Hi Helene,

Thanks for the great session on trader psychology - unfortunately I was only able to join in halfway through; however, it was all good stuff!

Just setting up a thread for my trading plan and journal, as requested.

I'm not trading today but should have something posted tomorrow, although lots of news out - yikes!

Happy Trading!

David

No problem! I am glad you learned something in the session. I look forward to seeing your journal! And yes be careful on trading the news.

__________________
~ FXCM Micro Specialist

Hey there!

Having listened to everybody's comments and questions during the chat session, re: trader psychology - I had a long hard think about my past trading experiences and my own emotional state when trading.

I came to the conclusion, that the only times I have really lost the plot, felt sick, couldn't operate the calculator, didn't really know what to do next (I know I am not alone), etc., was when I was over-leveraged and/or hadn't planned for a particular eventuality in the market.

During the session, there was talk of doubling and trebling account sizes one week and then blowing it up the next. This is of course, either the result of over-leveraging or sheer bad luck. Your comment Helene, regarding the work involved in doubling an account size, is a good one - and one, which is illustrated by my attachments, which I will explain in a bit more detail during this post.

I have been paper-trading forex for a little while and am now going to dip my toe in the water for real. I would like to share my approach with you, as it may be of benefit to others, and I would appreciate your feedback if you feel I have gone wrong anywhere?

Ok, so this is where my trading plan starts for me and I am going to concentrate on 3 things:

1) Mindset
2) Strategy / System
3) Consistent Action

These are of course all inter-related to some degree, as in, if I'm not in the right frame of mind, I probably won't stick to my strategy/system and then I will go astray in terms of consistent action.

I like things to be as simple as possible, as I simply find it very difficult to concentrate on too many things at once, particularly when the markets are moving and I'm trying to work out my entries, exits, risk to reward ratio, how many lots to trade, etc, etc. Not so bad paper trading; however, there IS ALWAYS emotion (additional stress) involved when trading for real.

So what am I going to do to simplify my approach? Firstly, I am going to concentrate on 'Pips' - I am going to start trading with $1,000 in a Micro Account and from now on, not think about it as money but as 10,000 pips. I will not target myself in $ but also in 'Pips' which I hope is going to help me not fall victim to over-leveraging or think so much about the fact I'm trading with money. It is so tempting to over-trade with a small account size, when $50 profit doesn't seem much, but it is 5% of $1,000 which is a great trade!

I am going to start trading with 2 Micro-Lots and then I know as long as my stop is less than 100 pips away from my entry, I am within my risk parameter of 2% of account size. If my stop is 50 pips away from my entry, I am only risking 1% and I'm cool with that. Once I know my stop risk is <100 pips, the trade is good to take from that perspective and I don't have to think any more about position size.

I then plan to increase my 'Lot Size' by one, as my account balance increases by 5000 pips and once it reaches 50,000 (got to think positively!) I will transfer to a standard account and trade Mini-Lots. I will start with one lot and increase by one for every 50000 (Micro-Pip) increase in account size. I have scheduled out what this looks like on the below attachments, one targeting 250 pips profit a week and the other 500 pips profit a week. Working it this way also helps me to scale down if my account takes a hit through a losing streak. I will only scale up my trade size on a week by week basis; however, I will scale down immediately based on account size.

To summarise then - this plan deals with number 1 - 'mindset' and helps me to take 'consistent action' - number 3. This just leaves me number 2 to concentrate on, which is to trade a successful system or systems. At least now I can see visually how my account size will change based on two different weekly pip profit targets, and I have something to compare my actual trading performance against.

Ok, I think that's me done for now, I will of course post my charts, etc., as I take trades, with regards to my trading strategy and risk management.

All the best and good trading!!

Attached Thumbnails

 

 

Hi there,

Based on the trading system I am using, I have a potential short entry in the EUR/USD pair.

Considering the daily trend - has it really broken out of its uptrend?? It has looked that way; however, after yesterday's gains closed back above the supporting trendline on the daily chart.

The general market consensus seems to be from what I can see that unless anything crazy comes out of the BoE or ECB today, we may see some dollar strength over the next few days, following the FOMC yesterday, although we have Non-Farm Payrolls and Unemployment Rate coming out of the US tomorrow (what a week of news!) so caution is key.

My short entry started setting itself up on the hourly chart by the red arrow, which indicates a cross of the 4 and 5 EMAs. This was followed by a red candle closing below the 'Blue 5 EMA' (which is shifted 5 periods).

The short entry signal was confirmed on this red candle by the RSI line of my QQE indicator crossing down below the 50 line from above, and is nicely below the broken red signal line in the QQE.

My entry level on an hourly chart is 10 pips below the low of the short entry candle, which in this case is 1.4805, indicated by the solid blue line. My stop is set 10 pips above the recent swing high of the blue 5 EMA (shifted 5 periods) at 1.4872; therefore, 67 pips of risk, which is within my pre-defined risk parameter of 100 pips maximum.

The orange lines and the green line are for my initial risk management. When I see a close below the lower orange broken line (1.4771) I will bring my stop down to the upper orange broken line (1.4838) which reduces my risk by half. Once I see a close below the green line (1.4738) which is based on a risk to reward ratio of 1:1, I will bring my stop down to break even, which reduces my risk on the trade to zero, if something goes horribly wrong.

My profit target is indicated by the magenta line at 1.4642 which is just above the lower 'Donchian Channel' wall and yesterday's low. This represents a profit target of 163 pips (RRR=1:2.43).

It doesn't look like I will be taken in before the central bank rate decisions in Europe, which can only be a good thing. It will be sure to go one way or the other, particularly after the ECB announcement. If I'm taken in on the short side by the news, it should be a good trade, or I won't be in at all and yesterday's upmove will continue. We shall see! I will post again if I'm taken into the trade.

In the meantime, all the best and good trading!

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Hi there,

Just to clarify the broken red line in the main chart window is a 5EMA shifted 3 periods, which I only use for trailing stops.

All the best and good trading!

Hi there,

I have cancelled my short entry order on the eur/usd, as my system signalled a long entry, which I am not going to take 15 mins before ECB rate decision.

I have, however, been taken long in the audusd, so have attached a chart below detailing my entry (blue), stop (red) and my possible exit (magenta) around a good previous level of support.

Again, I have green and orange lines for the purposes of money management, as described in my previous post re: eurusd potential trade.

Good luck with all you trading the news and I will be back as my trade progresses.

All the best and good trading!

Attached Thumbnails

 

Hi there,

This is a snapshot of marketscope re: audusd long trade, as it's a bit less cluttered and easier to see entry, stops, exit, etc.

All the best and good trading!

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Good Job in you plan! This is very detailed. And I am glad you took our Live Trader Talk session into consideration. Now all is left is executing your plan which I am sure we will see, so I can't wait.

__________________
~ FXCM Micro Specialist

Agreed, if your system or strategy is telling you a long signal, removing your short order is a good idea as well as deciding not to trade right before ECB.

__________________
~ FXCM Micro Specialist

Hi Helene,

How are you?

Thanks for your feedback.

How's your trading today?

I know Joel was looking to short the cable at 1.6650 but it hasn't quite got there. Only a few pips away at one point though!

Anyways, take care and speak soon!

Good trading!

David

I have posted a chart below, which shows divergence between the EUR/USD price and my QQE indicator, i.e. the price has double topped in the hour time frame and the QQE has made lower highs.

Therefore, I am still on the look-out for short set-ups if they come.

The EUR and GBP seem to have digested the news releases and started to settle back into their stride. The BoE's quantative easing program announcement seems to have overshadowed everything else, with a bit of bullish sentiment for the GBP.

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Hi there,

Finally I reached my first money management target of the broken orange line above my entry; therefore, you will see from the attached chart that I have moved my stop up to the level of the orange line below my entry (0.9069). My risk on the trade is now 50% of what it was.

I have been in this trade for approximately 16hrs and am mindful of the fact that USD based pairs are hesitant at this time leading up to the Non-Farm Payrolls announcement that many of us have a love/hate relationship with

I am not really planning to still be in this position at the time of the NFP, so I will see what happens; maybe I will be stopped out or maybe if I am fortunate enough to hit my second money management target of the green line, moving my stop to breakeven I will consider planning a strategy to be in the market. This will probably entail a tight stop below the market, as long as I am in a risk-free position on the trade overall.

Anyway, I will post again in a few hours and let you know what I have decided to do.

All the best and good trading!

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Hi there,

Prices did indeed close above my second money management target of the green line, which is based on a risk to reward ration of 1:1, therefore, I have now moved my stop to break-even and for all intents and purposes in a free trade.

I am now thinking about how to manage my exit prior to the Non-Farm Payrolls announcement.

See you again soon.

Good trading!

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Well we are just under 90 minutes away from the Non-Farm Payrolls announcement and there has been some retracement to the short side on the AUD/USD. I don't want to let it get carried away and then find that the news gets the dollar bulls going and I give up all of my profit so far.

So, I have decided to trail a stop just below the 10EMA on the attached chart. I am placing this a few pips below the EMA beneath the low of the last completed candle.

I fully expect to be stopped out, probably before I finish typing this post lol - anyway we will see. If I am still in at the time of the NFP and it's bearish for the dollar then I may catch some upside momentum.

Good luck to all of you trading the news.

Happy trading!

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Well what do you know I was still in this position at 8.30 EST; however, quickly stopped out as the market digested the news and sentiment seemed initially bullish for the USD. This is probably in line with the flight to safety seen in the nearly $8 jump in gold futures.

Anyway, I am pleased I kept my stop tight and locked in 48 pips of profit, which is not impressive from a risk to reward point of view but nonetheless a disciplined approach (Well for me in any case lol)

I won't make so many posts per trade in future now that you can see my trading style from this one. I will post my intended entry, stop levels and profit targets, with a summary of the trade at the end, together with the occasional chart.

That's it for me trading this week, so in the meantime take care and good trading!

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