Forex Trade Example (3 June 14)

Like I said earlier, this blog is not a trade advice or even a trade education course. It was set up to record my own trades and to share my own trading methods with other trading enthusiasts who wants to find the best method for themselves. In testing out my methods over the long term, I encounter some difficulties in coping with market volatility and my own psychology. These problems are what many retail traders face all the time. Only if we curb them, can our trades have higher probability of winning. The second trade today shows how trading psychology can be your greatest pitfall.

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

Trade: Set order to buy at trough, sold at 12 pips profit after exceeding previous peak.

Review: Short term downtrend ended, long term uptrend resumed by higher peaks and higher troughs. Position taking was a little hasty, but due to the long consolidation phase within the hourly uptrend, prices are likely to spike rapidly, order is set to buy in a more favourable price.

Trade: Buy on uptrend pullback. Got caught on a bigger pullback, but did not break previous support. Closed position at breakeven point, in case it is a longer consolidation phase.

Review: Long term trend observation is correct. But was too hasty on taking position. Could have waited until upward signal was present at 2015hrs before taking position since previous trough was not broken yet.

Trade: Sell when previous trough is broken, confirming start of downtrend. Quick profit taken at 5 pips.

Review: This is a break out trade. Since downtrend is confirmed, and downward movement is usually faster and shorter, short position is take quickly and averaged up on the next bar. Profit taking is also done quickly before a strong drop is followed by a strong pullback.

Summary

Trades 1 and 2 today were too hasty to take position. As a result, the position taken was either unfavourable or not confident. Make sure directional signs are in place before taking a position. The third trade was a quick breakout. An unusual trade for me, but seeing the opportunity of a downward break, I quickly shorted at break trough to take a quick profit. Trades can come in different forms, as long as you are confident to hold out for the time and profit target set out, it will be a good trade.

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.