Watch A Typical Day Of A Real Day Trader

[ForexTraderX 10]

right now short 6A from 1.0442

[ForexTraderX 10]

Well, it was a very short night tonight. I'm a bit tired, and will be calling it a night early. Up $45 on 4 trades in the futures, not a world class evening by any means, but up is always good.

 

Had a 2 or 3 people show up tonight, to watch a few things and chat. was a nice time... will be around next week as well.

 

Made just over $160 in futures this week, after comissions, about $90.00. but, i didn't spend much time trading them...was primarily focused on my forex trades. However, it worked out no ttoo bad, as profit is always a good thing.

 

Hope to see more around next week... feel free to post any questions here in the meantime.

Edited August 2, 2012 by ForexTraderX

[ForexTraderX 10]

here is a SS for this week's futures trading:

[ForexTraderX 10]

Ok, for the first 24 hours of the market open this week, I've reviewed a daily, weekly, and monthly chart of USD, EUR, JPY, GBP, AUD, CAD, and NZD, and determined an overall market strength/weakness score for each one as priced against a basket of the other major currencies.

 

This is the first step in my analysis, and I do it at the close of the U.S. session every day, for the following day.

 

It's not complicated, nor is it exact. It's not meant to be exact. It's meant to give me an overall bias as to which markets are more likely to move up the following day, and which are more likely to move down.

 

It doesn't even have to be correct a great deal of the time. If it even gives me a 5% greater probability at determining which market is more likely to have a bullish day against another market... even just 5%... it's a good place to start, being already ahead of "random chance"

 

And besides, it's not part of my setup. It's just a filter. Even if it filters out a few good trades, that's ok. As long as it filters more bad trades out than good trades, It's a good first step.

 

Here is what I've determined for the upcoming trading day:

 

USD - bearish 2

EUR - slightly bullish 5

JPY - bearish 2

GBP - neutral 4

AUD - slightly bullish 5

CAD - bearish 2

NZD - slightly bullish 5

 

So, going into this week, I could go long anything against the USD, JPY, or CAD. But against the AUD, EUR, or NZD, any other currency would have to be short (unless it is the AUD paired with the EUR, or the NZD, etc)

 

Again, this is really just a filter. If I were to get a signal on monday that said "GBP/AUD long", I just wouldn't take it. Because going into this coming trading day, GBP scores a 4, and AUD scores a 5. And I'd never take a market that scores a 4, long against one that scores a 5.

 

Ideally, I'm looking to get long the EUR, AUD, and NZD, and short the USD, JPY, and CAD based on this preliminary filter.

 

Now, on to step 2

[ForexTraderX 10]

Ok... now, I take all the major pairs I trade, and just open a daily chart for each one. Now, there is a degree of subjectivity here. However, I'm looking for pinbars, engulfing candles, as well as range expansion candles (engulfing or otherwise).

 

If I get a good potential setup, I also consider if we are in a range, or if the market is coming into support or resistance, as well as how many times that S/R has been tested. If it's a first test, i'm unlikely to take a trade into it. If it's been hovering below a R level, and tested several times over the last couple days, well, i'm more likely to be willing to look for a potential long setup in anticipation of a break above that R level.

 

And of course, this is just one step in my analysis... the many filters I use help me keep a "bad choice" out of the selection process more often than not.

 

Going into monday, here is what I have so far, unfiltered:

 

AUD/CAD - long

AUD/JPY - long

EUR/CAD - long

EUR/GBP - long

EUR/JPY - long

EUR/USD - long

GBP/CAD - long

NZD/CAD - long

NZD/JPY - long

USD/CAD - short

 

Now, i'm going to apply the overall market strength/weakness filter, and see if any drop off the list....

 

It seems that USD and CAD both score a "bearish" score. So, no need to risk unless I'm sure, so I'm going to go ahead and cut this out of the selection. The new list is:

 

AUD/CAD - long

AUD/JPY - long

EUR/CAD - long

EUR/GBP - long

EUR/JPY - long

EUR/USD - long

GBP/CAD - long

NZD/CAD - long

NZD/JPY - long

[ForexTraderX 10]

Next, I take each of those pairs that made the cut so far, and I look at the weekly, and monthly charts.

 

Now, the idea is I don't want the weekly or monthly charts looking bearish. (since all the possible setups for this coming day are bullish).

 

And again, i'm NOT talking "trend" here... i'm talking recent price action. Do the candles look bullish? bearish? overbought? oversold? coming into a major S/R level, or leaving a major S/R level?

 

Ok, so, now that this is clear, lets see if any weekly or monthly candles contradict my daily long outlook on pairs I listed so far.

 

After looking, one could make an argument for most of the monthly charts containing the EUR look bearish... however, I'm looking for something that is also not coming into support, or is over-extended, etc. And based on this, I can eliminate EUR/CAD based on the monthly chart (range expansion candle making all time lows...that's pretty bearish no doubt), and the GBP/CAD (weekly range expansion candle breaking out a 3 week range to the downside).

 

The rest... I couldn't clearly say if this week will be bullish or bearish, and for the AUD and NZD pairs, i could say in most cases that this week does indeed look like it will be bullish. So... we eliminate 2 more markets, and press onward.

[ForexTraderX 10]

Now, I use 2 simple moving averages, a 21 and a 50. Basically, I'm using them jsut to keep me away from trading AGAINST a strong trend. A strong downtrend here is defined by the 21 MA under the 50 MA, both sloping downward. The following markets are what I have left, and each of them has a bullish bias for the sunday/monday trading session. So, i want to see if any of them have this moving average filter showing a strong downtrend (in which case, they get cut from the list)

 

AUD/CAD - MA bullish bias

AUD/JPY - MA neutral bias

EUR/GBP - MA bearish bias (gets cut)

EUR/JPY - MA bearish bias (gets cut)

EUR/USD - MA neutral bias

NZD/CAD - MA bullish bias

NZD/JPY - MA neutral bias

 

We eliminate 2 more markets from our list, and now, it's a bit more filtering...

[ForexTraderX 10]

Now, we are down to 5 possible markets. It's from these that I will be trading for the sunday/monday session. At this point, the most important part of determining a "bias" is done" The next two steps are primarily to help me determine how those markets will be traded... as in going for distant targets, quick targets...how will I manage stops? how much risk will I take on my entries? how many entries will I be willing to take in each market...? etc.

 

Sometimes, if something is particularly obvious and compelling on a chart, I will use it to further eliminate a potential market from being valid to trade, but on most cases, I now know the markets I will look to trade, as well as the direction to trade them.

 

Here is how using trendlines to further filter, as well as to recognize what could help or hurt a trade, helps me with each market:

 

AUD/CAD - just broke upward sloping TL, but may fall back under around 1.0570. another TL could pose resistance around 1.0640-1.0650

 

AUD/JPY - Possible minor TL retest around 82.50ish, but right now hitting moderate TL resistance at 83.05-83.15. Again TL retest (resistance) at 84.00-84.10?

 

EUR/USD - broke major TL down, may retest it at 1.2340-1.2320... look for it to act as support.

 

NZD/CAD - 0.8130-0.8160 had several TL's intersect. Now past that, and broken major TL on daily TF to the upside... however, one moderate TL around 8190-8200 could provide some resistance, but if this is broken, nothing to really stop until 8250+

 

NZD/JPY -Possible trendline retest (resistance) at 64.75, and TL support around 63.40-63.00

 

So, for each of the 5 markets, I have a general understanding of what they are doing in terms of TL's drawn on a daily and 4hr chart.... and because of this, I see the AUD/CAD as having the closest possible TL resistance, and the EUR/USD as well as the NZD/CAD as the strongest possible bullish markets going into the coming trading day.

[ForexTraderX 10]

As far as looking out for congestion or consolidation patterns, recent breakouts, ets... it looks like everything is moving upwards just fine, there have been no recent significant breakouts, nor are any of these markets trapped in some consolidation or range situation, at least not on the daily charts, and these are really the only charts I use for this type of determination (besides possibly the 4hr charts if the daily are not clear)

 

So, looks like 5 markets that I'll be looking to trade, all to the long side, and I have some idea of where those trades may run into trouble.

 

Next, I'll go through the news of last week, as well as how the markets reacted to it, and the upcoming big headlines this week, and start to determine how the markets are likely to respond, and what will be the most important fundamental and sentiment factors going into the sunday/monday session.

 

This will furhter help me determine risk amount on each entry point in the 5 different markets, as well as what (if any) markets to avoid, or whether I should look to take just a single entry at a deep retracement, or set up 2 or 3 entries, some more agressive, because of a strong particular response to a news event or what not.

 

But now, I can say, I now know my markets, my direction on those markets, and have some idea of potential overbought/oversold levels using trendlines, for the Sunday/Monday sessions

[ForexTraderX 10]

Risk on seems the flavor of last week, particularly with friday NFP posting a much better than expected jobs number to break a streak of I believe 4 or 5 straight NFP's that were trending towards decreased hiring each month. And while the unemployment rate did tick up from 8.2% to 8.3%, this is obviously playing 2nd fiddle to the jobs report... and the reason is simple: Jobs don't lie, but the unemployment report is a specific metric that doesn't consider various segments of the population that are underemployed or not employed. But a boost to jobs is simply that... so, seems hiring (argueably the most important part to any recovery) is increasing at a faster rate than previously expected.

 

Of course, the USD could still see easing come the next meeting, particularly since the unemployment number DID tick up. So, for risk, this is the best of both worlds... surprise improvement in hiring the biggest economy in the world, while still staying under the shadow of dollar devaluation ala QE3 or other stimulus policy.

 

Draghi's comment on euro zone solidarity is a help to risk as well, however the EZ's future plan that will likely consist of bond purchasing ala LTRO will support the euro zone strength, but actually be an inflationary measure due to the increased money supply of euro's out there. And now, it seems the IMF and other Troika members are saying progress has been made to some extent with greece. That's pretty amazing all things considered...and though this coalition government in greece COULD crumble... the fact that there is 3 party agreement for the moment is pretty significant, and this will boost euro sentiment as long as nothing contradicts this.

 

So, I have mixed feelings on how it will impact the euro directly, though it will very likely support the surrounding economies and currencies such as the GBP, and to a lesser extent, the commodity currencies.

 

of course, the BoJ and Japan govt are, as usual, talking intervention. Though the rhetoric has slowed a bit, and it seems that the major market players don't have much faith as to what effect such intervention will effectively do. Even though underlying fundamentals like Japan's debt, and other changing macroeconomic factors are slowly starting to affect the speculative community, it still is being aggressively used as a safe haven.

 

the AUD Central Bank meets this week, on the 7th, and most players are under the belief that the CB will NOT reduce their interest rate. If they DO reduce, well... look for the AUD to really make a sharp drop off... be careful going into this meeting if in AUD or even NZD

 

So, all in all, the CB policy still seems to be the driving factor in market sentiment and direction, and considering the USD, JPY, and EUR are all under the risk or the imminent threat of devaluation, it's a pretty easy call to say the other markets like the AUD, NZD, CAD, and GBP will increase in value to them. Even though the GBP has their own easing going recently, it is minor compared to the USD, JPY, and EUR.

 

The X factor here really is the EUR, as per usual this year. I expect it to stage some volitile moves upwards on short squeezes/hopium buying, but overall grind lower. The easiest bet is a greater move up in the aud and nzd.

 

And finally, both the stock market and crude oil have rallied strong, and with the stock market, looks like the move is likely to stick. This bodes well again for risk, and the easiest trades of the week may just be long the U.S. equity markets.

 

So, today, given this analysis, the clear long plays are AUD and NZD, and short the JPY. Watch for euro zone news that could further support or deflate this move to risk, watch for talk of CB action that will help boost other risk markets (other than those talking about CB intervention), and keep an eye on china and to a lesser extent AUD news, to know what may or may not hurt or help any possible trading opportunities.

[ForexTraderX 10]

Well, after looking at the AUD/JPY, I've decided to get in right around the point of the high on July 31st. So, I have a long order at 82.45, with a 40 pip stop, 45 pip initial target where I will take 65% of the trade off, and then I have a final target at 84.00.

 

If my order is filled, and I then hit first target at 82.90, I will move my stops to my entry price, and let the last 1/3rd of the trade work out as it does.

 

I will post other markets as I do the analysis.

[ForexTraderX 10]

Aright, so, other orders:

 

looking to get long NZD/JPY around 64.05, stop around 63.60, targeting 64.50, and then 65.10

 

Also, another long order around 63.75, 40 pip stop and target, then 2nd target around 64.95

 

AUD/CAD long somewhere between 1.0525 and 1.0510, stop around 1.0490, targeting 1.0565 for a first target, and 1.0595 for a 2nd target.

 

EUR/USD long around 1.2240, stop 40 pips, target 50 pips

 

NZD/CAD long arouhnd 8140, stop 35 pips, target 45 pips, then 85 pips for 2nd target

 

I may do some live futures scalping later today, but, for now, this is what I'm looking at.

[ForexTraderX 10]

This just came up on my news feed. Was thinking about this earlier, but this type of thing helps me confirm what I'm thinking, or open my eyes to a new perspective. In this case, it'll give me more reason to look for near term longs on E/G and E/J at least until we move up closer to where the carry trade funding via borrowing EUR took over about a month ago.

 

 

 

Here's the article:

 

"In the latter part of last week the quest for yield swung to short date Spanish & Italian debt after Draghi's comments, steepening the curve and bringing the use of the EUR as a funding currency to an end. With central bank settings at or close to zero in the US, Japan and the UK - there is no shortage of currencies to assume the role of funding currency. Depending on the BOE Quarterly on Wednesday and the BOJ decision on Thursday - the GBP of JPY could become the funding currency of choice and lead to heavy buying of EUR/GBP or EUR/JPY or both."

 

Price action agrees strongly with this article, the only issue is the overall trend, but I may look for some good levels to take more agressive intraday moves over the next few days.

 

On a seperate note...articles like this above are, IMO, why it's important to keep up with the news and developments on the fundamental and sentiment fronts... Otherwise, one could argue why the yen or the GBP is supposed to be so much stronger than the euro, and blah blah... but, once one realizes the basic driving factor over the past few weeks in the euro drop has been it's use to fund the carry, and now the yen and gbp are looking good, because of their low interest rates and the yen for it's relatively expensive valuation and low interest rate... as long as this new shift in funding the carry trade stays valid...we could see some upward movement as money is shifted back into the euro and away from the GBP and JPY and even USD.

 

Again, it's very important IMO to know what the basic current driving factors are in a market... otherwise, you can blindly trade on technicals and get it all wrong, but have no idea why or when it will get "right" again.

 

Best to be lined up with what the market is moving on, as well as what technicals are lining up in the same direction. All the more reason for my long AUD/JPY order to look good for today.

[ForexTraderX 10]

got long NZD/JPY at 64.09, and cancelled the order at 64.05.

 

so, long now.

 

CORRECTION: 64.096

[ForexTraderX 10]

here's a pic of the trade...

 

since this is a fairly aggressive entry, and I have another order below just slightly above my stop, i'm risking exactly 0.5% on this trade.

[ForexTraderX 10]

Well, so far, it's been slow. Still just the one trade triggered, the NZD/JPY, and not enough movement yesterday for anything to really develop beside what already had. So, same orders in same places in same markets.

 

the NZD/JPY is now up about 20 pips... at 45 will take some off, and move stops to BE. then, it should be just fine from there.

 

Hopefully we see a bit more action this week as well.

[ForexTraderX 10]

Well, just closed out half the trade at 32 pips profit, and moved stops to BE on the long NZD/JPY.

 

Now, final target is 65.10, and I'm up about 0.20% for the week, give or take a bit. And the trade can't lose.

[MR. JEEZE 10]

Hey FTX,

 

Can't believe more folks aren't jumping on this thread. Just recently started getting interested in forex but having trouble dragging myself out of bed (live in Florida) to take advantage of the Europe session. Hope you keep things going here.

[ForexTraderX 10]

Hey FTX,

 

Can't believe more folks aren't jumping on this thread. Just recently started getting interested in forex but having trouble dragging myself out of bed (live in Florida) to take advantage of the Europe session. Hope you keep things going here.

 

Ya... I'm still hoping for more interaction myself, maybe as time goes on it'll develop. Feel free to post up here however any questions or comments or any results you've been getting from ideas on this thead. As expected a lot of my trades take hours to resolve, sometimes 2-3 days. So with that being the case, it's very possible to post up trading ideas and such here, so i'll be doing more of this as well myself.

 

More to come, and thanks for dropping in!

[ForexTraderX 10]

Ok, today provides me with an interesting situation in the forex markets...

 

As of yesterday, I only had the one NZD/JPY long trade open, because the first day of the week was pretty slow. It retested a previous daily high, and I took half off, moved stops to BE.

It then pulled back and stopped out. No problem. Some profit made, and nothing else happening, either to justify setting up more orders, or even removing the orders from the other markets I had set from the beginning of the week.

 

However, today, a drop in AUD/CAD and NZD/CAD pushed price down into my orders on those markets, long at 1.0517 on the AUD/CAD, and 0.8140 on the NZD/CAD.

 

Problem is, when I look at the daily chart on both markets...it shows a strong bearish engulfing candle on both markets. This is what I would look for to get SHORT...not to get long.

 

So, what do I do when an order triggers, but the new daily price action basically invalidates the order as being a good trade?

 

I look to move my target down significantly, and get out just a bit better than break even.

 

So, i've moved my target to about 7 pips above my entry price on both markets... this way, I can get out a bit better than break even.

 

And what if it doesn't hit this target? Well, that's what I call a losing trade. However, I've found that it's pretty rare to have an entry, and not get at least 7-10 pips of profit at some point during the trade. Since price action now invalidates my original trade (but I couldn't have known that would be the result when the trades triggered...) I'm just looking to get out at any place I can to eliminate the chance of loss on a sub-par trade, and look to get a better opportunity in some other market, at some other time.

[MR. JEEZE 10]

Question for you?

 

From a previous post it looks like you are using the OANDA trading platform. I have a demo account with OANDA but I am used to an entirely different type of platform that I use with Infinity Futures. I think Trade Station has a similar type of set up. I'm not sure what to call it but it is a ladder type of trading platform that seems to be much more user friendly as far as placing orders quickly and modifying orders and stops etc.

 

Executing and modifying orders with OANDA is like pulling teeth.

 

Am I missing something or is that just the way it is with OANDA?

 

Looking forward to following along and learning from you. Thanks.

 

P.S.

 

Have my alarm set for 2AM. Will try to join you.

[ForexTraderX 10]

I just got long CAD/JPY at 78.53... 45 pip stop, 50 pip 1st target.

 

that is the one "new" setup for today... also, have another long order around 78.20, with a 45 pip stop and a 50 pip target

[ForexTraderX 10]

Question for you?

 

From a previous post it looks like you are using the OANDA trading platform. I have a demo account with OANDA but I am used to an entirely different type of platform that I use with Infinity Futures. I think Trade Station has a similar type of set up. I'm not sure what to call it but it is a ladder type of trading platform that seems to be much more user friendly as far as placing orders quickly and modifying orders and stops etc.

 

Executing and modifying orders with OANDA is like pulling teeth.

 

Am I missing something or is that just the way it is with OANDA?

 

Looking forward to following along and learning from you. Thanks.

 

P.S.

 

Have my alarm set for 2AM. Will try to join you.

 

Well, right now, I just have one new trade for tonight. the long on cad/jpy. my NZD/CAD stopped out, and the AUD/CAD I closed out at 1.0524, so I'm down about 0.85% on those two trades, but was up about 0.25% on the first trade of the week (nzd/jpy long)... so, i'm down about 0.60% for the week so far...but I like the trade i'm in now, on the CAD/JPY.

 

Other than this, I don't think i'll be doing much tonight. However, I will make some sort of announcement on any day that I plan on doing more live futures trading.

 

 

For now, just the long at 78.53 on CAD/JPY. time to wait and see what happens. Will take partial profits at 78.95, and then will shoot for 79.50 -79.70 for a 2nd target.

 

Take care... lemme know if u have any questions, or what you are looking at to trade... be curious to see what others are taking.

[ForexTraderX 10]

well, just moved stops to BE on that CAD/JPY long, and 1st target at 78.95. I'll take half there, and then let it run.

[ForexTraderX 10]

Also, my long on the EUR/USD triggered at 1.2340.

 

I just took half off, and moved stops to 1.2316. So if i'm stopped out, i'll make half a pip net profit on the whole trade. In other words, break even.

 

I'm doing this because fundamentally and sentimentally, the eur/usd is a fickle pair these days. I want to be as risk free as possible about it.

 

My target is now at 1.2495. that'll give me almost 2:1 on the original position.

 

Also, cancelled all other orders. Will do a new full analysis today to see what is setting up.

Edited August 8, 2012 by ForexTraderX