Charts

GBPCHF

1st trade of week. Not really gonna look for anything else today as a new month begins tomorrow.
Would rather wait for the new month to begin and see how the rest of the week wants to play out with lots of major news announcements out this week.

Price was failing to break through 3rd touch of trend line so opened trade on confirmation of line holding on M15. Not much really happened from when I took the trade last night till sometime today but finally we got movement in the direction I was looking for. Ive scaled out 1/3 position and stops at BE so no risk on table. Gonna let the rest ride to my TP2 and TP3 or stopped at BE.

J

Charts

EURCAD

Last one for the week. This is one thats been going in and out of profit since I took it. I almost got stopped but she's still going.
I entered off the strike of the yellow line but Ive also marked a trend line and triangle that Ive noticed to support my thinking for a push north.
Price is looking like its establishing support and making new highs. I got my 1st TP set roughy about 1:1 and am gonna see how long I can hold as there is quite a bit of room to the upside if we can break north.
Have a great weekend all!

J

Charts

GBPAUD

Was looking to start building a position long on this pair. Should have got stopped at break as had 1st position up 100+ pips at one point then added 2nd position and got stopped from news.
Got slipped by the broker on my stop by 30 pips. Should not have taken the 2nd trade leading into major news. Lesson learnt!

J

Charts

USDCAD

Got stopped at break on this. Fell short of my 1st TP by a few pips.
There was a perfect entry on the strike of the line and I would have taken this one but was already in the trade using a different technique for entry.
Am not opposed to taking another entry if it strikes the line again.

J

Some fun stuff to start the week

Rich Froning JR recently won the Crossfit Games for the 2nd year in a row. This is just a quick snippet of the Games and how hard these guys really push themselves.
I do Crossfit and it gives me the best workout day in and day out that has effected my life both physically and mentally (which assists with my trading).

J

Charts

GBPUSD

I took a small position on this on Friday. I generally dont like opening new trades on Fridays so this trade was at a reduced position size looking to add today (Monday).
There was a bit of confluence on this trade as price was aligning with old highs and I had the confirmation when my lower trend line was broken.
Since the open price has just fallen so I have scaled out to cover the stop but still have the view to add if I can get a clean technical entry.

Charts

NZDUSD

Continuation trade. All candles are pointing up so really just looking for continuation.
Have scaled and moved stop to break as approaching a strong resistance area on the left so would rather walk away with a few pips than none at all considering markets aint really doing much at moment.

Learning When NOT to Trade.......

We spend so much time trying to identify high odds setups and trades that we sometimes may end up looking for something that just isnt there or see what we want to see and only once you have been stopped out and looked back on the trade and thought "why the hell did I even open a trade there?"
Whilst yes we must develop our skills on when to trade we must also have an eye for when the markets arent doing much for us and sit on our hands, read a book or watch Masterchef (this show makes me hungry).
I posted a chart above where looking at the current price action is of no interest to me as the way Im looking at it its currently in the middle of a range and the odds of it going up are no better than it going down. I dont like these odds so I would rather sit aside than gamble on a trade trying to hope that I can score a few pips.
Its a hard thing to learn in trading to sit on your hands and trust me I still have troubles with this but if you can identify when NOT to trade and then have a clearly defined edge and trade that only when it provides its signals you are on your way to consistency.
Remember something that is very important that I think soooo many people including myself sometimes forget: Trading is not like anything else you have done in your life/career and is not like a job. Dont think because you sit in front of the markets for 5, 6 or 10 hours a day you have to be paid for that effort today.
If you're after a job that pays you an hourly rate go get it but I think you will struggle to get that from trading FX.

J

Charts

EURUSD

Got stopped at BE on this trade. Came within 3 pips of my 1st TP which is kinda annoying but I guess thats the game.
Entry was based on the line holding. I sometimes will play the strike of a line quite aggressively but seeing as it was Monday I was playing quite cautious and waiting for confirmation from the 1 hour with a decent close. The bar I also entered on was a very large bar which gave me the confirmation and based on my plan my R:R was good but once I saw price get within 3 pips of my T1 and start turning I decided I would rather get stopped at break even than have a loss.

Plan For Profit

Plan your trade and trade your plan. A common saying we have all heard. But do you really do it?

Theres 2 parts to this comment:

1st - Plan your trade: I believe the difference between winning and losing traders is a winning trader takes a more professional approach by planning out and really analysing their trades and all possible outcomes whereas the losing trader just pulls the trigger like  they have a machine gun and unlimited supply of bullets (Im pretty sure we have all been guilty of that at one time or another).  Which if you had an endless supply of bullets (cash) I dont think you would be trading. From my own personal experience I tend to find the less trades I take, the longer time there is between my plan for a trade and execution of the trade the higher my win rate and profit tends to be. Of course there are many different styles of trading and personally I prefer to have a high win ratio and good R:R so obviously these setups dont occur everyday which means I generally have time to plan out a trade but I know of guys that would rather trade more often maybe sacrifice a bit of the R:R and are still very profitable. This is where you have to know you personality and what would suits you better.

2nd - Trade your plan: So often we are so focused on entries that when we nail the entry we dont know what to do. We close the trade out too early because we have been stopped out a couple times this week or we get too greedy and hope this trade is the one that runs for 1000 pips and somewhere along the way we get stopped at break even or worse a loss. This is why we should plan up front before we pull the trigger what our method is going to be on how to manage the trade. I use varying methods depending on the type of trade I take but my most common will be either scaling out 1/2 to cover stop or scaling out 1/3 and in both scenarios I generally let it run unless its a counter trend scalp which I would have a hard fixed target. This also is where the discipline comes in because if you truly have planned out your trade which could be a phenomenal plan but suddenly you get 1 hourly bar close in the direction against you which you didnt expect and you suddenly rush to get out (speaking from experience). So once you have a well laid out plan follow it.

So all in all what Ive just discussed is actually quite basic, nothing new to trading and your probably thinking "Man everyone knows this blah blah blah" but I truly ask you:
Are you a profitable trader and if the answer is no are you doing points 1 and 2 above or are you machine gunning away like Arnorld Schwarzenegger in Commando?

J

Charts

Cable

Heres an entry that I have just taken and have scaled out 1/2 of the original position to cover the stop.
I have been looking for the USD to strengthen all week but as most of you will already know it really has been quite non eventful. I was hunting a couple shorts last night on both NZD and GBP but price fell short of my entry zone only by a handful of pips. I guess thats the game and you gotta be willing to accept that you cant catch them all.
The entry I used above was quite aggressive drilling down to an M5 and the main reason I did that on this occasion is because of how much the USD has been strengthening against all pairs today I was looking for a continuation move and found this break was was good enough for me. I only risked 19 pips on the trade and it never went against me which is nice.

J

Charts

NZDUSD

This is a follow up on the kiwi trade I took last week. I ended up closing out that position for +74 pips but took about a -27 pip loss when I added to the position so I banked 47 pips.
The 2nd position should never have been added but I think I was a little too eager to trade on Monday and that is what ended up in me sacrificing some of my profit.
I generally dont trade on Mondays or at least before NY but again that need to trade on Monday and seeing as I was already in profit so greed ended up in a reduced profit in the end.
Lesson: No more trading on Monday pre NY.

Charts

NZDUSD

I have been watching this pair for most of the week and been watching the lack of movement in the pair and wondered if the consolidation area had been soaking up buy orders as it was reaching levels where I would be interested in looking for shorting opps. Once I saw price breakout of the consolidation and close straight back in that was my confirmation so I pulled the trigger which was on Thurs night.
Leading into NFP I was in the money but not by much, it was going in and out by 20 or so pips so I decided to close out 2/3 of the original position size which pretty much covered the stop should I have been spiked out from volatility. Of course its always the way that the position that gets scaled or closed out goes in your favour and then when you hold you get stopped but Im actually fine with the way I played as I took the conservative approach and I believe this is the best way to play.
One other thing to note is also where price stopped and reversed or at least had a reaction. This is the line I had marked on my charts as the scale out level had I been playing full position size.

J

Charts

EURUSD

This is the 1st trade I took this week. Which considering it was taken on a Thursday means I was sitting on my hands most of the week.
The main reason behind the trade and my thinking was I was expecting volatility from the min bid rate and ECB press conference. Please note Im not a fundamental trader or do I really pay attention to the fundies but I do know that these kind of news releases can cause a major reaction in the markets so given the right technical entry Im gonna participate in the move.
My technical reason for entry was the week is clearly down so the weekly candle is a bear candle combine that with the break of Wednesdays low to me all looked short so I played.
Ive scaled out 1/2 of the position and stops at break looking to play through NFP but if price happens to be within 50 pips of my stop before the release I will close out.

J

Trading is all about exceptions

There are many lessons that need to be learnt to become a successful trader along with all skills but when it comes to lessons I believe as a discretionary trader you have to learn the exception to every rule and when it comes to trading it has many exceptions. Pretty much every rule I can think of will have an exception and this is why we must learn them and this can only come through time and experience. This is not really something that can be taught and from my experience, even if you are taught it you must live it for yourself to validate it and make it your own experience.
This is why analysis of every trade is CRUCIAL. What did you learn from that trade winner or loser. Winning trades have common elements as do losing so what are they? If you take a trade and lose find out why so it doesnt happen again. If you cant find a reason then look harder and dont only look at the charts remember trading is a psychological game so maybe check whats going on between your ears ;)
Then once you learn these document them and start creating your rules or your rules of exceptions. Unless you have a photographic memory I highly suggest keeping a pen and paper by your side and when you learn something new document it. I really wish I had done this from the 1st day I started trading. I can only imagine how many books would be filled by now..haha! Then of course make sure you review and implement these exceptions.
The main point is make mistakes or as I have heard people say "fail faster" as there is nothing wrong with making mistakes or failing if we learn something from it so we dont do it again. Think about it for a second if you are making mistakes and these are costing you money what should happen when you stop making the mistakes? This is also why in the early days practising on a demo or small account is probably a safe bet rather than blowing your account before you have the chance to even learn the rules of the game.

How I trade

Seeing as its the start of the month and quarter Im gonna sit on my hands today and see how the market wants to play out for the coming month.
Ive decided to blog about how I trade. Im a discretionary price action trader. What you see on the pic above is pretty much what you get. Im not interested in indicators like bollinger bands, macd and moving averages. Dont get me wrong in my past I have used and played around with these indicators but for some reason I always come back to pure price. I like things to be clean and simple.
I do use things like trend lines, horizontal lines and sometimes fibo's.
When I say Im a price action trader it doesnt mean that I look for pin bars or candle formations though they can sometimes support my idea but rather I mark key areas where I expect buyers or sellers to come back into play. I generally always try to think continuation as it suits my personality better as I rather be right more often and take trades with good risk vs reward but this also means taking less trades which is what Im still learning to master and thats where I also think this blog will come in handy.
As WMD always says if price is going up it can go higher and if its going down it can go lower and when its going up think "where can I buy" and when going down think "where can I sell". I really think this way of thinking can keep you out of a lot of trouble and generally keep you on the right side of the move. I know when I changed my way of thinking to looking for continuation more often it had an immediate impact on my trading. I didnt realise how often I was actually fighting price and trying to pick tops and bottoms. I have never ever heard anyone say picking tops and bottoms is a profitable way to trade. Dont get me wrong most people including myself love to do it but in the long run I think you get yourself in more trouble than its worth and that because you are always on the wrong side of the move trying to play counter trend.
If your interested in learning how to trade price action there really is only one place and that at  http://www.wmd4x.com/  and you can also get some great info from http://www.forexfactory.com/showthread.php?t=206723

J