Cheers Michael,
that trade may have worked against me, but I may have learnt something from it, so maybe something positive can come from a negative result
Let's hope so

Keith

EUR USD

Monthly. Has been in uptrend since mid 2002. December made a lower high and engulfed the previous three months candles. January's candle is negative so far but has bounced off the middle BB. A close below the middle BB would indicate more downside to come.

Weekly. Support break at end of November went through middle BB but bounced up before lower BB. Last weeks candle could reasonably be described as a Hanging man. This week opened with a small gap down and closed about 250 pips down having been 350 down at one point. Closed almost bang on the lower BB.

Daily. Lower high and lower low confirm a downtrend on the daily. Bounced just above the psychological 1.4000 area which has seen congestion in the past, Close below this level could be a negative sign. If price continues to rise then RSI and MACD are likely to show a convergence with price, a positive sign.

H4. Indecisive. Trying to break through the middle BB on price and 50 RSI. There are valid supports on price and RSI, break of either would be a sell signal with stop above the recent high of 14181. Break above the middle B would be against the trend at the moment so I wouldn't trade it.


My guess is that it will be choppy round the 1.4000 level for a while before either resuming the uptrend as seen on the weekly and monthly charts or continuing the fall to many hundred pips below the current level. There may be trading opportunities in the H1 timeframe if it does stay choppy for a while. I don't see a pending trade setup other than the support breakout on the H4.

Michael

Interesting stuff Michael, It is good to see each others interpretation of the charts.

Hi All

GBPCHF

I spotted this while trawling through the charts and thought it worth posting.
On the four hour chart this pair has dropped through a support and then come up to almost retest before starting to fall. The previous candle was maybe a bit short to be a comfortable sell signal and though the current candle spiked down then up again it is too young to give a lot of credence to at the moment.

The Daily chart shows that it has broke down the middle BB in a series of red candles but there are some wild spikes to contend with as well.


The one hour chart shows this almost tracking the underside of the middle BB so if it doesn't drop and confirm the sell it will break up through the BB and rise. Any close above the BB probably cancels this as a short trade option.

All the best

Michael

Hi all

Well, its been more than a month since I posted here and I've not contributed much at all recently.

I've decided to change what I post in this journal and try to stick only to discussing my active trades. I'll post analysis when I can either in response to posts in other threads like Keith's or in threads about the particular pairs.
Please don't take any trades on my recommendation!!

I currently have two positions open since last week.

NZD USD Long which I have posted about in Keith's journal Keith's journal

EUR CHF Short.


There has been a long fall in this pair which has tapered off in the last few weeks. A break down on the H4 was likely and I took the trade on the 10th at 1.4612
If you look at the longer timeframes this is very near a historic low so a positive reaction is entirely possible. My stop is +40 from entry and I will move that to break even as soon as possible.

So NZD USD seems to have got a sense of direction after a few days of prevarication. My analysis hasn't changed much over the last few days. I entered on what I saw as a buy signal on the daily, and then it went up and down for a few days, keeping clear of my stop. I wouldn't have entered short or long over those days, and there was no signal strong enough to justify closing the trade early.
A robot trader would have ignored those days but I was getting more and more doubtful as time passed. Keith's analysis was good and the trade went his way but missed T1. My anxiety has led to poor decisions in the past but this time I managed to stick it out.
Of course, it's not a win till the trade is closed and the money banked, and it is sitting at the high of 10th so anything is possible, but I have now moved my stop to breakeven so lets see what develops.

EUR CHF has got stuck above 1.4500 Is this consolidation before a further fall or is it the start of a serious reversal? I have no idea! I added to my position last night, probably not a great idea but overall if both positions get stopped out I will be even so I'm content to watch and see.

All the best

Michael

I closed the added position at breakeven today. It was a foolish trade to open at the time and I'm trying to get away from impulse trading. The original position is still open.

Michael

Impeccable timing. It dropped like a stone after I closed that

Hi Michael,
If the addition to the trade was truly impulse trading and contrary to your money management rules, then you did the right thing.
Don't beat yourself up over it, it actually shows that you are maturing as a trader

All the best

Keith

Thanks Keith

I agree intellectually but my emotional side is still calling me names

The EUR CHF trade closed last night when it fell sharply. I had a limit trade set which was being review daily and it got hit. Total profit on this trade 224 pips it would have been more if you... Shut up emotions!

Now, I'm wondering what to do next. On one hand there is no good reason to assume that the fall is over, but on the other hand I would be risking a banked profit to re-enter. The obvious place for the stop is above yesterdays high, which is about 90 pips above the current level. I'll probably not re-enter cos its Friday and I am happy with what I took from this trade.

NZD USD is sitting about 120 pips in profit at the moment. I'm itching to bank that and switch off for the weekend! The weekly is sitting right at the Bollinger mid band. The daily chart puts me in mind of a High Wave pattern as described by Vahids article but looking at H4 and H1 charts its a triangle.
My stop is just below 0.7100 so I should come out with about 70 if it does fall from here. I still think it will at least test the upper resistance so I have a limit trade set at 0.7248

All the best

Michael

Good going Michael

I hope that next week goes as well for you and that your trading continues with the uptrend


Keep it up

Keith

Thanks Keith

NZD USD did fall so my total for the two trades was 286 pips - an amazing achievement for me!
The hard bit will be looking at the charts over the weekend and doing nothing if I don't see any valid setups...

Its a new week for us all and a new start.

All the best

Michael

Of course Michael, pips don't tell the full story. I hope that you are sticking to good money management rules

As for checking the charts and not seeing any set-ups, when you are on a roll, you want it to continue. It can be frustrating when you can't spot any trading opportunities.
I've not been able to pinpoint anything that looks particularly good this weekend
Please don't forget to post if you see any possibilities

Hope that you are enjoying your weekend

Keith

I am now long USD JPY based on the breakout on the H4 chart.
Open: 92.96
Stop: 91.89
Target open at the moment.

I'll be managing this as a trade on H4 unless the daily chart justifies a long position, in which case I might change it to daily. The difference will be in the placing of stop/target values.

The charts are in the USD JPY thread but I'll be posting about the trade here.

All the best

Michael

I have now closed the USD JPY trade for 115 pips. It broke the support on H4 but I wasn't able to check at the time so that cost me about 30 pips.
I had taken a short trade on AUD USD last week that went against me very quickly so my grand total for last weeks trades is 15 pips.

This week has been better so far, I saw the same trade as Vahid on EUR USD and that has now closed for 110 pips profit.
I am also long GOLD from 1128.5. There is a resistance breakout on the daily chart and if this week closes positive it will confirm the breakout on the weekly. I'll try to get time to post charts later.

All the best

Michael

This post explains where I am and what has been going wrong with my trading. I have two reasons for posting this.
Firstly, I believe that by sharing our issues honestly we help each other to become better traders.
Secondly, I found out some time ago that there is a great power in writing down ones thoughts and intentions. It seems to crystallise the issues and help push me into the required actions.

I have posted many times that emotions were my biggest issue as far as trading is concerned. I can break that down to discipline, fear, greed and self confidence. All of these problems, and their solutions have been discussed in the forum and in Vahids articles many times, but it is only by accepting them as they apply to me that I can conquer them.

Discipline.
In a recent post by Vincent he said "Keep It Simple..... Then execute the simplicity faithfully."
There are three problems here for me.

Define the system.
I have a set of criteria which I have been following to identify trades I should take. These need written down clearly and coherently as a check-list. I need to remove everything from my charts that is not part of the system. Indicators I want to play with or test should not be on charts which I make live trading decisions from.

Follow the system.
If the set up doesn't comply with the check-list then don't trade. If this leads to missed good trades then the system can be modified in light of experience, but only based on evidence not instinct! My tendency is to break my own rules if my gut feeling is that I know what will happen next. Not a good idea!!

Consistency.
I waste a lot of time and effort by doing analysis then not following it through. I realised some time ago that I would have to shift to longer timeframes and I now look for trades based on weekly, daily or H4 charts. My record keeping also needs re-assessed because I make notes about potential setups and then don't follow through, only to see the analysis work out.

Fear and Greed
That two headed monster that besets so many novice traders still hasn't been defeated by me.
When trades are going against me I want to close with a smaller loss rather than wait for the stop to be hit. Mostly now I let the trades run. Some turn around and end up winners, some dont. When the losers hit my stop then I give myself a hard time for not closing them early.
When trades are winning I am desperate to close them for a small profit in case they turn against me. Those that I do let run which make good gains I often leave too long and give back a lot of the gain.

I have made huge progress here but I have realised that one key issue has been sabotaging my efforts. Money Management is the cornerstone to success here and I have thought that I was doing fine with this by limiting my trade sizes. I have however overlooked something fundamental because I have been doing it the same way for so long.
I don't use a FX broker, I spread bet. Having lost quite a lot of money with shares early on by being stupid and arrogant I decided that for FX I would do all trades at minimum stake. I have savings elsewhere which I will add to the account when I am confident but up to now I have been counting some of that as part of my trading ballance without it being in the account. The net result of this is that a 2% trade can lose 2% of my nominal balance but 7% of my account balance. I now realise that though I have intelectually counted the savings as part of the account my emotions have reacted to the real balance, so its no wonder I can't master fear and get carried away with overconfidence after a few wins.

My solution for this is simple. I am looking at brokers just now and will open an account shortly which will allow me to trade most pairs with 2% risk and reasonably wide stop losses. If the required stop is wider than I can trade at 2% I don't trade.
Only when I am consistently succeeding at this will I change back to spread betting (it has significant tax advantages in the UK)
This might seem a no brainer to most of you but until very recently I have been blind to this flaw in my system

Self Confidence.
Too much when things are going well, and I get sloppy. Too little when things are going against me and I start doubting every decision I make. The funny thing is that in my day job I don't have that issue. I know my job and do it the best I can. Like everyone else I make mistakes from time to time but my attitude is to try to learn from them and then move on. I need to look within for the answer to this one but Vahids recent comment to me regarding programming and robots is stuck in my mind. My success or otherwise at FX doesn't define me as a person it simply shows up areas of my system, or how I implement it, that need improving.

I hope these ramblings help someone somewhere. It has certainly helped me typing it out.

My summary is that I have had all the information I need to be successful for some time now and I am making lurching progress toward doing the deed. I'll not be trading until the broker account is set up and I'm confident I know how to use it but I will post some analysis here when time permits.
I will also be posting ALL my trades here for a while, either when I make them or as soon as I can after. This is to help me to stick to my system. If I can't justify a trade to my peers I shouldn't be making it!
If you read this post and then decide to copy trades I make then you just might be dafter than me

All the best

Michael

Hi Michael,

Thanks for your last post.

Emotions are everybody's problem, not only you. But it is not that hard to control them. You can do it if you want. I had an article long time ago about how to become a professional trader. Maybe I need to revise that article and make a lot of changes on it, but I think it still tell you how to improve your confidence and become a professional and profitable trader finally: http://www.forexoma.com/when-you-will-b ... ex-trader/

Briefly, if you follow the below steps, you will be able to control your emotions and trade efficiently:

1. Learn the forex trading basics, including the technical analysis. This is what you have already done.

2. Choose a system and start demo trading with it. Treat your demo account as a live account. Don't say that it is just a demo and doesn't matter if you lose. NO! It does matter if you lose because of trading without any discipline. It become a habit and you can not control later.

3. Demo trade with discipline until you build your confidence about your knowledge and your system.

4. Open a small live account. Start trading with very small amounts. Be loyal to your system rules, specially the risk management and STOP LOSS.

This will rebuild your confidence.

5. Open a bigger account while you are 100% confident about your knowledge, experience and system. Trade like when you were trading with the demo or the small live account. Still be as loyal as you can to your trading rules. Wait for the perfect trade setups. Ignore the poor trade setups.

You are there

You will see that your fear and greed will be controlled automatically. You can not fight with them. They can not be defeated. Your mind should be trained to deal with them and control them.

Nice post Michael



This is one of the biggest psychological battles that we face in my opinion. I have always found it more difficult to decide when to exit a trade than the entry.
If you make a profit with a trade and the move continues after you have banked the gain, you tend to focus on the fact that you could have made more profit. It is a winning trade, but you almost feel that it is a loser.
The same with a winning trade that reverses and you give back some of the gain. You focus on what could have been if you had managed to close the trade at exactly the right time.
None of us has a crystal ball. It is impossible to know when it is the perfect time to exit.

Hey Michael,

I like the honesty. You touch on so many areas I also still experience, regardless of all of my knowledge to the contrary. I have a question: Do you have a demo account? If so, do you experience the same emotions to the same degree when you demo trade? I have a practice that when I am battling emotions, and the often urge to jump into a trade, I trade in demo mode. It has a kind of dual benefit: 1. It satisfies the urge to jump into something, and 2. If it goes bad I breathe a sigh of relief. If it goes good, I take the pleasure vicariously.

You are a smart guy, and maybe that could be a weakness. Too much thinking. Try taking a simple strategy, crystallize it down to some trading rules, demo trade it for awhile, go for at least a 1:1 RR, and see how that works. (A good example is the GBPUSD intraday breakout system. Simple, easily confirmed succesful via demo, and very profitable).

Forex is a funny thing. After graduating with a PHD in Technical Analysis, you realize that all you ever needed to know you learned in grade school. The rest of the battle is getting the head to realize that and trust it.

It is a journey, and with dedication, persistence, and head control (and some other stuff.......), I have no doubt that those of us who are serious will get there.

Your post was very beneficial. Thanks much,

Vincent

I continue to be amazed by the insight that is shown by some of the posters on this forum.

Keep it up

Keith