08 May 2009
07 April 2009
April 7th Commentary
It seems utilizing the H4 SHI for direction and making sure that the LRC 7 agrees with the direction seems to be working well for the past 2 days. There were some crazy market conditions on a couple of pairs, and knock on wood I was not in them. Of the past 2 trading days, I placed 4 orders, 3 were triggered and they all ended up as winners.
Its important to note that these types of trades are not set and forget. After I make my initial judgement at 5pm EST, I take another look to confirm my T/P and S/L points after 00:00 GMT (8PM EDT). This gives me the opportunity to tighten up my T/P based on the latest Pivots. The next step is before 7am EST, if I see a triggered trade is in profit, but not yet hit my T/P, I re-asses the trade and usually reset my TP to the overnight hi or low. Doing this too late in the morning may not work out correctly so pre 7am is probably the best bet.
I am going to update my system post to reflect the new changes.
Its important to note that these types of trades are not set and forget. After I make my initial judgement at 5pm EST, I take another look to confirm my T/P and S/L points after 00:00 GMT (8PM EDT). This gives me the opportunity to tighten up my T/P based on the latest Pivots. The next step is before 7am EST, if I see a triggered trade is in profit, but not yet hit my T/P, I re-asses the trade and usually reset my TP to the overnight hi or low. Doing this too late in the morning may not work out correctly so pre 7am is probably the best bet.
I am going to update my system post to reflect the new changes.
02 April 2009
Update today
Of the April 1st trades, 3 of the trades opened and all three failed. On top of that I was not correctly watching my lot size, so of course I lost more money than expected. Unfortunately this means my account balance does not show account growth based on my 4 wins and 3 losses so far this week, which equates to +178 pips.
In addition, I have decided that I will be refining the way I determine the direction of my trade. I will be moving to the h4 time frame, and also utilizing a 7 period LRC. The trades taken last night were only taken if the LRC and the H4 Shi were in agreement. The reason for this change is that I do not care what the overall trend will be for the next 20 candles, I care about what will happen overnight.
As for my new directional filter, last night was not necessarily a good indicator, as the 6 currencies I follow all trended in the direction of the Shi.
In addition, I have decided that I will be refining the way I determine the direction of my trade. I will be moving to the h4 time frame, and also utilizing a 7 period LRC. The trades taken last night were only taken if the LRC and the H4 Shi were in agreement. The reason for this change is that I do not care what the overall trend will be for the next 20 candles, I care about what will happen overnight.
As for my new directional filter, last night was not necessarily a good indicator, as the 6 currencies I follow all trended in the direction of the Shi.
31 March 2009
Trades for 1-April Overnights
I am not sure if I will continue this or not, but lets go ahead and post my trades.
Here are my trades that I will make tonight. I guess the GMT day will be April 01.
Pair - Stop type - Entry - S/L - T/P
EU Sell 1.3220 1.3308 1.3120
GU sell 1.4275 1.4385 1.4115
GJ Buy 142.35 141.20 143.48
EJ Buy 131.95 130.59 133.50
Here are my trades that I will make tonight. I guess the GMT day will be April 01.
Pair - Stop type - Entry - S/L - T/P
EU Sell 1.3220 1.3308 1.3120
GU sell 1.4275 1.4385 1.4115
GJ Buy 142.35 141.20 143.48
EJ Buy 131.95 130.59 133.50
30 March 2009
The Point of an Edge
I was listening to an interview with Mark Douglas and here is the main points that I gathered from it:
- Outcome of trades are random.
- Indicators may look the same as they did in the past, but these are just mathematically formulas.
- Markets are moved by people, not these formulas.
- The point of our system is to give an edge, meaning we will trade more winners than losers.
- We have to accept loss as part of the system.
- Paper trading results versus real trading results shows us what we need to learn about ourselves.
27 March 2009
My Current Overnight System
I will try to define and describe my overnight system. Its loosely based on the triple screen system and the teaching of Mike Parker. Please note that this system is currently being built and I will be making changes as time goes on. Also, what I have layed out here is a roadmap, and not the street signs. This is not a signal based system, instead its more about trying to judge where the market is headed during the overnights and placing strategic entries and exits around Support and Resistance zones.
Finally, losses are expected and at the end of the day I am trying to build a system that wins more than it loses, and risks less than it rewards.
System Requirements
Here is what I am looking to accomplish with my overnight strategy.
Majors and Crosses. I am not a fan of the comdols though.
Main Chart
These are some of the items I use that if met, I will not trade.
Choosing the direction I will trade is very easy, take a look at the Shi_true and the LRC_7. If the 2 channels agree on the direction, this will be the direction of the trade. If they do not agree, move on to the next pair.
Finding and Entry
To find an entry you must know what direction you are going to trade in. Trades are placed via Buy Stops or Sell stops only. One of two methods will be used, both are looked at by utilizing the H1 timefarm.
First Method
In order to find an entry we use the H1. There are 2 ways that I will pick my entries. The first method involves the LRC7 on the H1 when its in the opposite direction of our trade. For instance if the H4 SHI is pointing up, we know we want to trade long. If the LRC_7 on the H1 is pointing up, we move to the next pair. If the LRC is pointing down, then we will start looking for entries.
Assuming we are looking for a long entry, and the LRC_7 on the H1 is pointing down, we would look 1 candle back from the current candle and place our Buy_stop 2 pips higher than highest price it hit. For shorts, we would do the same but place the Sell stop 2 pips below the lowest price of 1 candles back.
If the H1 trend does not change for a while, you are free to move entries. This would help you tighten your trades and give you an opportunity to enter the trade at the optimal points, but please make sure to adjust your S/L and T/P points if needed.
For extra assurance, we can always use 2 candles back. This is one of those items that are not hard and fast and sometimes the stop order will be placed based on support and resistance.
Second Method
The second method is based soley on Support and resistance. and is the same method I used to find my S/L and T/P points. I will use the current Barrys's S&R, Pivots, and Previous Day/Week candle data to find and entry. If going long, I will usually place my Stop order somewhere around 7-15 above/below the resistance zone that I am using.
Finding a Stop Loss/Finding a Take Profit Point
Finding a place for the stop and take profit is not easy and takes some practice. I suggest taking a look at Mike Parker's thread on Babypips and Forex Factory as these have helped me immensely.
In general I use the Channels, Pivot's and Barrys support and resistance to determine my Stops and Take Profit points. I usually give the greatest weights to the Channels and the Pivots, with Barry's coming in a strong third. However the price channel and Bols are also consulted if things are not clear enough.
Do not be too greedy, I would say that most Take Profits are in the range of 50-125 pips, and the stops around the same. Keep in mind that we must keep a 1:1 Stop/Profit range.
Finally, losses are expected and at the end of the day I am trying to build a system that wins more than it loses, and risks less than it rewards.
System Requirements
Here is what I am looking to accomplish with my overnight strategy.
- A system that I do not have to be in front of the computer at all times to trade with.
- Money Management - The suggested pip size is to have every pip worth $.40 for every 1000 in my account.
- Stop losses need to be used, but have to be large enough so as to not get unnecessarily whipsawed out of the trade.
- Stop loss within 150 pips.
- Trade with the "trend".
- Profitable in the long run, losses are expected.
- Will work in trending and ranging markets. Ranging being the most important since markets range more than they trend.
Majors and Crosses. I am not a fan of the comdols though.
- EURUSD
- EURJPY
- USDCHJ
- USDJPY
- GPBUSD
- GPBJPY
- Daily
- 4H
- Hourly
Main Chart
- Shi_Channel_True (Provides my channel and direction)
- Husky_Daily_Data_full (Yesterdays Close/High/Low)
- Pivot_shifted (Pivots are common S/R areas and Targets)
- Barry's Support and Resistance (Dynamic S/R calculator
- Auto_LRC 7 on the H4
- ADX (Strength/Direction)
- CCI (Current counter trend/trend)
- DSS (Current Trend)
- Bols (20 and 50) additional Support and Resistance
- Price Channel - Additional support and resistance
- Auto_LRC 14 (Channel confirmation)
- Auto_LRC 240 (Additional Channel Data)
These are some of the items I use that if met, I will not trade.
- Stop loss that needs to be more than 150 pips
- Risk/Reward Ratio is higher than 1/1. If you risk 100 pips for a win of 75 pips, this would be disqualified.
- On Daily/H4: For long trades the price has not touched or is not within a few pips of the Shi. The opposite is true for shorts. If you do play these you are playing a breakout, only amateurs play breakouts.
- (Caution)Analyzing the market past 10pm. Unfortunately if you are late to the game, then I think your risk/reward ratio may be out of whack.
Choosing the direction I will trade is very easy, take a look at the Shi_true and the LRC_7. If the 2 channels agree on the direction, this will be the direction of the trade. If they do not agree, move on to the next pair.
Finding and Entry
To find an entry you must know what direction you are going to trade in. Trades are placed via Buy Stops or Sell stops only. One of two methods will be used, both are looked at by utilizing the H1 timefarm.
First Method
In order to find an entry we use the H1. There are 2 ways that I will pick my entries. The first method involves the LRC7 on the H1 when its in the opposite direction of our trade. For instance if the H4 SHI is pointing up, we know we want to trade long. If the LRC_7 on the H1 is pointing up, we move to the next pair. If the LRC is pointing down, then we will start looking for entries.
Assuming we are looking for a long entry, and the LRC_7 on the H1 is pointing down, we would look 1 candle back from the current candle and place our Buy_stop 2 pips higher than highest price it hit. For shorts, we would do the same but place the Sell stop 2 pips below the lowest price of 1 candles back.
If the H1 trend does not change for a while, you are free to move entries. This would help you tighten your trades and give you an opportunity to enter the trade at the optimal points, but please make sure to adjust your S/L and T/P points if needed.
For extra assurance, we can always use 2 candles back. This is one of those items that are not hard and fast and sometimes the stop order will be placed based on support and resistance.
Second Method
The second method is based soley on Support and resistance. and is the same method I used to find my S/L and T/P points. I will use the current Barrys's S&R, Pivots, and Previous Day/Week candle data to find and entry. If going long, I will usually place my Stop order somewhere around 7-15 above/below the resistance zone that I am using.
Finding a Stop Loss/Finding a Take Profit Point
Finding a place for the stop and take profit is not easy and takes some practice. I suggest taking a look at Mike Parker's thread on Babypips and Forex Factory as these have helped me immensely.
In general I use the Channels, Pivot's and Barrys support and resistance to determine my Stops and Take Profit points. I usually give the greatest weights to the Channels and the Pivots, with Barry's coming in a strong third. However the price channel and Bols are also consulted if things are not clear enough.
Do not be too greedy, I would say that most Take Profits are in the range of 50-125 pips, and the stops around the same. Keep in mind that we must keep a 1:1 Stop/Profit range.
Back to Demo
I went live trading at the end of January.
Unfortunately, at the same time my EA's started to lose and exposed my bad manual trading. At the time I had a feeling that my manual trading was still negative, but my EA's were doing well enough to cover it up and hide those danged little demons. After about 2 months of fast declines and slow gains I have decided to go back into demo.
So after loosing my first account, I took week off and started fresh. I was armed with some insight from listening to one of Dr. Elders books "Trading for a living". He has some good insight into both market and individual psychology (Go figure that is what his Doctorate is in). I am starting to develop a new system that I will post a seperate entry about. If I would have followed my system, without demon's I would have been up about 16%.
I have found that posting my daily trades becomes a weight on me, and then neglect all blogging. I will attempt to blog more, with good data, instead of the noise of my trades.
Here are some of the things that I was doing wrong.
Unfortunately, at the same time my EA's started to lose and exposed my bad manual trading. At the time I had a feeling that my manual trading was still negative, but my EA's were doing well enough to cover it up and hide those danged little demons. After about 2 months of fast declines and slow gains I have decided to go back into demo.
So after loosing my first account, I took week off and started fresh. I was armed with some insight from listening to one of Dr. Elders books "Trading for a living". He has some good insight into both market and individual psychology (Go figure that is what his Doctorate is in). I am starting to develop a new system that I will post a seperate entry about. If I would have followed my system, without demon's I would have been up about 16%.
I have found that posting my daily trades becomes a weight on me, and then neglect all blogging. I will attempt to blog more, with good data, instead of the noise of my trades.
Here are some of the things that I was doing wrong.
- Not looking at the forest, I was only looking at the single time frame
- Counter-trend trading.
- No Stop loss. I am simply not good enough yet to either of the last two items
- Overall feeling that I was trading just to trade and was "shooting fish in a barrel"
- Trading too much
- Looking forward to the higher time frames
- Less trading
- Utilizing proper Money Managment
- Overnight trading, this is when the moves seem to really happen
- Adding "Triple Screen" style entries.
- Utilizing Limit orders for market entry
- Overtrading
- Jumping into the market.
- Trading outside of my system
- Taking risks that I should not
22 January 2009
Jan 22
I went live yesterday. I ended up funding a small account, and trading micro's. Over the past few months my EA has been doing very well, so I figured it was time to give it a try.
15 January 2009
Jan 15
I have not updated this in a while, I think it became too much of a hassle to write down every trade. So I think I will resort to less often writings and just a summary of whats in my mind.
So far everything seems to be good in my demo accounts. My $2000 EA demo account that I started trading on 12/22 is now up to about $3500. I have moved to a different demo now, and so I am back to $3000. The main reason I stopped trading the ODL account was because I think my initial account will be with FXDD, therefore I wanted to run their demo. I put in my application last week, but they are backed up because of the bonus program.
My manual trading seems to be going better, but I have 2 trades open now that could eat away at my recent gains. The $2000 manual account I opened last week is showing about $2485, I have had some good trades and feel more comfortable settling into the higher time frames with a bigger S/L and T/P level and only executing a few trades per week
My two open trades are in the red right now, they are the EURUSD and GPDUSD. I have a hedge opened on the GPDUSD because I am not sure this will come back in my direction within the next week. The EURUSD was a continuation of a trade I made last week that I closed for about 200 pips. My new T/P on the EURUSD is 1.3000, but signs for tomorrow point to an up day, so we shall see.
On the USDCHF I see a breakout coming, I am not sure which way though, so I have decided to play with a couple break out trades. When the price was at about 1.1200 I opened a buy and sell stop order. Lets see how this works out, I am a little nervous as this is outside of my normal trading. I tried to set the numbers outside of the current channels so that a trade would not be signaled unless there was decent movement.
On the USDJPY, I see a uptrend on the D1 and a downtrend on the W1 so I am staying out until they are in agreement.
Finally, I decided to get a VPS. I was not comfortable utilizing the machines I was for trading. I found a 3 month free coupon with experthost, so I set it up yesterday and started trading today. So far the performance is acceptable.
Profitable trading,
Husky
So far everything seems to be good in my demo accounts. My $2000 EA demo account that I started trading on 12/22 is now up to about $3500. I have moved to a different demo now, and so I am back to $3000. The main reason I stopped trading the ODL account was because I think my initial account will be with FXDD, therefore I wanted to run their demo. I put in my application last week, but they are backed up because of the bonus program.
My manual trading seems to be going better, but I have 2 trades open now that could eat away at my recent gains. The $2000 manual account I opened last week is showing about $2485, I have had some good trades and feel more comfortable settling into the higher time frames with a bigger S/L and T/P level and only executing a few trades per week
My two open trades are in the red right now, they are the EURUSD and GPDUSD. I have a hedge opened on the GPDUSD because I am not sure this will come back in my direction within the next week. The EURUSD was a continuation of a trade I made last week that I closed for about 200 pips. My new T/P on the EURUSD is 1.3000, but signs for tomorrow point to an up day, so we shall see.
On the USDCHF I see a breakout coming, I am not sure which way though, so I have decided to play with a couple break out trades. When the price was at about 1.1200 I opened a buy and sell stop order. Lets see how this works out, I am a little nervous as this is outside of my normal trading. I tried to set the numbers outside of the current channels so that a trade would not be signaled unless there was decent movement.
On the USDJPY, I see a uptrend on the D1 and a downtrend on the W1 so I am staying out until they are in agreement.
Finally, I decided to get a VPS. I was not comfortable utilizing the machines I was for trading. I found a 3 month free coupon with experthost, so I set it up yesterday and started trading today. So far the performance is acceptable.
Profitable trading,
Husky
08 January 2009
Jan 08
After yesterdays losses, I am taking it easy today and trying to study what I see in the markets, that re-occurs. Here is what I am seeing so far
1. EURUSD, 7am and 12noon
2. USDJPY - 5 day cycle
Anyway, as for my trades. I have only closed one, and another is executed.
EURUSD - 17:08 sell @ 1.3713, 18:48 trailing stopped at 1.3687. My profit level was expected to be around 50 pips, but put the trailing stop because I was sick of loosing :(.
I have open a USDJPY Based on the d1, The D1 is showing a downtrend, and is at the top of the channels
USDJPY, Sell at 91.27, SL at 92.10 (this is big), TP at 89.75. I put my stop loss at what I felt was reasonable based on the past action history.
1. EURUSD, 7am and 12noon
2. USDJPY - 5 day cycle
Anyway, as for my trades. I have only closed one, and another is executed.
EURUSD - 17:08 sell @ 1.3713, 18:48 trailing stopped at 1.3687. My profit level was expected to be around 50 pips, but put the trailing stop because I was sick of loosing :(.
I have open a USDJPY Based on the d1, The D1 is showing a downtrend, and is at the top of the channels
USDJPY, Sell at 91.27, SL at 92.10 (this is big), TP at 89.75. I put my stop loss at what I felt was reasonable based on the past action history.
07 January 2009
Jan 07 Close
It looks like I am still having some issues with my trading technique. First off I broke my 3 rule trade. Here are my additional trades for the day.
A little more analysis on the previous order listed above.
Sell 12:27 EURUSD @ 1.3604, S/L 1.3655, TP at 1.3503. Stopped out for -51 pips. Personally, I thought everything lined up. After taking a look tonight, it looks like I traded in the middle of the channel, which is a no-no.
Here was the new order
Sell 19:28: EURUSD @ 1.3614, SL1 at 1.3655, SL2 at 1.3670, TP at 1.3581 Stopped for -56 pips.
My first mistake was moving my stop because I thought about triple Wednesday. Also, since my original s/l was 40 or so pips, my lots were scaled accordingly, making me loose more money. This trade did come within about 10 pips of my TP :(. The other thing that sucks is that the price turned right at my stop, and headed down. Fundamentally I really do not see much error, I should have kept my original s/l and re-entered as it passed down through 55 again.
I am down about 1% account value today.
A little more analysis on the previous order listed above.
Sell 12:27 EURUSD @ 1.3604, S/L 1.3655, TP at 1.3503. Stopped out for -51 pips. Personally, I thought everything lined up. After taking a look tonight, it looks like I traded in the middle of the channel, which is a no-no.
Here was the new order
Sell 19:28: EURUSD @ 1.3614, SL1 at 1.3655, SL2 at 1.3670, TP at 1.3581 Stopped for -56 pips.
My first mistake was moving my stop because I thought about triple Wednesday. Also, since my original s/l was 40 or so pips, my lots were scaled accordingly, making me loose more money. This trade did come within about 10 pips of my TP :(. The other thing that sucks is that the price turned right at my stop, and headed down. Fundamentally I really do not see much error, I should have kept my original s/l and re-entered as it passed down through 55 again.
I am down about 1% account value today.
Jan 7
Over the past few weeks, I felt that my manual trading was doing poorly but my overall profit was held up by my EA. This concerns me, because given the MT4 statements, I found it hard to extract my manual trade data. In an effort to make sure my manual trading system is properly debugged, I have decided to open a new demo, that only these trades run on.
I opened the account yesterday, and so far I am up, but my win loss ration is 2 wins, and 1 loss.
Going forward, I have decided to hunker down my manual trading. I think I was getting to anxious to trade.
The following rules are being reinforced:
2009.01.06 22:43 sell eurusd @ 1.3499 Trailing Stop hit at 1.3467, + 32 Pips
2009.01.06 22:44 buy usdchf @ 1.1178 Trailing stop hit at 1.1178, + 0 Pips (Good trade, but need to clean up my trailing profit strategy)
2009.01.07 03:40 sell usdchf @ 1.1153 Manual TP at 1.1029, + 124 Pips
2009.01.07 12:27 sell 0.10 eurusd 1.3604 S/L at 1.3655, - 51 pips (I still believe in the trade, but should have checked the news times first, the price seems to be coming back around)
Trades I am looking at:
I have a sell stop on EURUSD, at 1.3580 (one pip past barry's support) with S/L at 1.3638 (Using the H1 uptrend in case we are in retracement and not direction now), and a TP at the day open of 1.3503. If I see good price action, I will move this to a Trailing stop. The H4 lines up, the D1 looks like we are below the shi channel but not my LRC so I am a little nervous.
I opened the account yesterday, and so far I am up, but my win loss ration is 2 wins, and 1 loss.
Going forward, I have decided to hunker down my manual trading. I think I was getting to anxious to trade.
The following rules are being reinforced:
- Trade on the H1, wait until the initial signal candle closes and wait for the second to confirm
- Trade has to be confirmed on the H4, and somewhat supported on the D1
- I will take trades on the H4/D1 if I see an opportunity, but I still have to be into the 2nd candle.
- Proper money management
- Plan the trades.
- Use support/resistance as the guide for my.
- I want to limit myself to 3 trades per market day. This should limit my wanting to pull the trigger to fast.
- Wait to pull the trigger as long as possible.
2009.01.06 22:43 sell eurusd @ 1.3499 Trailing Stop hit at 1.3467, + 32 Pips
2009.01.06 22:44 buy usdchf @ 1.1178 Trailing stop hit at 1.1178, + 0 Pips (Good trade, but need to clean up my trailing profit strategy)
2009.01.07 03:40 sell usdchf @ 1.1153 Manual TP at 1.1029, + 124 Pips
2009.01.07 12:27 sell 0.10 eurusd 1.3604 S/L at 1.3655, - 51 pips (I still believe in the trade, but should have checked the news times first, the price seems to be coming back around)
Trades I am looking at:
I have a sell stop on EURUSD, at 1.3580 (one pip past barry's support) with S/L at 1.3638 (Using the H1 uptrend in case we are in retracement and not direction now), and a TP at the day open of 1.3503. If I see good price action, I will move this to a Trailing stop. The H4 lines up, the D1 looks like we are below the shi channel but not my LRC so I am a little nervous.
06 January 2009
Jan 6.
So its been a while, but I did not do much trading over the holidays. To be honest I lost some, and that was because I was not studying the markets enough. Yesterday was a pretty good day but I think I traded way to much.
Since there is no one reading this, I think I will use the blog as a way to analyze my loosing trades. I still need to record trades that I entered, but need to figure out a good balance.
I need to refocus, as I think I have lost my way abit, the only thing that is keeping my account from loosing money is my EA that I made.
So here is going to be my focus for the next week:
1. No instant orders they should all be pending, at least for market opening
2. Do not trade until the current candle is closed, or at least put in a pending trade. I have been stopped out too many times because the first 15 minutes of the 1h show a reversal, and going back to the longer trend, but then the candle moves back to the retracement direction.
My current Account balance:
$2189.32 (At least im up 10%)
Pending Trades:
EURUSD, Sellstop @ 1.3376, S/L at 1.3455, TP at 1.3250.
When I input this pending order, I thought EURUSD was done with retracement, the previous candle closed down after a couple ups from the days previous move down. It looks like we just went past the .50 fib. My price point was the close of the 1600 candle, which looked like the restart after the initial retracement. My S/L was based on the high of that same candle, and my T/P was what the Shi Channel would be a few time frames ahead. If the price breaks the .61 fib, I will probably cancel this order.
Since there is no one reading this, I think I will use the blog as a way to analyze my loosing trades. I still need to record trades that I entered, but need to figure out a good balance.
I need to refocus, as I think I have lost my way abit, the only thing that is keeping my account from loosing money is my EA that I made.
So here is going to be my focus for the next week:
1. No instant orders they should all be pending, at least for market opening
2. Do not trade until the current candle is closed, or at least put in a pending trade. I have been stopped out too many times because the first 15 minutes of the 1h show a reversal, and going back to the longer trend, but then the candle moves back to the retracement direction.
My current Account balance:
$2189.32 (At least im up 10%)
Pending Trades:
EURUSD, Sellstop @ 1.3376, S/L at 1.3455, TP at 1.3250.
When I input this pending order, I thought EURUSD was done with retracement, the previous candle closed down after a couple ups from the days previous move down. It looks like we just went past the .50 fib. My price point was the close of the 1600 candle, which looked like the restart after the initial retracement. My S/L was based on the high of that same candle, and my T/P was what the Shi Channel would be a few time frames ahead. If the price breaks the .61 fib, I will probably cancel this order.
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