Thursday, October 20, 2011

"I am always wandering around in enigmas" ...MC Escher"

Oh what a day! 

Have you ever had one of those days like the guy on the escalator? 

I sometimes wonder if maybe M.C. Escher was a forex trader before he found his specialization in mathematical art. How else could you explain how this statement, "I am always wandering around in enigmas" would fit so well in a a day of a forex trader.
Side Note: By the way, just click the picture on the left and you will see what I mean.

I haven't been trading since Tuesday. It was just a crazy busy day but I did plan out two trades for Tuesday morning (Asian Session) one for $EURUSD and the other one $AUDUSD. I was really frustrated that I did not have time to take them during the day. They turned out to be good setups. Wednesday and the better half of Thursday were filled with stuff to do!

So I camped out on $AUDUSD just before the start of  US Session and took a couple of shots.

For the next couple of hours, I was the man on the escalator.
After the third break-even trade (Trades 2,3, and 4) and still holding to 11 pips of losses (Trade 1), I thought maybe I should re-think my strategy and either give-up for the day because I might not get so lucky. Or maybe just take the next one at 1 to 1  to exit an end up the entire day break-even.

Well, I actually ended up with an astounding 36 pips!! profit. Yeah, making it green and a bit larger is fun!

Thinking back, I know the reason that I ended today with a profit rather than a big loss was that I was able to use the "Move to Break-Even" bullet. Thanks Robbie!  Boy, pulling the triggers on that one really helped. Even on my Revenge/Frustration trade (Trade 3) .

Yes, I am still subject to that momentary lapse of reason that overcomes you and makes you pull the trigger on a revenge trade. Only I guess I have a better, more polished bullet or maybe I can take better aim. Oy, enough already with the gun metaphors!

Back to the trades:

I started with a Bossilator on $AUDUSD of 930 on the 15M charts. So I was looking for a counter-trend sell. At that time, there was about 90 pips to the SMA800 so it was pretty good for any kind of trade with a good Risk/Reward (R/R).

I am working on entries on a lower timeframe because I am really bad at sitting still in a trade. Also going in on a lower timeframe means I can find shorter timeframe lows and hopefully enter and exit earlier. Right now, I am focussed on just trying to get that 20 pips or 25 pips move in the full 50 or 70 or even 100 pips move that it could make. I figure with the right risk/reward I should be able to navigate through these trades and keep my account afloat for a longer period of time. (Note...I didn't say make great profits although that is where I really want to be. I just want to work on holding on to the ones I have for now)

$AUDUSD 15M View
So you can see I had missed the correct entry on the 15M charts. I think I was looking at it and I really a nice clean entry on the 1M chart but the indicators showed otherwise which was why I waited.
$AUDUSD 15M Oh what a day!

$AUDUSD 1M View and Trades

Trade 1 - AUDUSD Buy (-10 pips)
  • 1M Stochastics Oversold.
  • Entry at 0248
  • Stop at 15pips - It was also about this distance away from the SMA800. If it reverses past this, I want to be out of the trade.
  • Target 2:1 - at today's high at the time.
  • Result: -11 pips. I exited this when I saw that large black candle bounce off the SMA200

Trade 2 - AUDUSD Sell (Breakeven)
  • Sell at SMA200 Resistance
  • Entry 0234
  • Stop Loss 0259 (25pips)
  • Break Even Set to 0234 when price was at 0214 (This broker needs a 10 pip difference from price before a stop loss)

Trade 3 - AUDUSD Sell (Breakeven)
  • SMA 200 Resistance
  • Entry 0236
  • Stop Loss 0261
  • Break Even Set after 5 minutes of trade (again!!)
  • Break Even Hit 11 minutes after trade starts

My patience is now wearing thin and I am now getting really tired....

Trade 4 - AUDUSD Buy (Breakeven)
  • Revenge and Frustration - Just go for it- Trade
  • Entry in the middle of that long candle (yes, I plead guilty) 0255
  • Stop Loss 0233 (at least I was consistent with the Stop Loss)
  • Break Even Set after 3 minutes of trade
  • Break Even Hit after 23 minutes of trade

Trade 5 - AUDUSD Sell (Finally +46pips)
  • SMA200 Resistance + Break (also on the 15M Chart)
  • Enter at 0239
  • Stop Loss 0264
  • Break Even Set at 5 minutes of trade
  • I keep setting Stop Loss forward by 10pips every 2minutes (At this point, I am fearful so I am always 15pips behind)
  • Exit 0193 (+46pips)
  • Nett +36pips for the day

Oh What a Day!!

Happy Trading!