Trade Update - CHF/JPY Long CLOSED

Update 05-05-08 7:00 am:
I thought this trade wasn't a high probability trade. But it did end up in my favor. The charts show that it wasn't the best trade to enter, and I was lucky it went in my direction. On the Elite setup, we see the CCI is showing an anemic market. I should have stayed away from this trade. The same can be seen from the OzFX chart.



Trade Results:
Date: 05-05-08 2:15 am
Result: Pair hit target
Total Pips: +300
Profit/Loss: $287.65
Rating: 3

Reason/Setup:
Signaled by both the Elite setup and OzFX setup on1 hour chart. Little late with the entry on both.

On the Elite setup, the price action seem to be sideways, so this might be a possible upside breakout. On the OzFX setup it seems like a weak rally to the upside. The long term trend for this pair is down. So I need to get out of this trade fast.



Trade Details:
Date: 05-02-08 12:20 pm
Entry: 99.74
Lots: 10
Stop Loss: 99.44
Target: 100.04

Trade Update - EUR/CHF Short CLOSED

Update 05-02-08 2:00 pm:
Both the price action and indicator suggested its a good trade to enter. But once again the candle I entered was the last down candle, and the pair soon reversed direction and headed up. Entering the trade early would not have changed the outcome either. So it looks like for a valid signal, I have to wait until the Stoch crosses the 0 line before entering.


Trade Results:
Date: 05-02-08 1:50 pm
Result: Pair hit stop.
Total Pips: -348
Profit/Loss: $329.11
Rating: 4.5

Reason/Setup:
Entered based on OzFX setup on 1 hour chart. The price action shows multiple red candles. The AC has shown multiple red bars, and now the AO has turned red. The stoch is moving down from oversold and the lines are wide.

The only point of concern is that one of the candles is a "Doji". This indicated that there is no clear direction for the price to move and the players are undecided on the direction. But we have had 2 low candles following that. I had also entered this trade a big late. I entered close to the end of the candle, and missed close to a 12 pip move.


Trade Details:
Date: 05-02-08 11:40 am
Entry: 1.62743
Lots: 10
Stop Loss: 1.63091
Target: 1.62443

Trade Update - EUR/JPY Long

Update 05-05-08 11:45 am:
This trade did not work out as expected. For most part, the price moved in my favor, but close to the end of the US trading session, the price reversed and I was down both the lots. I manually closed both positions before it hit my stop loss as I got a sell signal on both the Elite & OzFX setups on H1.

Had I not changed the initial target, I would have definitely closed atleast one position. Instead by my moving the targets further away, I missed out on locking some profits. What I need to figure out is whether I want to try to ride the trend as long as possible, or just want to keep taking profits often. I still do not have an answer for that yet.


Trade Result:
Date: May 05 2008, 11:45 am
Result: Closed both trades as the signal had reversed.

Trade 1:
Total Pips: -214
Profit/Loss: $197.30

Trade 2:
Total Pips: -451
Profit/Loss: $430.47

Overall I still think it was a good trade to enter. The signal was valid and correct when I entered the trade. That the trade went against me was unfortunate. I could have done better by taking profits when I could, but then sometimes you have to have patience and let the trade develop.

Trade Rating: 4

Update 05-04-08 5pm:
I entered this trade again based on the 4 hour chart. This time the signal was triggered by multiple setups (Elite, HAS and AM). The charts below shows what I saw when entering the trade. I have now moved the stop of this trade to the one placed using the 4 hour chart. Trying out pyramiding. I have also moved the target to 75 pips (163.290) instead of 40 pips. Lets see if that decision bites me in the ass.



Trade Details:
Date: May 04 2008, 5:00 pm
Entry: 162.777
Lots: 10
Stop Loss: 162.210
Target: 163.777

Reason/Setup:
Entered based on the OzFX setup on hourly charts. I see 2 up candles with good volume, and I entered towards the end of the 3rd. The uptrend is confirmed on multiple time frames, both lower and higher than the 1 hour TF.

I placed the stop at the last support/resistance level. Its about 71 pips away and wider than usual. The target on the other hand is currently 40 pips away and is below the 200 SMA. Depending on the strength of the move, I may change the target.



Trade Details:
Date: May 02 2008, 7am
Entry: 162.54
Lots: 10
Initial Stop Loss: 161.82
Initial Target: 162.94

Trade Update - GBP/JPY Long

Update 05-02-08:
Another trade that went in my direction right from the beginning. And from looking at the chart, we can see that the pair continued to move a lot higher after it hit my target. Too bad I missed out on the move, but I was sleeping then, and its good to know that you are making money even while you are sleeping.


Trade Result:
Date: 05-02-08 2:00 am
Result: Pair hit target point.
Total Pips: +500
Profit/Loss: $477.03
Rating: 5

Reason/Setup:
Entered based on Elite setup on H4 chart. Signal is also valid on H1 chart and just a candle late. Since this is a volatile pair, I decided to enter with just 5 lots. This allows me to place a bigger stop and target (100 pips each) for this trade.



Trade Details:
Date: May 1 2008, 6:00 pm
Entry: 207.013
Lots: 5
Stop Loss: 206.013
Target: 208.013

Trade Update - USD/JPY Long

Update 05-02-08:
This proved to be a good trade to enter. Even though I was a bit late to enter this trade, the pair continued to move up steadily and hit my target point. One of those rare "no tension" trade I do once in a while


Trade Result:
Date: 05-02-08 12 am
Result: Pair hit target
Total Pips: +500
Profit/Loss: $476.16
Rating: 5

Reason/Setup:
Based on Elite setup on 4 hour chart. Good price action in the previous candles. Price crossed over the 34 SMA and so did the 3 EMA line. I was an hour late with the entry, and missed about 12 pips. But the stop is 35 pips away, just below the 34 SMA and target 50 pips away.


Trade Details:
Date: 05-01-08 10:15 am
Entry: 104.507
Lots: 10
Stop Loss: 104.157
Target: 105.007

Trade Update - GBP/JPY Short

Update 05-01-08 10:00 am:
This trade did not last too long. The late entry did not help either. The only good thinking about the trade was that I placed a stop and cut my loss short.


Trade Result:
Date: May 01 2008, 10:00 am
Result: Pair hit stop loss.
Total Pips: -500
Profit/Loss: $478.84
Rating: 3.5

Not that entering the trade earlier would have helped me hit my target, but at least when I was last, I could have stayed away from the trade.

Reason/Setup:
Entered based on Elite H4 and OzFX H1. Now I wasn't sure of this trade as I was a bit late on both setups. So I decided to go with a smaller position size. Target and stop 100 pips away as this is a volatile pair.


Trade Details:
Date: May 1 2008, 7:30am
Entry: 205.148
Lots: 5
Stop Loss: 206.148
Target: 204.148

Trade Update - AUD/USD Short a.k.a How to Lose $500 on a Winning Trade

Update 05-02-08 8:00 am:
I have named this trade "How to lose $500 on a winning trade". Because that's precisely what happened here. The trade moved in my favor and would have hit my target had I not changed it at the last minute. After that the trend reversed, and I never even came close to hitting my target. So moving the target did not prove to be a wise decision in the end.


Date: May 02 2008, 8:00 am
Result: Pair hit my stop loss.
Total Pips: -500
Profit/Loss: $509.20
Trade Rating: 3.5

Update 05-01-08 11:30pm:
There is a sudden movement of price and the pair was very close to hitting my target. I changed the target from 50 pips (0.92792) to the next Fib level at 0.92472. The pair briefly went past my initial target before pulling back. Only time will tell if this was a good decision.

Update 05-02-08 7am:
It currently looks like changing the target was not the right thing to do. The price has moved right back up and close to the 34 SMA line. So instead of having locked in 500 point profit, I am currently down almost 200.

Reason/Setup:
Entered based on Elite setup on 4 hour chart. Good entry, as the moving averages have just crossed. Stops and target 50 pips away. So far rating is a 5.


Trade Details:
Date: Mat 01 2008, 7:30 am
Entry: 0.93292
Lots: 10
Stop Loss: 0.93792
Target: 0.92792

Monthly Summary: April 2008

Overview:
I feel this month was one of those action packed learning experiences for a forex newbie. It had a mixture of everything. I made some good trades, and I made some terrible trades. I was lucky a few times where I made bad trades and still managed to come out ahead and there were moments where what seemed like good trades went bad right from the beginning. Overall, I still managed to end the month with almost $9000 in profit.

The Strategy:
This month I changed my trading strategy. Instead of looking for profits of 100 pips or more per trade, especially using the OzFX setup, I looked for just the initial 30-50 pips. But to compensate, I increased my position size per trade. The reason is that the first 30-50 pips is always the easiest to get. In previous months, I have had numerous occasions where the trade would reverse after hitting the initial 50 pip target.

Recap:
The strategy worked like a charm, at least initially. The first week of this month, I made close to 80% on my account and had over 80% winning trades. It seemed like I could do no wrong. The next week, I continued from where I left off. I was making all the right trades, and sometimes I was getting lucky. But most importantly, I was sticking to a plan. I had stops and target for every trade I entered. But by the end of the week, I was getting carried away by my success. And I ended the week with a string of losing trades.

The losses towards the end of the week was due to this nasty little habit I picked up called over trading. And I didn't realize this until the middle of week 3. The first 2 days of the week, I made close to 20 trades and lost most of them. I made so many trades because I figures thats the way I can make up for the losses in the previous week and then start making more profits. But I was in fact digging myself into a grave. As soon as I realized what I was doing wrong, I cut down on my trades and took only the good ones. And I ended the week with a bang by scoring 6 huge wins on a single day.

Looking back at my losing trades on week 3, I realized that I was getting stopped out on a lot of them only to find the pair reversing direction soon after. So the next week, I decided that I will not place any stops on the trade, and will just keep a mental stop on the trades I enter. But this turned out to be a terrible decision for a number of reasons. First off, I am really bad at keeping mental stops as I lose track of stop levels and sometimes get emotional in the trade. And second, I did not have a stop when I was away from my computer like when going to sleep. This cost me dearly as I had 2 trades go against me by 300 pips while I was sleeping. And on some of the trades, I was down by 100-200 pips before the trend reversed and hit my target. Either way, these trades proved to be too stressful and I don't plan on entering trades without stop ever again.

Looking Forward:
Looking forward, I found few areas that need some improvement. First one is choosing the right trades to enter. I am going to wait until the trade develops and is signaled by one of my setups before I enter them. No more trying to enter trades that are half baked or premature.

Next I am going to let the price action determine whether I take a trade even if the signal is given by a setup. This is because all the indicators in my setups are laggy, and price action is the only true indicator of the market. This would help me get into high probability trades.

And then I am going to stay away from trades that I am late in entering. This is especially true in lower time frames where missing a trade by few minutes or few pips can mean the difference between a win or loss.

And finally, I am going to place stops based on previous well known support/resistance levels instead of fixed price/points. This is the proper way to place stops and will probably prevent me from getting stopped out of a trade too often.

Doing all of the above will hopefully help me not over trade and only get into trades that have a high probability of succeeding.

I am also going to start keeping track of trade I do not take due to various reasons. I will also be following up these 2 days after to see the end result. This will allow me to see if my decision to not take a trade was a good one or bad.

And finally, all the trades and results for the month can be found here.

Trade Update - EUR/CAD Short

The Trade: EUR/CAD Short


Reason/Setup:
Entered this trade based on the Squeeze setup on daily chart. I was few hours late on the entry, but the price had practically not moved in that time. So its still a valid entry. Unfortunately, I wanted to enter with 5 lots and have a 150 pip stop and target, but made a mistake and entered with 10 lots instead. So if the price goes against me, it will be a big loss.

I would still rate this trade a 4 despite the mistake.

Update 04/30/2008 4pm:
Mistake number 2. Not only did I get into this pair late with a larger than desired position size, I also set a very large target point. What was i thinking. The pair moved down a little over 100 pips, and the proceeded to reverse. I should have just taken a 100 pip profit considering the position size I have at stake. My trade execution rating is rapidly decreasing.

Comments:
I finally got the target placed correctly and the pair finally hit my target after swinging either ways for a while. Overall the trade execution was good, and I would rate this a 4.

Trade Details:

• Date Entered: April 29 2008, 5:30 pm
• Entry: 1.5765
• Lots: 10
• Stop Loss: 1.5915
  
• Target: 1.5660

• Date Closed: May 01 2008, 3:00 am
  
• Result: Pair hit target.
• Total Pips: +1050
• Profit/Loss: $1040.85
• Rating: 4

Trade Update - CHF/JPY Short

The Trade: CHF/JPY Short


Reason/Setup:
I entered this trade based on the Elite setup on daily charts. I was bit late in entering this trade, but the price has practically mot moved since the start of the new candle 3 hours ago. Price action shows nice move down and the volumes of the candles are quiet steady. I have a stop of 75 pips which is just over the 34 SMA line. The target is 100 pips away.

Trade Details:

• Date Entered: April 29 2008, 5:10pm
• Entry: 100.22
• Lots: 10
• Stop Loss: 100.97
  
• Target: 99.22

• Date Closed: May 01 2008, 7:00 am
  
• Result: Pair hit target.
• Total Pips: +1000
• Profit/Loss: $962.05
• Rating: 5

Comments:
This was a good trade to enter. The entry was well timed. And since I got in at the right time, I had some flexibility with placing the stops at the right place. I was in the negative on this trade for almost a day, but soon the pair reversed direction and went on to hit my target. And since this was a trade based on the daily chart, I placed the target 100 pips away.

Trade Update - EUR/USD Short

The Trade: EUR/USD Short


Reason/Setup:
Entered based on squeeze indicator on daily chart. Price action indicates strong move down.

Squeeze histogram shows the red bar is significantly lower than the previous bar indicating a healthy move down. I am anticipating a move of few 100 pips, but I have set up the initial target at 100 pips.

Currently I would consider this as a 5 rank trade.

Trade Details:

• Date Entered: April 28 2008, 4:50pm
• Entry: 1.56466
• Lots: 10
• Stop Loss: no stop loss set.
  
• Target: 1.55466

• Date Closed: April 29 2008, 1:05 am
  
• Result: Pair hit target.
• Total Pips: +500
• Profit/Loss: $500
• Rating: 5

Comments:
This was a very good trade to enter. Perfectly executed and goo timing with entry. The trade was in the money from the very beginning, and it was a steady move in my direction to hit the target. I could have continued holding on to the pair even now, and I would still have a good profit of over 200 pips.

Trade Update - GBP/CHF Short

The Trade: GBP/CHF Short


Reason/Setup:
Trade based on the Elite setup on 1 hour chart. I am late in the entry of this trade by couple of hours. But I am hoping to catch the trend down and make 50 pips. More over, I already have an open position in this trade. So just want to average down and see if I can make a profit here to offset the loss I will take from the other position.

Trade Details:

• Date Entered: April 28 2008, 12:05 am
• Entry: 2.04636
• Lots: 10
• Stop Loss: no stop loss set.
  
• Target: 2.03876

• Date Closed: April 28 2008, 4:40 pm
  
• Result: Manually closed the trade.
• Total Pips: -1270
• Profit/Loss: $1227.76
• Rating: 2.5

Comments:
Again a trade full of mistakes. I already have an open position in this pair which is killing me. And while the Elite setup might have been valid, I should have stayed away from entering this pair once again. And my late entry didn't help either as the pair soon moved against me.

The irony of the situation is that when I finally gave in and closed the position as I could not take the pain anymore, the pair moved down. And it would have hit my target had I still been in the trade. Anyway, lesson learnt.

Trade Update - USD/JPY Long

The Trade: USD/JPY Long

Reason/Setup:
I entered this trade based on the recommendation from the OzFX frum. The trade was based on the OzFX setup on the daily chart. I was a bit late with the entry, but since this is a daily signal, decided to go ahead with it. Target was 100 pips away, and stop was to be a ental one.


Trade Details:

• Date Entered: April 27 2008, 8:15 pm
• Entry: 104.71
• Lots: 10
• Stop Loss: no stop loss placed.
  
• Target: 105.71

• Date Closed: April 28 2008, 1:00 pm
  
• Result: Manually closed pair.
• Total Pips: -526
• Profit/Loss: $504.88
• Rating: 3.5

Comments:
The reason I took this trade was because at the time, I have a lot of open trades that was ling me great amounts of money. And I just wanted to get into newer trades where I could make up for some of the losses I would have with the open positions.

The problem was that, I should never had gotten into this trade in the first place. Look at the AC indicator in the chart. Its practically hugging 0 for the last 2-3 bars which indicates it has no clear direction or strength. So this is not really a high probability trade to begin with.