The trials and tribulations of a newbie.. still....

[PAtrader]

The aim of this topic is to help me document my thought processes and reasoning for taking trades. My tradestation is littered with notes and screenshots etc.... however I still find myself periodically not sticking to my 'plan'. So i figured if I put myself out there to be ridiculed then it may be the kick up the behind I need to finally shift some of the demons!

I 'found' forex about 2 years ago when I stumbled across ICT and was greatly appreciative of the content/time that was put into videos/webinars etc.... as time progressed it was apparent that I am my own worst enemy when it comes to information overload. Or what has been dubed 'Analysis Paralysis'!

A little background.. I have never demo traded..... I trade very small accounts until I hope I become more consistent and then I would like to step it up a gear or two. Psychology was a massive problem I never knew I had/would struggle with... I could always talk myself out of a profitable trade and convince myself that my S/L would never be taken... I guess a few of you know exactly what I mean.

My trading style/system... will gradually make its way on here... occasionally I will use bits from ICT and Petefader.

Anyway enough of the waffling... I have to get my posts up to get rid of the moderation ;D

 

[PAtrader]

Now.... so far in my short trading career... I have lost track how many times Price Action has been mentioned...and it has kinda eluded me everytime ' EXACTLY' what is meant.. sure I understand that price 'swings' about and I also know I will never catch the extremes... unless I'm buying into a new high in that case it's a given ...

Has anyone got a clear definition of what Price Action really is??

After spending countless hours watching charts so far I think it is starting to become clear.. but only because it was staring me in the face all along.. but I was too fixated to see it!

Now this is where thanks to ICT comes into play for opening my eyes to the term Fractal. More of that to come later

 

[PAtrader]

I used to buy into the notion that it was all about the pips....and I remember the wow factor at people and their 100+ pip achievements and to be honest made me feel quite depressed. Half the time it was probably because I was in similar setups but bailed far too early, I mean how does anyone know where price is trying to get to? Then it was suggested to me by a top fella also from the UK that maybe Price Action isn't random and that you can watch the flow of price from one point and predict quite accurately where it may be trying to get to. But that would mean me getting off of 5/15/1hourly charts...but surely 4hr/daily/weekly/and monthly mean I miss all the action...

 

[PAtrader]

I used to exclusively trade just EU/GU because that is the advice newbies tend to get.. and whilst certain 'tools' worked well with them when applied correctly.. they didn't transfer across to other asset classes very well.. perhaps it was my application who knows ....

I now 'try' to trade each week.. a yen pair.. normally EJ but this week looking at AJ, GOLD, OIL (Brent or WTI) and SP500 (sometimes FTSE). I tend to keep an eye on EU or GU but as of late I don't like them very much.

My whole trading model is based on my interpretation of PA and Horizontal S/R.
My charts are clear of everything else except for MA's which can help me keep perspective.. although a trade will never be based upon them.

 

[PAtrader]

Back to my theory on PA....
I used to worry about news and thought the crazy whipsawing around high impact releases were random.. I didn't realise it was just HTF's being respected.. albeit quickly.. don't get me wrong though.. unexpected releases or news events globally tend to shake things about a little and if that happens and I am at the computer will normally just close positions and wait for the dust to settle.

Okay for price to change direction the patterns of open and closes must first form an engulf

 

[jonnycab]

But that would mean me getting off of 5/15/1hourly charts...but surely 4hr/daily/weekly/and monthly mean I miss all the action...

I trade primarily off the 15M and 1H charts (I'd class myself as a pure price action trader - I dont use any indicators at all). However, I use the 1H and 4H S&R levels + Fib retracement and extension points (using these higher time frames) to determine my TP levels within the current trading range.

When you see higher time frame S&R levels line up with higher time frame Fib retracement and extension points of the smaller ranges, then its usually a good signal to let the remainder of the trade run, especially if the levels look good for resting stop loss orders and things like that.

A habit I've gotten into is once the trade is placed and risk is managed, ZOOM OUT

Where has price been?
Where is it going?

A trade I took this morning:

(click for larger image)



Long EURUSD @ 1.3065, levels for taking some profit:

1.31 handle, big level, that wasnt quite tagged this morning before the drop.
1.3120 - 62% retracement of current trading range
1.3140 - 70.5% retracement.
1.3160 - 79% retracement.

I will always round my TP down to the closest whole number/institutional level - dont be greedy . By the time I've taken TP2, the majority of my position will be scaled out, so any further gains will be small, but I find that helps with the analysis side of things. It may result in me leaving larger portions on for larger pip hauls.

I dug out an old screenshot from May with my levels from back then:

(click for larger image)



What has changed in terms of my key S&R levels? Not much

Its a little messy when you zoom, but draw some fibs on the chart and see which ones are key in terms of TP levels.

Using MT4, cleaner chart 1H TF without my messy S&R levels + market structure fractals (you mentioned these too, very useful!)

(click for larger image)



Look at the current larger trading range retracement levels + smaller fractal range extension points. Quite a bit of confluence there for some TP levels, as well as adding some confirmation to my own key S&R levels from the big messy chart above.

I think the biggest thing you need to ask yourself before you place any trade is, what do I expect to get from this? Once you know that, you can start to manage your own expectations and be comfortable with how the trade plays out if starts to hit all of your predetermined levels. That way, as soon as the levels are reached, you have a plan, rather than just closing out or letting it run up a lot, only for it to come back and tag your SL.

Anyway, just a few thoughts that might help you choose profit objectives.

 

[PAtrader]

Good post Jonnycab.. nice to see your name again.... yeah to be honest most people when they start out are so absorbed in S/L they forget about the most important part ... profit taking. I used to follow what ICT teaches with regards partial closes, however found that all the spreadsheets in the world using this method never truly reflected what I would call real-world gains. Yeah on paper it looks great and it does seem logical... it satisfies the human basic element of knowing you are right... but from what I have found to date.. when it comes to trading, I personally am best rewarded when I 'switch off' this human element.. that in itself is very hard to do.

Regarding my trades.. they 'usually' have one of 3 outcomes.. s/l, b/e or tp I do not do partial closing. If price blows through an anticipated s/r I will look to re-enter. Occasionally I will collapse a trade if I have distractions in my home life or approaching Friday close as I do not wish to hold anything over the weekend.

 

[jonnycab]

Yep, I understand completely, then I guess you have to look at it from Reward:Risk perspective.

If I risk 30 pips on this trade, is there anything that would support a 60 pip move based on higher time frame objectives?

This is definitely one of the hardest things to get to grips with (for me at least). It really depends on the style of trading you like to do as well. Im in and out in a day, rarely hold for longer. Once you've worked out what type of trading you gel with, I think this profit taking issue works itself out. Ultimately Im looking for fresh highs or lows for initial TP. Then the rest is just watching and waiting for a move in your desired direction.

 

[PAtrader]

Okay so I have had a good day today 100+ pips on Gold and didn't want to re-enter on the invalidation of the Daily S/R.
I am expecting the daily to engulf yesterdays bar which would set the stage for me to be looking for buying opportunities up to the monthly line 1307 (ish). Assuming I get into the trade as per my rules I will be taking profit around the 1305 area.. as it stands at the moment it is a nice 150 ish pip target.
My opinion of Gold at the moment is still very heavily Bearish and so I would not consider holding out for extended targets in case it slides quickly!
Assuming the above is still true when I wake up I will be mindful of the weekly s/r as that will be the safe TP but I am expecting a bounce nothing more and will hopefully have stops up to BE at that point.
Picture paints a thousand words.... I will try and start putting a few together.

SP500.. today looks set to close down but not under s/r...possibly suggesting first down then back up tomorrow.

WTI.. caught me today I was holding for TP at the weekly level, instead got within 20 pips of it and dropped like a stone. Assuming it does close under s/r on the daily I will be looking for shorting opportunities.

AJ.. been patiently waiting this week .. stalking my moment.. some lovely setups long but my plan for this week was short...currently sideways into NY close and daily closing up above daily s/r (trending). However there are 2 levels above of interest and I will let Price Action show me which one.. thought at the moment is possibly up in Asian session to s/r and then wait and see..

 

[Tansen]

Yep, I understand completely, then I guess you have to look at it from Reward:Risk perspective.

If I risk 30 pips on this trade, is there anything that would support a 60 pip move based on higher time frame objectives?

This is definitely one of the hardest things to get to grips with (for me at least). It really depends on the style of trading you like to do as well. Im in and out in a day, rarely hold for longer. Once you've worked out what type of trading you gel with, I think this profit taking issue works itself out. Ultimately Im looking for fresh highs or lows for initial TP. Then the rest is just watching and waiting for a move in your desired direction.

I envy you for this jcab lol.

When I get into those monthly trades I often forget or lose my skill that got me there while waiting for it to pan out because it's like a mini vacation. I'm still looking at it every waking moment.

One thing I'm working on is averaging in which would make those monster moves pay even more. Problem is I hate Oanda's FIFO rule and I like seeing a large number of pips with my trades and in order to scale out I have to close my old position.

Don't know why they have it but it's annoying to see your up 200 or 300 pips scale in and your second position has 60 pips but it's still your original full risk on what you used to get into your carry position is and it says sorry can't let you scale out.

Also I agree with you PA nobody realistically knows what price action is or has a clear definition. Everyone has a loose interpretation that they run with and whether their right or wrong may just be ambiguous.

 

[PAtrader]

http://paulbourke.net/fractals/fracintro/

Intersting article re. Fractals.. IMO is the only reason Fibs 'can' work

 

[PAtrader]

Oh well you win some and loose some...there was a level on Gold I negated to take note of.
A/J Trade was invalidated and result B/E
S/L B/E or T/P

Edit: WTI just manually closed as missed TP by 2 pips

 

[jack]

Oh well you win some and loose some...there was a level on Gold I negated to take note of.
A/J Trade was invalidated and result B/E
S/L B/E or T/P

Edit: WTI just manually closed as missed TP by 2 pips

D'aww!.. sour about that gold trade. I'm not a gold trader myself, but if I saw the same price moves I'd be all over that long and just as sour as it doubles back so harshly.

That embedded daily / weekly chart indicator looks neat, I've seen a few like it but they were laden with info/text that was a bit annoying to look at, but yours looks clean. Mind pointing it out?

 

[PAtrader]

Hi Jack... you're going to have to bear with me it's been part of my MT4 for a long time now and whilst it is installed on mine I cannot remember the site I originally got it from. There is/was a font installation program that was required to get it working correctly so it's not a case of I can just send it to ya...
Appologies

 

[jack]

Hi Jack... you're going to have to bear with me it's been part of my MT4 for a long time now and whilst it is installed on mine I cannot remember the site I originally got it from. There is/was a font installation program that was required to get it working correctly so it's not a case of I can just send it to ya...
Appologies

No worries.

If you do find it, or at least find that it's not available or supported online from the place you originally sourced it, we can always host it here based on what files you have as others might find it useful.. along with providing instructions on how to fix any font issues as you mentioned.

But no pressure.

It just caught my eye since right now I do the whole 'three' screen method of having 3 charts of different timeframes and flipping through symbols via changing the preset profile templates I created in Metatrader... it's a bit cumbersome and having just one chart with all the same info would be better since then I'd just have to change the symbol on the one chart when I need to.

 

[PAtrader]

Thoughts for tomorrow:

Gold - Big daily drop today.. I would have been looking for a safe level to TP at which was tagged 1270.. at the moment I will wait for more info before committing to further trades to the downside. If price indicates a possible retracement overnight through asia I may take a small position long if I am awake and aim for s/r shown.
For London if price shows more down then will look to get into the move.
I do suspect the monthly s/r has possibly kicked in meaning we will more more of those big bearish h4 bars!

Looking through I may watch Fiber tomorrow. My first thoughts are drop lower to go higher. If that is how it pans out tomorrow then my targets are set in purple.

WTI - I can see this going up... I cant see any weakness at the moment (which is probably a bad thing.. watch it drop 500 pips!) Assuming I get an entry signal tomorrow long first speedbump would be the highs but I may be tempted to set a TP 110.54.. going to enjoy this log as I can look back and laugh at my ridiculous comments as time goes by!

SP500 - currently I think I would like to see a clear break high before I commit to any more buying.. the safe TP I took today was the 1686 area. Whilst it certainly does still look like it wants more, Price is going to have to show me first..

AJ - Starting to wish I had taken longs this week, the price action has been lovely.. however.. still maintaining this short bias.. bouncing around one of my levels I was watching this week with the other a small stab away... c'mon PA show me some short action!

 

[PAtrader]

My opinion of Gold at the moment is still very heavily Bearish and so I would not consider holding out for extended targets in case it slides quickly!
Assuming the above is still true when I wake up I will be mindful of the weekly s/r as that will be the safe TP but I am expecting a bounce nothing more and will hopefully have stops up to BE at that point. So why didnt I listen to myself.. was the whole idea of logging my thoughts :-[


SP500.. today looks set to close down but not under s/r...possibly suggesting first down then back up tomorrow. Tick

 

[PAtrader]

Finally stumped up for a domain to host my blogging as I realise I will be taking up alot of space for my waffle that is only beneficial for me. I will move my random wittering there and keep to system/trading methodology in this space.

Regards

 

[PAtrader]

WTI - I can see this going up... I cant see any weakness at the moment (which is probably a bad thing.. watch it drop 500 pips!) Assuming I get an entry signal tomorrow long first speedbump would be the highs but I may be tempted to set a TP 110.54.. going to enjoy this log as I can look back and laugh at my ridiculous comments as time goes by!

Sitting here .. watching as the trade goes by.. I broke rules yesterday for gold entry and that didn't turn +'ve results for me yesterday.. so I refused to do it again today... although it woulda been kinda nice! I dont feel annoyed or anything like that... I guess its trading for ya!

 

[PAtrader]

Disappointing day for me today... took a loss on oil this morning that was a valid entry signal but I didn't get one for the massive move I had predicted yesterday.
Just closed out AJ manually as to be honest it didnt look like it had any more legs today and do not fancy carrying overnight as I wouldn't have been surprised to see s/l hit. Real choppy today though.. looks like someone is selling into it...... 3:1 R/R on AJ although I was targeting the level above.