MidKnight

Good plan from yesterday with the focus squarely short. There could be some possible minor R in the 1.5270 - 1.5300 area and if that holds before it makes new lows, then that is very telling just how much control the short side has. Noted that we are not seeing the same volatility as EU is seeing at the moment. Usually that high volatility comes into currencies when a significant top/bottom is near. That is showing up on EU but is yet to appear on GU. The plan is more of the same..... Only longs to be had will be scalps unless there is a very very clear capitulation. Should it capitulate I will aim to be out of 1/2 by the time we trade the recent multi-day range low and attempt to trail the rest and scaling out the remaining 1/2 into 2 separate exits. Still not much to work with, feels a case of should already be short and riding it, rather than be aggressive to get on board this short train. However, I will be monitoring obvious minor intraday R as per the 15m chart should this decline continue today without a decent rally to wash out some shorts. Trades taken from minor R they will be managed a little more aggressively than normal, be out of 1/2 at the first immediate obstacle. EDIT: I say yesterday's plan was good in that it kept me OUT of all but the very obvious.

Reminds me of the Mafia, they also take whatever they want when they want it. And if you don't pay, they will threaten and extort you - sounds familiar?

Tight choppy trade respecting the immediate minor R above, however, unable to continue to press lower as keeps finding developing support in the 1.5390 - 1.5410 area. The potential support developing is noted, but it does not change my short bias. Every time frame 60m and up can see the nice trend to the downside, even the weekly chart is looking like its finally starting to trend down. I theorize that this 'obvious' trend will be attracting players of many time frames and will probably continue for some time to come. Only longs to be had will be scalps unless there is a very very clear capitulation. Should it capitulate I will aim to be out of 1/2 by the time we trade the recent multi-day range low and attempt to trail the rest and scaling out the remaining 1/2 into 2 separate exits. I don't really have a lot to work with on the short side here...I feel that if it rallied up through the minor R above, then it probably wouldn't go back down much until it had tested the more significant R above again. I'll be alert on a probe through PDH but any shorts from that must be very obvious.

indeed, methinks. Thanks for the good post on the subject. It's funny, up until I came to this thread back in Oct/Nov 2009, all my effort was just on entries and recently it's changed to virtually all my effort on trade management. Hopefully this doesn't take as long as it took me to work on my entries :haha: :doh: With kind regards, MK

But surely there are some loose criteria to validate 'sideways', and 'against your position'. The terms are too general I feel, just like the cliche 'cut your losses'. Is 2 ticks against your entry a loss? Many call that getting filled! You see what I mean? This is my difficulty with it and in my case, more often than not I end up thinking that I am cutting my losses at the time, but really I just end up cutting my profits. This small aspect of trade management is extremely hard for me to get a handle on. The problem is that it means something different to everyone based on their style. The guy that originally came up with the term - who knows what he/she really meant! With kind regards, MK

Outstanding spike like reaction from the obvious R (on the 60m). I continue to favour the short side, especially as that test of obvious R resulted in such a fierce sell response spending very little time in that area. Only longs to be had will be scalps unless there is a very very clear capitulation. Should it capitulate I will aim to be out of 1/2 by the time we trade the recent multi-day range low and attempt to trail the rest and scaling out the remaining 1/2 into 2 separate exits. Obvious shorts above 1.5460 - 1.5490 with the aim of being out of 1/2 before making a new low for the year and trail the other 1/2 as per LHs on the 60m chart.

It will cost you at most 1R but more than likely, less than 1R With kind regards, MK

I think he is using that to mean 'yesterdays high'.

Very tight and choppy trade all session. Yesterdays lack of news clearly influenced this choppy nature. Nothing to do yesterday and proud of it. I continue to look towards the short side for more continuation today. Only longs to be had will be scalps unless there is a very very clear capitulation. Should it capitulate I will aim to be out of 1/2 by the time we trade the recent multi-day range low and attempt to trail the rest and scaling out the remaining 1/2 into 2 separate exits. The obvious short to look for is in the recent multi-day range low area, ideally in the 1.5660 - 1.5620 area. Shorts there will be aiming for a new low but will be out of 1/2 before making that new low. I'll attempt to trail the other 1/2 with successive LHs from the 60 min chart. Alternatively, can take obvious shorts above 1.5490 area and manage them slightly more aggressive in the beginning with 1/4 off before 1.5450 trades, 1/4 off around 1.5410 area and trail the other 1/2 with successive LHs on the 60m chart.

This subject can be debated forever and its going to be a different answer for different trading methods. The only way to really know which is better and how it is best to manage is to test it out on your past trade data. In every auto system (a couple dozen systems) I have ever tested out, scaling out definitely smooths the curve and lowers RoR. In my discretionary trading, this is no different. Do the work, then you will know for certain. With kind regards, MK

Choppy trade most of the day on Friday showing a reversal in the USA session. The break down from the recent multi-day range has been fierce. Any re-test of the lower edge of that range is obvious for working into a short position. Only longs to be had will be scalps unless there is a very very clear capitulation. Should it capitulate I will aim to be out of 1/2 by the time we trade the recent multi-day range low and attempt to trail the rest and scaling out the remaining 1/2 into 2 separate exits. The obvious short to look for is in the recent multi-day range low area, ideally in the 1.5660 - 1.5620 area. Shorts there will be aiming for a new low but will be out of 1/2 before making that new low. I'll attempt to trail the other 1/2 with successive LHs from the 60 min chart.

I'm just going to chirp in here quickly As a evolving trader there have been several times when I have written documents like sevensa describes, I tend to refer to this a business plan. To me, a trading plan is a subset of that. I'll just comment briefly here about the trading plan side. I come from a strong programming background so it was natural for me to want detailed and explicit rules. I would pursue this approach for nearly 4 years. Testing, defining, testing, re-defining etc. It didn't really get me anywhere and it wasn't until late in my fourth year of full-time trading that I tried something totally different. I let my self go from the many rules and explicit definitions I had created. I tore down the wall! Almost instantly my results became positive. Now my trading plan consists of 3 types of trades and is only 2 pages typed (including the larger font subheadings). Mostly the plan is a set of guidelines to follow, or questions to think about with regards to trade management. Each of these questions has a mini-decision tree of actions to take as a guideline. Keep in mind though that up till the 4 year point I had observed many different types of markets (from bunds, to spoos, to currencies, to hang seng) and spent absolutely every day studying studying and observing movement. That probably did help. I guess I wanted to post here because just like virtually everything in trading - there are many different ways to plan that work for different people, but you'll need to experiment and find what works for you. All the experimentation in trading takes time.... With kind regards, MK

None of yesterday's plan ended up happening. I had expressed concerns for the long case yesterday with it not making it up to the obvious R on the rally 2 days ago, and then again with it testing so deep within the recent multi-day range. All a sign to me that seller is still in control. However, my current 'trend' framework does not take those into account currently. Yesterday's strong move down to new lows completes the basic pattern of tight multi-day range in a down trend, go up just enough to take out the range high to hit stops and entice longs, and then hammer it back down through to the range for trend resumption. This is the pattern I thought would happen except I thought the rally would go just a little bit higher to test the obvious R. It fell 15 pips short of that on my data and 35 pips short of what I would have considered ideal. Only longs to be had will be scalps unless there is a very very clear capitulation. Should it capitulate I will aim to be out of 1/2 by the time we trade the recent multi-day range low and attempt to trail the rest and scaling out the remaining 1/2 into 2 separate exits. The obvious short to look for is in the recent multi-day range low area, ideally in the 1.5660 - 1.5620 area. Shorts there will be aiming for a new low but will be out of 1/2 before making that new low. I'll attempt to trail the other 1/2.

I personally use the new york close as my cut off for daily bars, but for intraday, I'd use whatever session you wanted to trade! But that is just me.....I think in that recent webinar from LBR that Thales posted the other day, she even stated that it doesn't really matter what time of day one uses to measure participation, as long as it is consistent. If I was in Europe, I'd probably use London as the open and Frankfurt as like a pre-market....I start my day trading at about 2 hours before Frankfurt open because there is the odd large move in Asia around that time. But in general you can feel it change when Frankfurt opens, and even more so once London opens. :bag_of_salt: With kind regards, MK

Choppy trade in most of Europe, but a decent trend move down in USA session. The move down has come into the immediate S and should this up move out of the recent range continue, it is likely that the S will hold. I would have thought if the recent range really left so many traders short then we wouldn't pullback any deeper into the range. That is what I would have thought, but I will take my cues from the market rather than what I think. The cues are: major trend down, immediate trend up, but could be about to change. I was surprised we didn't test into the 1.5830/50 area at yesterdays high, that is another sign of caution for me towards the long case. I'm happy to look for longs down to about 1.5630. I'll aim to be out of 2/3rds by the time 1.5760 is traded and trail the final 1/3 for a run to a possible new high. Only very very obvious shorts in the narrow 1.5740/60 band, and again, I am happy to work the R zone 1.5840 - 1.5900 and even through up to about 1.5980 for a while. Have 1/2 scaled out before the first immediate S on the 60m chart. Try and ride out the other 1/2 (or at least a portion of it) as a swing trade ultimately looking for new daily lows. I'll be trailing the stop via the obvious pivot highs on the 60m chart and breaking this up into 1/3rds.

I don't think it would be at all, Marko. It's the chart examples I'm interested in here... Currencies IMHO, move best around the opens of various centers around the world. Tokyo, London & Tokyo close overlap, New York and London close overlap. With kind regards, MK

That's unfortunate about the algo work not living up to expectation. I've been there....heaps of times. If I may query, why FOPs rather than just futures? I am going to assume these will not be quick scalps but rather maybe have some other component to them, maybe you want the greeks rather than pure delta? With kind regards, MK

Bit of a strange day. Got yet another reaction in the 1.5720 area for a decent enough down move and then in the USA session ended up breaking up through the top of the range. The immediate trend has changed to up but the major trend is down. I'll be fairly aggressive to go long on tests of the recent range highin the 1.5720/50 area. I plan on being scaled-out of 2/3rds by the time it reaches PDH and will hold 1/3 for some move to a new a swing high. Any other longs ahead of 1.5750 must be very very obvious and treated more like scalps. Should we trade below 1.5700 and the move has been in an extended down trend for the day (not a creeping trend), can scalp longs. A strong zone lies above from approx. 1.5840 - 1.5900 and even through up to about 1.5980. I'll be working shorts anywhere in this broad range for a while. Have 1/2 scaled out before the first immediate S on the 60m chart (currently looking like the recent range high around 1.5740. Try and ride out the other 1/2 (or at least a portion of it) as a swing trade ultimately looking for new daily lows. I'll be trailing the stop via the obvious pivot highs on the 60m chart and breaking this up into 1/3rds.

This was awesome. I finally got around to listening to it - thanks a lot for the share! With kind regards, MK

Yawn, I may start cut and pasting the daily plan soon (note to self, when I feel its going to last forever, this is when it will break - stay alert today!) GU still within range of last weeks tight play. Good rejection out of 1.5720. I still feel it needs to go up through that R before it can go down through the S. The daily chart shows these tight clumps fairly often on GU with the majority end up breaking the counter trend swing (in this case, up) before resuming the major trend (down). Light longs in the narrow band of 1.5540/80 aiming to be out of 3/4ths before 1.5700. Looking to short above 1.5720 and be out of 3/4ths before 1.5580. Should be break out and I'm not on board I'll be entering on the first mini pullback into the edge of this range we are currently in.

Nothing really changed still. GU continues in the range giving another decent short opportunity on Friday. All of last week was spent down in this range. It has refused to break my immediate resistance in the 1.5740 area so far implying to me that there are many eager sellers still at only slightly higher prices than these lows. But I also feel it needs to go up through that R before it can go down through the S, it feels like a case of the market is too short at the moment and needs to wash some shorts out before it can go lower. Maybe I'm over analyzing it, but that is how I feel. Despite how I feel, I'll trade what I see and the plan will be similar to Friday. Looking to short above 1.5720 and be out of 3/4ths before 1.5580. Light longs in the narrow band of 1.5540/80 aiming to be out of 3/4ths before 1.5700. When we do finally break, I want to at least have something already on, even if it is just a 1/4 position because the move out of here could be decent.

Hi Cory, I hear ya on many fronts, but take comfort in knowing that virtually every aspiring retail trader goes through all these things. You are not alone or unique in this regard. Keep working on your craft daily. I try my best not to focus on daily results but instead prefer monthly with the frequency that I am doing (weekly when I was scalping), but there are things that I ask myself at the end of each trading day. I like to type them out, there is something about the written word that helps cement ones thinking into action. I'll post them here as maybe you or someone else finds this useful. Due to my trade frequency, I have a weekly process oriented goal. This goal is typed out each day. After the day is over, I grade how well I accomplished this goal. Once the goal receives a high enough grade, then I consider it accomplished and move onto a new goal. I never remove a goal in less than a week though. I also only focus on one goal at a time, I'm a man.....what can I say You can have several if you choose, but for me one at a time is enough and keeps me focused improving one thing at a time. Then I move onto the general what happened today stuff. What was the unwanted action? What did the unwanted action teach me? What is the solution? How will this improve my trading? This series of Q&A each day over the course of the week help seek future goals. Finally I grade the entire day and tag it with the grade number. At a later date I can search the entries by grade number. I find this useful for spotting recurring problems and even just to look back and see how my trading has changed/improved. I do all this on a private blog. Oh, and I also use a free, opensource program called 'audacity' for voice recording during the day. I do this because I want to preserve the emotion in my voice and my real-time thoughts. Granted, since moving to a lower frequency type of trading this part of my daily review is becoming less used, but I do still use it. You can find a lot of this sort of thing and suggestions on Brett Steenbarger's great traderfeed blog. My journal blog entry described above is a very slim version of some things Brett recommends. Take care, MK

These charts are looking like repeats day after day, but I am finding this process of the written word for my daily plan to be useful to me rather than my usual marking on the charts and silently think about the plan. Got the good reaction off the 1.5660 area to the tick that I was looking for but overall we remain trapped within this range. I'm starting to feel that it will go higher before it goes lower, but for now I am still happy to stick to the short side mostly. I'd be interested in shorts above 1.5720 area and maybe light long in the 1.5640/60 area. I'll scale out of shorts in 1/4ths with the aim of being out of 3/4ths before 1.5560. Because I am not very confident on longs in the middle of this range, but, I do see that 1.5640/60 has become a pivotal price and it would be testing yesterdays pivot highs, I would be scaling out of longs from there with 1/2 quick and then hold 1/4th for a possible break of the range highs. Anything else is a scalp all in/out. I'm trying to be available for the possible run it will eventually do out of this range and get away with a cheap low risk entry in the process....

The way those yen crosses have been moving as of late, it could do 500 in a day!

I honestly couldn't say which trader I would rather be without knowing the frequency. To really assess which is better one needs to know the frequency. Your 6R example may only do a handful of trades a month but the 1.4R guy may do a handful a day. Who would you rather be? I'd pick the 1.4R guy! With kind regards, MK