I suspend this fx trading journal as lately I’ve switched my focus to stock index trading.
There are quite a few conclusions which I can take away from TheRoninTrader Project. I’ve learned what are my strengths and weaknesses in short term trading.
I will provide the link to the new trading project in a separate post.
(photo source: Reuters)
I entered long on a pullback against the underlying uptrend in EURGBP. The entry was at Bar1 after a bullish pin indicating the end of a pullback following the breakout from a broader correction from the 0.8976 top. The price reached my profit target with a strong gain today after BoE comments on bond purchases. Closed the long with a 154 pips gain at Bar2.
eurgbp 20110622 1d
eurgbp 20110622 4h
The DAX index had a trend from the open but it reversed the bullish opening bullish gap.
Bar1: long entry on a bullish pin testing the gap support and the uptrend from the previous day’s late rally Bar2: stopped the scalping part of the long, 5.70 pts loss
Bar3: trailing stop hit for the swing part, 7.50 pts loss
The market reversed its bullish opening into a clear donwtrend.
Bar4: short ‘with trend’ entry on strong bearish bar breaking a small bear flag correction Bar5: trapped out with 8.50 pts loss
Bar6: re-entered the short which was another fake
Bar7: stopped with 14.00 pts loss
Bar8: long entry on break above the high of the midday correction
Bar9: stopped out after the US jobless data, it was the second leg of an A-B-C, loss 5.30 pts
After this long string of losses give myself a break until next Tuesday to recover. I suffered 20 losses against 4 winners while the gain/loss ratio has dropped to 4.78/9.59 after I decided to double my entry size and scale out from my positions.
DAX had a bearish gap at the open after the Asian markets started the week with heavy losses. The 1h trend is clearly bearish while the German index trades at the liner regression channel support.
Bar1: long entry just above the S2 level on a long legged doji rejecting the low of the bearish trend bar
Bar2: trailing stop was hit with 5.80 pts profit
Bar3: I did’t enter long on the break above a micro trendline after the second bullish pin bar as I was looking for a second entry (break above a lower high) which didn’t happen and saved me from a losing trade.
After this point the index were ranging with a Barb Wire pattern from 11:30 to 14:00. Later there were two tradeable trendline breakouts at Bar4 and Bar7 and two failed dowside breakouts at Bar5 and Bar6. I decided not to trades any of these setups since there was no sign of conviction on neither side of the market.
Bar8: breakout pullback long entry
Bar9: trailing stop was hit with 2.50 pts loss
The DAX ended the day in a tight range with repeated failed breakouts on both ends. To sum it up we had a range day which I always find hard to trade however today I managed to escape with a tiny 3.30 pts gain.
dax 20110523 5m
dax 20110523 1h
I will change my daily rundowns to a more ‘to-the-point’ style so it will be less time consuming to write (and read).
Bar1: short entry at the R1 level just below the previous session’s high Bar2: profit taking 22.50 pts
Bar3: short entry on a bearish engulfing line at the EMA20
Bar4: profit taking 12.30 pts at the bullish trendline and daily pivot level Bar5: missed inside bar entry after a break below the pivot level Bar6: long entry on a bullish 1-2-3 reversal
Bar7: stop-loss -15.00 pts
Bar8: long entry on a bullish pin which turned out to be a breakdown of a small correction
Bar9: stop-loss: -15.00 pts
I stopped trading for the day after the second loss. Closed the day with 4.80 pts profit. I still close my winners too early. I was quite satisfied with the first too trades but missed most of the day’s potential. All in all not a bad day for a Friday.
dax 20110520 5m
dax 20110520 5m2
To trade the DAX intra-day I add daily pivot levels to my set of tool to identify support and resistance levels. I use the 1-hour chart for trend recognition with a 30/100 EMA pair and a 70-period auto-regression channel.
My strategy is based on price action with trendlines and pivot levels to pinpoint low risk entry points. Preferably I will take positions in the direction of the 1h trend unless a low-risk countertrend setup offers a reliable entry at overbought/oversold levels. Once a trade was entered I look for an opposite signal to exit but not reverse the open position.
The setup that I’m maily looking for is candlestick signal that fails or reverses at/near a price action line. The main signals are pin bars, inside bars (and haramis). For a high probability entry try to I separate the signal bar from the entry bar. The bar that tests the price action level is the signal bar and the following bar that takes out the extreme of the signal bar is used as the entry bar.
Whenever there is strong momentum against a valid setup or if the signal bar is a wide ranging bar moving away from the natural stop loss level I will wait for a second entry. The second entry can be a pullback or by Al Brooks … “a second entry means that you do not take the initial trade. Instead of buying the breakout of the high of the prior bar, wait to see if the bar after the breakout has a lower high. If it does, place an order to buy one tick above its high.”
At the end of the day I post and evaluate the trades I make and also the trades that I miss.