ForexTraderX

Got long 1 more time... at 1444.50

Eh, closed out half a point loss... maybe i'll hold back and see how this develops... don't like the downward momentfum

Just got long at 1444.50.... stop about 2-3 points, target a bit bigger... hopefully anyway.

Well, all in all it looks like it turned out to be a pretty good week. Up about 1% at the moment for the day, about 3.5% for the week, and about 7% for the month. I also have about another 0.33% in open positions... and with any luck they will continue to improve into the end of the day, and I can take profits on part of them. If i'm really lucky, i'll be able to get another half a percent in profits while leaving something open in the XXX/CAD pairs. Again, I'm expecting the USD/CAD to push to parity at least, so I'll very likely have something on it until we do at least that. Fact is, if the EUR/USD is continuing it's move up (which I think it may.... this could be the start of the 3rd wave ala elliot wave concept)... and if it does, I'll be long and strong the EUR/CAD.... as I've mentioned before , I think it has the best potential to rise of any other major, cross, or comdoll (of the majors) In spite of the 1 day of dumb trading, it was a solid week over all. I don't know if next week will have quite the same magnitude of opportunities as this week had (considering CAD weakness)... but, on second thought, it probably will.... I think the CAD is just beginning to see what will eventually be a significant decline of value over the next 12-18 months... and if i'm correct, then we could see it drop by 300-1000 pips during that time, depending on what currency one is trading against it. So this could be just the beginning of the beginning for a readjustment in valuation for the CAD. I suppose time will tell. FInally, thanks to those who asked questions and made comments and got involved. I prefer a dialogue to a monologue, and I think it's more helpful when I can address specific questions or comments than just general market ramblings. So thanks again guys, hope to continue such in the coming weeks. FTX

Well, I just got long again in the EUR/USD and still long in the EUR/AUD... eur/usd long from around 1.3050ish... we'll see...

Blue, I was wondering if you could clarify a few things for me... as far as more profitable... good call, trading is trading and profit is profit. However, a skilled and successful day trader will have a smoother equity curve than someone trading longer term simply because it is assumed that they are day trading because it allows them to act on a higher frequency of signals than just EOD trading signal(s) would arise. This is not really a huge advantage in itself, but it can (and often for me does) help me move past the emotional impact that losing in the markets can have, as my losses affect my account equity for a shorter duration of time than a swing or position trader of comperable skill and win rate/reward:risk/etc. Now, the one place you totally lose me is by saying trading intraday is expensive... implying it is more expensive than trading signals provided by using only EOD data.... If you mean in terms of time, ok, sure. But that's pretty abstract for the situation in which you made the comment. How is intraday trading intrinsiclly more expensive than EOD or any other form of trading? FTX

As a follow up post... I was thinking more and more about how rediculous the whole "KISS" concept is when applied to trading. I started considering more careers where "KISS" is really just "S.T.U.P.ID." Imagine the following: Callling up Obama or Romney political strategiests, and telling them "you guys really don't know what your talking about. your trying to do too much, and understand too much data. just use the KISS approach, and your candidate will win for sure!!!!" :doh: Or how about "Look General Martin Dempsy. Just because your job says your the head of the U.S. military joint chiefs of staff doesn't mean you need to overthink this whole war on terrorisim/ 9-11 / afghanistan / bin laden thing. Just, you know... K.I.S.S.! and you will win the war and bring peace and security to all those you are sworn to protect!!! Of course, the K.I.S.S. approach works outside of giving government employees advice. You can take it to the private sector as well: "Well, Mark Zuckerberg, I know your stock is crashing into the shitter these days... and I think I know your problem. You don't "K.I.S.S." enough. your like, trying to do to much with your website, and your employees are probably confused, and you probably are too. Well, just use KISS, and your stock price will come back in NO time!" Or Even... "What? what do you mean to become a brain surgeon you need to get a college degree, and then go to medical school, and then spend a year or two at least working as an apprentice for a doctor at a hospital?? Look buddy, your overcomplicating it. Just go grab yourself a cadaver... craigslist might have one... and then go sharpen your best knife from your kitchen. Read this book here on the human brain, give it a try, and you'll be good to go in no time! Somebody obviously didn't tell you the secret to becoming a successful neurosurgeon is you just need to K.I.S.S.!!" Or Maybe... "Well Ms. JK Rowling... I know you want to write some really good books about some kids who have magic and go to boarding school and fight evil... but, seriously, that's just where you are going to fail. Epic Fail. Because everyone knows the secret to truly innovative and compelling literary mastery and sucess is really just about K.I.S.S. If you just stick to the basics in your story, you'll do a lot better than if you try to write some big old long novel or something. Just KISS, and you'll fulfill your dream and alter the literary world... because, well, you just KISS'ed!!!" :crap: I could probably go on and on. K.I.S.S. ... I think acronym was invented by a person looking for an excuse to justify their stupidity to the rest of the world. FTX

Nails man. F'ing Nails. That's EXACTLY the problem with the whole "KISS" approach to trading. Look. Seriously. Anyone who wants to trade is competing in an industry that literally has more money in it than any other industry in the world (maybe more than EVERY OTHER INDUSTRY COMBINED)... That type of money buys a lot. It hires the best, and the brightest, some of who create self dividing and self managing algo's referred to as "genetic" algos. We're talking about the guys who literally write the books that your graduate level professors teach from. They also can afford better speed and data mining operations, develop and test more ideas, more strategies, with more thorough testing that most of us will ever be able to imagine. On the other hand, you have the independent retail trader. The successful one. Who is successful because they have the ability to look at an infinate number of variables, and somehow identify which 3 or 4 of those variables are relevent right now, and what would or could alter that, and to what degree. They have memorized every chart pattern, every candlestick arrangement, and every form of support and resistance that has been thought up. They are probably familiar with literally hundreds if not thousands of different indicators, and they usually have a good working knowledge of data and news releases, how they may affect any particular market, and how they plan to trade in each case. Oh, I almost forgot. They have also been practicing this for years. literally. years. Just like a guy who can juggle 4 gas powered spinning chainsaws and make it look easy, the independent successful retail trader probably spent triple the amount of time learning to do what they do, just to get a 55%-60% edge in the markets, than the guy who can juggle 4 gas powered spinning chainsaws. Oh, they also have a talent for it. A mind that is "built" to understand and make sense of the endless stream of input, quotes, correlated markets, trend, etc... most of which will hurt your trading, rather than help it. The guys who really do this for a living are not usually the guys who have 2 moving averages, a daily and 1hr chart, and a bolllinger band... who wait for A and B and C and D to all show up, when X is also there. They are usually the guys that know enough about the markets, that they could literally sit down and write out new formulas that would work...every day. They don't follow a recipe. They create new recipes every day from an near limitless selection of ingredients. But, like some top chefs, because they just have the talent and experience and love for trading as chefs do food... they just know how food WORKS. they know what ingredients can be mixed with what other ingredients to achieve a taste like such and such. A chef knows food. literally. He has such an understanding of food that he can pick and choose the right ingredients for any course (appetizers, desserts, entree's...etc...) and he can usually just look at how much goes in a pot to know if it's a cup of this, or if it's only 7/8 of a cup, and you need to put more of it in. His measurements are in his head. His recipe is being created as he cooks. His ingredients may be differerent every day, and yet he can still make amazing food, every day, without ever having a "formula" or recipe to work off of. Once you can trade like a top chef can create amazing culinary creations... then... then you can "simplify" your trading. Because only then will you be good enough at trading, to know what "ingredients" you need to use to acheive the best outcome for the opportunities being presented. Until you can trade like a top gourmet chef can cook.... trying to "simplify" is basically the equivilent of trying to teach yourself to be a top chef, but then deciding your going to :"simplify" your cooking and just never cook dessert or meats. Because you don't know how. and besides, you always mess those things up. In such a case, simplification is really just a code word for " I really have no clue about what i'm doing, why i'm doing it, or how markets work at all." K.I.S.S. - This asinine acronym only works when you are overcomplicating something simple. It has no place in a world where you need to learn a completely new set of vocabulary words, just to be able to understand the most basic questions people post up in the "beginners" section of this website. K.I.S.S... hmpf. My ass. FTX

King, not sure.... ahh... lol. actually. it was already mentioned. Ya. swing for the fences. Ever wonder why the contest winners or even the top 10 or leaderboard or whatever are hardly ever the same people who won the LAST competition? Reason is... they are using a strategy or trading an idea that will either take their demo account up 1000% in a week, or it will crash and burn completely. They are cool knowing that they will crash and burn 15, or even 20 times in a row in order to have a single entry where they get a 1000% return in 2 months (or whatever) Now... what you should be VERY VERY interested in learning about or from is if you can identify a single individual who enters the same contest (or a select few contests) time and time again.... and yet is nearly always near the top in terms of returns. Show me a trader who enteres 10 demo money competitions, and finishes in the top 3 of all 10... and never blows out his competition accounts... and that's a guy who has a crystal ball to the market. I actually looked for something or someone like this a long time (years) ago. For online demo money contests.... I never found a single person who ever placed in the top spots more than once... the only exceptions were 2 people i cam across who ever 3-4 trading competitions each month... so, they both had a few finishes near the top for 2 or 3 contests.... but mind you, they blew their entire accounts out in about 30 other competitions that year... so, not really a good strategy to learn for real money trading. FTX

So, after considering a few other variables in my EUR/USD long trade... I've decided that it's probably not nearly as certain of a thing as I was previously thinking. I still think the trade has merit, so I am leaving a portion of my position on, but I have already closed out over 50% of my original position at a small profit. The reasons for my weaker conviction are as follows: 1. US equity markets didn't fare so well today, and the eur/usd has a positive correlation with the S&P. microsoft and google had disppointing announcements, and the U.S. data numbers weren't as hot as one would like for a risk on trade. 2. The EUR/USD was in a poorly defined yet obvious consolidation pattern. I realized that unless this move down is actually a reversal.... (which most moves after such consolidation are NOT reversals).... particularly given that the euro is at a significant high price, and thus such a "fake out" is more likley to be an actual bear move, than a fake out to an up and coming bull move. 3. correlated markets across the currencies also dropped off. If just the euro dropped a bit, that wouldn't bother me at all.... but considering the drops in the GBP and other risk markets... it tells me that there may be more to this drop than just a simple move to equalibrium from an orderflow imbalance. 4. The fact that although my bias in te euro is strongly bullish over the medium term (days to weeks)... I am taking a very aggressive level for an entry... gap fill or no gap fill. Really, I could see price very realisticaly retesting the 1.3020 level, or even lower before it fulfills on my bullish bias (IF it fulfills on my bullish bias at all!) So, again, a bit of overconfidence and I almost missed some important warning signs... So, with these considerations, I had no problem closing most of the position out, leaving just enough on that wouldn't botther me win or lose and even with these new issues coming to light in my analysis. I'd really rather be rested, clear minded, and ready for london when it opens, because london is muc more likley to set the low or high for the day than the asian session is. Really, THE easy trade IMO today is Long in the USD/CAD From between 9800 - 9820... and then lower at 9775-9665as well. I stilll like the EUR/AUD, EUR/CAD and EUR/USD long... but none are as clear as the USD/CAD is for a long opportunity.

Welll shit. First level in GBP/USD didn't hold. 2nd one held perfectly. (the 1.6170-1.6200 I mentioned the other day)... and it just would have hit my target at 1.6050. Oh well... when I'm trading badly (as I did the other day), no amount of great opportunities will help me make money, but it's a reminder to me to make sure I always trade well in every way... because being distracted with an unfortunate market situation not only keeps me focused on sub par trades, but kinda blocks out the necessary frame of mind to take advantage of other, better, trades... like that GBP/USD short i'm watching right now just drop like a rock without me in it....

Actually, considering all the correlated markets such as the EUR/COMDOLLS, and the EUR/USD, etc... and now it seems bloomberg is getting in the mix as well here: Dollar Poised to Bounce Versus Canadian Peer: Technical Analysis - Bloomberg Euro May Rise to $1.35 After So... yep. I feel pretty good about what I'm seeing, and I think by the end of this week, we could see the euro really push to retest or break the highs of the last few weeks.... and if we don't see that, I'd expect we see a CAD squeeze as longs start to bail out en-mass. One of these two currencies will move by the end of the week... I'd be somewhat surprised if neither move.... but not at all surpirsed if they BOTH move (cad down, eur up)

I'd even go so far to say that we are within 50 pips of a low in the EUR/USD before we push up again to retest the high of the last 2 weeks... And frankly, I see a break of that high coming as well... but I'm not willing to bet on that last part just yet.... however, being right now within 50 pips of the low for the rest of the week? ya, i literallly am betting on that now.

As for examples... I JUST posted a breakdown, almost thought by thought, of a EUR/USD long i'm in right now from about 1.3060. It's still going on, so I could totally fail here by the tiem you read this...however.... you can check out the last 2 or 3 pages in my thread to see what i'm talking about, and you'll see how I use a 1 min chart to help my decision making process FTX

I'll probably take something off the EUR/USD long at 20-30 pips.... but my "real" first target will be right around the US session highs today, 1.3118ish. Next target, high of the week, 3rd target, 100 pips up from my entry. This is assuming hte trade works out as I believe it will.. but it no, no biggie. I risked a little to make a lot, and it's a solid opportuity with a confluence of both level, bias, stronger markets against weaker markets, and price action and volume. If I don't take trades like this... .I probably should re-evaluate my career. FTX

Also, the EUR/AUD for a long play from righ here, right now, around 1.2600 is probably really solid as well. Here's a chart of a 1 min of the E/U.... looking pretty good to break upwards...

Situations like this in the EUR/USD are particularly nice, because a person can get a fill at, say 1.3060, and take a 15 pip stop or something...and easily go for a 30 pip first target, 60 pip 2nd, 100 pip 3rd target. So, it's vyer possible to get a 4:1, 5:1, 6:1...etc... reward:risk ratio, with a very small initial stop. Not every trade opportunity presents as such, but when they do like this one does, it's almost "stupid" to NOT take the trade. With a 4:1 reward:risk... a person can lose 2 out of 3 trades, and STILL make a profit... so for me, even though I think the EUR/CAD is overall better (and I'm in that)... the tight stops and solid reward:risk ratio I get on this EUR/USD long makes it worth taking, IMO.

I think the EUR/USD should have no problem retesting 1.3090 before it hits 1.3040. it's at 1.3060 now. Of course, i'm wrong a lot... but this feels like a fake out to me. If it's broken, i'll be looking at 1.3020-1.3010 for a possible long, and then again down at 1.2990, and then 1.2930, and then, 1.2900, and 1.2860. Truth is, these situations tend to frustrate me, as they have so many decent levels so closely spaced together. In these cases, best to wait for price action confirmation, and a little volume spike wouldn't hurt either. After that... i'll have to re-evaluate my perspective... but truthfully, if we get so much as a 20-25 pip bounce off of 1 or two of these levels, i'll put myself in a situation where risk is miniized, if not elimiated altogether.

Oh...yea.... the 1 min chat is forming a CLASSIC basiing pattern, 5 min showing nice pinbars... and the gap fill, with my already explained upward bias in EUR in general.... I'm super happy to get long here. Doesn't mean it'll work of course! Just means I have clarity on this setup, and to quote cloggie from over at forex factory: "Clarity is more important than certainty"

Here is a 1 min chart of the E/U futures.... i'm posting it to show the volume changes as the gap was filled, not to mention the aggressive buying interest by larger players.

Well, the EUR/USD futures literally just filled a gap they had made from a few days ago. I'm long the E/U for a small position right around 1.3060.... however, the better trade IMO is a long of the EUR/CAD.... If the EUR/USD finds support here, given the movement of the USD/CAD and the other reasons 've already listed for a bearish CAD.... it stands to reason that if the EUR/USD will move up, then the EUR/CAD will likely move up even more. If the EUR/USD falls further, or completely falls apart here and dropss quite a bit more... well, the EUR/CAD may just tread water, or have a minor retracement...but whatever happens, the odds of it holding up better compared to the EUR/USD right now is extremely high. So of course I added to my EUR/CAD long position. This way if i'm right, i'll probably make more with it than the E/U, and if i'm wrong, the EUR/CAD may drop back, but may avoid the stop loss point... and if so, it will have another chance at further upward movement as soon as the E/U finds support.

Bleh... shitty trade management the last 36 hours. Had a few positions really get away from me, for a variety of reasons, but primarily because I let my recent success contribute to an overconfident mindset. OF course my risk is low enough on any given entry that even a dozen or so stopping out that in most cases it won't even kill a week of work, nevermind a month... but, It's just a total lack contingency planning for my trades in case something doesn't work out the 1st or 2nd or even 3rd time, but has not yet acted in such a way that would negate my overall bias. I got a bit myopic due to this overconfidence, and it ended up costing me. By my estimates, I should be up now between 4%-7% for the week, had I not made the mistakes that I've identified. Instead, i'm only up about 2.3% for the week. I'll probably finish out around 3%, depending on where the trades I'm currently in resolve...but, 3% is significantly less than 5 or 6 or 7 percent. So, i'm working on some ideas that I hope help me address the overconfidence issue better in the future. Will post more as it is relevant. FTX

Huh.... I'm kinda with Tams here... the vast majority of successful day traders I know use multiple time frame analysis methods. In fact... I can't really think of a single one who DOESN'T look at more than 1 time frame. I'm sure they're out there... but I bet they are in the minority. Now, if we look beyond day traders, to longer term investors, position traders, etc... I'd say that probably the majority of these don't look at much under a daily chart... but they may use weekly and monthly charts, which would still be multiple TF analysis. As far as someone who posts stuff up before it has "triggered", or a live track record, and what not... I guess i'm as good as any on a public, anonymous forum that is built to cater to an audience who is seeking millions of dollars in riches while sitting at their home computer. Here's my thread : http://www.traderslaboratory.com/forums/market-analysis/13737-watch-typical-day-real-day-trader.html you'll have to go through it carefully to see the examples, as I often post "live updates" of trades and opportunities that I'm watching or trading, and a lot of that stuff won't make sense unless you were to open your own charts and follow along... I also post my trading results on myfxbook (link is in my signature). It's a real money account, and it's independently verified...so, what your seeing is what I do. But i'd suggest you read the first page of my thread. If you can't be bothered to read through it, then i'd say skip to page 25, and then start reading. And yea... I actually look at every time frame from 1 min up to monthly, and when i'm trading or managing a day trade, I'm usually flipping through a variety of charts, usually the 1 min, 5 min, 15 min, 1 30 min, and 1 hr, and of course the daily chart. I look at many different factors, some of which are: - a "market profile" of sorts on each time frame, with the intention of finding very clear "MP trade worthy" levels that have 2 more more time frames with a high degree of confluence between each one. - a reversal candle on a larger TF (say, a bearish engulfing daily candle)... I will then watch the euro and or U.S. session to see if a great looking reversal candle (bearish of course) occurs on an intraday chart, particularly at a level of support or resistance (I like session/daily/weekly highs and lows for S/R, but market profile and other concepts I do use as well). This type of situation is most powerful if there is a deep retracement on the day following the bearish engulfing candle... because the deeper the retracement I can catch, the more likely that is going to be the high of that day... - I'll watch a 1 min chart, and watch volume (for futures and stock trading this works best)... and see if the volume spikes are more often correlating with green candles, or red candles. This generally indicates aggressive buying or selling by larger players (thus the high volume spikes)... then, I will look to see if we also form a nice reversal candle (pinbar, engulfing, etc) on a 5 min or 15 min chart... a 1 hr chart is best. If this happens to correlate with the volume spikes in the 1 min charts (say, bullish 15 min pinbar at support, with my biggest volume spikes on my 1 min chart being nice green 1 min candles)... I'll look to get long... etc. Just stuff like this, this is how I use multiple time frames. I do a lot more than this as well, but... I have to say, I'm wondering how much trading you've done, or specifcally, how much experience you have with day trading.... since almost everyone I know uses multiple time frames if they day trade... So much in fact do I rely on multiple time frames, that if I had to use only 1 TF to trade off of, I would choose the daily charts, and I would never day trade again. Period. It's that intrinsic to my trading. Anyway, maybe this gives you a different perspective on multiple time frames? maybe not.. but I'm one trader who does do this successfully, professionally, and can't imagine trading without multiple time frames. FTX P.S. Really, read the thread. You will see probably over a dozen examples of how I use multiple time frames and multiple markets to line up very high probability opportunities.

Next week then you say? Ok... well, guess I'll continue to look for CAD shorting opportunities between now and then. IMO, the degree of "net shorts" we've seen in the euro until just before the bottom a few months ago, and the overall large scale devaluation of the euro against the comdolls since the financial crisis, and the record setting net longs seen in the CAD right now., I think the EUR/CAD is best long bet out there right now (of the G8 currency pairs), for longer term trades, and I'm thinking we'll retest 1.4000 or higher in the next 12-18 months.

Aright... I see what your saying Neg, and to a limited extent, I agree... but I still stand by my point of: "if you understand how markets work and have a working mental model that you can effectively apply that knowledge of how markets work to your trading, then there really is very little 'discipline' involved" It becomes more like... say you are visiting Miami beach in the summer time. You get to your hotel, and want to check out the ocean. You can choose anything you want to wear. It doesn't take discipline to avoid wearing thermal underwear and a heavy goose down coat. It just takes a working mental model of what a borderline tropical climate is like, and what the culture of miami beach is like in the summer, and no discipline is needed to choose the appropriate attire. I will say this for discipline though: I do use it to a degree every day in terms of never risking more than I am emotionally able to lose. The analysis itself is just something quite "pure" to me at this stage of the game, its' just like reading a story (most of the time anyway), but when it comes to actually choosing how much to risk and how to manage or reduce that risk as the trade moves on... yea... that's NOT so clear cut. Because it's not based on an external, emperically relevent, data driven logic, but on a much more internal, subjective, "unknown" (the unknown being exactly how a loss of X% in a trade/day/week/etc will affect me when it happens) So for this, it does take discipline... for me it's the form of an internal montoring, but I have to always remember to focus on that, and if it gets uncomfortable, have the discpline to ignore my more optimistic, hopeful mind, and just focus on doing what i need to in order to be comfortable with my risk. If I let this get away from me, I can destroy a month of work in an hour or two. And it IS discipline that enables me to keep vigilant of this. But in trading analysis, identifying opportunities, determining what levels and how big of stops and targets...etc... it's more like understanding than it is about discipline, IMO (and in my own trading. others will differ here of course) FTX