My journal - Spread-betting 7 FX pairs

[HURRY]

Thanks very much for taking the time to reply, awe.

IG are one of the firms i'm using so good to know you recommend them.

i only want to risk a max of 2% of my pot per trade so guess i may have to look for a spreadbet firm that can offer smaller trade size (i think ig is min 50p per trade) so my stop can be wider than 40 pips..

will defo take a look at gekko - thanks for the heads up

good luck

Hurry

 

[meanreversion]

Please never hurry to start trading .. work on a plan first, test it thoroughly before commiting your hard earned money to the market.

Having mentioned that Van Tharp book before, I started re-reading it last night after not having touched it for a year... it really is a superb book, good for all levels of trader.

 

[HURRY]

Hi meanreversion

its actually my last name, but i do understand not to hurry into trading. i have had my fingers burned before and like to think i have learned my lesson there...

Nevertheless, your advice is much appreciated. are you refering to 'trade your way to financial freedom' by Van Tharp - defo worth a read?? does he talk about all styles of trading - can you relate to FX??

thanks again for your help and good luck

Hurry

 

[awe]

Having mentioned that Van Tharp book before, I started re-reading it last night after not having touched it for a year... it really is a superb book, good for all levels of trader.

Guess what I just bought!

 

[meanreversion]

It's a fairly comprehensive book.. most of the examples cited tend to be about stocks, but that's not that important. It gives you an overall approach to trading. For example, he talks a lot about position sizing and exits, and their importance (he even devises a random entry system that is profitable).

Most people focus exclusively on entries and really don't know what to do once in the trade (or even how much they should bet per trade). As such, the main failing is running losers and cutting winners, the exact opposite of what you should be doing ..also, betting too much per trade and so on.

 

[meanreversion]

The other good one is 'Trading in the Zone' by Mark Douglas. He comes up with 5 rules to remember, no. 1 is "anything can happen". This one's my favourite --- always bear this in mind to prevent overconfidence, or even excessive pessimism. We simply do not know what is going to happen next. I'd take it one step further and extrapolate to mean that profit targets are pointless (I trade with trailing stops) BUT I am sure there are many people out there who trade quite happily with profit targets, it's just my opinion.

 

[HURRY]

i dont want to detract from the main purpose of awe's journal here, so thanks v much for all your advice guys.

hopefully see you around on T2W somewhere else

good luck

Hurry

 

[meanreversion]

Sorry, I've hijacked this journal .. didn't mean to, I'll go away now ..

 

[megamuel]

Good stuff Awe. Thanks for the vids. Always good to see what other people are doing! Just out of interest, what are your other business interests?

Sam.

 

[awe]

Thanks for your contributions and recommendations, meanreversion. They've actually kept some life in this thread whilst I've been either waiting to enter trades or having been distracted by other things so I should be thanking you for that!

No prob, HURRY! I hope you'll check back in here and let me know how you're getting on! If you have any questions please feel free to post or PM me.

I have a feeling I'll have read very similar books to the Van Tharp one I just bought, and had I read some more reviews and blurbs I probably wouldn't have bought it.

I've read and re-read about a dozen texts and books about trading and FX over the past couple of years. The facts remain the same, only the opinions and trading styles of the authors change.

What I think I've learned, without getting too philosophical, is that, like a lot of things, there is so much more to trading than what can be taught. I'll give an analogy; I am not Picasso or Van Gogh or even Banksy. But I could teach someone to paint. Here is a canvas on an easel, here is a paint-brush, here is a palette with paint on. Hold the palette with one hand and the paint-brush with the other. Now dip the brush in the paint and drag the brush with paint on across the canvas. You can now paint.

That's as basic, mechanical and factual a process of how to paint that I could describe. Now take it a step further; there are different colour paints, different size brushes, different materials to paint on. There are also different styles of actually applying the paint to the canvas, this is your style. You may, after time, be able to create magnificent works of art that people admire. You may see such works of art created by others and give up because you can't achieve the same greatness immediately or as quickly as you would like to.

You may also persevere and although never being as revered as Van Gogh et al, you are able to produce fine works of your own that you are happy with and that others will want to buy from you.

I could continue elaborating but hopefully I've made the point.

I think I'm at a stage now where I need to start developing my own style, having learnt how to trade in its' most basic sense and now having started to develop a style that I am happy with. There is no single way to trade, there is only my way/your way to trade.

 

[meanreversion]

You flatter trading by comparing it to something as artistic and creative as painting. "Trading" can in fact be taught fairly quickly, read "Way of the Turtle" by Curtis Faith.

Trading, when done well, should be boring and mechanical. The creativity comes in designing your system, but I strongly favour a mechanical approach, which (once in action) leaves no room for artistry.

 

[meanreversion]

And whilst you are correct in that there are a myriad of trading styles and methods, I would contend that, irrespective of style, certain tenets should be observed, viz. the trend is your friend, and cut losers, run winners. There are no boundaries in art, compare a Constable to Duchamp's urinal.

 

[awe]

I think my analogy is fitting. There are many ways to create art, there are many ways to trade, e.g. using different indicators, strategies, etc. However the ultimate goal is the same, profit.

If trading were as dry and mechanical as you state then there wouldn't be a market at all as sooner or later everyone would work out the 'right' way to trade.

I think you need to be able to adapt and learn. Let your trading evolve.

If this is a staunch difference of opinion we're experiencing here then I'd really appreciate it if were kept off the journal as I'm absolutely going to trade 'my' way regardless and didn't start this journal in a quest for enlightenment, just to record my trades and my thoughts.

Of course I welcome contributions from yourself and others but I'd rather not turn this thread into a debate.

 

[awe]

Good stuff Awe. Thanks for the vids. Always good to see what other people are doing! Just out of interest, what are your other business interests?

Sam.

Hi Sam,

Thanks for dropping by! Glad you like the journal. I've started to read yours and should hopefully be through it soon. Time permitting...

My other business interests are; I run a small mortgage and insurance brokerage, estate and lettings agency and I'm also a landlord and look after my own properties.

All of that is very demanding and as trading makes up a tiny percentage of my income I have to prioritise my time accordingly. I really am trying though to make sure I devote a couple of hours a day at least to trading as if I want that percentage of total income provided by trading to increase then it's necessary.

Good luck with your trading!

 

[meanreversion]

Sorry Awe, was not trying to be disruptive, please continue ..

 

[findlay234]

In my inexperience (trading a year or so) I like the artistry analogy.

I think you could train people to be good enough at painting to make a living, just need to find out their way of doing it. Same as you can teach most people to be a surgeon, you could teach/provide learning for some to even be quite good but only a very few will have the innate understanding of the human body and the self awarness of their own skills and reflexes to become a truly world class surgeon.

You could teach a lot of people the science behind rockets, many would even be able to make a living on it (thousands do) but very few would ever be as intuitively aware of the workings of rocketry than von Braun.

You can train people up to run a business, most would probably learn it quite well and if the had a set mechanical formula to follow (turtles) they would probably do ok. There would be a lot that were able to make a living running a small business but there are very few that have that innate business acumen in order to rapidly grow their business to Virgin proportions...

I dont disagree that with lengthy training and experience you cant gain that innate ability but again that comes with time. If mechnical systems were the way to become soros or buffet then everyone would be doing it.

All IMHO...

 

[awe]

Thanks for your posting your thoughts, findlay234!

Everyone has their own opinions and way of looking at things. When you really think about it, reality only exists as perception and things can be (and are) perceived differently by different people.

I once heard a story that I think the Spanish had sailed their fleet to somewhere or other to invade and conquer whatever land it was. The indigenous population when they saw boats on the horizon, having never seen boats before, believed they were seeing dragons. Heaven knows how this story got passed down and even if it's true but it affirms what I mean by perception.

Anyway, happy learning and happy trading!

 

[megamuel]

Hi Sam,

Thanks for dropping by! Glad you like the journal. I've started to read yours and should hopefully be through it soon. Time permitting...

My other business interests are; I run a small mortgage and insurance brokerage, estate and lettings agency and I'm also a landlord and look after my own properties.

All of that is very demanding and as trading makes up a tiny percentage of my income I have to prioritise my time accordingly. I really am trying though to make sure I devote a couple of hours a day at least to trading as if I want that percentage of total income provided by trading to increase then it's necessary.

Good luck with your trading!

Interesting... Wouldn't mind getting into property myself one day. I'm afraid you might be a bit disappointed with my journal as it came to an end, well it never really got going in fact! But I'm thinking of giving it another go soon as I want to start trading again. In the meantime I'll be following your thread with interest!

Sam.

 

[wellray]

Hi Awe, like the journal and I've similar goals to yourself. If I understand correctly you use technical analysis for the setup and exits. I would like to use a similar method with MA's, S/R and trend lines. Your 1st trade was interesting. rather than trying to find the bottom of a pullback, you opened on a resistance breakout, catching the momentum, very nice.
Your 2nd trade GBP/USD going short didn't look great to me. The trend is up,with all 3 ma's pointing up and it's just broken through resistance. You go counter trend!
3rd trade USD/JPY, perfect. A 6 day downtrend with a pullback which confirms with a long red candle and then you pull the trigger - nice again.
Would appreciate some more Tech analysis and interpretation of the calendar pre-trade
btw I use IG for spreadbetting, but looking at the charts for your trades they don't match! I mean the candles, the MA's,etc. I'm looking at Forex spot - what are you using for charts?

Thanks

 

[awe]

Hi Awe, like the journal and I've similar goals to yourself. If I understand correctly you use technical analysis for the setup and exits. I would like to use a similar method with MA's, S/R and trend lines. Your 1st trade was interesting. rather than trying to find the bottom of a pullback, you opened on a resistance breakout, catching the momentum, very nice.
Your 2nd trade GBP/USD going short didn't look great to me. The trend is up,with all 3 ma's pointing up and it's just broken through resistance. You go counter trend!
3rd trade USD/JPY, perfect. A 6 day downtrend with a pullback which confirms with a long red candle and then you pull the trigger - nice again.
Would appreciate some more Tech analysis and interpretation of the calendar pre-trade
btw I use IG for spreadbetting, but looking at the charts for your trades they don't match! I mean the candles, the MA's,etc. I'm looking at Forex spot - what are you using for charts?

Thanks

Hi, wellray!

Welcome to the forum and thanks for taking the time to post here. It's nice to know you've really studied my trades and I appreciate your feedback.

As they say hindsight is 20/20 and looking back on that 2nd trade of GBPUSD short from a week on, it is a little embarassing. This is probably a prime example of trying to second-guess the market. Rather than trade with the trend after a confirmed breakout and with all my indicators pointing up *I felt sure* that this pair was going to bounce off the resistance (after widening the channel slightly) and drop like a stone. I was too hasty. Perhaps because of it being Friday and thinking that if I was going to get a trade on I needed to do it fast.

Here's a grab of the cable daily showing the previus support and resistance lines I'd drawn marking out the channel boundaries...

Here's a grab of the hourly, I've squashed it a bit to get all the lines in...

The blue vertical line rund through the candle I got in on...
The black lines are still present marking out the channel...
The red lines are where I got in (middle), my stop (top) and my limit (bottom)...

It doesn't show it so well being a squashed chart and the blue line runs through it, but the candle where my order was filled retraced into the channel... But it didn't close inside, it was merely testing the previous resistance and it had become support! Had I been watching the charts at this point I would have closed the trade after this candle closed. But I wasn't, so I didn't and I was stopped out for -1%.

I hear ya re more analysis and interpretation of the calendar pre-trading, I don't mind doing that but I am a bit worried about sending people off to sleep with my droning on for minutes on end... ZZZzzzz

I'm currently trading with Alpari so I use the version of MT4 supplied by them, if I get chance I'll log in to IG and set-up a chart and see if I spot any anomalies. Anyone else have this problem?