Rat Race to Financial Freedom

[monkeymonkeyman]

So I am starting with £1000 capital using the trading platform FXPro, as this platform allows for 10 pence per point which means I can risk 1-3% of my capital. However, I prefer the IG trading platform for analysis so will utilise that.

I am committing to putting in £200/month and reinvesting all profits (hopefully), benefiting from the marvel of compound interest.

As I work full time I will be trading on a mainly daily and 4 hourly time frame, taking a swing trading approach and using automatic stop losses so I am not stressing out at work.

I don’t have a specific amount in mind that I would like to get to, but my plan is to get to the stage where I can pay all my bills through my trading. However, I am well aware that I will need to see if and how much I can generate on average consistently to then understand how much capital I will need to reach the ultimate goal of financial freedom.

I believe in the combination of fundamental and technical analysis but am currently leaning much more towards focusing first and foremost on price analysis and then looking at the fundamentals to understand what is moving price and if the factor is likely to keep moving the price in the same direction and how long-term it may be.

With that in mind I am taking a strategy straight from Babypips trading lessons and using the ma 5 and 10 as leading indicator. Then I will take MACD as the lagging indicator and the RSI as the confirmation indicator.

Something I have added to my strategy of late is to use the 4 hour time frame to set my stop loss and target exit based on previous lows and highs respectively. I then work out the difference between the 2 and then divide it by 3. If I am going short I will subtract this amount from the stop loss level and if I am going long I will add this amount to the stop loss level.

This strategy allows me to make sure that I am always at least 2 to 1 on risk/reward ratio. However, I will look for a strong bullish or bearish candle based on the direction finishing above my target entry.

It’s a tough road ahead but the reward at the end is infinitely worth it. Let the journey to financial freedom begin!

[monkeymonkeyman]

The Week Ahead - 22nd - 26th October

Potential trades for the upcoming week.

GBP/USD 4 hour time frame

Appears to have broken out of long-term downtrend on daily chart and is pushing into new up-trend

on 4 hour time frame I have set potential entry at 13086, stop loss at 12992 and target at 13275.

MA 5 and 10 have already crossed - MACD just about to cross - waiting for RSI to push above mid level - also waiting fro strong bullish candle finishing above entry level.

EUR/USD - 4 hour

Potential of EUR/USD to form new up-trend on daily timeframe

on 4 hour timeframe double bottom formed - entry set at 11549, stop loss at 11414 and target exit at 11821.

MA’s and MACD already crossed, waiting for RSI to push above 50 and strong bullish candle.

GBP/AUD 4 hour

GBP/AUD in new uptrend on daily chart

on the 4 hour chart target entry at 18390, stop loss at 18210 and target exit at 18751 - MA’s and MACD already crossed - RSI to push above 50 and strong bullish candle finishing above entry point.

CHF/JPY Daily chart

Pair in uptrend on daily chart

target entry at 11446, stop loss at 11222 and target entry at 11824. waiting for the crosses on MA’S and MACD and push of RSI.

These are the main three I am looking at this week - let me know if you are planning on trading these yourself or if you have any thoughts on these potential trades.

[anon76360754]

Best of luck buddy, we’re all in it for the same reason, all be it for perhaps varying financial reasons. Either way though it all comes down to the same common goal. just stick to your instinct, hard work does pay off - this is perhaps the one industry where it works in reverse… meaning we almost all start off this with over complex ways of analysis, time consuming methods and exuberant intentions. The truth is though, that after spending many years doing this, that simplicity is key.

As one successful trader once said, if you cant write your trading method on a single side of handkerchief at a dinner table then it’s likley to be too complex to follow when under the pressure

[monkeymonkeyman]

Excellent advice Bacon Sandwich - thank you very much and I will certainly think about what you have said in terms of simplicity - paying homage to the KISS theory - do you use indicators?

[monkeymonkeyman]

Hey Guys,

So a few updates on the potential trades.

GBP/USD got hit hard today because of the potential leadership challenge to Theresa May - Price dived and went below my stop loss - luckily I had not entered the trade and so came away unscathed

There is potential for this one to bounce off of previous resistance and head back up to previous highs forming a new range. However, time will have to tell on this one and Wednesday’s news will be critical.

EUR/USD started off the day pushing higher, however, quickly got pushed lower due to Italian news that they will be sticking to their new budget. This one has not puched out of the potential trade yet so worth keeping an eye on in case price starts pushing back up towards my target entry.

GBP/AUD didn’t do a whole lot - Pound pushed lower and CAD found some buyers - still in potential buy trend at the moment - need to sit on this one for now

CHF/JPY started pushing North - MA’s already crossed and MACD looks like it is very close - if the indicators give me the go ahead I may well get into this one a little lower than the target entry.

USD/JPY - one I have bought today though is USD/JPY - nice uptrnd has formed on the daily chart and I had set my entry at the 11263 level with a stop loss set at 11143 and a target set at 11472.

Price pushed nicely above my target entry with MA’s showing bullish momentum and RSI pushing above the mid level. Only MACD to follow but looks like it is heading in the right direction. This may be a little risky considering that the Q3 GDP US report is coming up, however, my stop loss is at a position that I am happy to get out of should this one turn against me.

Let me know your thoughts on this one guys

[monkeymonkeyman]

Hey Guys!

So my USD/JPY trade is in full swing - it got hit hard this morning and early afternoon - at one point hitting a dive of 75 pips - OUCH. However, price has since pushed back up - my current position is seen below, screenshotted from my account:

position.docx (100.7 KB)

As we are still waiting for a few FED officials to speak as well as the release of the beige book tomorrow plus the 3rd quarter GDP on Friday I am hoping for some bullish momentum on the pair. However, if risk aversion remains due to a sell off in the equity markets as well as macro economic worries then we could see a strong yen.

A daily FX article pointed out today that traders are currently 55% long on the pair at the moment which is traditionally a bearish signal - only time will tell but the important thing I feel is that I am sticking with my strategy and managing my risk.

I have moved away from the GBP/USD and EUR/USD crosses because of my position taken with a bullish bias towards USD in USD/JPY - I am weary of contradicting myself in pairs with one of the same currencies.

However, GBP/AUD continues to remain interesting - with price holding at that ascending trendline seen on the daily and 4 hourly charts;

AUD got kicked lower today due to risk aversion and if that current sentiment continues we could see the pair push higher. The pound found some bullish momentum today due to some positive news on Brexit negotiations from the EU side - suggesting they may be able to propose a solution to the Irish border dispute. However, this is only speculation at the moment, the pound is very susceptible to news and therefore volatile and if there is a leadership challenge to Theresa May then, no doubt, bearish pressure will ensue.

If news pushes price above my target entry at 18390 I will make sure that that news has the possibility to progress price upwards.

CHF/JPY showed very little movement today - as both currencies are traditionally safe haven assets this explains the reason for equal weighting on both sides - still a wait and see on this one.

Potential Trades

AUD/CAD has reached the upper level resistance of it descending trendline

If AUD continues to see risk aversion weakness and CAD gets some bullish momentum from this weeks BOC rate news then we could see this pair undertake some bearish price action - my target entry will be around the 9280 level with a stop loss at 9382 and a target exit at 9080.

NZD/GBP

The pair has hit an interesting area of resistance that has formed heavy support previous multiple times.

If we continue to see bearish price action due to risk aversion on the Kiwi then this pari could descend but, again, a close eye needs to be kept on the volatility of the pound

My target entry is 5017 with a stop loss at 5097 and a target exit at 4858.

Any thoughts in these guys let me know - are you trading any of these pairs?

[monkeymonkeyman]

Well!! Its been a crazy day on the markets!

I hope if you are in the markets at the moment price has swung your way and your getting some major pips!

I have to say I am quite pleased that my strategy has kept me out of some trades so far that would have gone against me.

There seems to be a lot to be said first of all for patience and also for setting a target entry when your thinking logically and then sticking to that.

I certainly would have already lost out on GBP/USD and EUR/USD.

So on to the current trades:

USD/JPY

still in negative pips on this one at the moment but with all the strength in the Yen recently the pair has still maintained its price level above the ascending trendline which gives me some confidence that if strength in the USD happens over the next 2 days then we could see some bullish price movement.

GBP/AUD

The pair saw some bearish momentum earlier this morning but this relinquished towards the afternoon. Price, however, has now fallen below the previous low and so this could lead to bearish momentum - however, if we see a reversal then I will have to adjust my stop loss and target entry slightly.

AUD/CAD

the pair pushed down today but is has gone too low for me to be able to get a decent risk/reward ratio - I’ll have to wait to see if price heads back up to give me a better entry. however, neither the MA’s or the MACD have crossed yet which is intrinsic to me entering a trade.

NZD/GBP

Still a possibility for this pair to show some bearish price momentum - its a wait and see situation at the moment.

EUR/GBP

Seen this pair’s price heading back up to descending trendline - if we continue to see Euro weakness due to the Italian situation and some renewed Pound strength then this pair could be prime to deliver some pips.

Currently my target entry would be 8815 with a stop loss at 8873 and target exit at 8701.

EUR/CHF

So I have taken a trade in this pair today guys. Although price has broken above descending trendline its has reached a place of heavy previous support turned resistance - in addition both MACD and MA’s have crossed with confirmation from RSI pushing below 50.

I feel that there could be continued weakness in the Euro for some time to come as there doesn’t seem to be any let up in the Italian situation. Also the continuing risk aversion should give bullish momentum to the Swissy.

My entry was at 11364 with a stop loss at 11514 and my target exit at 11165 - this doesn’t give me my target 2:1 risk to reward ratio but still more in the reward than risk.

[monkeymonkeyman]

USD/JPY Trade

Unfortunately I was stopped out on this trade for a loss of 138 pips. As I am only risking 1% of my account the monetary loss was not too bad. Here is the candle that took me out:

In Hindsight I got in too early before the reversal had been confirmed. From the past few days activity the pair are still showing bullish activity but this time I will certainly wait until there is more bullish price action and this has been confirmed by the MACD.

This week is a non farm payroll week so plenty of volatility could play out in the USD as well as announcements from the head of the BOJ and risk sentiment affecting this pair.

EUR/CHF

The pair continue to push up at the moment against my short trade:

However, with new worries surrounding leadership in Germany as well as continued Italian budget and Brexit woes I am currently bearish on the Euro - the only worry for me for this trade would be that increased volatility will take me out of the trade prematurely as in my USD/JPY trade. However, this is the market teaching me a lesson on stop positioning more than anything else.

Interesting Trades Ahead

NZD/GBP

I am still looking for an opportunity to short this pair as price has reached a very interesting area of perevious support now potentially tuned resistance:

I will have to wait for the MACD cross and RSI to dip below that mid level to confirm bearish momentum but if risk off vibes continue, potentially hurting the NZD or, with another super Thursday coming up we see bullish momentum in the pound then the opportunity to gain some pips off of this one could be there.

USD/CAD

The pair appear to still be in a very steady downtrend and in conjunction with the NFP report on Friday there is also the Canadian GDP being released on Wednesday - whatever happens I am expecting volatility in this pair and will be poised to take advantage of bearish momentum, should this happen:

AUD/CAD

I’m also keeping an eye on this pair as it keeps within its descending trend - in addition to the Canadian GDP release there are a number of AUD releases out this week which could move pirce as well as risk sentiment:

I’d be looking to enter around the 9200 level and exit around the 9000 level with my stop loss at 9350.

USD/CHF

This pair has reached a strong area of resistance and looks like it could be heading either way - if surprise or weak data comes out of the US this week we could see a move to the downside in favour of the safe haven swissy:

Ill look for a strong bearish candle as well as the splitting of the MACD to a negative signal and the push below the mid level on the RSI.

Any thoughts on the above trades let me know. I’d love to know how other people are positioning themselves on these or other trades.

[monkeymonkeyman]

Updates

USD/JPY

So Tuesday this pair gave me a buy signal in the form of a MACD cross signalling confirmation of a change in direction:

With a strong bullish candle pushing price above the previous high on Monday 22nd October It was a good opportunity to enter the trade. With a stop loss set at 111.17 - 30 or so pips below the previous low I am looking at a 1:1.5 risk/reward ratio.

The NFP report seems to have had little effect on the pair as people are more concerned with the result of the mid-term elections. The result will likely move price a lot, hopefully in a bullish momentum, but I am happy with my stop being far enough away to avoid getting prematurely stopped out .

EUR/CHF

Still holding in there for this one - it is still finding resistance at around that 1.14 levell which has been a major area of resistance and support in the past:

working our way down to hourly chart a wonky head and shoulders pattern has formed which could signal the end of this uptrend:

My thoughts on this one are to either try and get out at around break even level due to break out of descending trendline resistance or if I get a particularly strong bearish candle taking price back into the downtrend then hold on.

This will also depend on reason behind the price movement - as we are very light on fundamental high impact news for the Euro and the Swissy next week it will be more likely that Italian budget news will move price.

[monkeymonkeyman]

**Potential Trades w/c 05/11/2018 **

NZD/GBP

Price pushed higher for the pair this week, with NZD benefiting from improved hopes of a US china deal and risk friendly vibes:

However, price is still hovering around that area of major resistance/support

A look at the hourly chart, however, shows that price has seeped under ascending trendline support with the RSI hovering around the mid level.

With major economic reports out for both currencies this week, as well as Brexit related news and Chinese fundamental data, this pair could turn bearish.

AUD/CAD

This pair shot out of its descending trendline this week:

I plan for a retracement to around the 9314 level:

previous area of recent support and resistance to enter this trade.

GBP/AUD

Also a pair with the potential to give me exposure to the pound

The pair has been in a fairly gentle uptrend and shows signs of hitting that trendline relatively soon.

A look at the 4 hourly:

shows that the shorter term descending trend is still in play - if and when this changes I would look to go long in order to gain bearish exposure on the pound.

Happy trading guys!

[purtle]

Took the same USD/JPY trade although I’ve been in it since about 4 days ago. Stop loss is around the same level also. And the same r:r! We’ll see how long this trade will take before we get a good amount of action.

[monkeymonkeyman]

Fantastic Purtle! Not long left til we find out the results now!

[monkeymonkeyman]

Updates

USD/JPY

Pair continues to wait for news from the mid-term elections. It seems that 2 of the possible 3 outcomes are tipped to be positive for the US dollar and with the FED funds rate decision scheduled for Thursday there could be bullish momentum for the US dollar

EUR/CHF

This pair is continuing to go against my me - I am holding on because I don’t want to get panicked out of the trade and because I am practising. However, the pair continues to demonstrate a typical break out pattern:

It is a wait and see on this one and then an analysis of my trade afterwards

[monkeymonkeyman]

Updates to potential trades 06/11/2018

NZD/GBP

Price appears to be stalling around area of serious resistance - with a cross of the MACD on the daily chart an opportunity to get in on this trade should present itself:

The 4 hourly chart shows the break of the ascending trendline with price pushing back up to potentially test that broken level:

A bounce of of this level could provide the cross needed on the MACD on the daily chart - plenty of NZD announcements out this week plus Chinese major data and continuing brexit negotiations

AUD/CAD

The pair has continued to push higher:

I am still waiting on a retracement to previous low as this will give me a far better risk/reward ratio

GBP/AUD

Pair has now broken that 4 hourly chart descending trend and looks to be trying to push higher

My only hesitation with this pair at the moment is that price has not quite met the ascending trendline on the daily chart - however, with mid term election results looming and no telling which currency pairs might be affected I will decide first thing in the morning on this pair

[purtle]

Looking forward to your updates this week!

[monkeymonkeyman]

Updates

USD/JPY

So, Surprisingly the result of the mid-terms moved the pair very little, apart from the obvious volatility on the day. it seems, therefore that economic data is going to be the main push for dollar/yen amd this will depend on whether it is pointing to the rate hike at the beginning of December and further rate hikes from there.

For me at the moment I am hanging on - I am just under 100 pips up.

As we can see from the graph:

The high set around the 3rd of October has been an area of resistance on a previous three occasions. I had planned to try and scale in if I saw enough upside price movement especially as this would be the third wave. However, I would want to see a push above the 11455 level and then a retracement and stalling around this level to then up my bet.

Another possibility might be a bounce of off this level and a retracement to around the 11302 level which is the high set in July:

I think a case of bravery is going to have to be the call of the day here - especially as there is little point me getting out for a 100 pip gain when my risk was 150 - as always I will have to adapt to what the market brings.

EUR/CHF

The pair failed to break above the previous high and now with renewed fears surrounding the Italian situation and projections about German economic results disappointing there may be renewed bearish pressure on the Euro.

Price has reached a critical support level and I am now down to around break even:

My plan is to see if there is a bounce on the 4 hour chart either tomorrow or Wednesday and if the price action is confirmed by the MACD and the RSI then I will get out. However, if price gives a strong bearish candle back inside the trend-line then I will stay in:

Currently, sentiment seems bearish towards the Euro and this may give me the negative momentum I need to stay in. However, markets have a tendency to bring the unexpected.

[monkeymonkeyman]

Updates for Potential Trades Week Commencing 12/11/2018

NZD/GBP

Price has pushed passed resistance and has risen to the descending trend-line:

With Theresa May struggling to convince her cabinet of the benefits of her Brexit plan it looks more likely that this pair may stage a breakout, especially with very little to move the pair on the NZD side due to a lack of economic announcements this week.

AUD/CAD

The pair has taken a slight turn to the negative side today:

I am still looking for a descent to the ascending trend-line to try and get in on the potential breakout. With a few high impact economic announcements schedules for the Ozzie on Thursday we might see this giving direction to the pair.

GBP/AUD

It seems to have been a good decision for me to wait on this one has price has continued to head lower than the previous low. With all the negativity surrounding the cable at the beginning of this week I will have to wait for a change in sentiment until we might see some bullish momentum in the pair.

[monkeymonkeyman]

Updates

USD/JPY

Hey all, so loads of movement in the markets today - unfortunately, but not surprisingly, very little for this pair:

As price hasn’t yet managed to break above the 2018 high it looks like the ascending triangle is being maintained - because of the high amount of resistance round the level that price is at currently, if we do see a breakout we could be looking at some really strong bullish price action.

Here’s hoping, so we can rake in some major pips!

EUR/CHF

So I closed this trade today due to quite a significant bounce off of previous support and also the broken descending trend-line:

I got out for a loss of 25 pips, which is pretty much break even, but with this bounce and the MACD and MA’s on the 4 hourly confirming bullish price action I thought that it was a good time to get out.

More than this though, I am thinking that whilst I am in this trade I may be missing trades on other Euro or swissy crosses that I cant trade because of the potential conflict in crossovers. My thought process is to cut, what looks like becoming, a very uncertain trade to try and get into a potentially much more profitable trade.

Let me know if you have any thoughts on these guys

[monkeymonkeyman]

Updates for potential trades 14/11/2018

NZD/GBP

A very exciting day for cable with anything being possible - if an agreement is bashed out in parliament regarding the Brexit proposal then we could see the bearish momentum needed to enter this trade:

Price has certainly stalled right on the descending trend-line and around a previous strong area of resistance - MACD and MA’s look likely to cross with RSI pointing to bearish momentum - however, everything depends on the outcome of today.

I would like to see a bit more price action before I set my target entry and exit levels.

AUD/CAD

With the Ozzie holding out against mixed Chinese data and the CAD suffering from the continued fall in oil prices:

It is difficult to see where the bearish pressure might come from to bring price back down so I have an opportunity to get in and trade. However, the markets do have a way of surprising so it is a case of wait and see with this pair!

GBP/AUD

This pair could be a great trade very soon - with a lack of direction in the Ozzie (although that could change with Thursdays announcements) it is all down to the pound to give the bullish momentum.

With the MACD and the MA’s just about to cross and RSI suggesting bullish momentum it looks like this could be a good trade.

On the 4 hourly, price has broken that descending trend-line and and then bounced nicely off of broken trend-line support:

My target entry will be around the 18070 - 18080 level, just above previous resistance on the 4 hourly chart, putting my stop loss around the 17790 level.

This is certainly more than my normal risk level at around 300 pips, however, the upside could be the previous high around 18700 - giving a 600 pip upside and a nice 2:1 R/R ratio.

AUD/CHF

This pair has reached a very nice descending trend-line and looks poised to make a move in either direction:

It looks like we might be about to get the cross on the MACD and MA’s on the daily chart along with bearish suggestions from the RSI, just coming back in from that overbought level.

With nothing out for the Swissy this week but employment figures for the Ozzie coming out on Thursday it is most likely that this will drive price action.

I’ll look for an entry level around the 7150 mark with a stop loss around the 7350 - just above previous highs and a target at 6850 - just below previous lows.

Let me know thoughts guys - anyone trading or thinking about trading these?

[monkeymonkeyman]

Updates

USD/JPY

Hey all,

Apologies for the delay in updates - I am currently in search of a new job and that has been taking up a bit of my time.

So, interestingly, my psychology has been trying to get the better of me with a little voice in my head telling me to either raise my stop loss or get out of this trade as soon as we heard the more hawkish comments coming from so FED execs.

However, I think what I have to remember is that when I placed the trade and my stop loss it was all pre-determined when I was thinking logically and clearly and, therefore, I believe that my stop-loss should, for the time being, stay where it is.

So, some selling seen on Friday in USD - bringing price down to the ascending trend-line. However, it then broke through that 11276 level which offered some previous support/resistance:

and it looks like the next level may be around the 11200 level. I wouldn’t be surprised if we saw a small uplift in price through to the middle of this week as RSI is deep into oversold territory, but I think this may be limited as the daily chart still shows some room on the RSI until it reached oversold.

A look at the hourly chart for more clarity:

…shows that price would need to break out of this descending trend-line to have a chance of showing bullish momentum on the 4 hourly and daily time-frames.

With little in the way of liquidity for the USD due to national holidays at the end of the week there may be little this week to give much direction to the currency.

I’ll keep updating on this trade - let me know if you are currently trading this one and what you are currently thinking.