Hello everybody,
I guess that it is about time I start to keep my trading set up ideas in one place instead of scraps of paper which make no sense to me later.
I believe that I am getting better at analysing the Forex markets, but we will see.
Over the last 6 months or so, since starting to learn about Forex, I've been trading mostly on a demo account, but some with my real cash. I have found that a trading demo account is just not good enough as one tends to have a greater appetite for risk when real cash is not involved.
By posting here, I will be leaving myself open to criticism (constructive, I hope) and really do hope that others will post to say whether they agree or disagree with me. I find that discussing trade set ups with others really is a big help.
I don't actually expect to pinpoint too many trades, but hope that any possible set ups will lead to fruitful discussion.
I will try to avoid trades that are recommended by Vahid, after all this is an open forum and if it does happen that a set-up is the same as Vahid's, I will not refer to that fact until after the trade has completed.
I am very weak with setting stoploss and target levels. I am mostly guilty of setting my stoploss too tight, getting stopped and then watch the price go in the anticipated direction.

I will start with a theoretical bank of 10,000 and see if I can make it grow. I will work on value per pip as opposed to lot size to make it easier to understand. Ie. risking 3% per trade and a stoploss of 100 pips.....

Bank 10,000
3% of bank risked = 300
100 pips stoploss
Risk per pip 300/100 = 3

I'm actually tempted to use Alpari charts, as that is what I started with and they will be slightly different to Vahid's. But if people think that it is better to stick with FXPro, the same as Vahid, please let me know.
I will post again when I have a thought or in response to the many replies (I hope )

Okay, my first real post here is about a trade I will NOT be taking



It looks like The EUR-USD has broken resistance on the H4 Chart.

But the daily chart looks more like a period of consolidation



Also not so far below resistance on the daily.

I would rather wait for breakouts of horizontal support/resistance levels before taking a position here.

I have quite a lot of experience with the stockmarkets and it is an unfortunate fact that for most of this year, if the stockmarket indices rise, the USD weakens. It is not a slavish response by the $, but it cannot be ignored.
At this moment in the stockmarkets, the bears are starting to enter the markets. A lot of people think that this bull run is coming to an end. This indecision in the stock markets is causing quite wild swings with USD pairs. Until there is a sign that the stockmarkets will go one way or another, I prefer to not trade with USD currency pairs for the time being unless the daily chart indicates a breakout.

You are one of the more active members of this excellent Vahid's service and if you will keep writing this journal I am sure it will be another great teaching opportunity for all of us. So I wish you good luck
My suggestion for you is to trade with real money for this journal. The bank should not be big, I think 5000$ is enough to trade mini lots. If that is too much you can even trade micro lots with bank of 500$ (and I believe Alpari has micro account). This way you will be able to comment not only about technical side of your decision process but also about psychological one.
Your view on correlation between stock market and USD pairs is very interesting. Do you have any links to read more about it?

Hi Keith,

Thanks a lot for starting a trading journal here. It was a long time that I was waiting for someone to start a serious trading journal and keep it updated.

Hello Santiaga,
thanks for reading
I think that with trading mini-lots, there is not the pain or gain enough and so it will feel more like trading a demo account. By posting any trade set ups, I may suffer the pain of embarassment by exposing my thoughts to other traders. But your comment is fair and so it does make sense to trade with real cash as the possible pain will then be a combination.

My view on correlation between stock market and USD pairs is not based on any one article, so I am unable to provide links. But the Stockmarkets and $ strength do move loosely in opposite directions. A bullish stockmarket often leads to a bearish $
I attach 2 Weekly charts and hope that you can see the similarity between the S&P500 and GBP-USD

S&P



GBP-USD



This is not an exact science and it would be a bad idea to rely on this as an indicator with Forex.
The S&P500 has broken resistance on the weekly chart, but if you add fibonacci from the high of October 2007 and the low of March 2009, you will find that it has retraced 50%. Although there is nothing apart from the Fib to suggest that the market may turn, pundits are really focusing on the Price/Earnings ratio now as the average P/E is much higher now than when the market was at it's peak.
Because I watch the stockmarkets and individual instruments, I can see the indecision creeping in and I believe that until the stockmarkets continue with the uptrend or turn downwards, this indecision will continue to cause irrational movements in the US$ currency pairs. For that reason, I will not trade US$ pairs for the moment.

Hello Vahid,

I can see that keeping a journal is a good idea and especially in a forum like this where one's journal is in the public view, I'm hoping for some constructive comments on my thoughts. I'm sure that it will all help to improve my ability.

Hi Keith

Thanks for starting this. I don't have much to contribute here other than to agree that there is no clear signal and that waiting is the best bet.

If you do decide to trade some of the setups you post then maybe you should start with only posting the trade details after the trade has closed. This would encourage discussion of the setup which might help with improving your stops and limits but would discourage others from just copying your trades and complaining if they don't work out!

All the best

Michael

Thank you for your input Michael,

I admit to being a novice trader when it comes to Forex. I have only been studying it for about 6 months or so. I have been trading the stockmarket for nearly 10 years and still learning.
If anybody copied my trades, they would be extremely foolish and would have no right to complain.
Of course, if I only posted details of trades afterwards, some people would accuse me of not being truthful

Unfortunately, there seems to be mostly consolidation across the Forex markets at the moment and I cannot pin-point any possible trades that I am likely to take.
But this in itself does prove to me that I have improved. Not so long ago, when I was unable to spot a trade set-up, I would try to hard to find one. Nowadays, I want to let the trade set-up show itself to me instead of me thinking that there must be a trade opportunity somewhere and looking to hard.

Hello Keith,

Thanks for the contribution. I don't have the luxury to monitor the forum or charts as I would like, so I may not be able to provide much in the way of input, but I look forward to your work and will be tuning in. It will be an added benefit to us all.

Vincent

NZD-JPY

It looks like there could be a possible trade developing

4 Hour Chart



At the moment there is still 1 hour before the candle closes. This pair have been stuck in a range for over a week. If it does break the support level at the candle close, it will indicate a possible short. But it has covered the span of the range from top to break of support in just 2 candles! Also it is looking oversold on the RSI. Can the bears sustain pressure?

The Daily chart is a little more interesting



It looks quite possible that it will break support, and not looking oversold,but of course this candle is only 7 hours old. So a lot could happen before the close. What I like is the way that the bollinger middle band has proved quite solid resistance for 9 days. What I don't like is that the long term trend is definitely up!
I feel that as the bollinger seems quite strong, that the high of today's candle (66.68?) could be used as the stoploss if I entered a short trade tomorrow.
The opening price on Monday, 2nd November was a gap down at 64.06, which coincides with the previous closing low on 1st October, so maybe a good place to set the initial target.
This would give a trading range of 66.68 - 64.06, so 262 pips (more like 512 pips if trading something like EUR_USD)
Here I find a problem, 65.40 is halfway between stop and target and so if the daily candle does close below support you are only going to have a 1:1 trade. I consider that the reward and risk factor are so close, that this is not likely to be a viable trade.
But there are signs that there may be a better set-up in the next few days, maybe on the 4 hour chart, so I will be putting this one on my watch list.

I can't believe that Vahid can put so much into his reports AND reply in the forum. This post has taken me 45 minutes and that is just looking at 1 pair!

Thanks for dropping in Vincent
I'm not sure if my analysis that I post will be too much benefit. It has certainly proved to be a benefit to me already.
My second post was about a trade that I would not be making with the EUR-USD and it is looking a good thing that I did decide against it. But to be honest with you I had a similar trade set-up before that moved against me. I posted about that trade in the Live Analysis topic and Vahid pointed out that I should have taken more notice of resistance force on the Daily chart. A lesson learned and a mistake that I will not be likely to make again.

Re my second possible trade set-up with NZD-JPY. When I first saw this, I thought, "Hello, this looks like a good one"!
By writing down my thought processes in this journal, I actually examined this trade more carefully and then realised that it isn't a good enough set-up. So I do believe that writing a journal is beneficial.
I just hope that everyone will continue to drop in and won't find it boring - especially if I can't find a trade

plus he is playing games too!!
viewtopic.php?p=1580#p1580

Vahid just might be a machine

CAD-JPY

Another pair that I am keeping an eye on.



Its already broken support on the H4. On the face of it this looks a better set-up to me than the NZD-JPY as it has shown recent downtrend on the 4 hour chart.

On the H1 chart



It has, as yet failed to break the recent low

Daily



Steadily heading towards resistance

This does look a possible trade if it breaks the recent low on the H1 chart, but I usually manage to miss entries on the H1 anyway

For now, I'll add this one to my watch list as well.

Hi Keith,

How come you usually miss entries on the H1?

Without trying to be clever, you shouldn't have added it to your watch list you should have traded it because you missed the opportunity of making 100 pips there this afternoon.
Did you consider setting a sell stop entry below the recent low on the H1?
If you were not able to babysit the trade you could have set a tight stop loss with the sell stop order, depending on your risk tolerance, 15-20 pips would have been ok in case of a sharp turnaround, which happened later once the price hit 83.00.
At the same time I am aware that this may not suit your style of trading.

Setting the the right stop loss level is another art all on its own though, death by a thousand stops comes to mind.
I am still struggling to get used to Vahid's sometimes huge stop loss distances.

Regards,
Kel

Thanks for contributing Kel,

I don't regret that I did not take this trade, I'm happy that I spotted the opportunity, but I didn't think that the possible reward compared to the necessary risk made it worthwhile.
There will be more and I hope better opportunities,
I don't like using Stop orders to enter a trade. I know that they can work well if trading break-outs on the 15 minute charts, but I like to be able to see what type of price action is happening at the time. Also, I prefer to open a position at or near to the close of the candle. A trade entry with a stop order can be triggered by an irrational spike in the price.

I note now that yesterday's daily candle closed exactly on the resistance line, this is a good sign as it means that it is a valid resistance.



On the H4 chart it seems to have validated the recent low of 6th November as a support level with an indecisive candle with a long lower tail. This was followed by an engulfing bullish candle and the current candle seems to be confirming a bullish reversal.



If this h4 candle closes and is still showing good confirmation of the reversal, and with the slower RSI at 30 +. I will be opening a long position.

NZD-JPY is acting in a similar way.

Unfortunately, with just a few minutes to the close of the 1st H4 candle of the day, it is not confirming the reversal, so it looks like no trade.
I think that Vahid would have ignored this first reversal signal anyway.



Kel, 15 - 20 pips (especially when you take into account the higher spread in these pairs) is just too close a stop for any trade that I am likely to do. I want to fine hone my trading so that I can achieve more than 50% correct calls with high probability of 1:2 risk reward.

Hey Keith,

I see that you have the MACD indicator on the chart. Do you place any significance on it? To trade long would be going against the MACD trend, at least at an early stage. What do you think?

Vincent

I didn't see your post of a couple of minutes ago. Looks like you decided against this trade.

Vincent

Hi again, Keith,
I was just looking at the chart and see that the last H4 candle closed as a red doji (the D1 is bearish, as is the W1 candle). Your post appeared as I was starting this post.
In the light of the above I was going to suggest that you proceed with just a little more caution, which you have.

Now...wait for it (forgive me for saying this on your board), this may be my imagination going too far as it is way past my bedtime, but if there is such a thing as an inverted cup with handle, then maybe there is one - look at the H4 the inverted cup starts on 9 Nov at 84.30, loops round and closes on 17 Nov at 84.12, the handle then starts, loops round to finish on 19 Nov at 84.12. IF.. this is valid, then the downtrend should continue.
Vahid - please would you comment on this idea.

Regards,
Kel

I am a little confused. Which currency pair you are talking about?