Items Tagged With trade

I post Steve Shenker's commentary now and again from his Trader's Corner column because it's pretty good.  His latest trader's corner contains the entire series that has been appearing on the front page of DailyFX.com's Daily Technicals report.  It's 14 pages in length but is worth a full read or a skim.  Some subjects he touches upon are:

Don't blame the market for your mistakes, blame yourself
Never trade without the stop loss
Never  trade just to be in the market
Never think that you are better than you actually are, nobody is that good, no one, not me, not you, no one

These are just a couple and it isn't just a list.  He elaborates on everything he states.

Complete Trader's Corner

This is John's Trade Methodology:

HIS ANALYSIS?

Trade Idea:

Long EUR/USD on a bullish candle reversal (1 hour or 2 hour bullish Harami) that fails to sustain a break below 1.2240

Stops below 1.2210

Target 1.2330

Dollar forecast for the next 24hrs: Bearish

Stronger EUR/USD, GBP USD & AUD/USD

Weaker USD/JPY, USD/CHF & USD/CAD

Market Dynamics:

Favored - Cyclical & Regression Models 

At Risk - Trend Models

PFI exited its long EUR/USD trade this morning for 221 pips. For all practical purposes I could have stayed with it given the model bias remains bearish on the dollar.  That said, with a major event risk on the horizon (NFP on Friday) I've decided to stand aside for the balance of the week.

Today's price action will probably look a lot like yesterdays and will remain choppy through the day. This makes the target of the trade idea (1.2330) a tough task in the short term and could push traders into Friday trying to achieve it; which I don't encourage.  1.2240 and 1.2210 are Bollinger Band and ma support levels (different time frames) with 1.2330 bringing in substantial Bollinger Band resistance.

Overall the dollar is finding some support at our lower channel; it would be unusual for the dollar to sustain a push deeper into this region after floating across the top for any length of time. If we don't see a substantial pull-back to a more neutral position tomorrow, I'd almost expect to see NFP come out stronger than expected or an overall muted reaction to poor numbers, which will leave the market in good shape for a technical reversal at the beginning of the week.

Here is a quick lesson from Sam Shenker about moving stops which I'm sure we have all been guilty of.

As a trader one of the lessons I learned the hard way is to never move my stops against the position. One of the most common mistakes made by the novice traders is to move the stop against the position once the trade start going against him or her. As the trade keeps going against the trader and once again approaches the stop, what do most of traders do, they move the stop again, thus increasing an unrealized loss, but unrealized loss is still a loss and a real one at that. In order to become successful, a trader must learn that the initial stop most of the time is a correct stop, because if the stop is triggered it usually means that the trader is on the wrong side of the market and by moving the stop he or she only increases the loss. The reason why traders move stops is hope that the market turns around and goes in the direction of the trade, but hope has no place in the market, protective stops do. Remember:  NEVER MOVE THE STOP AGAINST THE POSITION, BECAUSE BY MOVING STOPS AGAINST YOUR POSITION YOU ONLY INCREASE THE SIZE OF YOUR LOSS.

TRADE

Date: Tuesday, February 21st

Entry: Short USD/CHF at 1.3082

Reason for trade/setup: Using the 240-minute chart, there was the presence of a downward trend line above.  In addition, a momentum indicator that I created and am currently testing indicated a short opportunity.  Furthur confirmation was obtained from the 3-period, 5-period Price oscillator using EMA and the continued downward movement of the 8-period, 21-period Price oscillator.  Stochastic crossover and a decreasing rate of change since early February provided double-secret confirmation.

Initial Stop:  1.3121, the high of the entry day.

Initial Target:  1.3050 then 1.2950 which are horizontal support lines.

RESULT 

Exit: 1.3121

Reason for Exit:  Stop Loss triggered

Profit/loss:  -38 pips

Trade executed according to plan? yes

Outcome: After trade entry, the pair had remained close with the downward trend line.  Volatility was non-existent during Asian session.  The USD was bullish going into the European session and the pair went as high as 1.3153 stopping me out of the position between 3 am and 7 am.  This trade never moved in my favor by more than a couple of pips.

Thoughts:  All the indicators in the world can't predict the future.  I seemed to have multiple confirmation, felt great about the trade, yet it didn't turn out well.  I feel good about executing the trade though because I didn't go against my plan.  I saw a possible setup and pulled the trigger.  If I could do it all over again I would make the trade again but may have waited for an increase in volatility.  In addition, I probably set my profit targets too high considering the lack of price action this week.

It isn't easy navigating the web looking for forex resources mainly due to the preponderance of "crap".  I'll be adding a link in the coming days of resources that I visit daily.  Any comments regarding sites that you visit daily would be appreciated.

I've been checking out Mizuho Corporate Bank's currency resources.  They provide a beginning of day analysis for most currency pairs, a start of day general analysis of the market, and weekly market commentary.  Freely available resources from corporate banks are few and far between so Mizuho's site is a welcome surprise.
http://www.mizuho-cb.co.uk/TresInternet/ 

I'll also be added a category called "Trade Analysis."  This is where I will attempt to analyze my trades more closely to include the following information:

Reason for trade/setup
Initial Stop and Target
Reason for Exit
Profit/Loss
Outcome 

I'll be following a similar outline as the Forex Trade Journal section of Currency Trader Magazine.

Recovering From Big Losses

US Trade Gap Narrows More than Expected due to decrease in Chinese Imports

Check out Amateur Trade System Results at Collective 2

UPDATE!!!  The pair has dropped another 70 pips since I exited.  That is why I am far from reaching my goal.

TRADE

Date: Tuesday, February 21st

Entry: Short USD/JPY at 118.78.

Reason for trade/setup: This trade was mostly based on the fact that resistance was up above at 119.00.  Furthur confirmation was obtained from the crossover of the Stochastic (9(3),3) from overbought territory. 

Initial Stop:  119.06, which was 6 pips above the high of the entry day.

Initial Target:  118.00 which is the top of the Ichimoku Kumo or cloud.

RESULT 

Exit: 118.35

Reason for Exit:  Profit taking.  I needed to get back on track this week.  I couldn't leave $1000 on the table

Profit/loss:  43 pips / $1070

Trade executed according to plan? no; early exit

Outcome: After trade entry, the pair played with the 119.00 resistance level for the entire U.S. trading session before finally finding more sellers than buyers at the Asian open.  The pair then stalled at 118.40 during lunchtime in Japan on Tuesday evening.  The pair retraced almost back to the 119.00 mark on Wednesday during the European session before heading back down.  There is solid resistance at 119.00.  I exited the trade before my target.  The main reason was for my need to get back some of my losses from the week.  I didn't want to leave $1000 on the table.

There's a new forex article on Investopedia about trading your own trading style. 

Are you as patient as a fisherman or do you thrive the downhill thrills of finishing a snow boarding run?  Fisherman are trend traders and Snow Boarders are faders.  The point of this nonsense is that you have to trade to your style.  If you hate fishing, why trade like a fisherman.  The conclusion is:

Trade to your Taste

Rob Booker for AUD/USD (4-hour chart):

I am considering two trades on this pair:

1. On a break below the redline, I think we can get all the way to the 38% retracement at .7219.  A break of that level should take us as far as .7180.
2. I would really like to see a resumption of the uptrend that we were in before – and this would happen above .7350.  On a break above that level, even to .7365, I like a long trade, stop .7300, target at least .7500.  More on that if the trade opens.

I'm mentioning John Carter again because he is having a two-day online seminar this weekend that concentrates on trading the forex market.  I have never really paid for anything but books towards my education but I'm wondering if a paid seminar is beneficial.  ???  This is a question to any of you who have paid for seminars.  Are they worth it? 

Carter's seminar this weekend is Saturday and Sunday for a total of 14 hours.  Here is the agenda:

- Your chance to see what you missed in Las Vegas

- Review Forex Market Basics (Everything you need to know to trade them)

- Trade by Trade Analysis with Real P&L's for John’s 5K Account

- Major focus: Currency Market

- Get Insight into Key Winning Trade Setups

- Learn everyday Trading Strategies for the Currency Market

- View John’s Favorite Setups

The seminar is $995 and I cannot say that I haven't been thinking about it.  You can read more on his website.  John Carter Seminar 

I would appreciate any comments that you may have.