My Forex Journal

2008-02-15T19:35:00.007+02:00

It has been a turn-around week for me. I've done as I wrote in last post. The result is that I think and do right decisions.

This week, I've done right decisions only. First trade ended up in loss though, because I wasn't at my computer and broker executed my pending order much earlier than I had set it - it was probably spread widening result due to the news that happened near my pending entry order. However I count it as right decision, with executing lesson - not to trust broker on entries and maybe set a bigger stop loss on scalp line trades.

The other two trades ended in profit. Targets were in right place, action was taken on the right time, execution was right, exiting was right. Really nothing more to say about those trades.

I haven't added any numbers nor pictures here in my journal lately. There is a reason for that. I feel like I owe too much to a person from whom I learn trading and most of the analysis is in sync with his. I don't want to be blamed on copying the analysis.

In the future, when I'm completely independent with my analysis and style, I will add those to this journal again. Until then, I'm continuing my journal at: www.forexfornoobs.com

2008-02-10T13:52:00.000+02:00

It's been a few weeks now since I last took trades. One of the last trades that failed, is still open. I'm not going to close it and let it play out in whichever direction it finally decides to set on.

I've been learning and backtesting as I said. The results are mixed. What works on one pair doesn't necessarily work on another. The conclusion I've reached is that unfortunately I can't see any way to trade 10 different pairs and be successful on all of them using a method that works on one pair. So trading several pairs on daily charts is not an option.

I've analyzed my journal. What I see, is that I constantly try to find a method that gives me more trades and takes less time to pay attention to at the same time. This has lead to taking weak trades, doing no analysis and ignoring recommendations of experienced traders. It shows two aspects of my personality - one is impatience and the other is "have to try it myself, before I take your recommendations seriously". Well, while thinking for oneself is generally good, in this case, as being newbie, I'd better follow all the recommendations and make my own rules when I'm already successful at trading Forex.

I'm going to stop fooling around. I will take recommendations seriously and follow the analysis of experienced while thinking along to be able to analyze charts the same way. I will no more worry about profit or how much trades I get. If there is no trade, there is no trade.

Today I have set up my GBPJPY chart with proper SR and scalp lines. In the evening or in the next morning I will set limit orders since I can't be around during the day because of work. I will re-establish alarms during the times I'm near my computer (including nights).

In conclusion: no ignoring recommendations, no impatience, will do analysis before week start, stick to one pair and one method as recommended and forget about monetary results and concentrate on perfecting my trading.

2008-01-29T19:54:00.000+02:00

Conclusion about 3 losing trades:

All were taken on trend analysis, not taken into account SR lines, only weekly chart as confirmation. I took trades that I thought could move after retracing on trend. Didn't pay attention to candlestick pattern, just if one candle was moving in the trend direction again after retrace.

Mistakes:

Not paying attention to patterns
Hindsight - no SR lines, no lines at all, even trend lines

Overall, I think the biggest mistake of all, that I've been doing over and over again, is not paying attention to patterns, just paying attention to overall movements. From here on, I will try and address this disability when taking trades. No trades in places I can't recognize clear pattern and CONFIRMATION candle (which may be optional, depending on the results of the statistics I'm about to make with testing platform).

2008-01-29T19:41:00.000+02:00

I've taken a little time off because of making 3 consecutive losing trades. Overall, trading has not been profitable lately, so it's a problem that really needs attention. I've taken time to gather my thoughts, reanalyze my method(s).

As it's an off-job week and I have time, I'm learning again and planning to make trades with testing platform, writing down statistics about every single trade.

The statistics should include:

Currency pair traded
Candlestick pattern
Was the trade correct
Was SL in proper place statistically
Was TP in correct place statistically
Did the trade move in the right direction initially
Risk/reward ratio
Average right to wrong ratio
Average right initially to wrong initially ratio

2008-01-20T21:46:00.001+02:00

I took 2 trades on the 17-th of January. Both resulted in losses -14,36 and -8,60. The first trade happened when I was asleep. The alarm woke me up at 3 a.m. The price didn't cross S/R line and after watching the graph for an hour I decided to set stop buy with stop loss of 50 pips and profit limit of 100 pips.

After 2 losing trades, I decided to take some time off. Didn't take any trades on Friday.

As of lately, I've come to an understanding, that I can't catch enough trades on normal hours because of work which takes most of my day leaving only 2 or 3 hours in the evenings. Waking up in the middle of night adds more stress.

Taking that all into consideration, I'm changing my time frame and add more currencies to trade. I will trade on 1 day chart and several non-exotic pairs. Although it's not advised to trade multiple pairs and change a strategy, once chosen, I really don't see any other way of doing this currently. Also this was the style that was working for me before I opened the real account.

This method means more risk as daily movements are bigger. However I try out and see what's reasonable. Risk level per trade should stay below 2%, having 3 trades at a time should be maximum.

I may start doing analysis with pictures for the pairs I plan to trade for the week in the beginning of the week. It all depends how much time it takes and if it helps me to keep track of my development or not.

2008-01-16T21:57:00.000+02:00

GBPJPY
direction ------ long
time frame ----- 4h
account after -- 1445,27
entry ---------- 211.54
SL ------------- 210.85
TP ------------- -
exit ----------- 211.87
profit --------- 6,12
date ----------- 16 Jan
risk level ----- 0,90%
risk to reward - -

Reason for:
entry - Crossing of an S/R line plus a pivot point a little later with nice momentum.

Exited earlier than was my initial TP, because of price starting to stall near my initial target.

2008-01-16T21:32:00.000+02:00

GBPJPY
direction ------ long
time frame ----- 4h
account after -- 1439,15
entry ---------- 209.36
SL ------------- 208.80
TP ------------- 209.68
profit --------- 6
date ----------- 16 Jan
risk level ----- 0,73%
risk to reward - 0,57

Reason for:
entry - Crossing of an S/R line.

This trade happened when I arrived home from work. Exited earlier due to irrational price behaviour near the targeted exit. The price reached the target later. Exit decision taken too early I think.

2008-01-16T17:42:00.000+02:00

GBPJPY
direction ------ short
time frame ----- 4h
account after -- 1433,15
entry ---------- 209.87
SL ------------- 210.72
TP ------------- 208.80
profit --------- 20,12
date ----------- 15 Jan
risk level ----- 1,13%
risk to reward - 1,26

Reason for:
entry - Crossing of an S/R line.

This trade happened at about 22:30 (GMT+2). Since I had to go to sleep I set my TP and SL in place. The trade reached the target and some more.

2008-01-08T19:06:00.000+02:00

GBPJPY
direction ------ short
time frame ----- 4h
account after -- 1413,68
entry ---------- 216.38
SL ------------- 216.98
TP ------------- 215.46
profit --------- 8,42
date ----------- 8 Jan
risk level ----- 0,28%
risk to reward - 1,37

Reason for:
entry - The price had reached a resistance forming a hammer after 4-candle trend.

This trade played out in the expected way. Hammer after a little trend near a resistance line.

2008-01-04T18:52:00.000+02:00

GBPJPY
direction ------ short
time frame ----- 4h
account after -- 1405,26
entry ---------- 214.62
SL ------------- 214.33
TP ------------- -
profit --------- 2,68
date ----------- 4. Jan
risk level ----- -
risk to reward - -

Reason for:
entry - After the Canadian dollar news the market got a push in downwards direction. Entered after a confirming movement down after retrace.

The trade turned out well. Moved my stop loss to the current highs of the retracings. Got out after a breaking of the ranging market upwards.

2008-01-04T18:43:00.000+02:00

GBPJPY
direction ------ long
time frame ----- 4h
account after -- 1402,58
entry ---------- 216,79
SL ------------- 215,64
TP ------------- -
profit --------- -10,43
date ----------- 4. Jan
risk level ----- 0,74%
risk to reward - -

Reason for:
entry - Price had broken a resistance line.

This one was a perfect entry, but there were news coming out for Canadian dollar at 13:30 GMT which was much different from expectations. Those news affected many currency pairs greatly. GBPJPY moved about 160 pips in 5 minutes which is a very strong movement.

2008-01-04T07:33:00.000+02:00

GBPJPY
direction ------ short
time frame ----- 4h
account after -- 1413,11
entry ---------- 215.36
SL ------------- 216.07
TP ------------- 214.70
profit --------- -6,48
date ----------- 3. Jan
risk level ----- 0,46%
risk to reward - 0,93

Reason for:
entry - The price had been in a strong general downtrend. After 1 positive candle, a hammer had formed quite near resistance.

The stop loss was taken out. The price had reached my goal afterwards and gone 2 pips further. However this trade risk/reward was not good.

MISTAKES TO AVOID IN THE FUTURE:
1) SL should be above the resistance.
2) follow ONLY the strategy and not do experiments with real money

2007-12-24T19:31:00.001+02:00

I will resume trading in January. I will trade with 0,5% risk level to preserve my capital as long as possible during my learning period. I will continue with the strategy that I've been practicing. It's possible that I change my entry rules to enter after the first retrace after breaking a support/resistance or pivot point and observe the momentum on a smaller time frame.

At the same time I will continue to practice the Art of War on a demo account as it fascinates me with it's logical and natural approach to the markets.

2007-12-16T19:55:00.001+02:00

I can almost touch the PROGRESS! Did some backtesting today with new mentality and approach. Results are great. However patience is a virtue (and one of the qualities needed to be mastered by a trader alike) so I'm not going to try it alive before my training is complete and I'm ready for it. It's a struggle of life and death out there, which is not to be taken carelessly.

2007-12-16T15:54:00.000+02:00

I've been observing for the past week, not even backtesting because there is something else than just knowledge and experience. Trading for profit can be looked upon as if going to war - proper preparation is required knowledge-wise as well as mentally. I've been imbuing myself with wisdom from a mentor. Sinking the mentality in takes some time. Currently I'm reading The Art of War, by Sun Tzu - a book written 2500 years ago, that has impact on todays trading warfare, if you will.

One can't rely on analysis of the past only when trading. Unbiased ongoing analysis must be done with ongoing trade as well and that requires sharp mind, discipline and... bah, better read the Art of War ;)

The Art of War

2007-12-07T17:44:00.000+02:00

Today I took 3 losing trades. After that I decided I won't trade more for the day. I've overlooked the numbers by now and the problem is clearly not having backtested the strategy enough and making simple mistakes in decision that cost me money as well as risk to reward ratio that should be at least 1 or better depending on right to wrong ratio, which has lead to average losses being greater than average gains.

Further plans:

develop and backtest the strategy on the weekend
choose one certain currency pair to trade and ignore the others until that pair is producing constant profit in at least on 50 trades

Strategy planning:

risk to reward at least 1,5:1 (depending on right to wrong ratio)
4h charts
SL risk level of 1%
right to wrong ratio at least 50% or better

Looking forward to continue with the journal as soon as I've got a strategy that corresponds to the points listed above.

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2007-12-07T16:10:00.000+02:00

GBPJPY
time frame ----- 4h
account after -- 1419,59
entry ---------- 225.58
SL ------------- 225.85
TP ------------- 225.00
profit --------- -36,36
date ----------- 7. Dec
risk level ----- 2,5%
risk to reward - 2,15

Reason for:
entry - price reaching resistance - mistake, predicting will not be a successful strategy
stop loss - too far, because there was an instant market move after entering - mistake
trade profit - psychological level this time, however too far for this scalp

This was the third trade. Probably I felt a little angry on unconscious level although I asked myself before entering this trade, if this is my knowledge or emotions making the current trade. I was wrong. Firstly, it's not my strategy to capitalize on bounces but breakthroughs. The momentum against me was too risky - very bullish looking candle with no signs of reversal whatsoever. Again the stop loss was not planned correctly and I changed it after entering the trade.

MISTAKES TO AVOID IN THE FUTURE:
1) no more trading for the day after 2 losing trades
2) follow ONLY the strategy and not do experiments with real money
3) profit and loss targets must have logical reasons
4) keep an eye on momentum and candle size - no trading against momentum ever

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2007-12-07T16:04:00.000+02:00

EURUSD
time frame ----- 4h
account after -- 1455,95
entry ---------- 1.4611
SL ------------- 1.4627
TP ------------- 1.4587
profit --------- -32
date ----------- 7. Dec
risk level ----- 2,13%
risk to reward - 1,5

Reason for:
entry - breaking of a resistance and pivot point
stop loss - 16 pips (no proper reason - mistake)
trade profit - calculated from SL - mistake, has to be a logical reason for exiting

This trade was made mostly from seeing a good setup. No former planning was made. Also, the momentum wasn't on my side and I had no idea, how strong the momentum was, because I hadn't been observing this pair.

MISTAKES TO AVOID IN THE FUTURE:
1) no trading with a pair I hadn't been observing
2) no entering into a trade I hadn't planned in front
3) profit and loss targets must have logical reasons

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2007-12-07T15:47:00.000+02:00

GBPJPY
time frame ----- 4h
account after -- 1487,95
entry ---------- 225.30
SL ------------- 225.55
TP ------------- 224.90
profit --------- -15,72
date ----------- 7. Dec
risk level ----- 1,05%
risk to reward - 1,60

Reason for:
entry - breaking of a resistance and pivot point somewhat further up
stop loss - a little below resistance - mistake
trade profit - below psychological price (225.00) and somewhat more - mistake

This trade didn't go the way that I had planned. Although the price crossed the 225 level indeed, it missed my TP level by 4 pips. I shouldn't have entered after the pivot point because the last resistance was too far up and I hadn't planned that trade in front but rather thought that I saw a good opportunity. I guess the emotional thinking took over to make 2 bad mistakes (bad entry and bad stop loss and profit levels). Have to practice discipline and not make decisions that haven't been analyzed long before the actual trade happens...

MISTAKES TO AVOID IN THE FUTURE:
1) not to enter unplanned trades
2) not to enter too close to a psychological level
3) no giving in on TP and SL targets

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2007-12-06T22:21:00.000+02:00

AUDJPY
time frame ----- 4h
account after -- 1503,67
entry ---------- 97.30
SL ------------- 97.10
TP ------------- 97.60
profit --------- +26,93
date ----------- 6. Dec
risk level ----- 1,22%
risk to reward - 1,50

Reason for:
entry - Breaking of a resistance and pivot point as well
stop loss - just under the resistance
trade profit - a little below the resistance that the price had had a few days ago, no other obstacles on the way

This trade went as planned.

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2007-12-02T11:18:00.000+02:00

EURUSD
time frame ----- 4h
account after -- 1476,74
entry ---------- 1.4625
SL ------------- 1.4603
TP ------------- 1.4650 & 1.4680
profit --------- +20,8
date ----------- 6. Dec
risk level ----- 1,89%
risk to reward - 1,14

Reason for:
entry - Breaking of a resistance at 1.4615
stop loss - 1.4604 was the lowest point 5 candles back
trade profit - just below a pivot point that was at 1.4652
trade profit 2 - previous movement had great momentum and I expected that price could move more

This trade went as planned. The profit target was hit with the first part and price started to fall back just after hitting 1.4652. After taking the profit from the first part, I changed the SL level on the second part to 1 pip profit, which eventually got stopped out.

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