My Journal at a Prop house

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Old Feb 24, 2010, 10:25am   #1
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My Journal at a Prop house

Hi Guys,

Currently working at a proprietary house and thought I would write a blog about not only my trades but also a little bit about day to day life at such a company.

I'm not to sure how many of you trade Futures, but the way that I trade can be applied to the spot market as well so I hope at least someone out there benefits from this journal (if anything it gives me something to do and keeps me from getting an itchy trigger finger which usually results in losing money)

Please feel free to comment or send me any feedback (dont be to harsh)

Pozzy.
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Old Feb 24, 2010, 10:53am   #2
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Re: My Journal at a Prop house

pozzyp started this thread Ok so im going to try and post in real time, Im only trading GBP/USD and EUR/USD at the moment.

24/02/10

EUR/USD March 10 contract:

Price is pretty much range bound and drifting sideways.

I've used a 30 min chart to mark of the range because it is easier to see.

Click the image to open in full size.

As you can see the Euro sold of rather nicely yesterday and made its swing Low at 1.3500(nice double 00 figure) Its previous swing High was at 1.3580. Now since price is neither making new swing highs or new swing lows I would define it as Range bound. So the range is marked off and its time to sit on hands and wait until there is a break out. Price did poke out for a cheeky false breakout at around 20:30 last night.


GBP/USD March 10 Contract

As boring as it might be GBP/USD in pretty much the same situation.

Click the image to open in full size.

There was the big sell off yesterday on the back of King and the BOE statements and now the market is drifting sideways. It is very easy to look to the left of the chart see the big moves and feel that the range isn't valid or that its an 80 tick range so there is still plenty of potential to scalp within it. However price is caught between its previous swing high and low and until it breaks out the market will chop around within this boundary so for me the kettle goes on and it becomes a waiting game.
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Old Feb 24, 2010, 11:56am   #3
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Re: My Journal at a Prop house

Hi pozzyp,

Should be an interesting thread to follow.

As you mention previously it made a false break around 20:30. Are you waiting for a break in either direction and retest of the S/R before taking a trade?

Rowan
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Old Feb 24, 2010, 12:13pm   #4
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Re: My Journal at a Prop house

pozzyp started this thread Thanks for the support,


Price on the GBP just pokes its nose out of its currents range signaling the possibility of a Long trade.

Click the image to open in full size.


dropping down to a lower time frame, (I use a 2 min but thats just my preference) We can see MACD has also made a bullish cross. This gives a nice suggestion that buyers are entering the market and confirms a Long entry for me. I place my entry above the breakout high so in this case 1.5480 (this guards against a false BO) yet before that order triggers MACD crosses again bearish and the trade is canceled. Price drifts back into its range. Back to waiting
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Old Feb 24, 2010, 1:11pm   #5
 
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Re: My Journal at a Prop house

blog sounds interesting, do you trade from mainly 30 min or hourly charts ? take it you are not salaried at prop house you you need to be profitable to pay the bills ?!
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Old Feb 24, 2010, 1:17pm   #6
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Re: My Journal at a Prop house

Hi pozzy,
I'm interested to see that you use MACD. You'll be aware, no doubt, about the on going debate about the merits - or lack of them - of indicators between those that favour them and the price action purists who don't. What would you say the general attitude in your firm is towards indicators in general (not MACD specifically)? Indeed, that question can be extended to charts and TA in general. Increasingly here on T2W there are threads suggesting that not only are indicators of all shapes and sizes useless, but that conventional TA is useless too. An insight into what other prop' traders use, be it funnymentals, TA, price action in its various guises - or something completely different - would be of great interest.
Cheers - and I hope the trading action picks up for you when the US opens!
Tim.
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Old Feb 24, 2010, 2:27pm   #7
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Re: My Journal at a Prop house

pozzyp started this thread advfntrader: I don't really use the 30Min chart just used it in this case as I thought it showed the range a little clearer. Normally look at a 4hr, 1hr and then a shorter timeframe so 2 -3 min. It is commission only so I try my best just to forget about the P/L but still always find myself peeking.

In regards to indicators Tim im actually not a big fan. 90% of my trades are based on price action I just use MACD in this instance almost as an alert just to flag a point of interest and then ill fall back on price action. I keep an eye on the fundamentals "funnymentals" I like it but I only watch out for major announcements GDP, interest Rates, that sort of thing. My theory is that if the news significantly moves the market, enough to change bias then that will be reflected in Price action. If the announcement just causes a spike but doesn't change prices general directional bias then its not important enough for me to take note of anyways. I think it all depends what you trade, I know some of the guys here that trade stocks and indices are fairly dependant on figures and news. IMHO if you trade price action you are trading what the market is actually doing. I feel fundamentals are a little bit like reading the form card at a horse race and then placing a bet based on that information. Price action on the other hand is waiting for the race to start and then betting in running you still might get it wrong but least that way you get to see which horse is in the lead (strange analogy i know but it was the best that came to mind) Think what im trying to say If a market moves im not really botherd why I just want to be on it.
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Old Feb 24, 2010, 6:07pm   #8
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Re: My Journal at a Prop house

pozzyp started this thread So after about 7 hours of sitting in front of a screen waiting for my range to break out finally the Euro had a little push up. It all happened a little bit quick and certainly was not the move that I was looking for. However it has given way to another trade setup.

Click the image to open in full size.


Price broke out and made a new swing high at 1.3596 (I add 2 and round up) so my entry was Long at 1.3600. Price then pulled back and yet again started making swing highs and lows within the previous swing high and low (marked with cricles) and the chance of an upward move at this point is finished. The bearish MACD cross also signals this and the trade is off the table.

In the process of typing this the new setup on the Euro that I mentioned triggered me long but i didn't get a chance to get a screen shot of the trade. I did however manage to snap the new setup before the trade happened and you will be able to see clearly what I was looking at.

Click the image to open in full size.

So again price is between its swing high and low and again I'm a waiting for a break. This time however it happened with a bit more conviction, price broke to the up side and I was long at 1.3600 with a stop at 1.3580 (didn't get chart shot but you can clearly see from the others that it was the setup I had been waiting all day for)
I like to scale out 2/3rds of my trade at half the stop loss size and then leave the last 3rd to run as long as possible. This is a method that was taught to me and means that the risk is taken off as quickley as possible.

Price continued to rally making Higher highs and higher lows. At the breech of a swing low I moved my stop to entry as this signaled the move running out of steam which it did and I ended up getting stopped out. so total trade was + 10 ticks on a 1/3 of my position size. Not even enough to cover the cost of the desk for the day but still I stuck to the plan and therefore it was a good day.

I know this post is a little disjointed but it was my first one so hopefully they will become more organised. Ill try and write a post tomorrow about my trade plan which should make my posts make a little more sense

GBP has still done nothing all day so ill prob hang around for another hour or two and see if it breaks out as the longer it takes the more explosive the move when it goes.

Thanks for all the support and ill speak to you tomorrow.
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Old Feb 24, 2010, 11:05pm   #9
 
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Re: My Journal at a Prop house

Pozzy,

How long do you look to hold trades for?

Is there any expectation on the part of the firm that you should make a certain number of trades in a certain time, or can you wait as long as you like for the right setups?


By the way, the Bernanke speech to Congress at 15:00 GMT seemed to cause some movement in both directions in the spot EUR/USD and to a lesser extent in GBP/USD. Maybe it was less noticeable in the future, which I wasn't following, and maybe not the kind of moves you are waiting for.
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Old Feb 25, 2010, 8:47am   #10
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Re: My Journal at a Prop house

pozzyp started this thread
Quote:
Originally Posted by montmorencyt2w View Post
Pozzy,

How long do you look to hold trades for?

Is there any expectation on the part of the firm that you should make a certain number of trades in a certain time, or can you wait as long as you like for the right setups?


By the way, the Bernanke speech to Congress at 15:00 GMT seemed to cause some movement in both directions in the spot EUR/USD and to a lesser extent in GBP/USD. Maybe it was less noticeable in the future, which I wasn't following, and maybe not the kind of moves you are waiting for.

Morning Mike,

The firm is really relaxed and give you the freedom to operate how you wish. So in terms of how many trades a day I place they don't put any pressure on at all. As I am still relatively new here, I do have a few restrictions, so I only have access to GBP and EUR and I don't hold trades overnight. If I wanted to sit here through the Asian market and trade then I could but I don't leave the office with any open positions. This will change as time goes on and as I build a longer track record with them.

I'll follow up with a little market overview in the next post.

Thanks for dropping in.
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