The Catabolist

Quite the success! This trade went basically how I expected it to. And given the confidence I had in it and it was a smaller pip trade, I sold .10 lots instead of the standard .02. This would have been a $10 profit (on a $500 account). Factor in the ~$3 loss from the first trade and it's still net $7. It's a great feeling to know I made a proper choice.

Well, that failed. Price kept dropping. So, since it broke through a support pretty well, I'm going to assume it has some decent downward momentum try and go for a very short-term sell and see how it goes. Used the previous S/L as a starting point for the S/L this time. Made the T/P simply something that's within a reasonable distance outside of the Bollinger Bands on the M5. I waited for the price to jump outside of the top BB on the M5 and reach high on the Fast Stochastic (12,2) Monday, 11-5-12, 6:40 PM EST EUR/USD Selling Price: 1.28010 S/L: 1.28100 T/P: 1.27910 Gonna see what happens.

Alright, the one I'm using now has a better platform with an interface that I'm growing to like a heck of a lot more. On top of that, it's EST-1 (GMT+4 I think that would be) so that's closer to the "official" close. I definitely understand where you're coming from with your reasoning behind that so I too take it seriously. Hopefully this helps.

Made this trade about 5:15pm EST on Sunday, 11/4 EURUSD: Price: 1.28249 S/L: 1.27990 T/P: 1.28880 Looked like a good swing low on the H4 and is also a support AND swing low on the D1, so I entered here. Set the S/L for below the next lowest point prior to this swing low on the H4. Set the T/P on the 38.2 fib retracement on the H4. Fingers crossed.

Alright, I will be doing just this. I was terrible this past week again, but this week I'm going to add severe focus and at least make one trade per day. I'm personally trading in GMT-5 (EST), but my MT4 seems to be in GMT+2 since the trading day on Friday ends at 23:00 / 11pm in MT4 which for me is 17:00 / 5:00pm. So based on your post here, I'm going to try and get rid of this confusion and pick up a new client. I plan on getting some trades set up today after the market opens up (though nothing crazy since it's such low volume on Sundays). I wonder how Hurricane Sandy has affected and will affect the New York trading session. UPDATE: I could download a different platform, but it will have to be different from what I use once I go live since my only realistic live option is MT4. The major difference is initial deposit needing to be higher and lot size larger, though I could simply scale those down mentally to be similar to how live trading would be. Also, the new platform will factor commission in so I'm curious how that will affect it since the MT4 approach only uses the bid/ask spread for compensation. UPDATE AGAIN: I realized I could use this other platform for charting and decision making, then simply use MT4 to actually place the trade. I think I'll give this a shot.

Okay, thanks! You make a good point. I'll post the charts/prices. Sorry about the hiatus this past week. I'm back at it. Hit the AUDUSD Wasn't too sure what to do with this one. I need to make a couple trades to get in the habit of it before I kept putting it off. It seems silly but it's a part of how I learn so it had to be done. I noticed it seemed to break past the 'range' between the 10 and 20 day SMAs for the M30 chart. This makes me think it's a bit more likely to go up, at least temporarily. The H4 gave me a good place to start for figuring out s/l and t/p. I figure if it's going up, it'll try and hit the 0.0 again. If I'm wrong, then the 38.2 is a good s/l. The D1 significant fibo shows that it might try for the 61.8 again.I don't think it's a coincidence that the D1's fibo 50 ended up being the t/p and its 31.8 was the s/l. It provides a little extra backing to my idea. We'll see where it goes! RECAP Buy Price: 1.03652 S/L Price: 1.03300 T/P Price: 1.03850

Well, the trade was a bust. My S/L was set at a good point so it stopped the trade as my failure was confirmed. I wish I wouldn't have gotten over excited and added more volume to the trade, but that's something I'll just have to keep a lid on in the future. What I'm more concerned about was another .02 (totaling .06) that I don't remember entering. If it was a program issue or something of the like, this is troubling because had this been a live account, I would have furthered my loss with no intention to. I'll have to keep a close eye on this. Net Loss: 25.1 pips

It creeped up about 40 pips more and continued to reinforce signs of stalling at this price level, so I dropped .02 more into it (keeping the S/L and T/P at the same absolute numbers)

Went short on GBPUSD. It's hanging closer to its D1 resistance than its support, though it's not exactly on the resistance. Hit a swing high on the H4 and is hanging right around there with signs of a reversal (pinbar, stalling price). This also lines right up with M30 and H4 resistance. I noticed it hit the M30's fib retracement of 38.2 on its way down while the M5 shows a harsh jump below its bottom Bollinger Band and under 20 on the Stochastic (12,2,1). I let it jump up a bit first and went short. Set the S/L at the H4 Fib 0 level and the T/P at the 38.2. As a final point, the distance from the T/P to the starting price is about 4 times the distance from the S/L to the starting price (with other positive signs pointing my direction). This is a good setup of a trade all in all in my current noobish opinion. Just dropped a standard .02 on it since it wasn't JUMPING OUT AT ME

This is actually very helpful, thank you. I'm trying to focus my efforts to only 1 or 2 pairs at a time and after I've made my trade, move to another 1 or 2 and so on (this is only limited to the USD majors). I've only been going through the AUDUSD, EURUSD, and USDJPY so far, but if you say that the USDJPY can be a rough road, I'll be very careful while traveling it. On a positive note, I had a damn good day all in all. My theory of the USDJPY was just finally confirmed as my t/p activated after all, leaving me with a 34.4 pip profit. If I subtract the 10.2 pip loss from my initial shot at it, I'm still left with a net 24.4 pip profit which makes me especially happy because it wasn't luck - I knew what I was shooting for. It timed out well in the sense that it shortly regressed back upward after it set off the t/p so my timing was pretty much spot on. I'll be aiming to start analyzing the GBPUSD next. Wish me luck

Didn't get a chance to log all of today's trades as I was waiting on a moderator to approve this post, but I do remember my USD/JPY It's showing resistance at its current level, a H4 swing high which alerted me to fibo. So I've got a 0% lining up with a resistance level and decided to shoot for the 38.2 retracement. Set a reasonable s/l just above the top end of the resistance. Felt confident because the trade jumped out at me and had multiple signals lining up. Dropped .03 lot on it (normally do .02) and wouldn't you know it, the s/l was tripped about a half hour later, but I checked it and it only hopped up then back down. It was still showing resistance I just happened to set the s/l the slightest bit too short. Normally I accept defeat, recollect myself mentally, and move on, but I felt good about this one so I took a second swing at it with only .02 just in case. So far it's hovered below the s/l (I used the same one as before) and I'm excited to see where it goes. Will update later.

I wanted to keep a log/journal of my trades so I know not only the numbers of the trades (lot size, entry, exit, etc.), but also what the hell I was thinking when I went in to it. Hopefully not too long from now I'll be able to look back and repeatedly see where I was going wrong so I can continue to improve my system. I only make two or three different trades per day right now since I'm taking it slow and not just throwing out shotgun trades. Everybody, noobs and pros alike, feel free to comment or ask questions or tell me how dumb of a trade I made was. I'm doing this to learn and with any luck, other members here can too. My track record: https://www.myfxbook.com/portfolio/practice-time/400559 (Note that I am currently using a demo account. This is after losing half of a real account and realizing I needed to slow down and get good with demo before I jump in to real trading. I do still treat it as if it's real money and am cautious but not over-restrictive with my trades).

Hey there, just wanted to ask a few questions here. Do you put more value into more recent data, though? Some daily charts show a lot of movement but end up in generally the same average, so it's hard to identify a trend. If I mentally weighted more of the recent data, I could develop some better trends, but I don't want to do this if it isn't actually a good idea. And what would you recommend I specifically look for with daily candlesticks? Thanks!

This was actually super helpful. It's kind of what I had a hunch for as it was. If I was aiming to buy at a reversal from a downtrend when the prices are about to hit support, I'd make sure to set a stop loss just a small, reasonable amount below support because if It hits that point, it's probably going to drop through the support and continue downtrending rather than reverse like I thought. Small loss, no big deal. Then take the opposite approach for going short on a pair. Unfortunately, there have been a few times where I didn't quite set the stop loss far enough and the price moved just far enough to trip it, but then still reversed like I planned it would. I guess I'll just have to learn to fine tune the exact details there. I'm now intrigued, though, about how you'd set partial stops and things of that nature (like multiple entry points on the same pair)? Perhaps exactly for a situation like what I just described.

On the note of avoiding too big of a bleedout on a loss, what is a reasonable method to setting a stop loss? I could imagine it'd vary a bit from person to person based on their needs and funding, but are there some generally good rules?

Thanks a bunch, guys! I'm starting to understand this better thanks to your posts (and playing with a demo account). I soon realized that I can buy or sell from the start, then do the reverse to close the order, finalizing the deal. Obviously it's not quite like this with stocks so I was a bit murky about that at first. I realize now that the interest only affects it while that order's open and (at least with Alpari-US), it simply adjusts the price. I get the idea of contract/agreement, though it makes me wonder how exactly it works at a deeper level. It's easy to grasp the idea of, "Okay, I'm telling you this is the price I'm promising to set as the buy price," followed by, "Okay, it's been a few days and it rose in price, so I'm going to 'sell' it now, as we agreed to. I get the difference (and you get to keep the difference in the spread." But, how does this actually go down? As in, where does the currency actually come into play?

This definitely did help a lot. I did feel a bit silly after I posted this and continued to run this through my head, especially with the interest rates (I realized that was yearly interest :P). Your post helped clear up all those questions completely (and then some), so thanks. The other thing that crossed my mind was how I'm allowed to trade a currency when I don't own either one. That is, if I've deposited 1,000 USD into my account to trade, how am I able to do something like GBPAUD?

The two major things I'm trying to get a mental hold of right now are (1) interest rates and (2) indirect vs. direct quotes and their implications. Interest Rates Here's my current understanding, so PLEASE correct me where I'm wrong: The interest rate of a currency is set by that country's national bank. These interest rates affect the currencies held in the forex market on a daily basis at 5pm EST. It's always relative and is the sum of the two currencies in question, so if I traded GBPAUD (which currently is 3.5% off .5% [which could be worded 350 basis points off 50 basis points]), that's net -3% interest. So if I've traded and now hold (arbitrarily) 1000 GBP, at 5pm EST (excluding the weekends) I would be debited 3% interest or 30GBP, leaving me with 970GBP. In an alternative scenario, if I've traded EURUSD (which is currently 25 basis points off 75 basis points so net +50 basis points) and now hold (arbitrarily) 1000 EUR, at 5pm EST (excluding weekends) I would be credited .5% interest or 5EUR. Which would result in 1005 EUR total. Some of the forex concepts and dynamics as a whole seem counter-intuitive and a bit murky to me (and I've only spent about 4 actively involved months on the stock market before this). Which is also where the direct vs. indirect quotes confuse me. Direct vs. Indirect Quotes The very fact that a quote is set as GBPAUD seems to have odd implications. If the GBP becomes weaker to the AUD, then the AUD has become stronger to the GBP. If my aim is to buy when low and sell when high (to put it very simply), then points where GBPAUD is peaking in price and is about to turn around and start dropping, a theoretical AUDGBP would be dropping to a low point and is about to turn around and start increasing. In this scenario, I'd prefer to have AUDGBP, but alas I'm stuck with GBPAUD. Am I missing the concept altogether? Am I just screwed when it comes to that? Is there a forex version of selling short on a stock then buying to cover? I appreciate any and all guidance you guys can offer me here.

Hey guys! I'm still new to trading (been in it for about 4 months now), and have started to get a bit of a hang of it. As of late, I've been basing most of my picks on dividends and trying to cycle through different high-paying stocks (not necessarily high yield-often times a stock that's simply paying out annually might have a lower yield but still have a higher payout in that instance). For technical analysis, I've been using Bollinger Bands, Fast Stochastics, VWAP, and ADX along with plotting the stock against a good index. Hopefully I'll learn how to refine this skill set from you guys here, and with any luck be able to contribute back.