Should have traded when it fell back in channel.
Journal Entry from European Session Monday Morning
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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.
Asian Session May 8th
Journal Entry
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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?
Week 2 Performance
After my 2nd full week of Rob Booker 1 on 1 training, my results have improved from last week, I only lost 153 pips! I'm being sarcastic and once again don't blame anyone for my results this week but myself. I made 17 trades this week, only profitable on 5. My average profit per winning trade was 18.8 pips and my average loss per losing trade was 20.58. Now it isn't unusual for traders to only "win" 5 out of 17 trades but when your risk/reward is only 1:1 like mine, it is difficult. That is why I find myself questioning Booker's channel trading strategies where most trades only give you the 1:1 risk/reward.
On an upbeat note, I ended the week on a 2 trade winning streak, my 1st was contrarian and my 2nd was during the jobs report on Friday. I actually have been quite successful trading the jobs report in the past and it was no exception on Friday. As I have done in the past, I drew channel lines for the high and low for the previous 12 hours or so. I placed a buy order 6 pips above the upper channel line with a 20 pip trailing stop. I placed a sell order 6 pips below the lower channel line with a 20 pip trailing stop. On Friday, the price broke the upper channel, my buy order was initiated and 15 minutes later was automatically closed when my trailing stop was hit with a profit of 30 pips. I could have made more if I didn't place a limit but I've never been greedy when it comes to taking profit. I'm a lot more stupid when placing stops.
Frustration Bottling Up
I'll admit that the frustration of losing is bottling up. I did manage to end the losing streak by getting a couple of smaller pip wins today after my 30 pips loss. I ended the day -15 pips. I sent a message to Rob this afternoon stating my frustration and he had 2 suggestions for me:
- Stop trading the EURO! He thinks the currency pair is a "turd" and that it hardly moves. He told me to stick to the GBP which has been moving big time over the last 2 weeks.
- Decrease my lot size on a day with no economic news whatsoever. I only traded 1 lot, followed my rules, and only lost 30 pips so it ain't so bad
I sent a follow-up question asking him what pairs he likes to trade most.
May 2nd NY Session #2
Funny how I was able to squeeze out a 11 pip profit on a trade that was absolutely discretionary. I was watching the GBP/USD and it was highly overvalued on the short-term charts with solid resistance at 1.8400. Even though the pair had reached a new high today, the MACD histogram failed to reach new highs (negative divergence on the 5 minute, not shown below). The I shorted the pair at 1.8380 with a stop 30 pips above at 1.8410. Once the pair ran up 15 pips, I set my stop to breakeven. It ran up as high as 26 pips but started losing momentum. I was watching for an exit on the 5 minute charts and once I noticed momentum and inertia decreasing, I exited.
15 minute chart below:
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.
Not Following the Rules Can Hurt!
I am attaching a PDF file that includes all of my trades this week with date/time, P/L, max drawdown, max run-up, and important commentary about the trade including whether I followed the rules.
While I was putting this together, I realized that I failed to follow the rules 50% of the time. Do you know how many pips I lost because I didn't FOLLOW THE RULES?
113
How many pips did it cost me for following the rules?
43
This doesn't count the fact that I failed to follow the rules today in my GBP/USD trade that cost me 30 pips or more!
If I would have followed the rules 100% of the time, I would be about even.
I take full responsibility for my trades and blame only myself. I should also note that though this trading system has rules, it is discretionary.
Here is the file:
Forex Trade Report 28/04/2006,00:08 11.74 Kb
It’s My Fault
A transcript between a couple of us today:
Wim Says:
Hi Rick,
Minus 180 pips on 3 days of trading seems not that
great. Wow, I would be pissed of, part of learning.. Are mentors really
that great..
Why would you coach someone if you make a ton of money?
I would not spend my time trying to learn somebody for $1000 if I can
make 50K/month with my personal trading.
Some time ago, I
took the FXCM euroshop ($169), well in my eyes, it is worth nothing. it
looks really nice on their website until you pay for it.
3 methods but none of them actually work in my eyes. Everybody can make a course or call himself a mentor.
Personally,
I won't spend a dime to education or learning anymore. Being in this
business for 3 years, I make money now but not the first 2 years.
I
think a combination of knowledge and market understanding is a lot more
worth then pulling up some indicators and following them blindly.
Magdalena Says:
Wim,
A couple of questions for you:
1) Are you saying you didnt make money in the first 2 years and are you trading full time?
2) What in your opinion is the best way to learn how to trade and gain the knowledge of the market, how did you do it?
Rich,
What
is the "touch of emotion" and how big of an impact it had on your
trading recently? Are you saying that Rob's methods work and you simply
didn't have enough discipline to stick to them, cuz that's exactly what
happened to me recently when using Raghee's setups.
Craig Says:
Hi Rich,
Bummer, I have been making a bunch of losing trades as
well. I was looking though your trade history and trying to figure out
why you made all those AUD/USD trades on the 25th, the pair was going
sideways. Is it possible to elaborate on your current stratergy?
P.S.
Have to say Wim's comment is pretty on the mark.
I Said:
I'm getting my spreadsheet together to analyze these trades but before
I jump over Rob, I have made some mistakes with execution and did so
specifically with my lost GBP trade this morning. I entered incorrectly
and got stopped out by 5 pips before the 100 pip move up. This cost me
huge. Some of the other trades were also executing issues. I can
honestly say that without even analyzing and from the top of my head,
if I was more experienced with this system, I would probably be up. A
lot of his strategy utilized multiple lots so that you can let some
more profit run. I'll post more when I know more.
I Said again:
Magdalena, I think Rob's strategies can work. I think they give you the
best shot at making money doing this. The touch of emotion happened 2
times to me:
The first was with my Aussie trade where I entered
before the candle closed. Rob says you can enter before the candle
closes but he waits and recommends you wait. After this trade, I would
definately wait also.
The second time was with my trade today. I
entered 2 candles late on the GBP/USD trade and set my stop without
reflecting the price 2 candles ago. If I would have set a stop based on
the price if I had entered 2 candles ago (when I should have) I would
have made MANY MANY pips today. Like I said before, I think I would be
in positive territory if I didn't make these mistakes.
Rob Booker 1 on 1 Training Going Well
So I ended today up 26 pips which surpasses the goal I set in the beginning of the week which was to end the week up 20 pips. The week hasn't ended yet though and I'm not going to stop trading because I'm learning.
I know 26 pips doesn't sound like a lot but I really have to attribute this to Rob Booker. I also have to admit that I really haven't talked to Rob much since starting the training but from his Chart School and other lessons I've been able to gain more confidence and clarity. I'm thinking that I will have more questions once I'm a little furthur along.
Trading Full-Time continued
Thanks to Forex2stay for the following comments. Visit his blog at http://forex2stay.blogspot.com/
I do think it's possible, but I believe money mangement is the key.
This needs to be a marathon not a sprint. One thing I've realized is
that you can't use the same lot sizes for all of your trades. For
example on one trade you might be risking 30 pips and another 20 pips.
So if you trade 4 lots on both of them (standard account) you'd be
risking $1,200 on one trade and $800 on the other. That's not good
money management and it can get you a person in trouble.Here's what I do…..
When
I position trade (4hr and daily charts), I won't trade unless I have a
2:1 risk reward ratio. I figure out the proper stop loss for my trade,
based on TA. So for this example say that's 40 pips. I then make sure
based on TA that I'm comfortable getting at least 80 – 120 pips profit.
Once i'm comfortable I put my information into the following formula.
S=(E*R) / (P-X)
S = Size of Trade
E = Account size (Cash)
R = Maximum Risk percentage per trade
P = entry price on the trade
X = pre-determined stop loss or exit price
So let's put in some numbers…..
My account size $10, 000
Entry price on EUR/USD 1.2600
Currently I'll risk 3% of my account on a trade
My pre-determined SL is 1.2560
So how many shares of EUR can we buy with our money management rules??
S=($10,000 * 3%) / (1.2600 – 1.2560)
S = $300 / .40
S= 75,000
Anyway this is the way I do it. I hope it helps…
Forex2stay
