Simple Trading Journal based on Volume Price Analysis - Burning Both Ends

NVP

Legendary member
37,750 2,096
Greetings fellow traders.

I have been a long term investor in the UK markets for over 12 years with moderate success.

Over that period I have read dozens of books, each one giving me a little bit more knowledge and accuracy with my investing, however my time has turned to a more shorter timeframe with trading as well.

Since lockdown I read 2 of the most important books so far. 'Reminiscence of a Stock operator' by Edwin Lefèvre, and 'The complete guide to volume price analysis' by Anna Coulling. They have had profound effect on my results and the way I now read the markets. The essence is simple, its how to read market volume effectively.

I first just want to make it clear that I recognize we have been in a roaring bull market since the April 2020, so I am acutely aware of how my viewpoint my be skewed based on the underlying strength and recovery of the UK markets.

The results that I am seeing after 6 months of solid research has been really eye opening and it has pushed me to publicly publish my trading journal with a new spread betting account. I have always treated the markets as a business and taking it very seriously, so recording and logging notes is part and parcel of my trading, so I thought why not create a trading journal and encourage discussion and education based on that.

This is a part time commitment for me but I will endeavor to update the blog at least once a week. If your interested please drop by at www.burning-both-ends.com

Regards
Sean
I met Anna at a forex expo a few years back and we talked about relative strength .....she’s pretty switched on and her husband is a smart cookie as well .....at the time they were pushing an indicator called the Hawkeye that integrates volume into the mix ....have you used it ?

N
 

NVP

Legendary member
37,750 2,096
I think people could easily accuse me of simplifying things too much but in general if a share is trending up I'm inclined to assume it's going to continue until it doesn't. The chart below is HSBC. The red vertical line is Jan 20 just before the pandemic hit share prices. Banks have been having a hard time for years before that anyway so it was already trending down from it's high on this chart of just under 800. Now that we know that loan write downs haven't been as bad as expected you would think there would be a chance that it would go back to the pre covid level of 580? In any event all the time the price is going up and it's above the 100 sma which is sloping up then I'll assume it's going to keep going... until it doesn't! I'm up just under £900 at the moment and £30 a point long over two trades so if it does keep going then I'll be banking a nice profit. If it doesn't then I'll just take whatever profit it does give me and move on to another share. Not bad for a couple of hundred quid initial risk.

I've done a lot of coding for automated trading systems on forex and the only systems that really make any money are the long term trend following systems that let the trades run as long as possible. Anything that takes profit for any other reason tends to not have wins big enough to cover the losses. I will say though that scalping 1 minute charts is the only other way I know to be consistently profitable as I have a friend who does it. I'm sure there are lots of people who can make money on 15 min or hourly charts jumping in and out but I don't know anyone who can and the ones who claim to be able to do it generally don't stick around very long.

That's just my view on things though, I suppose long term trend following just makes sense in my head but everyone has to do what makes sense to them. View attachment 300120

Some interesting points .....and it focuses the mind on exit strategies being more important than entries in many ways ......most trading systems operate at 50% at best regarding win rates .....and trend followers woulda kill for such rates ....read covels work .....their edge is riding the big drawdowns and running the big winners all the way ......
 
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NVP

Legendary member
37,750 2,096
I have also heard that scalping forex using 1 min charts "can" be profitable and in the case I knew of they were using DeMark as a basis to determine entry. If the market did not immediately go in the direction of the trade taken they were out. The success rate was only around 20% but it was highly profitable on the trades that went into profit. Most people would be unable to handle the mindset to accept 80% losing trades which is why few people can do it.

In the case of your friend, I am curious to know what percent of trades are profitable ?

Scalping requires a high % win rate as profits are taken on low fixed levels ......anything that runs trades isn’t really pure scalping .....but them maybe I’m wrong ?

N
 

NVP

Legendary member
37,750 2,096
He trades dax in the morning and nasdaq in the afternoon and he's very fussy with entries. He has a certain pattern that he waits for and it it doesn't happen he leaves it alone. He looks for momentum so if he takes a trade and it immediately goes against him he will just take a 3 or 4 point loss. He doesn't take many losers though. I don't know the percentage. He will take profit quite quickly too, sometimes only 5 points. If the situation is right he will let it run a bit longer, say 10 to 20 but he's happy sitting there pinching 5 pointers all day. He takes maybe 8 to 10 trades a session, so 16 or 20 a day and he quite often banks 50 to 100 points a day.
Sounds very logical......will require huge discipline and a strong bladder to sit it out .....he is trading in the zone and I know a lot of traders who do this.......I have spent years sleciakising in scalping forex with some cast iron rules but also a strong blend of discretionary in the mix .....perhaps too much in truth...but that’s me

his edge is complete specialisation in a particular market and trading style....that counts for a lot .....

N
 
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Trader333

Moderator
8,652 980
Scalping requires a high % win rate as profits are taken on low fixed levels ......anything that runs trades isn’t really pure scalping .....but them maybe I’m wrong ?

N
I agree and it was the reference to using 1 min charts that I was referring to.
 
 
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