Forex Trading

It's been a while since I've posted in this blog. My methods have completely changed. I am now documenting them in this blog: http://4xcycletrader.blogspot.com/

Here is an example of some Asian session EURUSD "scalping". Normally, you don't expect much in the way of movement during the Asian session for the EUR or GBP. However, I saw a setup when I was getting ready to leave work and I stuck around and traded both those pairs. I documented the EURUSD trade, but the GBP pretty much played out the same.

Setup is price coming up off the bottom in an up channel in the direction of higher time frame channels. Ideally, the higher channels are either providing the same signal or are already in a move. Here, the 15M just confirmed, although in a down channel and the 1H is looking like it might confirm. A bit more risky, but since the daily is still showing strength, let's scalp it. Entry price 1.2353. Target is 1.2370. Failure target is 1.2340. Risking 13 pips for at least 17 or so.

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After about an hour we finally get the action we were waiting for. Price nearly hit 1.2368.. 2 pips shy of the target. Success. Take profit now?

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The beauty of this system is being able to time exits, hold through consolidation, and find re-entry/add on points. The way to do this is to drop to lower time frame charts. Notice the 1H at the mean, the 30M at the top, 15M at the top, BUT the 5M at the bottom and turning up in an upchannel. The only down channel is the 30M. Mixed signals? Exiting here isn't a bad idea. I'm aggressive though. Normally I would add on to my position at this point because the 1H time frame is at the mean.. consolidation area and the 5M is showing signs of getting ready to launch with enough steam to breakthrough the 1H mean and 30M and 15M top channels. I already tied up my add on capital in the GBP and managing 2 different pair and adding on is a bit more than I want to manage at this moment. If this were a swing trade, adding on would be a no brainer. But being a scalper trade and relatively shorter targets, I'll play it safe.

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Continuation through consolidation. It's a beautiful thing. If you're a pattern trader, notice the 15M. Classic 1-2-3 ala Ken Roberts and the World's Most Dangerous Money Manual? Target is Length of first leg from bottom of consolidation.. that makes the target in the 1.2380 area. Which is also the target given by the 1H +1 line and a few pips off of the R1 pivot. Confluence.

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Hmmm... After some retrace and about 10-12 minutes of flat, is the move done? Close the trade? Let's drop to the smallest time frames:

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This a great example of using the system to gauge timing. Price can be flat and traverse the channel. Notice the 5M flat and approaching the mean. A reversal area? Notice the 1M approaching the -1 line. Again, a reversal area?

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Trading against the channel is always a risky prospect. Especially when every channel on the page is in the same direction. But it could be an exit area. I've to 10 pips that says price will do something when it hits the 1M -1 and the 5M mean. I'm still thinking long because of the confluence mentioned above.

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Looking good!

Uh.... maybe not? http://img5.imageshack.us/my.php?image=ptseurusd88132ms.gif

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Ok.. nothing to drastic. about 15 minutes of minor movement. But something did happen, eh? Now I'm expecting that long move since price wasn't able to reverse or retrace more than a handful of pips.

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45 minutes we got the long we were wating for. Nothing much in the way of our target.

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Target surpassed and then some. Now price is way over extended and a retrace is almost inevitable. However, the question remains.. will price retest the high or somewhere near it? I'm thinking it might. My stop is raised to 1.2370 to lock in the original target and I'm looking to put on a squeeze play by raising my stop and looking at taking profit at 1.2390-1.2395.

http://img99.imageshack.us/my.php?image=ptseurusd88355ju.gif

Woh... stopped out? Almost. Doesn't matter though. Everything beyond 1.2370 is bonus.

Price started to freak out in our vice:
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And I"m out at 1.2388. As I was making notes about the trade, I noticed something kinda weird. Check out the 1M chart in the next chart:

http://img130.imageshack.us/my.php?image=ptseurusd88687aj.gif

Somebody not like me taking 30 pips? Right back at ya buddy... scoreboard.

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The dollar is going to crash and I want in. But I need a bankroll. The company isn't doing as well and I can't count on my bonuses anymore. So I need to put together some scratch. But I'm pretty strapped. Child support, being seperated from the wife, etc. So I'm taking matters into my hands and the goal is $1k by July. That's one month from tomorrow. I can do it. In fact, after this past weekend, I'm 1/3 of the way there.

Thank you Wendover and thank you Texas Hold'em. I thought the players out there would be better. I busted out quite a few people. It's a $1/$5 table, so we're not talking massive pots. But I started the weekend with $80 and today I'm reporting $380. That's $300 profit. Not bad for about 6 hours of work, eh? I make more at poker than trading. But trading is the goal. Not poker. Tally ho.

I've been away for a while. Seperation from the wife and kids, living at my mom's, job, holidays, car probs. etc took it's toll, so I put trading on the back burner.

I'm back in my house and things are much better. Still seperated, but things are going well there. No phone or internet at the house though. No biggie. I'm trading swing style, so constant monitoring isn't needed. Plus it keeps me away from being tempted by intraday stuff.

On the trading end of things, I'm on a nice winning streak. Most of it demo, but the last 3 have been live. About 200 pips or live.

The system is much simpler now. Just trading ranges and chart patterns. The pychological end of my system is better now too. I'm only trading 1 or 2 times a week. Patience is key. Patience used to be hard, but now it's much easier having learned a lot of lessons from poker. My poker playing is a lot better because of trading. My trading is better because of poker. Nice little cycle there, eh? I only play winning situations. Rarely go all in. Bet enough to win the pot and win it early. Trading wise, that means wait for certain set-ups and don't look for every set-up or technical trigger.

I also have a new slogan. OPPORTUNITY MISSED IS BETTER THAN CAPITAL LOST. Fold those small pocket pairs when the flop misses.

I accidently left VT running at the office, so at home the connection would drop after 45 sec. or so and then try and reconnect. It took me 45 min. to get my orders in. So I missed my "optimal" price. But I still got in within the range I needed. Euro looked to be in 30-40 pip range waiting for something, but I didn't want to wait for that "something".. so I played the range.

Day 2 - Bought Eur at 1.2313 exited at 1.233 +20 pips.