Friday, October 31, 2008

10-31 Trick or Treat Trade? UPDATE

Eyeing this usd/chf set up, there is a gartley going into what I anticipate could be the last leg of a last ditch attempt before this pair falls which is many times the case in BBB patterns. There is a bearish gartley (79 and 162) lining up and into major congestion. I have a limit for 1.1632 and a larger stop. The swissy has not been erratic like the euro or cable during all this market hysteria so this could prove to be a good set up. Time and the market will tell. UPDATE... turns out this was a treat trade, but was bitter at first. A larger stop was the key here as it flew past my initial level but honored it none the less and profit of 25 pips on most of the position. Mr. Bernanke started speaking at 2 pm and my remainder was history as my stop was near entry.

Thursday, October 30, 2008

10-30 GBP/USD Trade Set Up (not taken) UPDATED

I was observing the market and watching the gbp/usd. After a huge rally (over 1000 pips) a quick drop and some volatility set up what seemed to be the right shoulder of a possible head and shoulders reversal pattern. One reason I did not trade this is the nature of the gbp/usd lately. set ups like these are very nice and in normal market conditions would be a no brainer, but in this market, nothing is a no brainer. UPDATED... After this writing, within 2 hours this trade was in positive territory for 100+ pips


Of course this market gets me a little freaked out with all the wild moves it's making, but one thing I know for sure, I must protect myself at all times but with patience and waiting on the right level, a set up will occur. Late US session I was analyzing the charts and checked out the AUD/USD. I noticed what seemed to be some weakness around the 6800 level and when it seemed to be breaking I traded a small pull back into my area. That trade paid 25 pips and stopped me out of 20% at my entry. I noticed however, that there appeared to be a much better level at 6836. I also had a 127R line up with that level and it was a pretty nice support level earlier in the day. As of this writing I am up 2 pips with a fill at 6834. The market CAN do anything but hopefully it will go in my direction. I am mainly trying to trade off of price in this market and thats why TSR really gives me the confidence to take the trade. UPDATED... The second trade at 6834 paid out a total of 92 pips.

Wednesday, October 29, 2008


After watching the Euro taking off like the space shuttle, I was hesitant to trade it against such a strong move. It did pay from the level I was watching but I chose instead to trade it's little brother, the usd/chf pair. After seeing the euro move 5 cents on the day, the swissy had only moved a quarter of that. I could see some breakdowns starting to form on the longer time frames and when the 4 week trend line was broken and a closed below support, I took notice. I scaled to a 15 minute, waited for a rally and then traded it at 1.1541 short. My better entry was 1.1580 but it was getting late and I didn't know if it would go there. I took the trade, secured some profit and left a larger stop. After getting up the this morning I was in profit by 44 pips and took some more out at 74. I don't know what will happen next, but it seems to be turning the corner and with the euro showing strength once again, maybe the swissy is lagging. I hope so :). UPDATED... This position was totally closed out with just under 300 pips of profit.

Wednesday, October 22, 2008

10-22 EUR/CAD Trade

Late in the day, this pair had climbed to a major level on the daily chart. When I sat down to my pc, I changed it over to the 5 min and traded price on the fractal break, where support became resistance again. I grabbed 18 pips and closed 100%. The spread widens so much on this one between the US and Asian session, I didn't want to give back profit because of thin liquidity.

Friday, October 17, 2008

10-17 USD/CHF fractal break

I traded this one based on the break of the intraday support that had been holding price. After the break I took the retest and it paid 30+. It did not break away, but in these market conditions, 30 pips are, well... precious!

10-17 One Loss, One Win...Right on Both

Ok, there were two trades I took today, proving to myself that I truly believe (now) the market can do anything and I have no control in the outcome. I know that sounds crazy because I always knew the market COULD do anything but just didn't believe it would. I was eyeing the AUD/USD pair. After a break of a fractal and close on the h hour time frame, I traded it long. I will say, that I was aggressive on this trade and had a tighter stop because of it. Looking back, I had two levels to enter. One was at 1.6825 and th other at 1.6810. I based this trade soley off TSR. Well, I entered the trade at the closer level, knowing I was at more risk. The problem is I entered with a larger position size by accident so I had to tighten my stop. Well, the market chose it's level and I got stopped out.

The thing that makes me feel great about this is that I did not let the loss get into my head enough to keep me out of another set up. I did this intentionally to overcome any fear that would keep me thinking objectively about the next trade. I also had been watching the EUR/USD and it seemed to have been forming a bottom. On this one, I felt very comfortable as with the AUD/USD coming down deeper, the euro seemed to follow and came right into my level. THIS TIME I used the position size and stop I was comfortable with. The market reacted to the level and I was able to secure a profit on this trade. I have to say, I did feel some anxiety entering the market so soon, but I was proud that I took a trade that met my criteria, was prepared to take a loss if the market deemed it so, and did not let that affect my execution to the point of backing away. I know that I must be careful not to revenge trade but this was not the case. I was watching both of these pairs for the set up I wanted to see, which was a moving out of the longer term fractal, into a new one and coming back into my level. As of this writing the AUD/USD took off another 100 pips in the direction I anticipated and I am still in the euro with profit in my wallet. Boy, there are a lot of things to put together at once and a mistake can cost you, even if what you anticipate comes to pass. The good thing is, I recognize all of this now and am implementing it consistantly.

Thursday, October 16, 2008

10-16 GBP/JPY set up

I had set an alert earlier in the day for a possible set up on the gbp/jpy. After getting the alert, I observed price approach my level. I did NOT have my fib drawn to see the 127R or I likely would have traded it there. I was looking for 176.20 but the high hit the figure and then fell 100

pips. Choosing trades using TSR and fractals rocks and combine that with retracement extensions and the odds tilt pretty good in my favor.

10-16 EUR/JPY Trade

This trade was purley TSR and additional confirmation from an extension (thanks for those extensions Chris!!!). After the drop late on 10-15, this pair was rallying before the open of the US Equities market, and rallying right into a pretty strong price level. I traded it on a surge to my level and banked some profit with 20+ and left around 10% in the market. With the equities all over the board, this could stop me out, or I could be in for the ride of my life...WHO KNOWS?

All I KNOW is I traded what I saw, I managed the trade and the market was generous enough to give me some profit.

Wednesday, October 15, 2008

10-15 USD/CHF Trade

A simple trade, but yet still profound to me on the break of a fractal and TSR. After a close of the 11:00 GMT candle below TSR, I saw the rally within the first 15 minutes of the hour and shorted the trade at 1.1353. I took out most of my position with 20 and then closed the remainder after I did not get the "shove" that I wanted in my direction. I think this pair is looking more bearish but it is yet to be confirmed. That is why I have come to realize money management is so crucial. I made money on this trade, yet it could continue with the macro trend and take off to new highs. Like Chris says, "you don't have to know where it's going to make money." So TRUE!!!

Tuesday, October 14, 2008

10-13 USD/CHF Trade ( I am right no matter what)

I can say with confidence that "I am right, no matter if I win or lose a trade." This may sound like I am confused. How can I be right when I lose, if I think I can win? The answer is, if I TRULY believe that the market can do anything and I have no control of the market, then I am right no matter if I lose a trade or win one. After going back to reading "Trading in the Zone" by Mark Douglas, a little light bulb flickered enough for me to see some things. OK, let me not kid myself. Actually, it was a blazing spot light that I saw and for whatever reason NOW, it hit me like 2 tons of bricks. For three years I have been in competition with the market. I have made great strides, in my opinion, toward my goal of consistantly winning trades and have results to show my progress, but the mental aspect has plagued me over and over concerning my approach to the market overall. I am competitive to be sure, but to think that I can "win" over an "opponent" with such deception, volume of cash available to it at any time and irratic if not surprising behavior is absolutely obsurd, yet, I felt that I was actually in competition to try and do so. Nothing could be further from the truth. What I have recently realized, (no matter how simple it was yet I could not concieve it) is that I am ALWAYS right when I get into a trade if I follow these beliefs:

1. I can only know what a technical pattern or set up looks or feels like.
2. I can only know how I am going to manage my trade specifically.
3. I can only know how much I am going to risk
4. I can only know that the market is capable of doing ANYTHING.

When I realize this, I am right everytime I enter the market. The things I don't know, that may cause me to lose money on a trade are:

1. I don't know when someone else is going to enter or exit the market or HOW BIG their position may be
2. I don't know what fundamental news events could occur at any moment and affect the market.
3. I don't know what can happen next on a global scale to have impact on the market.

I also know that it is imperative to protect myself with low risk exposure because of what I DON'T KNOW. This is simple to say the least, but is very hard to implement (at least it was for me and the statistics build a case for 95% of all traders). I can say NOW that because of recent market action, I DO BELIEVE that anything is possible in this market and now I make it a must to approach every trade in that state of mind. When I get ready to enter the market all I can know is my plan, my entry, my exit and most importantly my risk, and I MUST BE WILLING to realize that my risk amount is very likely to be taken from me at any moment. When I do come to terms with this, trading is not about fear, but about letting the market unfold at ITS WILL. All I can do is put as many probabilities in my favor as possible, and I do believe by doing this I can profit from the market more than I give to it. That is the HOLY GRAIL. There is only so much analysis I can do, the rest is in the market's control. The main thing is that I know proper analysis sets me up to grab profits from the market, but if I do not, I am not wrong, the market just proved to my why I am right, that yes, ANYTHING CAN HAPPEN. With that being said, I approached this USD/CHF trade in that mental aspect, knowing that this market has been irratic at best. Although there have been some set ups, they have been hard to recognize (at least to me) but this one seemed to be unfolding to me. I prepared my proper mindset and traded this possible head and shoulders pattern. The 1 hour chart showed me a rejection of the level I have keyed in on and I just traded what I saw. I waited on a pull back using the 15 minute chart and got filled at 1.1399. I took profits out at 22 pips and moved my stop to entry. I got stopped out by maybe one pip on the remainder of my position but that's trading. The market proved that it was in control and I knew that was the case before I moved my stop to entry, but that was my decision. The market made it's decision and then chose to fall 100 pips over the next several hours. Oh well, I am excited over what transpired. It only shows me once again that I was right and can be right on every trade because the only thing I really KNOW is that you can't know what is going to happen next, but you don't have to, to be profitable.