make me more betterer....

[unclesteve]

I have already posted this in babypips and FPA, but I'd love to see more action here on The Forex Guy's excellent site, and anyways, elsewhere people aren't as sold on price action as here.

The markets have died for the moment. And I have been a real money trader for 120 days. I have yet to make a profit but I have learned a lot. I don't regret anything, but I HAVE to learn self-discipline. So the time is ripe for introspection...

In my day job we find transparency, accountability and high visibility to be excellent for motivation.

So here's the lowdown: I have lost about $1700, my account is at about $300, and I would like to improve (duh...).

I totally believe in the price action processes, because I know the trades I have messed up on have been the result of over confidence, revenge trading, and alcohol!

So it is time to contemplate my navel and see what's usable and what is just fluff...

The main thing I have learned is that it is extremely hard to stick to a system, because a system usually stops you from trading (and usually, rightly so!).

For the month of January then, I will stick entirely to 1 system and log my results. I will take into account the stats of my successes to date, develop a plan, and stick to it.

Successful trade features:

Wednesday and Thursday have been my best days

Highest % of wins was between 5-7 AM and 9-10 AM closing after an average of 7.5 hours

Longs on Tuesday & Wednesday were the only trades I averaged a profit

I won over 50% of trades in UJ, EA , NU, GCH, AU, EJ, AJ, EU, GU , AN, GCA, ECH, UCA, ACH, EG



I made a profit on AN, UJ, CACH, NU, ECA, GCA, and UCA only.



Only USDJPY, NZDUSD, GBPCAD and USDCAD fall into both categories.



As I said I discovered Price Action, but I didn't really record the signals I found, and sometimes after a loss I couldn't find the ones I had traded.

Plan for January:

I will record the basis / signal name & location for every trade

I will look for signals discussed in various places as the top PA signals (rejection bars etc)

I will trade in line with the 200 SMA on whichever chart I enter, unless it is neutral

I will trade in line with the 10 & 20 EMAs on whichever chart I enter

I will set my risk to 5% of my balance or $10, whichever is more, using $/SLD (dollars divided by stop loss distance)

I will set SL at the last swing + the spread

I will set a trailing stop equal to the distance between entry and stop loss

I will flag weekly swing levels and only enter if entry-to-swing > stop-loss-distance x 4

I will only trade Tuesday night, Wednesday early morning, noon, after work and late at night, Thursday early morning, noon, after work and late at night.

I will trade D1, H4, H1 and M15, and record which chart I used for every trade

I will only trade USDJPY, NZDUSD, GBPCAD and USDCAD

I will log the characteristics of my pairs every Wednesday and Thursday before I take any trades


It's hard to discipline myself but I believe this will give me a better shot at success; does anyone else do anything like this?

What do you think?

 

[robert]

Hey, unclesteve,
Very inspirational!
I use my broker's records and a spreadsheet to keep up with my wins to losses (win around 50%, last time I checked) and the size of the wins which has been growing but still below 2 to 1. For one month this year my average win was 2.2 times the size of my average loss.
Comparing those things to my equity curve, I noticed that i have a problem with the size of the trades. When I feel more confident, I trade larger. That has not helped.
Starting January I'll print an actual chart of the trade for reference and put it in a binder. Since I trade visual levels, that should prove a good enough reference. Just looking back at the trades on the charts has helped me to decide what kind of stop to use. Longer stop on entry at support or resistance, tighter for continuations.
Hope you have a great year ahead!

 

[squalodon]

Great job very detailed but a lot of work.. Still keep doing it man.

I suggest also trading in a forex simulator during the times that there are no trade signals.. I can usually put in 30 trades in 1hr trading a simulator. And i get the results fast.

 

[unclesteve]

@squal sorry for the thick question but what's a trading simulator?

@robert I love pivot tables, it's not that much work. I just like to see where I'm doing bad and good.

I'm winning 54% of the time but my losses are bigger than my wins. I have recently started realizing I can use the lower charts to tighten my stop losses, and therefore bring my ratios up, but still... I haven't made a profit yet!

if you think of the market size - $5.4T/day - there has got to be a way to extract a living from it. I'm really trying to isolate the part of the market that best matches my (personality? experiences? ego? ability? knowledge? availibility?).

I greatly appreciate any input this idea generates...

 

[TheForexGuy]

Hey thanks for the post Steve,

I think to help you discipline yourself, you need to really isolate what 'common denominators' caused you so many losses, and also the common denominators that keep popping up for those winning trades.

Straight away I can see all your winning trades were taking in markets that were trending very strongly in the last 3 months - so there is one key thing you can take note of Trending markets are where the money is to be made.

It's good to go back through your trades, and see if you can remember what sort of actions you took that might have effected your trading.

• Did you not give your trade the chance to hit proper risk reward targets?
• Did you mess up your lot sizing calculation, or just ignore it?
• Were you to aggressive with your stop loss placement, and removed from the trade too early?
• Did you open too many positions at once across multiple pairs, causing you to stress out and try micro manage your trades?
• As you've stated, you're guilty of revenge trading.
• Trading under in appropriate circumstances (like while really drunk), and sometimes with an overconfident attitude after a few wins.
• Did you trade in 'congested' market conditions?
• Were you impatient, didn't wait for the better entry conditions and were 'chasing price'.

Compare your findings with your losing trades, and in contrast see what's absent in your winning positions.

I think a good start to your 'road to recovery' plan is to.

• Only have one positions open at a time (I myself try to stick to this one)
• Don't trade on Monday's
• Only trade during trending conditions
• Cement in your head that you don't need to trade often, and really one trade per week is still enough to see good account growth
• Focus on becoming an expert at one strategy, or signal before taking on anymore
• Don't interfere with open trades, let the market stop you out, or liquidate your position at your minimum profit target.

They are some guidelines that I hope you can integrate into your trading and get back on your feet.

I hope that was helpful

 

[squalodon]

@Steve- look for LFH forex trading simulator.. google it it's free

it will help improve you a lot during the down time.

@The Forex Guy- great insights.. btw can i ask has there ever been a time where in a week or month you couldn't find a good "trending" environment going? what was the longest time that you had no trade opportunities open and how many times does it happen for you? in your experience would that happen frequently?

 

[TheForexGuy]

Trends come in waves generally, so it's between trends when the market 'lulls' out that you find ranging and consolidating markets. Sometimes it can happen for months until you see a trend, but with some luck you will find a trend on one of the cross pairs or something.

You just have to hope for a good range trade in the quiet times.

 

[unclesteve]

Guilty as charged...

Interesting about trending pairs, though. I was thinking I had just gotten a better feel for the pairs I did well in, but I hadn't looked at the fact that they had been trending.

I realize you can't totally quantify this, but how many HH's or LL's are required to say there's a trend? Or is it really a question of zooming out and seeing if we're outside of a ranging area?

I'm not wording this well; the bottom line is I'd like to hear more about identifying trends. I have re-read the section in the course, but still could use more insight. Some books talk about 3-5 candles in the same direction, but that's obviously not sufficient and totally ignores the stair-stepping formation we have talked about before.

 

[TheForexGuy]

Hey Steve,

Have you read the latest articles in the debrief section...

Working With Different Trend Structures

You're basically just looking for the market to be making the HH HL, or LH LL pattern while respecting the mean value as dynamic support or resistance. Also the mean value should be angled upward or downward. No you can't qualify 3 candle movements in the same direction as a trend, you can get 3 candles closing in the same direction inside ranging or consolidating markets.

 

[robert]

Good article.
I look for the structures mentioned (ranges , trends , rejection candles.) Another thing that I do is start with my daily chart well back, a year and a half or more, and this reminds me of the "character" of the pair and what the long term picture is - gives me a bias for long or short.
Then I zoom in and look for setups.
By "character" I mean that on a 2 year chart, I can see if the pair is smoothly pointing up or down, and for how long it has been going in that direction AND how the current (few weeks) fits into the last couple years.
I sometimes take a small position in a ranging or counter trend market - but I know better.

 

[unclesteve]

Robert - that's a good point. I'm always trying to make this a science but it really is always going to be a bit of an art.

The Forex Guy - thank for pointing out the extra debrief section. Nice new look, by the way!

Best of luck to all in the new year (unless you're trading the opposite way to me, of course... :lol: )

Oh man... I think I just used my first emoticon, and I had sworn not to ever be influenced...

 

[unclesteve]

Trends come in waves generally, so it's between trends when the market 'lulls' out that you find ranging and consolidating markets. Sometimes it can happen for months until you see a trend, but with some luck you will find a trend on one of the cross pairs or something.

You just have to hope for a good range trade in the quiet times.

OK, this has been one heckuva month, and I am seeing light at the end of the tunnel (hope it's not a train...).

I'm working on an analysis of January but in the meantime, about The Forex Guy's comment above:

Can anyone point to a ranging-market strategy that has similar value to what we have in the War Room?

Or is the whole point to avoid ranging markets?

 

[b.buzby]

Hey Steve

It seems to me you can't say specifically why you are loosing money when you are winning 54% of your trades.
If you had a trading journal where you took note of your trades, not just the basics, the facts and figures you can get from your platform, but importantly the conditions of the market and the reason (or argument for) for opening the trade.
It makes reviewing your trading easy and gives you a clearer picture to help you refine your trading strategy.

Good Luck

 

[unclesteve]

Hey Steve

It seems to me you can't say specifically why you are loosing money when you are winning 54% of your trades.

g'day Buz...true... but I think Dale put his finger on it when he pointed out that the pairs I did OK on were all trending strongly.

I'm pulling together January's info and I think it proves it out. More in a minute.

 

[unclesteve]

Wow, what a month. UncleSteve learned some stuff the hard way. But I think I am confirmed enough in my system to leave it unchanged for another month, or rather just tweak it gently. I think the biggest insight may have been what Dale pointed out about trending markets.

If you recall, I started trading in August and by the holiday season had lost pretty steadily. I extracted trade data from MT4 and myfxbook.com and dumped it into a pivot table set, that wonderful instrument with which one tortures numbers and tries to make them talk.

My goal is clear, that within a few years I will be able to replace my salary with trading.

Long story short, I came up with a few guidelines for January, which I posted here, on FPA and on babypips to see what feedback I'd get:

Plan for January:

I will record the basis / signal name & location for every trade

I will look for signals discussed in various places as the top PA signals (rejection bars etc)

I will trade in line with the 200 SMA on whichever chart I enter, unless it is neutral

I will trade in line with the 10 & 20 EMAs on whichever chart I enter

I will set my risk to 5% of my balance or $10, whichever is more, using $/SLD (dollars divided by stop lossdistance)

I will set SL at the last swing + the spread

I will set a trailing stop equal to the distance between entry and stop loss

I will flag weekly swing levels and only enter if entry-to-swing > stop-loss-distance x 4

I will only trade Tuesday night, Wednesday early morning, noon, after work and late at night, Thursday early morning, noon, after work and late at night.

I will trade D1, H4, H1 and M15, and record which chart I used for every trade

I will only trade USDJPY, NZDUSD, GBPCAD and USDCAD

I will log the characteristics of my pairs every Wednesday and Thursday before I take any trades

January was one heckuva month. I stuck to my system

I know some people talk about not leaving trades open too long due to “exposure” but with trailing stops I don’t really know what that means to me. Some of my trades went wrong and hit my SL, each time losing me exactly what I had risked in dollars; the rest took a few days to reach the point where my trailing stop pulled the SL to the breakeven point.

I didn’t close any trades manually, and some just kept climbing. I spent a few swap dollars but the bottom line is, I started the month with about $300 in my account and ended with over $700.

I made 19 trades in the month, 12 of which closed in profit, so about 63%. In previous months I made many more trades and lost money. nterestingly, 2 of the failures were trades I took Friday morning, just not being able to sit on my hands. Idiot....

OK, so the question is, where do I go from here? I have made a few decisions:

• 1. I will continue with the trailing-stop model. I think it may work better for me than the split money management system, because with split MM once your trade 1 hits BE, your 2nd one is only trading with half your position

• 2. Agreeing with Dale's point about trends, I think the choice of instruments had more to do with trending conditions than any mystical connection with the charts. I will therefore cautiously add other instruments. To do this I’ll review the D1 charts of all my broker’s pairs with the 200 SMA , and the 10 and 20 EMA ’s. I’ll set the zoom level so the 200 SMA is as close as possible to the top-or-bottom-left corner of the chart, and select the instruments that look nicest.

• 3. This seems to work well for trending markets; assuming it continues to do so, I will start working on a strategy for ranging markets to try out in demo

If you look for "UncleSteve" on FPA you'll see I had a bit of an embarrassing saga with an EA; oh well, live and learn.

So now the big question is, can anyone point me to a good simple ranging-market strategy? If it involves an indicator I promise not to dob you in to Graham...

Here are my charts for February. USDJPY and XAG are candidates for being dropped, as the long trend is pretty iffy; but we'll see.



whadda youse reckon?

 

[kennard]

I made 19 trades in the month, 12 of which closed in profit, so about 63%.

Well done uncle steve, I am glad you had a profitable month,keep up a good work.

How many of these trades were on dailies?

I am a newbie myself and and try to focus on dailies so thats why I ask.

 

[unclesteve]

How many of these trades were on dailies?

All of them. I can't get a feel for the H4 charts. I did try a couple of trades on the M15 because I badly wanted to believe there was a signal. There wasn't. They lost.

That's a point I forgot about, thanks for reminding me. This month I'll stick to the Dailies and maybe the 4H but no more attempts at scalping. If I'm gonna let a trade stay open for weeks there's no point finding it on the lower charts.

I guess I'm converted to day/swing/position trading.

 

[unclesteve]

Well, where did three bloody years go?

 

[unclesteve]

So the last trading record I have is Sept 2014. In November I realized I was an alcoholic (see "trading drunk", above) and made recovery my main goal. I stopped drinking April 7th, 2015 and dealt with withdrawal, blah, blah, blah... couple years went past without a lot to show for it although I paid off my credit cards, took my family to Australia for a year, got demoted at work and more or less got over it, and finally came back here to see if my login still worked.

So here I am! I think my brain worked well on booze, because I can't hardly understand the stuff I wrote back then (so I must have been smarter, right?).

I'm re-reading Dale's course, and have opened a demo account - no real money until profitable demo. I'm playing a long game now and I may not trade real money this year.

Anyone still here from when I was starting this in late 2013?

Cheers!

 

[Mike-TT]

Wow, talk about digging up an old thread!

Anyway.. best of luck to you in your second attempt!