The Trading Journey of Lurker

[lurkerlurker]

GBPJPY Support

I'm thinking the low put in by this bar, which will almost certainly be a pin bar, is a strong support. On the hourly, we can see intraday resistance going back a week, and fib confluence around the 223Y level. Further, on a very long term chart we can see that this marks a major S/R pivot which has held all year.

Considering a long on the break of the high of this bar.

 

[lurkerlurker]

GBPJPY Live Trade

I'm thinking the low put in by this bar, which will almost certainly be a pin bar, is a strong support. On the hourly, we can see intraday resistance going back a week, and fib confluence around the 223Y level. Further, on a very long term chart we can see that this marks a major S/R pivot which has held all year.

Considering a long on the break of the high of this bar.

And a pin bar has so formed. It has a wide stop of 100 pips, however I am prepared to pay the risk in order to see if the trade is right. I note that each of the last few pins of this width on this instrument and timeframe have yielded at least 1:1, and with reference to S/R levels my first target will be 100(150) pips.

Orders placed to buy at 224.00, sell stop 223.00, limit 225.40.

 

[lurkerlurker]

Filled long at 224.00.

 

[lurkerlurker]

Filled long at 224.00.

After a 50 odd pip drawdown, the trade breaks into profit for the first time since being triggered 30 minutes ago. It looks as though this hourly bar may close with a smaller range pin bar, in which case if the high of this hour is subsequently taken out by a new bar, I can move my stop loss order up 50 pips. Running into resistance again though - interesting trade - I wonder how it will turn out...

 

[ER2-D2]

Thought you were off to bed lurker?

Watching this pair as well, don't like it for a short. Zoom out on weekly and you'll see this area has held up well many times.

[edit] - Oops.. that's what happens when I don't press refresh.. lurker posts another 6 posts.

 

[lurkerlurker]

Covered for +20

Thought you were off to bed lurker?

Watching this pair as well, don't like it for a short. Zoom out on weekly and you'll see this area has held up well many times.

So did I, but I had other things to do. Also, the 1Y drop / reverse kinda kept me awake!

Anyway, I've just covered for +20 and am now off to bed. We seem to be running into quite a bit of resistance at 224.5 again, so given the time of day I think I'm going to call it a day now.

+40 on two trades this evening. Night all!

 

[firewalker99]

This one's for you... perhaps better suited at the beginning of the journal

"Of what use was a sharp, well-balanced long sword, or an intricate and technically elaborate method of using it in combat, if the warrior... had not developed a stable, inner platform of mental control from which to act or react according to the circumstances of an encounter?"
-The Secrets of the Samurai

 

[lurkerlurker]

Once again, I'm having a few troubles with my trading. Taking the rest of the week off. Have a profit on the week and month.


Good points so far:
I'm trading less
I'm holding positions for longer
I'm on a higher timeframe
I'm slightly more disciplined with my exits
My stop placement now actually makes sense

Negative points remaining:
I'm not discerning enough with my entries
I still panic an exit, sometimes exiting during the same hourly bar I entered on, or on the close of said bar
Due to the above, my average loss is so much greater than my average win that my system risks large P&L swings, and neutral expectancy over time
I'm a little undercapitalised (trading 1 unit, I can only lose around 800 pips before I don't have the margin required to trade all the FX pairs)

 

[lurkerlurker]

Current system I am using.

Instruments: FX, gold, crude oil.
Method - price action, "pin bar" reversals
Timeframe: Hourly and daily

Entries:
Scan each market on watchlist for hourly "pin" bars on the close of each hourly bar
If pin appears, consider entry.

Conditions:
Pin bar must have a nose exceeding the recent range.
Pin bar must have rejected a S/R level with price reversing to near the open of the time period - this S/R level must be significant enough to suggest that the level has been rejected and price is moving the other way - this is determined on a discretionary basis, but S/R levels, trendlines, the highs/lows of previous "pins", and fib retracements are used.

Optional conditions: (these are things I like, but I'll take a trade without them)
Other FX crosses should support the trade. (for example, I took a cable short the other night when EURGBP was showing strength = £ weakness. Further, I sold yen when it was showing weakness against EUR, USD, and GBP - CHF also showing weakness) These conditions serve to confirm "pin bar" based entries - they do not stand as trade conditions in their own right.

Invalidations:
Stop excessive
Trade does not "feel" right
Pin doesn't look quite right
Pin is counter trend and the reversal isn't significant in terms of the previous price action (for example see the pin today in GBPJPY - falling back 80 after a 400 rise is not a reason to sell in and of itself, and I paid dearly for that mistake)
Pin does not conform to recent price action

Aside from 1), those are all very subjective.

Exits:

Currently, when I feel like it. This is not optimal. New rules:

No exits within the first bar unless stopped out.
Only move stop in the direction of the market, and only up (down) when the previous bar has made a new high (low). No moving stop to breakeven unless the market is heading into S/R against the position and is losing momentum. This cannot be on the first bar.
Only exit the trade when I feel it is no longer correct - not to take early profit or bag some pips, make up for another loss,etc. ie when price action is showing that the market has consolidated and is looking to reverse. This may involve holding a position for some time, however the risk can never be greater than the initial stop + cost of carry, so this should not be a problem.

 

[lurkerlurker]

{{Intermission}}

I've not been updating this journal very often. I'm going to spend the coming weekend copying / moving over the relevant posts from trader_dante's thread.

I have been trading hourly bars on the forex, and have some results as promised. I look forward to sharing all of these in due course. There are quite a few posts to be made, but most should be done by Sunday evening.

I have recovered quite well from my October drawdown. I have been advised to quote pips rather than pounds, and ordinarily I would, except I have been learning and improvising a strategy which combined with leverage is quite effective at growing a small account. Now I have made some profits, I can do multiple lots which allows me to scale out and is a great improvement on getting taken out on the 1 lot for BE when price reverses.

During the month of November, I grew my account from an initial starting equity of £422.00 to a closing balance of £1,119.66. Most of this involved trading the forex on hourly bars per my plan (with much assistance from Trader Dante and the James16 thread on FF). £45 or so came from buying NRK below 100 and covering it later the same day however. On balance my trading has improved, and I will post more detail of this at the weekend.

 

[EFXandy]

Lurker,

Glad to see you are back! Looking fwd to you posts and your trades.

If you ever want a nice read (or laugh) I am posting some of my trades/thoughts here: AskMrForex

Enjoy!

Andy

 

[lurkerlurker]

Equity Curve

This is my equity curve since I started trading FX. It contains daily P&L for every trading day since 1 November to today (including todays pips). I started with £422 in my bucket shop account, however I have been advised by a knowledgeable trader that equity curves should always start from zero. Also, the effect of leverage makes the starting capital a moot point - this curve just shows profit and loss.

Note that it underrepresents my losing trades as positions are marked to market at the end of the day. I end most days up, but I don't win every trade. Also, there is some large drawdown apparent. One of the bigger spikes was caused by my wheat trade, which made around £50 overall but was marked to market +£80 on the first day, +£90 on the second day, and -£120 on the third day or thereabouts.

This is just for the first month. In six months time I will do one based on end of day and end of week, and hope to show you all a much smoother curve. I think I've acquitted myself somewhat regarding the -997 drawdown in October. I think it makes sense to start a new curve as this is the first strategy I've consistently applied over time. It marks a departure from my intraday overtrading and a move to calmer timeframes. A good many of these positions were held overnight, and one was held over a weekend.

For more information on how I did this, check out "making money trading" - the link is in my signature - the thread teaches what the title would suggest!

Finally, thanks to ShadowNinja for his equity curve (complete with moving average) spreadsheet - I was too busy to make my own tonight! His spreadsheet can be found here. I wonder if we can get one with RSI and stochastics? (bad joke)

 

[shadowninja]

So, I do have a use, then.

Curve looking good, so far.

 

[firewalker99]

This is my equity curve since I started trading FX. It contains daily P&L for every trading day since 1 November to today (including todays pips). I started with £422 in my bucket shop account, however I have been advised by a knowledgeable trader that equity curves should always start from zero. Also, the effect of leverage makes the starting capital a moot point - this curve just shows profit and loss.

...

NIce work. I hope you are still keeping track of your winners/losers/avg win/avg loss/... you know...

 

[rathcoole_exile]

So, I do have a use, then.

just goes to show, you never know; anything can happen ! :-0

 

[lurkerlurker]

Future of the Journal

Most of my recent thoughts on the market and live calls have gone on over at TD's Making Money Trading thread. I think this journal has been very useful, and there are some real gems here posted by other members. However, I'm not too sure what to do with it now. I have a few ideas:

1. Post any trades I make in here live, with charts and commentary
2. Discuss my paper trading / backtesting of intra day Dow stuff I'm working on
3. Record trading stats, win /loss ratios, etc here with monthly equity curves

Aside from that, I'm pretty stumped. Suggestions appreciated.

 

[lurkerlurker]

2007 GBP/JPY Scrapbook

I've been backtesting the hourly pin bar system, and have made a spreadsheet of the results and captured charts of the entries and exits. If others find this useful, I'll post my backtesting for other instruments as well.

I did this by going through the hourly GBP/JPY bar by bar, looking at each to see if it was a pin signal, and if so was there confluence to justify taking it. I didn't look at bars after the date, but backtesting is difficult if you have a rough idea of what the instrument did that year.

Stops are trailed as follows. When price makes a new high (low) on an hourly bar, move the stop on a long (short) position up (down) to the low (high) of that hourly bar. The stop must be moved to profit the first time it is moved, so if price action doesn't allow a stop to be moved into profit, the stop remains at the low of the pin. When the stop is triggered the trade is closed.

Charts are marked with 2 or 3 red lines and the price. This is entry (break of the pin), stop (other side of the pin at the tail), and for profitable trades where the stop was triggered (break of last relative high / low on the hourlies).

Stats can be found in summary.png, whole scrapbook is in a pdf, charts are in chronological order, but 2 or 3 are missing. Dates in the bottom of the images. Also, the setup will be somewhere to the right of the chart, and the extreme right bar is always the one which triggered the exit stop.

Hope this is useful to some people. In summary, the hourly pin system made around 25 trades on this pair in the year, and made around 1400 pips after spread, losing two trades, with a risk reward of about 1:1 and a win ratio of 90%.

 

[lurkerlurker]

To follow later today

YMU7 Scrapbook. Covering the entire period that the contract was "top step".

Working on FW's system - thorough backtesting this time.

So far

53 trading days (June - Aug)
36 trades
644 gross pips
144 comms assuming 4 point wide spreadbet
500 net pips
9.43 Pips per trading day
13.89 Pips per trade
2 reward to risk
25 wins
11 losses
69 Win %

Looking good so far. That is just the mechanical 20/40 stops and targets. More interesting is the "second lot" option which is discretionary based on swing highs and lows. It gets more BEs, and sometimes less profit than the 40, but makes up for this when winners run.

Full stats to follow later - it has taken me around 8 hours to get this far. I've also screenshotted every trading day in a 5M chart, complete with annotations, so this will go up in a PDF along with the summary stats and full spreadsheet later today.

For now, sleep, as nothing is happening in the FX market and my eyes are going to start bleeding any time now.

 

[rathcoole_exile]

To follow later today

YMU7 Scrapbook. Covering the entire period that the contract was "top step".

Working on FW's system - thorough backtesting this time.

So far

53 trading days (June - Aug)
36 trades
644 gross pips
144 comms assuming 4 point wide spreadbet
500 net pips
9.43 Pips per trading day
13.89 Pips per trade
2 reward to risk
25 wins
11 losses
0.69 Win %

Looking good so far. That is just the mechanical 20/40 stops and targets. More interesting is the "second lot" option which is discretionary based on swing highs and lows. It gets more BEs, and sometimes less profit than the 40, but makes up for this when winners run.

Full stats to follow later - it has taken me around 8 hours to get this far. I've also screenshotted every trading day in a 5M chart, complete with annotations, so this will go up in a PDF along with the summary stats and full spreadsheet later today.

For now, sleep, as nothing is happening in the FX market and my eyes are going to start bleeding any time now.

i think you mean 69% win ratio, not 0.69% well, i hope so ....

 

[firewalker99]

For now, sleep, as nothing is happening in the FX market and my eyes are going to start bleeding any time now.

Good work, and if your eyes are starting to bleed you must be on the right track