The "Magic" Trading Journal

I really desire with all my heart to start a live account. I have developed a profitable trading system that is included in my trading plan. In this thread I intend to share the “magic,” my system of course. I will share the techniques I use to choose the currency pair to trade, how I analyze whether to go long or short, the leverage and margin used. How I find suitable entry points and establishing well calculated stop loss. I usually don’t set take profit since I trail my stop on the wining side of the trade and bag some profits. To be in my vibrations you have to understand Moving averages, Fibonacci retracement, trendlines and support and resistance levels. The knowledge of swing high and swing low candles is a necessity. Timeframe is in a 4hour chart but larger timeframes are used to confirm the trend.

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Looking forward to your future updates.

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Sounds like you have already given a lot of thought to your trading approach and it sounds very promising. I wish you luck with your “magic”. :slight_smile:

And, naturally, that magic is not just limited to your system, it also extends to your own patience and discipline in sticking to your rules and not getting distracted along the way! :slight_smile:

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Awesome. Looking forward to your first journal entry!

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I suggest you also consider focusing on ‘trading the trend’ in current economic markets. Just use a 200SMA with the aim to buy above and sell below.

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Hello journal

Identifying a pair to share in this thread has not been a walk in the park as I first envisioned it. After examining marketmilk carefully and mostly focusing on volatility of currency pairs I selected GBP/NZD. I have selected this pair because GBP is my favorite pair to trade and its highly volatile at the moment selected. I then head to open the chart. First I look at the weekly and daily timeframes to determine the overall trend of the pair. Since there are more bullish candles than bearish I determine the trend to be uptrend. From my trading tools I apply the 5SMA blue line and 10SMA red line. The Moving averages are acting as support hence confirms the uptrend. I use the crossover system as my signal to enter the market. In this case I will wait for the blue line to cross above the red line. I go back to my forex toolbox and pull out the Fibonacci retracement object. Identify a swing low(A candlestick with at least two higher lows on both the left and right of itself) then drag the cursor to the most recent swing high(A candlestick with at least two lower highs on both the right and left of itself). In this case my swing low is on 5th of May and swing high 11th May. I then wait patiently for my signal, blue line to cross above the red line.

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An interesting and logical analysis process. I think you might see some continuing volatile price action with this pair.

I suspect on the 4H timeframe that an SMA crossover might be a bit slow in giving you entry signals, especially when price movements have been volatile and erratic or there has been a fast change in direction.

You said in your OP:

which is ok on timeframes of 4H and higher (trailing stops on lower timeframes, where targets are smaller, maybe eat too much of the open profits before triggering).

So once you have opened your position do you apply an automated trailing SL with a pre-set pip value, or adjust it manually? If manual, on what basis do you set your initial SL and when do you adjust it? (e.g. pip amount, new swing low/high, etc, etc)

An interesting start to your journal :slightly_smiling_face:

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Then I pull the 1hour timeframe and place my long position at the highest point the price reached on the previous candlestick. I open a lot size of 0.02 and place a buy stop order at 1.95899. I wait patiently for my trade to be executed.

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I use average true range to calculate stop loss. at *1.5 gives my position enough room to breath.

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For the perpetuation of this thread I intend to write anything and everything related to my feelings and this position. I have confidence in this order especially now that it has been executed. To be honest I never thought that it will require much energy and persistence to record this journal, For fear of criticism is mostly at it’s peak especially at moments when the market is against the trade. But I have confidence in my probabilities and “Magic” system. And with this in my mentality I follow my trading plan the best way my heart knows how to and remain loyal to my system rules. In calculating stop loss I pull out the Average True Range oscillator from my forex toolbox. The ATR help to set the stop loss by calculating the volatility of the price pair. As stated previously I allow 1.5 to give enough room for my position to breath. My calculations:
1ATR=0.0081 points
1.5
0.0081
=0.01215
=1215 points.
Since my position is a buy order at 1.95899 I subtract the points
1.95899-0.01215
And set my stop loss at 1.94684

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Which timeframe do you use?

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Daily for trend confirmation and 4hr for entry providing it’s in accord with Daily. Extra: review the 15m chart to see if is in line with the higher TFs. If not, wait until it is. Set S/L at circa 3X ATR from the 30M TF.

I also use other confirming signals, which must all be in correlation, The justification of involving the 200SMA is that pro institutional traders employ it to set their positions, maybe for months, weeks, days ahead… Thus a consistent high trade volume going only one way.

That’s not to say you cannot trade against the trend, but keep it short-lived.

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Thank you.
It’s very similar to my trading style and system.

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Good morning Journal
Lets examine what’s going on?
The position hit stop loss.

Just like a normal person has good and bad days, a trader has good and bad trades. A good trader always goes back to his trades, whether good or bad to determine what exactly may have made the trade to be good or bad in the first place.
I define good trade as a trade that’s on your favor, probably reaching your take profits. A bad trade on the other hand is one that hits your stop loss.
In this scenario it was a bad trade since the trade was against my probabilities making a change of -0.62% in my demo account.
Examining my trading plan and this trade carefully, I try to understand why probabilities were not in my favor, reasoning intelligently from the known to unknown

  1. Pair selection
    I was not sure of the pair to share in this thread. As a matter of fact I lacked confidence since I deeply desired for my first pair on this thread to be a good trade. Even though I decided on this pair, I had much confidence in other pairs.

  2. Picking a volatile pair
    After placing the trade, the market quickly went against my probabilities and hitting stop loss before resuming it’s direction to it’s original trend. Some may say at this point that maybe I had not given the pair enough breathing space but I trust that *1.5ATR stop loss on 1 hour timeframe is sufficient space.

  3. This my first time to share my trading plan and system to this amazing family of traders. Being a newbie, Only seven months demo trading after 1 year with Dr. Pipslow at the school of Pipsology, the fear of criticism was at it’s peak.

With all these in mind. I intend to work on what needs to be worked on and ensure the perpetuation of this thread to Live account. Forex is a game of probabilities hence there will always be a good trade or a bad trade. No shame in that.

Hello Journal
Let’s see. Where was I?
The Power of Will.

The power of will captures the attention and vibrations are induced mentally. Desire is the starting point of all achievements and every great achievement was once and for a time just but an idea. I understand that I love conducting my own analysis but need little help pulling the trigger sometimes. I am adventurous and prefer to trade on charts fast and furious, for this reason I love to know if I end up a winner or looser at the end of the day. Come to think of it, nobody enjoys loosing. Loosing cultivates space for fear and greed. A good trader tries to understand why he won or lost in the first place. Changing his system as to customize himself with the law of averages.
I am a conscientious person, I have the right blend of self control and perseverance which makes me a rule follower. I stick to my trading plan and strictly follow the rules of my trading system, adjusting the system to be profitable on my own terms. With this in mind and the many lessons I get from this amazing community, I make the following resolutions

  • I will pick one direction, become an expert in going that way
  • I will pick a currency, know more about this currency than any other
  • I will pick one pair, know this pair inside out

Hello Journal
It has been quite a busy weekend and a break from the charts. But this week is here. This is my week of change. Paradoxical as it may seem, Nothing is permanent but change. So I had decided to make some big changes in my last entry. This wave of change penetrates to my trading plan hence changing the trading system in the process. I intend to learn and study one currency for the next coming days. I pick the JPY currency. With all it’s pairs, I’ll be observing how it moves and behaves at different time intervals. How exactly are the candlestick formed and what the pattern of their formation if any exist. I will also investigate how this currency moves when it’s highly volatile as also when it’s least volatile.
With all these in my mentalism, I have decided to take a break from entering a position. My chief aim will not be to find suitable entry points and take profit levels but to understand this pair inside out. Make this pair my best friend and keep it close. Know how it behaves when the market is ranging or trending.
This I believe will allow me time to think and meditate about the shortcomings of my trading plan and system and the various notch I have to make it profitable. This is my week Journal

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