June has been a bit of a roller coaster ride, with most of it spent with me white knuckled and screaming as the track plunges vertically downwards. For July I hope for a boring everyday grind with a dearth of heart stopping moments.

Those of a nervous disposition might want to skip this paragraph; I’m going to total up my losses (since there weren’t that many gains to be honest). The account equity change for June was -19.985%. The majority of this disaster came from one gut wrenching day,June 17.

Today was another step on getting back on the correct path.

After overcoming the barriers at 1.4450 and 1.4500 during the Tokyo session, the London session had seen a bit of a pullback.

I went with a long bias to start with. 1.4460 and 1.4450 looked like offering decent support and I factored in a retrace of part of the London session’s down move.

Bias: long
Conviction: medium

I was initially hoping for price to test the support at 1.4460 before looking to get a long position on. Price had other ideas and the euro bulls ratcheted price up slowly but surely right from the off. By about 6:20 EDT it was clear that an upward trend channel was forming.

I would have gone long at a touch of 1.4475 but was foiled here too, with price making a low of 1.4477 at 6:21 EDT.

The high of the hour at 6:25 EDT broke the trend channel line and I started to look for an opportunity to get short. I waited for one more push up and when it failed to make a new high I was ready to enter a sell trade.

I got in with the blue entry at 6:32 EDT and had to wait a few minutes before seeing price start to break lower. Since I’m now looking to try and take advantage of longer moves if I possibly can, I decided to move my TP level from its default 10 pips and moved it down to 1.4466, just above the low from the 5:00 EDT hour.

It was a worthy attempt. Price came... [Read More]

A better showing today, even if I still have work to do on that patience (I’m sure this will be a recurring weakness that will drive me nuts until I get a grip on it).

This morning the euro was ranging from 1.4255 to 1.4325. With price hovering around 1.4270 at the start of the hour I was looking for price to test the range low first.

Bias: short
Conviction: weak

Right from the off price plummeted down to the support at 1.4255. With the forcefulness of the move I was mindful that if the support level broke price could be well on its way down to 1.4200. My short bias was growing and an itchy finger got me in too early with the first trade of the day (in burgundy). I bailed when price broke the minor high at 1.4258 as there was no follow through.

I was sorely tempted to enter shorts at 6:12 EDT and 6:19 EDT when price was coming back down from those spikes, breaking the micro trendlines of the pushes up. In hindsight these would have been good short entries. At the time I wasn’t comfortable quite yet on doing these sort of trend entries.

My second trade (in orange) was jumping on board the breakout at 6:22 EDT. I still had my short bias hat on so was happy to jump on this instead of waiting to see how it would unfold.

When price pulled back up above 1.4255 I had no problems recognising the false breakout unfolding and switching to long (and thus an improvement on yesterday). I killed my short trade and attempted to put on a 10:1 long position.

My butter fingers managed to initiate a short position instead. I swore profusely. Closed it out and went long.

I held the long until we’d reached the prior spike high.

Nothing else stood out for me in the second half of the hour so I just sat on my hands.

A better showing today, even if I still have work to do on that patience (I’m sure this will be a recurring weakness that will drive me nuts until I get a grip on it).

This morning the euro was ranging from 1.4255 to 1.4325. With price hovering around 1.4270 at the start of the hour I was looking for price to test the range low first.

Bias: short
Conviction: weak

Right from the off price plummeted down to the support at 1.4255. With the forcefulness of the move I was mindful that if the support level broke price could be well on its way down to 1.4200. My short bias was growing and an itchy finger got me in too early with the first trade of the day (in burgundy). I bailed when price broke the minor high at 1.4258 as there was no follow through.

I was sorely tempted to enter shorts at 6:12 EDT and 6:19 EDT when price was coming back down from those spikes, breaking the micro trendlines of the pushes up. In hindsight these would have been good short entries. At the time I wasn’t comfortable quite yet on doing these sort of trend entries.

My second trade (in orange) was jumping on board the breakout at 6:22 EDT. I still had my short bias hat on so was happy to jump on this instead of waiting to see how it would unfold.

When price pulled back up above 1.4255 I had no problems recognising the false breakout unfolding and switching to long (and thus an improvement on yesterday). I killed my short trade and attempted to put on a 10:1 long position.

My butter fingers managed to initiate a short position instead. I swore profusely. Closed it out and went long.

I held the long until we’d reached the prior spike high.

Nothing else stood out for me in the second half of the hour so I just sat on my hands.

I did some more reflecting over the weekend. The end of last week had me straying from the scalping approach I’d been practising for the past few months. Was I going to change tact once again or try and soldier on?

I’ve mostly decided to charge on with my scalping. The main reasons for this decision were:

• I really dig just focusing on trading for a solid hour. I know from far too much experience that if I try to trade on a longer time frame that I have to divide my time between trading, work and family. I’m never guaranteed to be in front of my trading platform at the right time. I end up checking charts far too frequently taking away time and focus from those other activities that I should be dealing with. The one solid hour provides simplicity, clarity and focus.
• I really felt like I had a good rhythm going in April and May. The good vibes from that period was intoxicating. I know how fruitful scalping can be when things are going well.
• Sometimes I think back to the last time I attempted scalping and wonder what if I hadn’t quit? What if I had just kept at it? How much extra knowledge, experience and insight would I have now? If I quit now then I’ll only wonder the same thing sometime in the future when I inevitably try this approach again.

I’m keeping my focus on scalping the 6:00 EDT hour solely on EUR/USD.

But I have to switch a few things up or I feel I won’t achieve my full potential. I implemented the averaging down strategy soon after I started scalping in February as I had no good feel for when I should be entering trades. The averaging down allowed me to deal with slap shot entries and smooth over rough trading periods. The down side was that it made losing days into pretty painful experiences.

Negative emotions arising from a losing or poor day have a greater impact than the positive emotions of a profitable or good day. There is a definite psychological benefit to stacking the deck as much as p... [Read More]

My head wasn’t really in the game today. Still confused as to the way forward here.

I worry that I’m just changing things up for the hell of it. Never settling down with a method for good. I’ve seen myself go through this pattern many times before. I lose about 20% of my account (whether demo or real), fret that I’m just not hacking it and start to look for a change.

Plenty to ponder this weekend.

For that reason there’s not much behind today’s single trade. The big bull bar at 3:00 EDT looked to be starting point for a range between 1.4200 and 1.4300. With the 30 pip drop right at the start of the hour I waited to see if it might retrace the move or look to stay under 1.4250. Shorts below 1.4250 it was.

Bias: short
Conviction: moderate

Once I had the blue entry in I just waited for it to hit the earlier low of the day around 1.4200. If price had gone back up to test 1.4250 I would have looked to add another short.

Yesterday’s closing thought percolated in my mind for the remainder of the day. It mutated and evolved as I thought about millipede trading catching up on the millipede thread over on Forex Factory. Infinite yield. Stacking.

I’ve started to become concerned at the lack of big winners. What could I do to try and rectify that? Was there a way to merge 4×1, scalping and millipede together in some form?

I’m not sure if I have cohesive answer to that last question yet, but I decided that what I was ruminating on was worth experimenting with for a few days to see if it has any merit in the light of day.

To that end my trading approach was altered for today. Let’s start with what is the same:

• Only trading one currency: EUR/USD
• Only actively trading for one hour in the morning at 6:00 EDT.
• Pick a directional bias and look to actively trade in that direction.

Here is what has changed:

• Multiple trades can be entered but they will not necessarily be considered to be a trading sequence.
• Each trade will have its own separate SL, currently set to 40 pips. This equates to a 2% loss per entry for a default 5:1 position.
• Currently undecided between a default TP of 50 or 100 pips. Either way the TP level of any trades still active at the end of my trading hour will be altered to a common TP level.
• Trades can be closed manually for a profit or loss during the trading hour but the main goal is to try and allow for the market to move the positions into big profit over the next couple of hours. Looking for momentum during the NY open up. Trades will probably not survive past noon.
• With the FIFO system in place for US brokers and thus for Oanda which I use there is no incentive to hold positions for more than a day since I could very well be trading in the opposite bias direction tomorrow.
• SL will be moved up to BE on any positions that live beyond my trading hour (and probably b... [Read More]

This week has been a classic one step forward followed by two steps back.

In an eerie sense of déjà vu today was almost a carbon copy of yesterday. The mistakes I made were subtly different resulting in more severe repercussions.

The setup looked similar: a range between 1.4360 and 1.4420. In trying to decide on a bias for the hour two things that are core to my analysis are any trend exhibited during the London session so far and the bias of the 5:00 EDT hourly bar.

Today the London trend was short and so was the 5:00 EDT bar. I like to play it counter trend to the trend and in-line with the 5:00 EDT bar. Going counter trend to the London trend meant a bias of long. Sticking with the 5:00 EDT bar meant a short bias. Which one had precedence?

Ten days ago I would have gone with the counter trend as trumping the past hour. But I’ve been placing more and more importance on what occurred during the 5:00 EDT bar. I think that has been an error. The prior hour provides valuable information but I think I have to revert back to the analysis structure I had been using and only have the 5:00 EDT bar provide an advisory role, or maybe even help in a tiebreaker.

Obviously I went with the 5:00 EDT bar trumping the countertrend for today which was mistake number one. I also detect remnants of the decision making I made yesterday where I can’t seem to be confident in my counter trending nature at the moment.

Bias: short
Conviction: weak

With a short bias there’s not a whole lot wrong with my three entries. My bias was wrong and I was just looking to get off lightly.

Except that I wasn’t able to execute and get out at BE. I had no qualms doing this yesterday. I know that being 15:1 is too risky to be holding when I’m offered the chance of escape and it’s become clear that my bias is wrong. Get out and look for another lower risk trade. But today I had mental blinders on. I think I’m just desp... [Read More]

Today was all about steadying the boat. I spent a good bit of time over the weekend pondering on my trading approach and reviewing my journal for the past few months. I was trying to determine if any radical changes were needed or if I was generally on the right track but just sabotaging myself.

The key question probably revolved around whether my averaging down style was helping or hindering in the long run. After reviewing my usage of averaging down over the past three months I determined that it’s not the prime reason for my failures last week. That still seemed to revolve around being impatient and not handling spikes very well.

I also looked at whether it might be more beneficial to implement a sort of doubling down approach where I would exit a trade with a traditional close SL and look to increase the lot size of the next trade to hopefully make back those pips on the next winner. I’m not totally won over by doing something like this. To me it seems to be a wolf in sheep’s clothing: the same as my current approach just done slightly differently. The one advantage would be that I could trade in the opposite direction to the original trade if desired. I would generally be doing this if my bias has changed. But if my bias has changed what can’t I just flip my averaged down sequence anyway?

The conclusion of all this introspection was that I wasn’t going to change anything this week. Business as usual with the plan to regain the consistency and discipline I had been fostering.

After dipping a bit from the weekly open the London session seemed to be consolidating between 1.4200 and 1.4240. This meant I was going to be trading in a range market starting off in the top half of the range.

Bias: range
Conviction: medium

For the last 15 minutes of the 5:00 EDT hour 1.4230 had been acting as resistance which led to taking a short for the first entry of the day. This entry is fine, but not great. In hindsight I ... [Read More]