Probably the most important trading video I've seen

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So finally I had a profitable week. 3 trades taken, two of them were winners, and the other was a very small loss. I had a bit of a losing run, with 5 or 6 weeks where I just kept losing. That's when I decided to post all of my trades on this blog. Since then, things have improved. There is one video that helped me big time. I've watched this video 3 times now. It only properly sunk in the third time I watched it. You can see it, by clicking the link below, and then clicking on "rants and charts-a closer look at what we do". Completely changed the way I think about the forex market. See for yourself.


http://www.james16group.us/Guests/guestmaterial.html



Anyway, it's Sunday, the markets will open again this evening, and I wanna take more pips this week. I'm tired while I'm writing this. Completely done. Trading this week took a lot out of me mentally, but fuck it, I won't stop till I'm carrying 50's in a money clip. I'll live and breath trading until my win percentage is so high that my account is growing like a weed, and I have investors throwing money at me.

19/10/2012-AUD/USD

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This trade is pretty straight forward and I'm glad to say I made some profit on this one. My order was filled today and I took full profit just before the end of the London session. Here is the chart before I entered (click to enlarge). To be honest, this wasn't the greatest looking pin because the tail (or nose as some call it) wasn't that much bigger than the body. Still, it had a bearish close, was off a 50% fib retracement and had some room to move. I risked 2% of my account as usual.

Here is what happened

As you can see, price went exactly where I expected it to go. That is where it closed, and I took full profit just before the FTA. Originally I had planned to take profit a little bit later, but I ended up closing at around 0.72% profit. Again, not great profit, but sometimes you have to take what you can get. It's just nice when price does exactly what you expect it to do. 

17/10/2012-EUR/ZAR-damn economic news!

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I took this one a couple of days ago. A short position on the EUR/ZAR. reason was the fact that there was a BEOB which was also a major fakey at a previous resistance level. Apart from this there wasn't much confluence. I had a limit order set for the break off the bar. Risk was only 1% on this one because I had other pending orders on at the same time. Here is the chart before my order was triggered (click to enlarge).

Here is what happened

Overnight the bar was broken and my order was filled. Trade seemed to be moving nicely in my direction while I was sleeping, but by the time I woke up, it had reversed and I was in drawdown. Why did price reverse before the FTA? I don't know, but I heard that good economic news came out of Spain and that had pushed the Euro up. I don't pay attention to economic news. Price action is the only thing I use to trade. Anyway, as the chart explains, I eventually got out for a reduced loss of 0.25% of my account. I can handle that. Had I left my stop in the original place? We'll see what happens in the coming days. This loss did piss me off a bit, even though it was only small.

16/10/2012-NZD/CAD

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This was a long trade I took the other day for a quick profit on NZD/CAD. The reason being was that there was a pinbar off a very strong horizontal level. Firstly, if you look at this chart, you will see just how strong the level is. (click to enlarge). I've marked turning points with the green circles. Because of this, the pinbar had a very good chance of coming off. Risk on this is 2%

Here is a zoomed in version of the chart, so you can see the pinbar

Now let's see what happened. As you can see from the chart below, price hit the FTA before reversing and forming a pin. I took profit just before the FTA on half my position, and the other half was moved to b/e which was then hit.

 I made 0.14% on this trade. Not a lot, but at this stage I just want to get some wins under my belt, and be correct about where price is going. In this case, I was spot on. Price went exactly where I thought it would before reversing. Once I can do this over and over again, say 8 or 9 times out of 10, I can then start to think about maybe reducing my stop size and increasing risk. For now though, I just want to win consistently. 

EUR/AUD-12/10/2012 -Finally some damn profit!

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Finally, after 5 losing trades in succession I made some profit. This was a long trade I took on the 12th of October 2012. Here is my entry chart (click to enlarge). As you can see from the chart, there was a smallish pinbar with bullish close that occurred off a very obvious trend line. A break of this pin triggered my buy order. This was also a previous resistance area that should act as support as it had now been broken. My final target was 1.2800, but I was aware of a trouble area before then, (see my exit chart for more about that). Risk was the usual 2%.


Click chart to enlarge.

Here is what happened

The trouble area I was talking about is that pink horizontal line I've drawn on my chart. As you can see, it was in line with previous bar lows, and the trade was likely to have trouble here. Well, it did have trouble going higher, and I ended up taking full profit at this area since it was a Friday. When price first hit this area I moved my stop up to reduce risk. As the day went on, I saw that price was unlikely to close higher than this, so I just took full profit in the end. I made 0.6%.

EUR/GBP-10/10/2012

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Here is a trade I took last week on the 10th of October 2012. I shorted the EUR/GBP after a BEOB formed off a horizontal level that was previous resistance. It also occured off the 150 ema (blue line on my chart), which is an ema where price often reacts. My plans was to take half profit at 0.8000 (BRN) and move the other half to break even to target the 0.7960 area (blue line on my chart). Risk was 2%. Here is my entry chart (click to enlarge)

Here is what happened.

As you can see, a couple of days after the BEOB, a BUOB formed. This told me the trade was unlikely to go any lower, and I manually closed my trade at 0.8059 for a loss of 0.8%. In hindsight I don't think this was a bad trade to take, but perhaps I should have given more weight to the area I've marked on my chart with a red horizontal line (between the pink and blue lines). This area was acting as support previously, if you towards the left of the chart.

GBP/AUD-04/10/2012

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Sometimes I find that when the market is trending, price gets close to the 6ema but doesn't quite touch it, before moving away again. Therefore, you sometimes end up missing opportunities if you look for a 6ema touch trade. Therefore, you can set an order to jump in when price retraces at the halfway point of the previous days bar instead of waiting for it to touch the 6ema. This way the price you enter isn't as good, but it means you miss less opportunities. That's what I did here. I entered long at 1.5775. Now for this trade, price looked to be in a nice uptrend and was respecting the 6ema (yellow line on my chart). That was my reasoning for going long. I was targeting the 1.6000 BRN. Risk was 2%

Here is my entry chart (click to enlarge)

Now here is what happened

I was up 100 pips. This was a trouble area, as if you look at the pink horizontal line on my chart, you'll see it was a previous support area. Instead of taking profit or moving to break even, I just waited. The following day we had a big BEOB. It was at that point that I moved my stop up to cut my losses short. I did get stopped out in the end for a loss of 1.2%  

This was really bad trade management. To be up a 100 pips and still go on to make a 1.2% loss? unacceptable! Not the first time I've made this mistake either. Should have taken profit in hindsight. 

and that's the thing with trading. After a while, spotting opportunities becomes fairly easy. Knowing what to do when you're in a trade is a whole different ball game. Somebody else who entered this trade might have made good profit. They might have taken the money at 100 pips. I made it turn into a loss. It's just experience that is the difference here. I'm in my first year as a trader. Somebody who's been trading say four or five years would not have made the mistake I did. 

GBP/CAD-30/09/2012

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This next one is a long trade I took on the GBP/CAD on the 30th of September 2012. Again, this was another 6ema touch trade. Price had stayed close to, but closed above the 6ema (yellow line on my chart) for 11 consecutive days. The last candle was a pinbar as you can see. I entered long manually when price was touching the 6ema. Risk was 2%. Here is my entry chart (click to enlarge).

What happened at the close of the day? This!

As you can see, the bar I entered long on, when it was touching the 6ema ended up closing well below the 6ema. Therefore I moved my stop up from 1.5806 to 1.5844 to reduce my risk, as my confidence in the setup had gone. My stop was hit, and I made a reduced loss of a little over 1%. Had I left my stop loss where it was, I would've made the full 2% loss. So here is the question. The market was in an uptrend and had closed above the 6ema for 11 consecutive days. As soon as I entered long, it closed well below the 6ema. Bad luck? No, because if you notice the circled bar, it is a pinbar suggesting a reversal. I was aware of this initially but I ignored it due to the following days candle, which was also a pinbar, but in the opposite direction. I had thought that the downwards movement had run it's course and the market would continue upwards. Clearly I was wrong, and the first pin was much more significant because of it's location at a swing high. 

AUD/NZD-24/09/2012

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The aussie dollar... This damn currency has been hurting me lately. Not only making me lose money but mocking me. Missing my entry by one or two pips and then going onto hit what would have been my profit target had my order been triggered. Going against me to scare me into cutting the trade short for a reduced loss, and then reversing as soon as I get out to hit my target. Anyway here's a trade I took on the 24th of September 2012. My entry chart (click to enlarge). This was another 6ema touch trade that I shorted.. Price had closed below the 6ema (yellow line on my chart) for 13 consecutive days. I set my short order on the touch of the 6ema, hoping it would make a move down and close below the 6ema at the end of the trading day. Risk was 2%.

Here is what happened. As you can see, the bar that I entered on ended up closing above the 6ema at the end of the trading day. Therefore I cut the trade short and got out for a loss of around 0.5% or £30. 

Had I left the trade alone, it would have gone on to make at least 2:1 RR. In fact let's see what happened after I exited.

Looking back on this trade now, I have just noticed something. As I said, I exited the trade once the circled bar closed above the 6ema. However, you might notice that the close of that bar was in line with previous bar lows which I've pointed out. It was also in line with the 1.2660 area. I've drawn this as a red horizontal line on my chart, and it was a previous support area. This is significant because looking back now it seems as if this support area then turned into resistance, which is why the bar I've circled in green could not close above it, and price then continued downwards. 

If this situation cropped up again, how would I handle it? Would I exit as soon as a bar closed above the 6ema? or would I leave my trade open and trust an area like this to hold as resistance? To be honest, I'm not sure. This is an area where I seriously need to improve as a trader-money management. Getting into trades is easy. Knowing what to do once you're in.... well it could be the difference between financial freedom and being broke. 

NZD/JPY-23/09/2012

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Here is a long trade I took on the 23rd of September 2012 on the NZD/JPY. Here is my entry chart for this trade. (click chart to enlarge)

As you can see, price had closed above the 6ema (yellow line) for 12 consecutive days. It looked like we were in a nice uptrend, and I entered long on the touch of the 6ema on the expectation that this pattern would continue, and price would keep moving upwards. I risked only 0.5% of my account on this one because I had a bit of a losing run and was very low on confidence. 

Here is what happened. 

The next day I woke up to find that my stop loss had been hit. 0.5% of my account had disappeared. As you can see from the chart, I was fighting against a bearish pin bar a couple of days earlier at a swing high that suggested a reversal. I ignored it because at the time I did not know any better, and as a result lost money. In hindsight, I should not have taken this trade. My reasoning was that price had closed above the 6ema for 12 days straight. Obviously as soon as I entered it made a large move below the 6ema, took me out, and also closed below the 6ema at the end of the trading day. Was I unlucky? No. I was stupid. I should not have ignored the pinbar from a couple days earlier that suggested a reversal of the uptrend. Lesson learned. From now on, I will NOT take a 6ema touch trade if I see a bar or pattern that suggests a reversal of the trend, even if price has been respecting the 6ema for many consecutive days. 

Forex..... I'm coming for you.... 

The beginning of the end for the forex market

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I started this blog months ago. Might even be a year ago, shieeeet, but I didn't keep it up to date, because I was too much of a lazy bum. This time, every single forex trade I take, whether it's win or lose is gonna be posted here, without exception, no excuses. I'm gonna try and learn something from every trade that I take. Firstly, let me tell you why I've decided to do this...

You already know the basic story (read the blog description if you don't.). I may have made a stupid decision (I was drunk) and the odds might be hugely against me, but I'm another guy who wants to make it in the forex business. I demo traded a few months, made good money, traded live, lost a bit of money, got the hang of it and made some money, lost some money, and for the first 6 or 7 months I was a break even trader. Meaning my account never went into huge draw down and never went into huge profit. Some would say it's quite an achievement for a trader in his first year. The most profit my account had at one time was just shy of £200. The biggest draw down was also around £200. The last couple of months have been tough. It's like the market has just been beating me up. Acting illogically, just to spite me. Sometimes I've taken setups that I was sure as can be were gonna work out and BOOM! I get taken out in a few hours and lose 2% off my account. When the market moves against me it moves HARD. When it moves in my direction it hesitates and makes what I call pussy moves. Then it moves against me and moves fast to take me out. So my account went down to £438 and mentally it's been so tough to deal with the fact that I'm not getting that consistency that's required to make money. Doubts started to creep in, about whether I would ever make it in the forex business. Well, I think it takes a messed up person to succeed in forex. A messed up person as in someone who doesn't know when he's beaten. Doesn't know when to quit. Someone who will take a beating, lick the blood, and smile sadistically...Like this guy....

The forex market has frustrated me, beat me up and mocked me. The aussie dollar in particular, the fool. Well this is why I titled this post, "The beginning of the end for the forex market". I now keep a spreadsheet where I record all my trades (and I'm gonna post them all in this blog). Piece by piece, I'm working out the forex puzzle, becoming more picky with my trades. I had a losing trade the other day and it didn't even bother me that much because I know why I lost that trade. I won't make that same mistake again. I'm not your average trader. I'm gonna work everything out like this, so forex better watch out. Some people blow their accounts and quit. Some people blow their accounts and it makes them change into better traders. While I am screwed up, I'm not that screwed up that I can blow account after account and keep going. I don't intend to do that. Forex knows this. Forex knows I'm too smart to blow my account. 

Forex better be scared, because I'm coming for it. I'm learning from each trade. Forex may be winning right now but each day I'm improving as a trader. I'll take those losses on the chin, like Joe Frazier kept taking Ali's shots. I'll keep coming. Forex aint sh*t. Talking trash to the forex market like this makes me motivated. I feel like a prince when I talk trash about forex. I feel like a prince who is future king. It's my destiny to not only be a successful trader, but to beat the forex market from pillar to damn post. Outclass it. Counter it. Embarrass it.  I'll eat those pips for breakfast, dinner and lunch. I'll gobble those pips like pacman. When I make it, the market is gonna take one hell of a beating. I will clean up. The aussie dollar especially is gonna pay for the money it's lost me. This is the beginning of the end for the forex market. I'll read these words back some day, when I'm a legendary trader. 

So, having said all of that, let me post my first chart. I made this trade on the 17th of September 2012. I shorted this pair because price usually respects the 6 ema (yellow line on my chart) in trending markets. I figured we were in a downtrend, price had closed below the 6ema for 12 days straight, and it would probably reject the 6ema and keep going down. As the notes say, price just went sideways the whole week, I didn't want to hold over the weekend, so I took a very small profit of just over £7. Which is 0.24% of my account. I had risked 2%. My notes say it was not a bad trade to take. At this moment in time, I have not changed my mind. This does not mean I'm right. It does not mean it was a good idea to take the trade. It just means that  is how I feel AT THIS POINT in time-I'm still learning, and I may be completely wrong. 

Click chart to enlarge.

Had I not taken my profit, I would have made a 2% loss as in the coming days price went on to hit where my stop was (the first horizontal red line from the bottom on my chart-1.2308). I don't regret taking the setup, and if I saw the same setup, I would probably take it again. Again, that's just how I feel right now, but I may look at it differently in the future.