Forex Trade Summary (28 May 14)

Trend was more obvious on the JPY related pairings today. Did 2 good shorts today, and also learnt a good lesson about not trading against the long term trend. See second trade below.

Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade: Sell on downtrend pullback. End of pullback is confirmed by long red bar after dojis. Take profit set at near previous low. Trade closed at 10 pips profit.

Review: Obvious downtrend. Waited for confirmation of downtrend continuation before taking position. Good trade.

Trade: Trying to take advantage of short term pullback to gain a little profit on a general down trend. Market moved against trade. Cut loss at previous support level. Loss 5 pips.

Review: Too hasty to make profit during indecisive market period. Should avoid if not clear whether trend is reversing or continuing. Bad trade.

Trade: Short on downtrend continuation after head and shoulders pattern. Previous low was broken, and downward momentum shown by red bar after long legged doji. Took profit at 5 pips.

Review: Head and shoulders pattern is more obvious when viewed on the 30min chart.  Even without the head and shoulders chart pattern, the downward trend reversal is eminent with the lower troughs and lower peaks. Since downtrends typically last shorter, and have a larger momentum, I would go in early, as soon as trend continuation is confirmed.

Summary

Short positions usually last shorter, hitting profit target faster. This reduces market risk as well as your heartbeat. But you have to take advantage of it early. Avoid trading during pending market news, sideway trend or consolidation, or if there are any signs of trend reversal coming.

Forex Trade Example (27 May 14)

Following the weak trends on Monday, most major pairings were still indecisive. The Euro experienced a short term trend reversal against both USD and JPY. UK's pending release of borrowing figures made investors even more unsure. In the end, it sparked a dip in the British Pound. A good day to avoid the GBP.

Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade: Buy on uptrend pullback near trendline. Prices moved against trade. Average down after spotting doji and reversal signal for upside pullback. Got out near previous support/resistance level of 1.3653 with a slight profit.

Review: New low breaking previous low signals a trend reversal from up to downtrend. A way to close the trade would be to cut loss at first break of previous low. However, a doji and a minor reversal signal was seen, thus I averaged down the trade to close all positions at pullback to minimise losses. Since previous support is at 1.3653, pullback resistance should be around the same level, thus all positions were closed there.

Trade: Sell on downtrend pullback after downward kicker signal.

Review: Trend reversal from up to downtrend, seen by lower trough and lower peak. Sell and got out within 3 bars. Profit 5 pips.

Summary

5 min charts today were no trending obviously, therefore 15 min charts were used to see the clearer picture. In times of a trend reversal during an open position, there are 2 options. Cut loss immediately after break out, or average up/down positions and minimize loss at first pullback (see first trade on top). Averaging up/down is riskier. I only do it when I see signs of a strong pullback.

Forex Trade Example (26 May 14)

It always takes a longer time on Monday to clearly identify the general trend. But it was more obvious on the more stable AUD/USD pairing. 

Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade: Slight but steady uptrend. Buy on pullback and after doji is seen. Sell near previous high, after 4 bars. Profit 5 pips.

Review: Straight forward trend following trade. Waited for confirmation of uptrend continuation before taking position. Although not at lowest point, but trade probability was higher.

Forex Trade Example (19 May 14)

A sluggish Monday to start the week off. Spotted an early steady trend on the EUR/USD pair 15 min chart.
Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade: Buy on uptrend pullback after confirming it has resumed upswing (big green bar around trendline area). Caught it right before the bar ended. Took profit near previous high, which turned out to be a temporary resistance before swinging up some more.

Review: Good entry point after confirmation of trend continuation. Maximized profits at take profit. Good trade.

Forex Trade Example (14 May 14)

With the market waiting for Bank of England's inflation report and several European countries announcing their CPIs, most pairings were heading sideways as investors were being cautious. Nevertheless, there is still enough volatility to trade on the 5 min chart. Below shows 2 trades caught on the EUR/JPY pair.
Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade 1

Trade: Downtrend reversal confirmed by higher high. Buy at pullback. Upward momentum wasn’t strong enough, so got out quickly at 0.5 pips.

Review: It’s good to get out of a position you feel uncomfortable in and re-assess.

Trade 2

Trade: End of pullback after hammer doji and 3 bar reversal signal. Buy when next bar hits a lower price. Took profit at 5 pips.

Review: First pull back of trend reversal was made clearer by doji. Took advantage of fluctuations to take a lower long position in order to maximise profits.

Summary

Be it higher high, lower lows, dojis, big green/red bars, the more signals you see, the stronger the momentum,  the higher the probability of the trade. Dojis alone mean nothing if there is no confirmation bar after. A doji only signals uncertainty between the bulls and bears. The next bar will tell you whether the bulls or the bears are in control. This direction must also coincide with the general trend before you decide to take a trend following position.

Forex Trade Example (12 May 14)

With most pair being sideways and having erratic movements, I only managed to pull off one trade on the most stable pair, AUD/USD. 

Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade: Buy on uptrend pullback after green bar appeared somewhere near trendline. Took profit close to previous high at 7.6 pips.

Review: Simple and straight forward trade, taking advantage of the early stages of an uptrend and the low of the pullback. Good trade.

Forex Trade Example (9 May 14)

Had been a little busy this week. Didn't trade for 2 days. But I managed to catch this uptrend on the USD/JPY chart.
Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade: Buy on uptrend pullback after seeing upward signal. Price moved down some more after breaking previous high. Didn’t take profit as target was not hit and there is potential to move higher.  Did not cut since previous low was not broken. Took profit at 6.3 pips at next surge.

Review: Could have taken profit at first upward move about 8 bars later. Not worth the risk of trend reversal for a little more profit.

Summary

Sometimes during days of quiet activity, it is better not to trade than to enter into a bad trade in which you need to wait very long for the market to react. But one trade a day should not be a problem.

Forex Trade Example (6 May 14)

It has been a quiet day. Only managed one ideal trade today on AUD/USD. The other trade was a take profit from the previous day.
Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade 1 (5 May 14 1600hrs)

Trade: Buy on short term uptrend pullback. Prices slid, but held above previous resistance, sticking to medium term uptrend. Held on and got out at 1.1 pips at end of the day.

Review: Very short term upsurge, caught too late. Good that medium term trend is upwards and got out before the next trading day. Not a good trade.

Trade 2 (6 may 1400hrs)

Trade: Buy on gradual uptrend, 15min chart, ignoring large doji due to Australian retail sales announcement. Took position at upward swing after pullback. Took profit at 4.1 pips.

Review: If not for the large doji, would have held on for a little more profit, nearer to previous high. But technically not advisable. Good trade.

Summary

The second trade showed 2 points in technical trading. First, refrain from trading during times of important news announcements. There might be a large adjustment to the market. Whether it affects the upcoming trend of not, it will show in the next few bars and price action. Second, ignore absurdly large movements on the charts within 1-2 bars during a news announcement. It will could your judgement of reading the real trend and direction signals.

Forex Trade Example (5 May 14)

I'm proud to say that after today's trades, account balance has grown by 11% since the account was set up for the purpose of this blog, with the first trade done on 9 April 2014. Thank you for reading. Comments are greatly appreciated.

It's a slow start to the week. Trends were very gradual. Nevertheless, there is still profits to be made.
Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade 1

Trade: Short after spotting star doji after a short term uptrend/pullback, and a long red bar after the doji. Waited for next 2 bars to take position on a high and auto took profit at 4 pips.

Review: Since we are trying to take profit from a pullback, it could swing either way, thus it was good to get out quick. Good trade

Trade 2

Trade: Strong pullback on uptrend, but did not fall below previous low (bar body). Bought after spotting hammer doji and confirmation green bar. Quick exit at 3 pips.

Review: Trend was not very strong, but short term direction was confirmed by doji and resistance level. Quick trade to minimize risk.

Trade: Short on downtrend pullback, at first sign of downward movement. But pullback was stronger than expected before continuing downward movement. Quickly took profit at previous low before bar ends.

Review: Too hasty to get into position when pullback has not touched trendline. Noticed that downtrend was ending, or switching to sideways, so quickly exited.

Summary

Sometimes it might seem that we take profit too quickly and forgo the next few bars when price continue to go in our favour. But what we are essentially doing is to use the highest probability to take a small amount of profit, so that our hit rate is high. For some reasons, the market could turn against you and staying longer in position increases the chance of it happening.

Forex Trade Example (2 May 14)

Made 3 good trades and 1 bad trade today. The last trade (the bad one) was due to not noticing slight signals of trend ending. The first 3 trades gave me too much confidence that I didn't notice the details. Still managed to get out at break even and make a decent overall profit today.
Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade 1

Trade: Buy on uptrend pullback, after confirmation of uptrend continuation. Took profit quickly at next bar,  when it almost hit previous high.

Review: Good to wait for a small pullback before taking position to gain maximum profit. Quick and decisive profit taking. Good trade.

Trade 2

Trade: Quick buy at uptrend pullback, at point almost hitting trend line. Quick take profit after 1min after seeing doji, knowing it is not the end of pullback.

Review: A bit too hasty to take a position without confirmation of trend continuation, but quick profit taking minimized the risk.

Trade 1

Trade: 15min charts. Sell after pullback on strong downtrend. Auto take profit at 5.1 pips. Exited trade at the 6^th bar.

Review: Since it’s a strong down trend, there is more reason to take profit at slightly below previous low. Straight forward and good trade.

Trade 2

Trade: Tried to sell on a downtrend after a strong pullback. Price moved against position. Quickly got out at break even point.

Review: Bar bodies did not overshot previous high, but candle wicks did. Signalled the end of downtrend. Should have noticed more carefully. Not a good trade.

Summary

There are bound to be times when you make a mistake or sometimes the market just go against you without you knowing the reason. When that happens, be quick to get out. Set a break even point if the volatility allows a pullback to hit it, if not, set a cut loss where a pullback level will hit, or just cut loss immediately. Re-assess when you are out of the mess. There is always another trading opportunity.

Forex Trade Example (1 May 14)

It's labour day! Markets were not very active, nevertheless, I still managed to pick out one trade to profit 5.1 pips in 2 hours using a 15 min chart.

Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade: Buy on gradual uptrend pullback, after big green bar confirmation. Auto take profit just below previous high @ 5.1 pips.

Review: Obvious trend. Patient to wait for confirmation and lower price before taking position. Quick take profit within 10 bars. Good trade.

One trade is good enough for labour day. After all, it's meant to be a break from work.

April Trading Summary

It's been 3 weeks since my first Forex trade example was posted. Let's tabulate the results of trading for the month of April. Having an initial capital of $100,000 and by using a leverage of 50 times, with each trade not risking more than 30% of maximum tradeable units, the account balance has grown by 9.32% to $109,323.39. Total active trading time was about 3 weeks, from 9 Apr to 30 Apr.

This is achieved by using one main strategy of trading with the trend, getting into position at the end of a pullback, and taking profit quickly. Of course there have been many instances that the trades were not so straight forward, having to bring  in other factors like medium to long term trends and false breaks. Sometimes quick profit taking might result in losing out on higher profits, but this strategy is all about minimizing risk and preserving capital to achieve constant profits in the long run. At times, cutting loss is also essential to preserve capital when a position is taken wrongly or when the market goes against you for some reason. Get out, re-assess and get in again at the correct time.

Trade account balance for the month of April 14

I will be continuing to trade with this account and strategy to further prove its worthiness. Thank you for reading and following. If you have any comments or queries, feel free to leave a comment below. All questions will be answered. Please share this site if you think it is useful. Thank you.

Forex Trade Example (30 Apr 14)

All trades today were made using 15min charts, as market movement was quite flat on a 5 min chart.

Disclaimer:  This is purely for sharing purpose only, not a trading advice or instruction.

Trade: Using  15 min chart. Buy on uptrend pullback, after spotting upward kicker signal. First buy was high, averaged down on the same bar. Set take profits of 5 pips, which hit on the 4^th bar.

Review: Good to spot upward kicker signal to take position at bottom of pullback. Could have waited till the end of bar before taking position, then averaging down will not be needed. Since movement is not large, take profit has to be adjusted accordingly.

Trade: On 15min chart. Spotted hammer Doji after long consolidation. Took long position anticipating strong upward action. Set smaller take profit in case price continues long term downward trend.

Review: Risky trade. Consolidation during long term downtrend might result in strong downward action. Size of Doji too small.

Trade: On 15 min chart. Sell after downtrend pullback and signs of downtrend continuation. Auto take profit at 5 pips.

Review: Good to wait for downward signal before selling, made use of longer term trend. Since movement is large, take profit could be more. But overall a good trade.

Summary

It's a good practice to switch between 5min, 15min, 1hr and 1 day charts to get an idea of the short, medium and long term trends. This will give you more versatility and confidence in your trades.