Seeking consistency

[Leia]

I'm hoping that by forcing myself to keep a record of my trades (set up, entry, exit and targets) I might learn some discipline.

To date my record keeping has only been a cursory glance at my account balances

My trading objective is to identify opportunities for what I would describe as 'medium term' swing trades, by which I mean I am happy to hold an open position or unfulfilled order overnight and over a weekend.

I have been looking mostly at forex dollar pairs (gpb, eur, aud, nzd, cad, chf, and jpy) and eurgpb, eurjpy as well as gold, silver, ftse, dax & SnP.

I am looking at the 4 hourly time-frame for trend direction, using a 20ema and 50sma, I also look at the daily time-frame for its trend but contradiction between the two do not necessarily mean I don't take a trade. I also note the previous week and monthly time-frame swing high and low points and if the last [weekly or monthly] candle printed was an 'obvious' candle stick formation.

If I have a 4 hour trend (an uptrend would be where price is trading at a higher level than the 20ema, which is placed above the 50sma) I would look out for price pull backs to the 20, or between the 20 and 50) to levels which have recently acted as Support / Resistance on the 4 hourly, or lower time-frames. I then look for a candle-stick formation on the 4 hourly or lower time-frame that indicates strong rejection of the lower price level (a hammer or 'pin' being the most obvious example) to trigger me into the [4 hour] trend.

I make sure that I know when the major news releases are, as these often produce trade entries. I also am a member of the FX500Club and read what Christian Tegllund Blaabjerg writes each day in his 'wake up call' at Saxo Bank.

I have suffered many stop out's to date by playing such 'hammer' candles with an order entry at 1 pip above their high and a stop 1 pip below their low, so have recently changed my approach to putting the stop 1 pip below the last 4 hourly swing low. This often means quite large stops in terms of pips, much larger than most traders would accept. I only have a small account and I stake at minimum value per pip and will do so until I can increase my stake size without exceeding 5% of my account balance on one trade.

I hope that my approach makes sense to anyone that takes the time to read it. I will post some charts in time to hopefully clarify. It is said that a picture tells a thousand words.

 

[Leia]

Aud usd

Here's my AUD USD 4 hour chart.

The 20ema is the dashed red trend line, which is above the blue dashed 50 sma trend line. The solid red is the daily 20sma, which is below both of the 4 hourly trend lines and also moving upwards.

Price has pulled back to the 4 hourly 50 and the last two candles are bullish (hammers)

The last swing high printed higher than its predecessor (only by 15 pips), but the last swing low was definitely a lower low, and virtually gave back all of the months previous gains.

My concerns at the moment with this chart are:
has the 'cross' indicated the start of a new 4 hourly trend, or is 0.92 50 going to see a double top?
price has climbed a long way in a very short period of time (the lines @ 0.90 80 and 0.91 06 are the 50% and 61.8% fib levels of the last upward move)

So not looking like a set up to me just yet. Christian says it may fall back to 0.90 82 and struggle to surpass 0.92

I'll keep an eye on it though, for a 'deeper' test and rejection

Should there be an entry, potential upside, if the channel I have holds for April & May is the years high at .93 2 in January and then November 09's high at .94

 

[Leia]

Dax

4 Hour uptrend in place since 17th Feb

Now 'correcting' into the 20 / 50 moving averages area and (solid light blue line) recent support / resistance level and (dashed light blue lines) 50% and 61% fib levels of last upward move

Looks like this afternoons US session (next two or three 4 hour and lower time-frame bars) have the potential to set up for a long position trade

The solid dark blue levels are (thin) daily high and low (yesterday); (medium) weekly high and low; and (thick) monthly high and low. The February monthly low is off bottom of the scale of the current 4 hour chart screen shot

Christian has a 'buy on dips' stance. He quotes cash levels though and my chart is futures so the actual levels are of less significance to me than the direction he's looking at (also long)

 

[Leia]

Gpb usd

The 4 hr has crossed to the long side, however the very strong daily down trend prevents me from wanting to look for long trades.

A short set up (even if it only goes down as far as the 4hourly 20ma) would be of interest, but I am more than happy to leave cable alone for now:

Christian, however, is bullish from 1.5050 for a push to 1.5125 (which means I've missed it)

 

[Leia]

Usd jpy

4hr up trend established, however upside potential limited by this years high (very fat light blue line)

If I could get in long around 91.90 to 92.20, I would want to be at break-even if price touched 93.00, in case of a strong bear reaction to an attempt at the year high

Christian states that we may have seen temp top at 93.58. Risk we retrace to 92.85 before next leg higher.

If he's right, I won't see my potential long area anyway

 

[Leia]

Eur gbp

4 hr cross to short

a pull back to between 20 & 50 (red & blue dashed trend lines) would also be between 50% and 61.8% fib retracement )light blue dashed lines) of previous down move

watching 1hr and 15m time-frame for a strong indication of a rejection of higher prices

(Saxo don't comment on this pair)

 

[Leia]

Set up (missed)

potential to set up for a long position trade

Here's an example of the kind of thing I am looking for to enter the 4 hour upward trend, by using the lower time-frames.

A 'hammer' candle-stick was printed on the 15 minute time-frame making a double bottom with the candle marking the bottom of the initial fall (that may have been the US open, or some major US news release). The level marked is about 10 pips higher than my support (solid light blue line) at 6105, so the low point could still be lower. I have therefore put my stop at 6100 to allow for this. I have also probably missed the entry altogether as I was busy posting charts here in my attempt to explain what I am looking for, rather than monitoring the Dax situation. I also didn't anticipate seeing a potential turning point for a few more hours. Anyway, I have set an order in case the price dips again and allows an entry

 

[Leia]

Re: Eur gbp

watching 1hr and 15m time-frame for a strong indication of a rejection of higher prices

Here is a 1 hour shooting star candle, providing a potential set up to get in short

Lets see what happens (entry @ last weeks low: 0.89 18; stop @ 0.89 50 which is 50% fib just beyond the tip of the candle wick and target @ 0.87 50 being the last significant 4 hourly support level)

 

[Lord Flasheart]

I understand why you do this. I post all my trades on the live forex calls and set up thread. You dont seem to mention R/R in any of your posts.That and money management are the most important things IMHO. Learn them and you will learn to trade

 

[pboyles]

I understand why you do this. I post all my trades on the live forex calls and set up thread. You dont seem to mention R/R in any of your posts.That and money management are the most important things IMHO. Learn them and you will learn to trade

Actually I just started to do the same thing yesterday on a free blog. My hope is that if I post my trades then I will be more inclined to follow my own rules. Do you find that it has helped in that respect?

 

[Leia]

Hello there

Many thanks for your posts.

You are right, I haven't really tightened up my thoughts on Risk vs Reward as yet, I understand that if you only take a trade where the potential reward is twice the initial risk, then providing you achieve 1 winner for every three trades you will still break even. However my feelings are that you can't be certain that you will hit your target (for example you may get a strong reversal signal at your reward = risk level, ie 1:1), so you exit and take your profit even though you haven't reached anything like your target. Its still a good (winning) trade. You can be certain that you will hit your stop levels though (unless you move them) I'll keep thinking about this aspect of my trading....

With regard to the point about: has posting up trades helped me follow my rules? Its really too early to say, I only started this yesterday.

To update:
I cancelled my Dax long posted yesterday (off 15 minute hammer / double bottom) as price didn't come back down to the entry level and has subsequently taken out new highs. I also received a FX500club notification for a potential ftse short, which being contrary to my intended trade direction, made me happier for missing my long entry

I have moved my stop to break even on my eurgbp short and am delighted that my 1H set-up entry hammer turned into a 4H hammer too and price is trading lower today.

I'm not to sure about entering new trades this pm, as its a four day bank holiday weekend and NFP tomorrow

 

[Leia]

gbp usd

I have taken a set up against the daily cable down trend

This is because my 4 hourly trend is up, I have identified the daily 20ema as a support level and the 1 hour time-frame has just printed a bullish engulfing candlestick at the bottom (hopefully) of a downward retrace to the 61.8% 4 hourly fib level

I have taken screen shots showing the daily (arrow indicates recent rejection of the 20ema); 4 hourly (trend, 20ema above 50sma, both slanting upwards, retrace to 61.8% level of last up move) and 1 hourly setup trigger (bullish engulfing / outside) bar. I have also attached a 15 time-frame chart which I took as my first entry point earlier today (hammer, order to enter at break of high), but I cancelled my order when the lower price was taken out

Stop is 1.5120 (risk = 60pips) and Target 1.5380 (reward = 260pips)

Lets see what happens

 

[Leia]

Re: gbp usd daily chart

daily chart - support found on 20 ema?

 

[Leia]

Re: gbp usd

1 hour chart bullish candle (outside bar / engulfing bar)

 

[Leia]

Re: gbp usd

4 hour
red dashed (20) moving average above blue dashed (50) ma, both sloping upward. Also above red solid (daily 20)
Price retraced to 61.8% fib of last up move (pale blue dotted lines are the 50% and 61.8% fib levels)
objective is to hold with 4 hourly up trend to test last month (March) highs

 

[Leia]

Re: gbp usd

Initial (later invalidated) set up
15 min time-frame, hammer candle @ 4 hour 50% fib level

 

[Leia]

Indices Tuesday April 6th

The US open looks to be pulling prices lower after Easter

I will keep an eye on S&P for a pullback to the 4 hr 20ma, or to between the 4 hr 20 and 50 and then a signal on a lower timeframe to get me into a long position (the daily and 4 hourly trends are very strongly bullish)

 

[Leia]

Re: Eur gbp - update

I have just moved my stop to 0.88 75, locking in 40 pips profits at roughly 1:1 risk / reward of the opening position, because its just above what I perceive to be the current resistance level at 88.60, prior to the current push lower (purple line)

Here is a 1 hour shooting star candle, providing a potential set up to get in short

Lets see what happens (entry @ last weeks low: 0.89 18; stop @ 0.89 50 which is 50% fib just beyond the tip of the candle wick and target @ 0.87 50 being the last significant 4 hourly support level)

 

[The Artist]

Re: Eur gbp - update

I have just moved my stop to 0.88 75, locking in 40 pips profits at roughly 1:1 risk / reward of the opening position, because its just above what I perceive to be the current resistance level at 88.60, prior to the current push lower (purple line)

Hey,

Do you move your stops to 1:1 on a discretionary basis or is it a rule to use trailing stops with initial stop distance as increment?

 

[Leia]

Re: gbp usd - update

The news @ 7pm UK time has been kind to this trade and I have now moved my stop up to a break even position.

Stop is 1.5120 (risk = 60pips) and Target 1.5380 (reward = 260pips)