Yellowlion's EURUSD Trading Journal

Hello All,

I trade EURUSD during the London session every day and have been hoping to gather a few serious traders in a real-time virtual trading room to share ideas. If anyone thinks this may be something that could be helpful to their trading day, please let me know. I'm available on Yahoo! IM handle: yellowlion during the session usually from 06:00 GMT to 13:00 GMT. I maintain a website and could easily add something that would facilitate the trading room.

That said, I'm starting a journal on this thread that I hope will be helpful to other traders and as a way, hopefully, to meet other traders to collaborate with.

So here we go. I'm short off the top here at .4837 but don't intend to stick around long to the upside.

All the Best,
Yellowlion

OK covered at .4818. Actual entry was at 30 - the .618 retracement of the initial swing off the top . A little early on the entry 'cause I was distracted at the actual resistance level and had no limit sell in place so I missed the top and was anxious to get a play (how's that for discipline lol). Waited for a retracement and got a nice one. Just a little 1 lot trade covered for 10 pips. This has the potential to go further but I'm a little too distracted to do more than just play a quick idea.


YL

02/22 06:00

Good Morning. Last night's resistance level at 1.4756 - 1.4761 was worth 60 pips for those who faded it, and the current top was a few pips shy of last night's 1.4842 at 1.4837. I have to suspect that the current advance off 1.4449 is approaching maturity. My preferred count has us into wave 5. The question I would ask is will wave 5 extend to a new EURUSD high. I would expect the upper trendline to be left below as things develop. Key levels for the session: Your favorite moving averages, resistance at 1.4900 & 1.4951. Key support at 1.4756, support also at 1.4700.

02/22 10:00

Just not with it this morning. Kinda tired, marginally interested. Early session was kinda skittish. Put me off. Missed the setup to .4845 then waited for the completion while working out and watching TV and eating ice cream and generally lethargic with no sense of urgency. Looking for .4855 and paid no attention to my levels at 49 - 51 so I missed that too. Week has been good. Not really feeling the necessity to be present. Missed two setups. No trades. Gonna go watch a movie. Maybe get a couple hours nap. See how I feel when US comes online.


All the Best,
Yellowlion

Hello All,

Slept well for 4 hours. I'm not surprised traders are playing the shorter period expanding triangle. It's in a good spot and supply has been tested 3 times in the past 24 hours. May have found some support here at the hourly demand line. Could be worth a play on positive action during a retracement.

yellowlion said:

Well the hourly trendline was a decent play although I didn't get the setup I was looking for. Something I've noticed with the missed setup earlier today and the current move off the hourly demand line is the pattern I usually look for an entry happened at the top of the initial move off support rather than occurring near the original support. A variation worth watching for. I've found that the best entry is at the low risk support or resistance levels. If I get enough time and am in tune with the landscape, I usually set a limit order to override the difficulty I have entering these particular trades manually. If I don't have a limit order and can't muster the discipline to enter, I wait get a setup to play it. The past two trades off support were good trades but the pattern occurred not where I expected it. Just working through my issues as usual.

Click to expand...

Shows the importance of PIN Bars and Support/Resistance Levels

Hi All,

End of session and week. Sloppy, tired, unmotivated day. Interesting variation discovered on one of my setups. No trades. Couldn't muster any motivation. Feeling wiped out.
For the week: 5 wins 0 losses. Hope everyone has a terrific weekend.

02/23/08 06:30

Good Morning,

I hope everyone had a splendid weekend. Session opened bouncing impulsively off the hourly support line again at 1.4806 or so, to a little moving average resistance at .4825. I'm expecting dollar weakness into the week but the chart patterns of the dollar and 10 yr treasuries makes it somewhat difficult to gauge direction. Treasuries look weaker and I expect the dollar to cue off treasuries, which means strength. There is a quasi head and shoulders pattern on the hourly EURUSD and there is a clear 5 wave pattern ito .4863. Key levels are the high at .4863, hourly supply, and .4780.

02/22 07:28

07:28
Took a 1 lot play long off the impulse at .4818A looks like a stop loss is in the cards.

07:33
Stopped out
Played an a- b- c correction to the .618 retracement. Had the 1.618 expansion there too. Didn't expect to see a retest of hourly supply so played a shallow stop at .4808. - 10 pips.

Even though a bounce came at the trendline, the trade didn't work out.

Calling it an early session; have an early day tomorrow. Dull. Getting a little more lively with US waking up but London morning was like watching paint dry. May place a couple standing orders. For the session 1 trade 1 loss - 10 pips.

All the Best,
Yellowlion

very interesting journal, please keep up the good work

02/26/2008 06:20

Good morning all,

Clear ZigZag to 1.4811 to begin the session. Last night there was a quasi head and shoulders pattern on the 1 hour chart and tonight the same pattern has developed on the 3 hour. For a neckline, supply comes in at .4798 - 83.
Key levels for the session:
Pivots and your favorite moving averages.
Resistance - wave 5? high at .4863, .4897, and the high at .4951.
Support - head and shoulders supply at .4798 - 83, wave 3 high at .4760 - 56, and the .4709 area.

02/06/08 07:57 A lesson in following rules.

Welcome to the insane asylum,

Took an opening nibble at .4815A off ZigZag equality and the .786 retracement of the last advance from 4802 to .4840. Got a retest and then a slow grind higher to .4827. My target for the first lot exit is 10 pips. It's always 10 pips. If it's a 1 lot trade, it's closed at 10 pips. Well instead of that, I set a stop loss 30 pips below entry with the deluded notion of giving the trade room through all support. This gets even better later.


Ok so price goes to my 10 pip rule and I want to ignore it.

The result?


But I'm not done yet cause now I realize the error of my ways you see.
And so does the market. Thus:



Trade loss - 39 pips. Stick to the rules!

02/26/08 09:00 A lesson in sticking to rules.

To fully understand this post you should read the previous post.

My trade rules for a 2 lot entry are: 1st lot exits at 10 pips, 2nd lot at 20 pips or loss of momentum.

Gathered my wits quickly and got a completion target here at .4776 - 70. Entered 2 lots 9 pips above low at .4788A. Stop loss at .4769B 1 tick below target range. First rise first failure held. Exited 1st lot at 10 pips per rules, 2nd lot broke out strongly, sold on first down bar for 37 pips.

Even though the trade went higher, rules provided a nice win.

Simple, straightfoward. Followed rules and won.

02/26/08 12:30 End of session

End of session. Continues to amble higher. I had completion at .4878 and got a setup but wasn't really present for an entry. It was worth 20 pips before pushing higher. .4897 is next resistance before the high. The high at .4951 may be worth a few pips. I have a little completion cluster there.

3 trades + 8 pips. That was a lot of work for 8 pips but well worth the lesson.

Stick to the rules and win.

All the best,
Yellowlion

hi yellowlion,

so do you go gunning for 30 pips made up of 10/1st lot 20/2nd lot per session
(euro and us)?

or per day?
or as many trades that get triggered?

thanks

02/27/08 06:15

Good morning all,

Just got in from a long day. Major issues at my place of employment Starbucks. Today we took the first step to try to get Wall Street to stop hammering us.

11 hour day so I'm gonna get a couple hours sack time and trade the US session because I'm off tomorrow.

Wow Euro. Haven't checked the numbers released today but I guess they were dollar bearish. I hope everyone fared well over the past 24 hours. Here's a 13 minute landscape that holds a couple possibilities.


Later Gators,
Yellowlion

I take it you're scalping?

I have a similar lot management to you but via swinging. Take first lot at 20 pips and let second lot run or fall back to breakeven.

trendie said:

hi yellowlion,

so do you go gunning for 30 pips made up of 10/1st lot 20/2nd lot per session
(euro and us)?

or per day?
or as many trades that get triggered?

thanks

Click to expand...

Hi trendie,

My entry size is based on the amount of risk dictated by the setup. So let's say I have an overall acceptable risk of 2% of base capital per trade in my trading plan, and 1 lot at 30 pips = 2 %. And let's say that I am fully capitalized and can pay my bills on 10 pips a day.

Mind you the only thing I want to know about my account balance for any trade is how many pips is acceptable risk. My goal is consistent execution of proper setup technique. I don't interest myself too much with the dollar amount. I just look for proven high probability / low risk setups (not difficult) and try not to do anythig stupid when I get them (difficult).

OK lets say that I've just gotten a setup with a risk:reward of 1:3 and the risk dictated by the setup is 15 pips. I'll take a 2 lot position, get out the first lot at 10 pips, and adjust the stop loss to breakeven, get out the second at 20 pips or on loss of momentum because for this setup, after 1st lot is closed, price should not penetrate breakeven.

A couple of my setups are very low risk; sometimes 6 or seven pips before I know it's wrong with a risk well below 2% and a worthwhile risk:reward. If I can put 3 lots on (my maximum), I will hold the last one to the final target or let it ride with a trailing stop. But always the first 2 at 10 and 20 or loss of momentum.

I'll take as many setups as I get during a session. I prefer to hold no positions off session unless it's a third lot with a trailing stop.

All the best,
Yellowlion

02/29/08 06:00 Opening analysis

Good morning all,

Hope all are faring well. Feeling better. Must have had some kind of bug for the past couple days. Got some much needed rest, ready to go.

I would appreciate any alternative input to this analysis.

Taking a top down look at EURUSD tonight. First up is the monthly with a proportional wave count into wave 4, and then a nondescript wave 5 rise into new highs.


Next, on to the weekly where the nondescript nature of wave 5 takes on a little clarity. Behaving well within a Fib fan since the Thanksgiving breakout of 2006, no real impulsive pattern unfolded until June of 2006 where there is a proportional 3 waves into the top of the fib fan on November 18. I would like to note that I have a completion low for the Dollar index at 73.00. Here, the current impulse is proportionally sufficient at, 1.5394. This level is quite accurately confirmed on the monthly using a nonstandard method.


Just taking the widest swing off the current wave 3 on the daily, the retracement extensions show potential to confirm at least a pause in the Euro at the projected target.


Because of the position of EURUSD within the current pattern and the appropriate global economic climate, a very strong completion event is quite possible. If this occurs, things could get a bit crazy and uncoupled from any orderly analysis. As always, the market will take full advantage of any major consensus, so I would expect the unexpected as things approach completion.

All the best,
Yellowlion