Don’t overwhelm yourself mate, I find it much easier to stay simple and just create a strategy you truly can emboss mate.
I hear you, that list of resources is mainly just for me to keep track of what I’m reading for my education.
Definitely next step for me is to write up a formal trading plan.
That’s all mate step-by-step since we are all different individuals that leaves us with a catalog of different trading set-ups/scenarios.
This is why I am only at break even and my trading has been very erratic after how many months of studying this stuff and demo trading. They say that you need to be healthy in mind and body, trade like a robot, unemotionally. That’s kind of tough for me right now because of situations in my personal life. Basically going through some divorce drama and some struggles in my business. My mind is not necessarily clear. I’ve been trying to stay healthy, meditate, exercise, eat right. I don’t know if that’s enough because these situations are still there in my personal life and will be playing out for some time. There’s a part of me that thinks it may not be a good time for me to trade, but I really want to learn this stuff. So that’s why I’m sort of in a demo and reading mode right now.
Below is version 1 of my trading plan. I will link to revisions of this trading plan in this post.
Version 1.0 RJs Trading Journal
RJ’s Trading Plan
Version 1.0 - Last updated 11/28/18
About
This is a beginner Price Action strategy based on the James 16 and krugman25 ‘Price Action that Matters’ threads. I will focus on finding PA setups around areas of SR, trendlines, EMAs, and fib levels.
I will not trade very often for the time being and will spend the majority of my time studying charts, reading, and writing trading scripts in Python, Pinescript, and MQL.
I will check the charts every day for at least half an hour in the morning then periodically throughout the day. I will check the forex calendar and news every day.
I will not enter a trade unless I have followed my trading plan and the outcome says I should enter it, It is the only way not to feel any guilt if I lost the trade and make objective decisions. Before entering each trade I will check this trading plan, and I will track each trade in my trading journal.
After I am in a trade I will not move my Stop Loss unless it is in my favor. I will manually exit a trade if I determine that it will not go in my favor - I must document my justification from exiting trades prematurely.
I will never trade over my risk threshold and will stick to my pre-determined risk management strategy.
I will not edit or change my trading plan while I am in a trade or within 24 hours after I exit a trade (winning or losing one).
Long Term Trading Plan - From Demo to Profitability
From the James 16 thread:
WHATEVER / WHICHEVER WAY YOU DECIDE TO TRADE YOU MUST (AT A MINIMUM):
ON DAILY AND WEEKLY TIME-FRAMES, YOU ONLY DEMO-TRADE FOR THREE CONSECUTIVE PROFITABLE MONTHS IN A ROW. YOU DO NOT PROCEED TO STEP TWO UNTIL COMPLETED.
OPEN AN ACCOUNT WITH HALF OF THE INVESTMENT YOU INTENDED TO GO FULL WITH AND CONTINUE TO ONLY TRADE DAILY AND WEEKLY TIME-FRAMES UNTIL YOU ARE PROFITABLE THREE MONTHS IN A ROW MINIMUM. YOU NEVER RISK MORE THAN TWO PERCENT OF YOUR ACCOUNT ON ANY ONE TRADE. YOU DO NOT PROCEED TO STEP THREE UNTIL STEP TWO IS COMPLETED.
FUND A FULL ACCOUNT AND CONTINUE TO ONLY TRADE DAILY AND WEEKLY TIME-FRAMES UNTIL YOU ARE CONSISTENTLY BUILDING YOUR ACCOUNT FOR AT LEAST SIX MONTHS. YOU NEVER RISK MORE THAN 2 OR 3 PERCENT OF YOUR ACCOUNT ON ANY ONE TRADE.
IF AND WHEN YOU DECIDE TO DAYTRADE ON A SMALL TIME-FRAME AND YOU DON’T FOLLOW THIS TEMPLATE, AT A MINIMUM, YOU ARE ALMOST CERTAINLY GOING TO FIND YOURSELFE IN TROUBLE. IF YOU ARE GOING TO FOLLOW A SYSTEM OR ANY TRADING STYLE AND YOU DON’T FOLLOW THIS TEMPLATE AS FAR AS THE DEMO PROCESS, YOU ARE NOT TREATING IT AS A BUSINESS AND YOU HAVE NO ONE TO BLAME OTHER THAN YOURSELF IF YOU LOSE YOUR MONEY.
IF YOU EVER SUFFER THE LOSS OF 30 TO 35 PERCENT OF YOUR ACCOUNT, YOU STOP TRADING. PERIOD-PARAGRAPH. YOU GO BACK TO DEMO AND FIGURE OUT WHAT WENT WRONG. WHILE DOING THIS, YOU REFUND YOUR ACCOUNT BACK TO ITS ORIGINAL AMOUNT. YOU DO NOT GO BACK TO LIVE TRADING AGAIN UNTIL YOUR DEMO HAS SHOWN YOU WHAT WENT WRONG AND YOUR ACCOUNT IS BACK TO FULL STRENGTH BY WHATEVER MEANS. IF IT TAKES ONE MONTH OR SIX MONTHS, IT DOES NOT MATTER. YOU MUST FOLLOW THIS APPROACH IF YOU DON’T WANT BLOWN ACCOUNT AFTER BLOWN ACCOUNT.
Your goal should be this. Learn, learn and learn some more and don’t do anything stupid while your getting your feet on the ground. The ultimate goal of any trader is to build an account to a size where just a few good trades a month produces a staggering income. Hardly anyone ever gets there because they don’t treat it as a business. They do stupid things that they would never do in any other area of their life and it’s because of the money that can be made. If it takes you a couple of years or even five or ten to reach the level of a staggering income, is it worth it? The choice is yours.
Before entering the trade
Risk Management
Never risk more than 2-3% of your account on any one trade, and no more than 5% of account total on all open trades.
Shoot for 2-3% R:R ratio.
What Timeframes
See above quotes from James 16 thread. At this point in my trading, I will be trading W1 and D1.
What Pairs
Mainly Major Pairs, and variations of Major Pairs.
From krugman25 thread:
Support Resistance areas used - in order of importance
Horizontal S/R
Trendlines
Channels
Fibonacci (50% and up)
EMA (8 and 21) - for short and medium term S/R
Trade Requirements:
A valid price action signal must have formed, this provides the entry signal
These price action signals must have formed at key S/R level(s)
The trade must provide at minimum 1:1 RR, preferably 1:2 or higher
The signal must not have formed in a choppy or noisy area of price
At a minimum the candle must be the size of the previous candle, or fairly close
Chart Requirements
Must be candlesticks chart
Must be NY close
While in the trade
First Target Area
I will not touch the trade before the first Take Profit or the stop loss is reached.
After FTA is reached
When the FTA is reached I will move the SL to the entry point and let the rest of the trade play out
From krugman25 thread:
Trade Quality Measurement(The 5 star system):
I’ll give a rating on the krugman 5 star scale for the trade you are taking - I’ll record this in Edgewonk.
Personal Trade Filters:
No trading during 24 hour period around the fed announcements and nfp.
THESE ARE THE PRICE ACTION PATTERNS I USE IN MY TRADING:
From james 16 thread:
- DBLHCDoubleBarLowHigherClose
- DBHLCDouble Bar High Lower Close
- Two Or More Matching Highs Or Lows.Must be within 2 pips of each other. If
the high or low is broken, it means the resumption of the current trend. - BEOVDBearish Outside Vertical Bar(This is Simply Bearish Engulfing Pattern)
- BUOVBBullish Outside Vertical Bar (This is Simply Bullish Engulfing Pattern)
- Pin Bars
Below are screenshots illustrating how to trade the 6 james 16 PA Patterns above:
These are from krugman25 thread - do not use these now, but watch for them and study them - will start incorporating these later as I develop as a trader…
Price Action Candles(in no specific order):
Pin Bar
Hammer
Inside Bar
Engulfing Bar
Two Bar Reversal
Morning Star/Evening Star
Price Action Patterns(in no specific order)
1-2-3 Reversal
Bull/Bear Flags
Ascending/Descending Triangles
Ascending/Descending Channels
Double Tops/Bottoms
Triple Tops/Bottoms
Bull/Bear Rectangles
Rising/Falling Wedges
Pennants
Would appreciate any comments on my trading plan. Thanks all.
I took a short on GPBJPY the other night but I cancelled it - turned out I would’ve made money.
I took this live trade right now on EURUSD
EURUSD Short D1
On the D1 - several days ago there was a BUOVB but there are 2 bearish PA signals over the past few days. Bearish pinbar yesterday and a couple of days ago there was a BEOVB. Pinbar was formed around SR and beneath 8 21 EMAs. So there’s a lot of resistance in this area. BEOVB also formed between Psych resistance of 1.140 and SR line. Price is really being squeezed in this area, but this is clearly a bearish trend with market uncertainty around Brexit and strength of USD in last day against EUR and GBP. I only see price going down in the near future.
Price has already broken first SR a few times, nothing to impede it from reaching yearly low SR. I’m not good at rating a trade, I’ll give this one a 3 star due to double PA.
You were right to go short, and its still a good call across daily, weekly and monthly.
This is another good call. I’m short on it as well. This is what I see on the daily.
Here’s to making money 
The trade turned against me last night during the London session, which is not surprising to me. I have not been paying close enough to fundamentals - I was counting on the price reversing and going back in my direction during the US session today but I did not know that it’s a trading holiday today in the US due to the death of former President Bush. So US bears cannot save me today. I have to hope that the price does not hit my SL before trading in the US market resumes tomorrow.
EURUSD trade above:
SL hit. I still feel I took the right trade from a PA perspective, and this trade was according to my trading plan and how the PA signals were defined by the james 16 document - please comment if you feel otherwise.
I did not take into account fundamental events and how they could play into the market. And how subtle interpretations of fundamental events such as - trade war ceasefire for US and China first being interpreted positively then with skepticism, Theresa May’s Brexit plan likely being rejected, announcement from EU lawyer that UK could revoke its Brexit announcement, and things like - slowing down of US yields. There are a lot of fundamental elements that effected this trade.
AUDCAD Short:
On D1 - bearish pinbar and BEOVB. Definitely rejection of SR, but price currently being squeezed between trendline and SR. I like this trade right now because doesn’t involve EUR GBP or USD, a lot of chaos and uncertainty especially after disappointing ADP.
If price is really going down - then even more attractive because now may be a retracement entry opportunity.
The BEOVB and pinbar are not 5 star because it’s not clear we’re at the end of the bullish trend, although looks like it could be - definitely bearish volume lately. Also looks like a bearish move in Bollinger Bars.
From a fundamental perspective - CAD is losing ground as currently oil prices are uncertain, hawkish BOC announcement may trigger bull move. AUD is tied to China due to close trade relationship.
Would not be that great of a trade opportunity - maybe 2 star. Because bullish trendline, EMAs and H1 resistance are in the way.
AUDCAD Short:
Trade closed: target reached: Good trade, I should’ve risked more
CAD bullish after positive news with Opec Oil deal helped me.
1 Like
Weekly Review - 12/2/18
Notes:
Overall I broke even this week, gained a few cents. I still feel good that I did a ton of work this week:
-I wrote up a trading plan finally
-I did a ton of reading
-I took 3 trades - if I followed my instincts and not closed the first I would be up right now. I think I got nervous on that first trade but I think it was valid. The second trade EURUSD - I think I got bit by some turmoil in global politics. Brexit stuff, trade war nervousness between US and China, some fears around US bond yields, and then a bank holiday on Wed. I think my PA system is pretty sound overall though.
Lessons Learned:
-Pay more attention to daily FX news. Make sure your perfect PA is not falling in some unexpected situation like NFP.
-You may be taking too many trades (3 in one week?)
Did a ton of programming in Pinescript and Python over the weekend fyi. I particularly liked reading about Jon V’s algorithmic trading and machine learning platform built in Python and the Oanda API at GitHub - jonromero/forex_algotrading: My Forex algotrading platform in Python - based on my posts at http://jon.io . Good stuff I’ll be looking at more in the next few weeks.
NZDUSD Long
BUOVB formed on D1 in an uptrend. Along trendline , SR and EMA’s. So there is support and PA, and we are in and uptrend. Problem is a lot of uncertainty right now with US China trade war and US yields underperformance and fears of recession. Continued good relations is good for NZD. There is not a lot of conviction in the market in the form of volume around this PA.
The pair seems undersold on the H4 chart, but a lot of bearish volume.
My fear is that it may take several days to make that TP level - and there may be fundamental events that change the conditions of the trade before it hits.
I only risk 1% just to see if I’m right. The only doubt I have about this trade is:
-only one PA signal, the BUOVB
-a lot of questions around fundamentals
I would rate this a 2, although I’m not sure about this. Could be a better setup. It’s supported by SR(?), trendline, and EMA’s. Nothing to stop it from reaching TP at next SR zone.
My fear is that I’m trading just to trade. Also - this conforms to my trading rules, but political situaton makes it a little risky.
See NZD/USD Weekly Price Outlook: Kiwi Rally Runs into Resistance
Confirms bullish bias, not sure if that will help this trade though.
We had a bullish move last night, but price pushed down again today.
NZDJPY Long
On D1, BUOVB and a bit of a retrace right now may be a good entry. BUOVB appears on trendline, EMAs, and around SR area. See https://www.tradingview.com/chart/NZDJPY/mqONKmJo-NZDJPY-TREND-CONTINUATION/ Risk on in EUR last night after positive jobs report.
This trade meets my rules, I only take 1:1 RR right now because I’m still not that confident. also, there is the 79.23 SR which may prevent it from hitting my TP. Decided to take the trade with a lower RR ratio - and some worries that I may be trading too much. Also some worries that I’m taking this trade at a time when I have some high anxiety levels, it does meet my requirements though. Rating would be a 2-3 due to SR zone.
NZDJPY and NZDUSD Longs
I closed both my trades. I know i violated my trading plan. NZD seemed to be really struggling for a couple of days now, despite weakness of dollar. I didn’t like 3 pinbars in a row. I know I should’ve let it play out to its conclusion. I don’t want to be in the red again with my account.
Right now I made about $1 on my accounts. If these trades turn out to be winners in the next couple of days I’ll be kicking myself. I know I’m not sticking with my plan.
I’ve made a slight change to my Trading Plan - I’ve added this:
After I am in a trade I will not move my Stop Loss unless it is in my favor. I will manually exit a trade if I determine that it will not go in my favor - I must document my justification from exiting trades prematurely.