in a sideways movement on the weekly timeframe but such conditions can still be explored for short term trading opportunities but the Dollar Index should be monitored closely to see if it his in a uptrend or downtrend on lower timeframes of this larger fractal movement.

A brief look at the Dollar Index on the daily timeframe seems to be forming topping formations on the lower timeframe than initially examined , seemingly indicating that we should look for selling opportunities of the USD but this should be looked at in much more detail for confirmation

A brief look at the majors charts for the major forex currencies pairs seems to show that USDXXX pairs to be forming topping formations particularly USDCHF (looking to move lower) and XXXUSD pairs to be forming bottoming formations particularly the NZDUSD (looking to move higher) on the daily timeframe

3.STOCK INDICES
The Dow Jones Industrial Index (US30) has been in a range since January 2024 with the high of this range happening in April 2024 and Tested again in Mat 2024 but the market failing to break this level and form all time highs, this may be an indication that has also been observed in the Yield Inversion and Dollar Index about the ultimate direction or outcome of the US economy after so many rate hikes to cool down inflation and possibilities of rate cuts going forward, are having on the share prices and future outlook of some biggest companies in the Dow Jones. Based on Technical data the Dow Jones seems to be leading in trending in a particular short term direction and then the S&500 and NASDAQ lagging behind but ultimately following the short term trend direction of the Dow Jones.

The S&P500 and NASDAQ have followed a similar direction as the Dow but it does not appear to be in a range although they had a similar pullback in the month of April 2024 , in the month of May 2024 they reached a new all-time high making it uncertain if these markets are in a continuing uptrend or is in a range as indicated by the Dollar Index and Dow

4.Gold and OIL

Gold has had a significant pullback since the all-time high, the market would need to make a new lower low on the daily timeframe for confirmation that the market direction has changed and we should be looking for selling opportunities.

Oil has also had a significant pullback since its most recent high in April 2024 but unlike Gold, it has taken out its most recent lows meaning that we assume that the market is in a short-term downtrend and at current levels it is consolidating with no clear direction but we expect a continued move lower.

Conclusion

Yields: Mixed
US Dollar: Risk ON
Stock Indices: Risk ON
Gold and Oil: Mixed

Overall: Risk On!


Based on the Risk On analysis in the General Market Overview, we are having a bearish bias towards Oil and Gold, of these two pairs USOIL/WTI presents us with the biggest opportunity for the following reasons.

  1. The Oil market made its high on the 5th of April 2024 and since this date it has a lower high as well as a lower low indicating to me that this market has entered a downtrend that matches up with my original thesis on the General Market Overview as it broke the uptrend structure it was originally in.

  2. The Commercial Net positions on the COT have been in decline since 12 April 2024 and the Net retail positions have been on the rise over the same period, thus if we go on the assumption that the retail traders are incorrect most of the time while the commercial traders move the market then we can safely say that the market is most likely to be bearish.

  3. Pair data compiled from several brokers that the retail traders are estimated to be 68% long on oil and 32% short at the moment and based on the assumption that the retail traders are always incorrect then we can also take the contrarian view that the commodity will be bearish.

  4. Some of the biggest economies’ inflation is slowing down due to the high-interest environment and a decrease in inflation in Europe, the United States, and Asia is a signal to us that there is a slowdown in the general increase of prices and that could mean that there is a slowdown in economic activity hence then a downturn in the demand side of oil, which further leads to downside pressures on the price of oil if supply is greater than the demand.

  5. The 2Y bond yield has been on the rise, which means investors expect the rate to be equal to that rate two years from now. So, the higher it goes, the less risk appetite investors have and is an indicator of slowing economic activity or spending thus negatively affecting the demand side of oil and leading to downward pressure in the price of oil

  6. Further indication of a slowdown in economic activity can be observed in the GDP figures of the world’s largest economy which has decreased from 5.2 in November 2023 to 1.6 in the last available GDP results from April 2024.
    This slowdown in economic activity can also be observed by the United States manufacturing and Services’ purchasing managers index which had a slight decrease in April, as well as the unemployment figure increasing from 3.8 to 3.9 in April.

  7. Rumors are there in the market the OPEC might be considering a cut in the supply of oil thus being bullish for the oil price but we shall wait for the actual cut as we don’t trade rumors

  8. The Oil market has been range bound for the past 3 weeks and we expect it to move lower from this range and if taken at current levels it offers a potential R:R of 1:4 if you have a tight Stop and if you want to have a slightly looser Stop then you can manage a 1:3.

Happy Trading
FXMK :grinning:
.

Based on the Risk On analysis in the General Market Overview, we have a bearish bias towards US Indices of these US30 presents us with the biggest opportunity for the following reasons

  1. The US30/Dow Jones has been in a downtrend since 20 May 2024 as also prefaced in the General Market Overview because this is the general direction of the indices markets, overall the US economic data has been weak so this could have a worse effect on the Dow Jones as it is heavily weighted in tech stocks.

  2. The Commercial Net positions on the COT is about 74.35% net long on the Dow and has been on the rise for the past 5 weeks, being aware that the COT Report is lagging and I expect it to decrease on the latest report tonight based on the movement of the Dow Index counter being bearish all week as in the 24 May 2024 report was more or less flat only indicating a net increase of 1% in the longs possibly as a sign of uncertainty and more downward movement to come based on economic slowdown in the US Economy.

  3. This Index

  4. Some of the biggest economies’ inflation is slowing down due to the high-interest environment and a decrease in inflation in Europe, the United States, and Asia is a signal to us that there is a slowdown in the general increase of prices and that could mean that there is a slowdown in economic activity, GDP numbers came out yesterday even lower than previous months number.

  5. The 2Y bond yield has been on the rise, which means investors expect the rate to be equal to that rate two years from now. So, the higher it goes, the less risk appetite investors have, and it is an indicator of slowing economic activity or spending thus negatively affecting US Companies and US Indices.

  6. Further indication of a slowdown in economic activity can be observed in the GDP figures of the world’s largest economy which has decreased from 5.2 in November 2023 to 1.3 in the last available GDP results from May 2024.
    This slowdown in economic activity can also be observed by the United States Manufacturing and Services’ purchasing managers index which had a slight decrease in April, as well as the unemployment figure increasing from 3.8 to 3.9 in April.
    .

  7. The Indices have been on a short-term downtrend or pullback and have been forming areas of consolidation and then rallying lower so the aim is to enter the next rally to the previous support level for a 1:2 Risk to Reward trade.

UPDATE 31/05/2024

UPDATE 31/05/2024

Review

The US30 trade that was taken on Friday did not go according to plan but even in hindsight losing the trade, I followed all of my rules, I risked 1% of my account and I would feel comfortable taking the trade based on the analysis that I had done at the time as the US Economy is still not in great shape and with each data release it seems to confirm the Bias that we had developed that the US Indices would be negative and overall all the US Indices closed lower than when they started the week.

The US Oil trade is going okay, and for now, it has moved in a bearish direction so we still look forward to even more bearish movement since the trade is almost at an R:R of 1:1, I should manage the trade well, and put my Stop at my break-even point because the demand side risks to Oil still exists but the threat of further OPEC cuts to boost the Oil price is also not to be ignored but we will wait for the actual cut and possibly exit the trade at break-even if there is a rather than a loss, so I will manage the risk of a loss by moving my stops to break-even on Monday to mitigate against this risk as the net longs for Oil have also increased according to the COT report for US Oil.

UPDATE

Against the backdrop of the OPEC meeting that took place over the weekend to extend Voluntary cuts as well as prices being around the $80 mark which is the price that most OPEC Members require in order to maintain their countries spending and budgets, which increases doubts in that there is still a significant downward opportunity for the price of Oil, So I am closing the trade at R:R 1:1 for a 1% profit gain.

Quoting a recent news article

Brent crude oil prices have been trading near $80 per barrel in recent days, below what many Opec+ members need to balance their budgets. Worries over slow demand growth in top oil importer China have weighed on prices alongside rising oil stocks in developed economies.

Opec and allies led by Russia, together known as Opec+, have made a series of deep output cuts since late 2022.

Its members are cutting output by a total of 5.86-million barrels per day (bpd), or about 5.7% of global demand. Those include 3.66-million bpd of cuts, which were due to expire at the end of 2024, and voluntary cuts by eight members of 2.2-million bpd, expiring at the end of June 2024.

On Sunday, Opec+ agreed to extend the cuts of 3.66-million bpd by a year until the end of 2025 and prolong the cuts of 2.2-million bpd by three months until the end of September.

Opec+ will gradually phase out the cuts of 2.2-million bpd over the course of a year from October 2024 to September 2025.

Based on our market overview, we are still expecting a weak dollar as we are in a Risk ON scenario, meaning we expect a weak dollar.

The EURUSD looks like a great trade out of all the pairs due to the following

  1. From a technical point the pair seemed to be in an uptrend making higher and higher lows on the Daily Timeframe.

  2. When Going down to the H4 timeframe we can see that the market has formed what seems like a bullish flag pattern further indicating that the market has the potential to move higher as it looks like it broke through the flag pattern in the direction that we expect , we will set pending orders in order to trade the retest.

  3. The COT data shows the EUR at 59.23% longs and 40.77% shorts AND the USD at 53.98% long and 46.02 short meaning that the large commercial market participants are more bullish on the EUR than they are on the USD although not by much, we don’t expect a big gap in the COT data as this is one of the most liquid and widely traded pairs so a slight difference can move the market in either direction

  4. Retail Data collected shows that the retail traders are 72% net short on the EURUSD and we take this as a contrarian signal then we expect it to move in the opposite direction to the retail traders so meaning we expect bullish movement in the pair based on this.

  5. The May 2024 EUR CPI has ticked up slightly compared to the previous month from 2.4% to 2.6% and this could be an indicator that the inflation in the EUR region might not be under control as previously thought whereby the ECB could start to decrease interest rates, while the inflation figure in the US has decreased from 3.5% in March to 3.4% April as we await the May figure and if it’s lower or equal to 3.4% or lower then we expect this pair to rally higher.

  6. US GDP has decreased for May from 1.6% to 1.3%, while the EUR GDP figure has remained constant at 0.3 for both April and May so it indicates the EU economy has grown at a steady rate while the US economy has grown at a decreasing rate thus in terms of growth the market would prefer steady over decreasing growth rate.

  7. The US retail sales have decreased from 0.7% to 0% for May thus indicating the demand for finished goods and services by consumers decreasing in the US and this potential slowdown in economic activity is bearish for the USD, while the retail sales of the EU have increased from -0.5% to 0.8% in May showing an uptick in the economic activity of the region and thus bullish for the EUR.

  8. The unemployment rate for the US has also ticked higher from 3.85% to 3.9% meaning that slightly more people are employed than in previous periods this affects the spending and economic activity in the US Economy. The EU unemployment on the other hand has decreased from 6.45% to 6.4% indicating an increase in economic activity and thus is bullish for the EUR and also the EURUSD pair.

The EURUSD trade hit our SL on Friday after NFP, as the payroll data came in strong at 272k against an expected 182k but unemployment rose from 3.9% to 4.0% on Friday which caused the markets to rally in the opposite direction of our analysis that we expect based on the General Market Overview, which should be reviewed to see whether the Risk On analysis is still valid or if the markets have now shifted into a Risk Off Scenario

The USOIL trade that we had taken has been going well in the direction that we anticipated although I took profits at R: R, 1:1, and the market has had a bit of a pullback, which is a lesson to me to filter information and if the economic or industry data is unchanged then the markets will most likely go in the same direction as anticipated so I will be looking for a retest of the Zone where the market was undecided and was ranging and still expect this market to go lower so we will do this utilizing pending orders.

OVERALL

The account is in a negative by 1% since we lost a trade on US30, Gained 1% on USOIL, and now again lost 1% on EURUSD, so the account is overall negative 1%

We need to update the General Market Overview to know if the Risk On Scenario has changed, but I will wait until the CPI data is released later this week.

On Tuesday 11/06/2024 I entered a GBPUSD long position based on the following:

  1. In terms of market structure the pair has been in an uptrend making higher highers and higher lows so it’s an indication that the pair is in an uptrend , I can also look for long positions as the trend is my friend.

  2. When Going down to the H4 timeframe we can observe that the market needs a trendline area of support so for us this is a great area to enter the trade.

  3. The COT data indicates that GBP is 63% LONG and 36% SHORT, while the USD is 55% LONG and 45% SHORT, with the GBP longs increasing from the prior week. At the same time, the LONGS on the USD have remained relatively flat probable to important CPI data expected in the coming days so based on our General Market Overview, we are expecting a soft USD. I expect the CPI to be a lower than expected figure thus helping our trade to be more bullish.

  4. Retail Data indicates that the retail traders are 59% net short on the GBPUSD and we take this as a contrarian signal then we expect it to move in the opposite direction to the retail traders so meaning we expect bullish movement in the pair based on this.

  5. The May 2024 EUR CPI has ticked up slightly compared to the previous month from 2.4% to 2.6% and this could be an indicator that the inflation in the EUR region might not be under control as previously thought whereby the ECB could start to decrease interest rates, while the inflation figure in the US has decreased from 3.5% in March to 3.4% April as we await the May figure and if it’s lower or equal to 3.4% or lower then we expect this pair to rally higher.

  6. US GDP has decreased for May from 1.6% to 1.3%, while the GBP GDP figure has decreased from 0.4% to 0.0% although the June figure is as expected it is still negative for both economies as it indicates a slowdown in the economic growth of both countries.

  7. The US retail sales have decreased from 0.7% to 0% for May thus indicating the demand for finished goods and services by consumers decreasing in the US and this potential slowdown in economic activity is bearish for the USD, while the retail sales of the GB have decreased from 0.0% to -2.3% in May showing another downtick in the GB Economy so I expect this trade to not go very far the GBP data is mixed.

  8. The unemployment rate for the US has also ticked higher from 3.95% to 4% meaning that slightly more people are employed than in previous periods this affects the spending and economic activity in the US Economy. The GB unemployment has also increased from 4.2% TO 4.3% indicating more bearishness for both economies and an expectation that the pair will not go far and possibly that we have a higher chance of being incorrect based on the data.

AT the time of writing this I am already in the trade as I have an automated system that collects this data and presents it to me in a more user-friendly manner but due to copywriter laws I am unable to post it here as I am not the owner of the software

Expected R:R is 1:3

UPDATE 12/06/2024

Trade did not reach the TP as expected but it almost did I exited the trade at a R:R of 1:2 instead of the 1:3 that was initially planned but overall this trade turned out better than I had expected as it was a more risky trade to take than I usually do and I want to work to not take trades of this nature anymore and just work on less risky trades in future but it was managed well as I did not lose this trade.

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