Should have traded when it fell back in channel.

Journal Entry from European Session Monday Morning

{mosimage}

I'm just now entering a journal entry for a trade I made this morning at 4:30 am.   We had a breakout of the upper channel GBP/USD at 4:30 am this morning and I thought we may see a little volatility so I went long at the close of the candle.  As you can see, it was quickly stopped out as the price entered back in the channel.

According to Rob Booker's rules, if the price falls back into and closes back into the channel, you can reverse your trade or place a new trade if you were stopped out.

I was stopped out and should have went short on the GBP/USD once this happened.  I would have had a stop at the bottom of the channel which would have been good for 50 pips or so.  

There's always next time. 

Popularity: 2%

Asian Session May 8th

Journal Entry

{mosimage}

I decided to trade the Asian session and shorted the USD/JPY.  I was just stopped out at 0 profit/loss. 

I shorted the pair on a break of the support trendline and a break of RSI trendline.  It was good entry execution.  I waited for the price to break the trendline and then waited for the 15 minute candle to close.  After I was up 20 pips, I moved my stop to break even at 111.52.  My limit was still 111.05, right above a lower support line.  The trade was up as much as 28 pips where I typically would have closed the position.  Tonight, I wanted to show a little restraint and patience so I waited.  The pair never made it back down before stopping me out for a scratch.  

Should I have taken the 28 pip profit? Would you have?  

Popularity: 2%

May 2nd NY Session

I'm in short trade right now, USD/JPY at 113.25 with a 30 pip stop.  It's currently down 15 pips.  I just really need a winning trade right now.  I'm not going to do anything stupid though and I'll follow the rules and hopefully I'll come out on top.  

I opened the trade at 8:30 am when we started to get some volatility.  It has since dried up.  There are no major economic releases today.

I'm about to get stopped out.  I have to admit that I'm fighting with myself over the stop.  I want to move it up so bad.  I won't touch it. 

I didn't touch it but I was stopped out.  Wow, I don't know how many trades I've lost in a row.  Since signing on with Rob Booker, I have 1 winning trade and 9 straight losers.   One thing is for certain, I'm great at picking the bottom when I'm shorting.

Trade Details

The red thumbtack is where I went short.  I was stopped out
2 candles later.  I went short after a close below my lower channel. 
The volatility dried up and the squeeze dissipated quickly after 8:30
am.  

 

 

 

 

 

 

 

 

 

 

 

Popularity: 2%

First Trade 1 PIP Profit!

OK.  I closed out the GBP/USD position with a 1 pip profit for 2 reasons:

1. European session is over
2. All major currency pairs are consolidating in expectation of US economic reports this morning.

I couldn't set the limit to close out the pair at break-even so I performed it manually.  That is why I profited 1 pip.

Good thing I did.  The pair moved upwards 20 pips right after I closed it.   

I'll regroup and see if any setups emerge during the next couple of hours.

Popularity: 4%

Encouraging Words from Raghee

I’m alive and eating solid food! 

I was delighted and surprised to receive inspirational words from Raghee Horner the other day.  Here they are:

Hang in there…you’re trying some new things and its when you are getting close that the setbacks often seem the greatest. Keep it simple…you already know that. You shared some great insight as well as your ups and downs…kudos for your frankness. Anyone who says they haven’t been there too is just fooling themselves. If I can be of any help, please don’t hesitate.

Popularity: 2%

EUR/USD Week of March 26th

I stated a couple of days ago that I would try to analyze the market as if I was a Currency Strategist.  I have no idea what it takes to be a Currency Strategist but  I made an attempt today to analyze the EUR/USD for the upcoming week.

Introduction
The EUR/USD has had 7 straight weeks of alternating price action (down, up, down, up, down, up, and down.)  The 3 weeks prior to last, we had higher highs and higher lows but last week, the EURO failed to push above the prior high of 1.2208.  The price closed on Friday at 1.2037.

Candlestick
A dark cloud occurred (which indicates that prices moved up strongly on the previous bar, opened higher, but then closed significantly lower).  This implies weakness as the momentum appears to be shifting from the bulls to the bears.

Moving Averages
We have support below from the 8 and 21 EMA’s at 1.2020.  The 50 and 100 EMA’s at close above at 1.2144 and 1.2133 respectively.  The 200 EMA provides longer term support at 1.1720. 

Basic Indicators
MACD - Bullish
Stochastic - Bullish
RSI(7) - Neutral
RSI(14) - Neutral
DMI - Neutral and Trendless 

Trendlines
Resistance: 1.2217, 1.2330
Support:  1.1785, 1.1868, 1.2000

TTM Squeeze
Squeeze in progress since 1/27/06.  The last exit from a squeeze was 11/11/2005.

Commitment of Traders Report
As you can see from my graph, non-commercial positions are building on the long side.

 

 

 

 

 

 

 

 

 

 

 

 

 

Volatility Analysis
Bollinger Bands are 41.41% narrower than normal. eur is currently experiencing very low volatility as compared to its normal range.  The probability of volatility increasing with a sharp price move is likely in the near future.   

Prediction
EUR/USD may remain in the 1.2000 - 1.2200 range.  If the psychological important 1.2000 is broken, look for furthur downside to 1.1868.

Popularity: 3%

38 steps to becoming a trader

Brian mentions that this has been on the internet for years but it’s the first I’ve seen of it.  It’s pretty good.  I can and you should also be able to relate.  Thanks for the info Brian.

38 steps to becoming a trader

They are as follows:

1. We accumulate information - buying books, going to seminars and
researching.
2. We begin to trade with our ‘new’ knowledge.
3. We consistently ‘donate’ and then realize we may need more knowledge or
information.
4. We accumulate more information.
5. We switch the commodities  (products) we are currently following.
6. We go back into the market and trade with our ‘updated’ knowledge.
7. We get ‘beat up’ again and begin to lose some of our confidence. Fear
starts setting in.
8. We start to listen to ‘outside news’ and to other traders.
9. We go back into the market and continue to ‘donate’.
10. We switch commodities  (products) again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get ‘over-confident’ and the market humbles us.
14. We start to understand that trading successfully is going to take more
time and more knowledge than we anticipated.

MOST PEOPLE WILL GIVE UP AT THIS POINT,
AS THEY REALIZE WORK IS INVOLVED.

15. We get serious and start concentrating on learning a ‘real’ methodology.
16. We trade our methodology with some success, but realize that something
is missing.
17. We begin to understand the need for having rules to apply our
methodology.
18. We take a sabbatical from trading to develop and research our trading
rules.
19. We start trading again, this time with rules and find some success, but
over all we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient
with our rules.
21. We feel we are very close to crossing that threshold of successful
trading.
22. We start to take responsibility for our trading results as we understand
that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and
our rules.
24. As we trade we still have a tendency to violate our rules and our
results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and
trade.
28. Our trading results are getting better, but we are still hesitating in
executing our rules.
29. We now see the importance of following our rules as we see the results
of our trades when we don’t follow the rules.
30. We begin to see that our lack of success is within us (a lack of
discipline in following the rules because of some kind of fear) and we begin
to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about
ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes
boring, but successful)
and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always
dreamed of.

Most traders will identify with this list and should be able to place
themselves within these steps. Keep in mind that very few people progress
through these steps in an orderly fashion. Developing your trading skills is
an iterative process. For example, you may reach Step 13., find that
although you were making money, your basic premise for trading was flawed
(you might have been benefitting from the bull market, rather than your own
trading prowess and then have been rudely awakened when the market entered a
bear phase) and you may drop back to Step 4. and start ‘climbing’ the steps
again. Having the proper mindset, attitude and psychological makeup becomes
increasingly important as you progress through the steps. The focus of the
earlier steps is on external issues, i.e. developing proficiency in the
mechanics of trading while the focus of the latter steps (particularly from
Step 30, on) is on internal issues, i.e. improving ourselves mentally and
psychologically, maturing as traders.

Popularity: 1%

Rob Booker Analysis Tuesday

From fxcmtr.com:

1 Hour Chart

I really like this one.  The trade would come on a close below the redline.  The profit target is all the way down at 1.3020, or perhaps 1.3060 for more conservative traders.  I would like to just use a 30 pip trailing stop on the trade.

 

 

 

 

Popularity: 2%

Filed Under Learn Forex · 2 Comments  

Consolidation Flags and Broadening Formations

February 22, 2006

There is a new article on Investopedia with instructions on trading 2 consolidation patterns for profit.

The first is the flag formation which is a common formation in the currency market and indicative of a continuation trend.

1.    Apply trendline to identify the flag formation
2.    Place stop 5 pips above the high or 5 pips below the low of the recently closed candle ONCE a close above or below the trendline has occurred.
3.    Place a corresponding stop two-thirds below previous session’s high or low.
4.    Use your specific rules regarding corresponding limits 

The second is the broadening formation which is commonly a consolidation before the reverse but could also be a continuation indicator

 
1.    Identify the broadening formation through diverging trendlines
2.    Apply entry 5 pips below the low or high of the session once a break has occurred
3.    Use appropriate money management
4.    Use your specific rules regarding corresponding limits

 

 

This article is elementary yet a good refresher.  http://www.investopedia.com/articles/forex/06/ConsolidationPatterns.asp

Popularity: 2%

Filed Under Learn Forex · 1 Comment  

Weekend Reading - Keeping an eye on Momentum

February 19, 2006

Keep An Eye On Momentum

http://www.investopedia.com/articles/forex/05/MomentumMACD.asp

This article states the obvious yet brings up a simple setup that I never thought about.  The basic premise is that momentum precedes price.  Any momentum indicator can be used but this article uses MACD as an example.

1.    Define a MACD segment.  Segment #1 below.

 

 

 

 

2.    Measure the highest bar of segment #1.  In the above case, the highest bar was .004.

3.    Wait until the next segment forms; segment #2 above.  If a bar from segment #2 falls below -.004, downward momentum has exceeded previous upward momentum.
Segment #2 consists of 10 bars.  The values are in order from left to right (-.001, -.004, -.006, -.007, -.008, -.008, -.008, -.006, -.002, -.0008)

The third bar from the left is -.006, showing greater momentum than during anytime in segment #1. Sell at the close of this bar (price=1.7579.)  Exit the position at your discretion but a good time to do so might be when momentum slows.  Momentum stalls 2 consecutive bars at bar #7.  MACD value is -.008.  Exit at the close of this bar (price=1.7381)

The profit is close to 200 pips.  Like every other setup, this will not always be successful and should be used in conjunction with other confirmation tools. 

What I like most about this setup is its simplicity.

Popularity: 2%

Filed Under Investing and Trading, Learn Forex · Leave a Comment  

Next Page »