2013 Summary

So this marks the 4.5 year of my trading and I'm still in a hole...

MINDSET/PSYCHOLOGY/METHOD
Summary: finding trading peers and mentor through blogging and learning Al Brooks method have dramatically changed my trading and confidence...

What I have come to realize in the past couple of months is that I did not know how to trade correctly. To be precise I did not know how to read/prep price action correctly. My methods up to that point were lagging and so I often ended up on the wrong side of the market when taking trades, despite following my rules exactly.  Until the past couple of months I worked on everything except my price action reading convinced it was always going to be a bit "here or there" and believed that simply managing risk, following my plan and staying disciplined would put the odds in my favour eventually. But in reality I was not reading price action correctly and so even with the best discipline,  psychology and risk management I was only ever going to lose money, albeit slowly.

Keeping this blog has changed my trading entirely.  I am a self taught trader, up until I started this blog my only lessons had come from books and experience.  I was not a huge fan of forums, finding them overly opinionated and occasionally intimidating.
This blog and getting involved in the "community of blogging traders" has changed my trading entirely because I am no longer isolated and now finally have peers and a mentor, pointing me in the right direction and sharing in my experiences and theirs for that matter.

The second biggest thing to have happened to my trading this year was a blogging friend putting me on to Al Brooks, despite not entirely agreeing with all of his principles he knew this was what I needed and it has changed everything. I no longer feel the need or want to have indicators on my chart because I understand how to read price action correctly. I still have a long way to go in terms of entries but my reads have improved exponentially and I am now for the first time identifying more correct trades than incorrect ones  and I am in time with reversals instead of lagging behind them like a fat walrus.  I feel confident in what I am doing and where I am going.

FACTS
Summary: So despite this new method I am still sinking deeper with my intraday trades. There are 3 major problems. 1.  I still sometimes get the direction wrong,  especially when I'm rushing and not taking S&R into account. 2. Entries have been very late because I have not been tracking my Buy/Sell stops when they aren't initially triggered,  I also need to think about entering on a S/R level rather than a candle level. 3. I have been suffering outcome bias recently so have been exiting perfectly good trades early for fear of creating a larger loss. My risk management has always been very good.  But other than that as you can see everything needs work on and this is how I'm going to start the year. Work on the Prep, Work on the Patience,  work on the (in trade) Discipline....

I am now going to also put up a weekly PL curve and trade summary a la MBA and Scalping the Stretch. They're right this game is about making money and I don't look at my PL curve enough!

This year I have basically had 3 trading methods

Methods 2&3 developed by myself which both lost money (090713-151013)....

Summary:
Deposit/Withdrawal:		0.00		Credit Facility:				0.00
Closed Trade P/L:		-446.00		Floating P/L:				0.00	Margin:			0.00
Balance:		2 225.16		Equity:				2 225.16	Free Margin:			2 225.16
Details:
Gross Profit:		666.73		Gross Loss:				1 112.73	Total Net Profit:			-446.00
Profit Factor:		0.60		Expected Payoff:				-3.63
Absolute Drawdown:		452.22		Maximal Drawdown:				506.87 (18.60%)	Relative Drawdown:			18.60% (506.87)
Total Trades:		123		Short Positions (won %):				68 (26.47%)	Long Positions (won %):			55 (16.36%)
Profit Trades (% of total):								27 (21.95%)	Loss trades (% of total):			96 (78.05%)

........................................................................................................................................................
The final (3rd) method is basically based off an Al Brooks method and has achieved (151013-231213)... The up moves in the PL were created by swing trades. The problems are listed in the facts summary above.

Summary:
Deposit/Withdrawal:		0.00		Credit Facility:				0.00
Closed Trade P/L:		-149.69		Floating P/L:				0.00	Margin:			0.00
Balance:		2 225.16		Equity:				2 225.16	Free Margin:			2 225.16
Details:
Gross Profit:		112.57		Gross Loss:				262.26	Total Net Profit:			-149.69
Profit Factor:		0.43		Expected Payoff:				-5.54
Absolute Drawdown:		149.69		Maximal Drawdown:				149.69 (6.30%)	Relative Drawdown:			6.30% (149.69)
Total Trades:		27		Short Positions (won %):				18 (16.67%)	Long Positions (won %):			9 (22.22%)
Profit Trades (% of total):								5 (18.52%)	Loss trades (% of total):			22 (81.48%)

Weekly Summary 211213

Intraday Weekly PL:£-54.54      R   -2.5

SUMMARY
Main issue this week was Prep and Discipline.  Messed with my prep method on Monday and Tuedsday. Managed to get back on track on Wednesday but then basics like not trading on SS/HM or after BW and not trailing my entry when a signal bar failed to trigger became the issue. Finally I slipped back into poor prep on Friday as I was rushing to finish the year. I also had a bit of problem with outcome bias on Thursday, but managed to reprogram an execution bias by Friday.
The lesson to me here is that Prep is just the most important thing. You just have to miss one LH to fuck the entire read or ignore BW once to take a bad trade that will knock out your wins.
Next year I will start with with my focus on Prep and Discipline/Execution bias (how best to execute the moment right now in front of me. prep it, wait, avoid it, trade it, hold it, exit it?)!

Trade summary... 5 (3 once back to original prep method) poor / 3 good
1 poor trade Monday because of trying out a new prep method can be forgiven. £-20.16
1 poor trade Tuesday because of trying out a new prep method can be forgiven. £-17.70
1 good trade on Wednesday £+34.02
1 poor trade on Wednesday not waiting for a RL to R (prep)£-14.52
1 good trade on Thursday but executed horrendously late (Prep) £-4.20
1 good trade on Thursday but discretionary exited (Outcome bias) £-10.08
1. Poor trade on Friday due to trading on BW/doji (Prep/Discipline)£ -3.90
1 Poor trade on Friday because of wrong direction poor prep £ -18.00
NET PL:£-54.54     R   -2.5
PL minus Mon and Tues new prep method trades £-16.68    R-0.75

POSITIVES
1. Reverted to Old prep method on Wednesday for more success
2. Better understanding of recent S&R being the places for entries and exits.

3. Despite the wrong trade I did hold through the until my stop was hit instead of discretionary exiting.
4. Better understanding of Prep,  Patience and Discipline.

5. Remembering Execution Bias

NEGATIVES
1. M & T Tried a simpler method of price action preparation today... that was too slow resulting in 2 bad trades

2. not waiting for a RL to prior R to short from. (Wednesday)

3. Thurday too late an entry by not tracking the inside bars when the initial signal bar was not triggered

4. Anxiety discretionary  exit due to outcome bias / loss aversion,  over longterm goal focus and execution bias.

5. trading after BW Not respecting BW

6. Missing a LH (Poor Prep!) 

7. Marking up charts for blog instead of for read during trading session

8. using a SS as a signal bar!

FIXES
1. Actually fixed by Wednesday by reverting to original Prep method PREP. Update Prep Method to orginal.
2. Need to mark up and update His and lows throughout session PREP Update Prep method to inc the use of S&R on setups
3. Actually had read about using an next bar as signal bar if prior signal bar doesn't trigger (inside bar entry?) as an entry but felt it was advanced. But this was the correct trade so i should have done this (thanks JMF3).  Start trading/ using next bar as signal bar if prior doesn't trigger (inside bars) as signal bars. Update Prep method to use subsequent bar as trigger if prior signal bar fails to trigger
4. Anxiety caused my discretionary exit which was due to my Outcome bias.  rather than Execution Bias. DISCIPLINE Update method (Psychology) to mention Execution bias
5. BW: this happened last week too.  I was bettr at IDing this week but I still didn't respect it.  Add to rules no trading after BW! PATIENCE/DISCIPLINE Add to Prep Method no trading after BW
6&7. The most important thing is PREP if you fuck the prep you will take shit trades. Emphasis that Prep of Price action (not blog) is the most important thing 
8. Add to prep method not to use SS / HM as signal bars.

ADDITIONS
Add Churchill Quote to "Quotes"
Reply to Comments

SWINGS
NA

Broke the Discretionary Exit Habit :) Missed a LH :(

P/L: £-21.90    R -1

SUMMARY
Despite loss, a better day as managed to break this bloody cycle of discretionary exits. Prep was good until I started marking up my charts for the blog post, instead of the read and missed the LH at 0 everything screwed from here (this was partly because this my last day trading this year and I was rushing to finish). I also need to be faster to ID and be more respectful of BW. Respect BW, only mark up chart to read while trading,  add extras when completing blog post.

Waiting on action.  I have a hankering to get short into the prior low (625), then get long off it as it looks like it might create a W bottom there but I haven't had the necessary action to allow me to start shorting (TLB-LL-LH) I've only had a TLB + LL.

TLB - LL - LH puts my bias on short side 
1. BW,Poor Prep that I kind of missed /  didn't give enough strength too.  and entered after it at...
2.  LH short after confirmed downtrend.  Prep good,  Patience poor (didn't wait out BW),  Discipline Okay (should have been out as soon as I noticed mistake)exited at a small loss  although dilly-dallyed on the exit getting mesmerized by the fluctuations in price . R -0.2
0. Missed this LH! WHICH WOULD HAVE CHANGED EVERYTHING FOLLOWING, In reality price then made a TLB-HH-HL which is my trend reversal so I would have only scalp shorted 4 and would have got long at 5. 
3. TLB. but still have a bias on short as need a HH-HL. Poor Prep missed prior LH at 0.
4. LH short, (actually a HH short because of 0)didn't like the following action,  but determined to hold though the 10mins of pain I've been experiencing and break the habit of discretionary exits.  Prep poor missed LH at 0,  Patience Good,  Discipline Good R-0.8
There had now been a TLB-HH-HL  =  Long
5. HL.  but no TLB-HH-HL Poor Prep missed 0 so was valid, Good Patience,  Good Discipline.

PINK ellipse is BW marker for me while trading. Sorry hope chart a little easier to read now.

Anxiety (Outcome Bias)

P/L: £-14.28     R-0.7

Just before I begin I should say that to me trading requires three areas 1. good Prep,  2. Patience to wait for the correct setup and the 3. Discipline to execute a trade correctly (Execution Bias. This is something I need to add to my method, it's in my head but not on paper).

SUMMARY
Good prep throughout session. Patience was good at first then slipped.  Discipline, to be precise discretionary exits (a slip to monetary bias over execution bias) and trading after BW are the problems and what I need to work on.  A part of me feels that I've just got to suck it up and get on with it.  There was a Churchill quote that I read yesterday that I liked "Sometimes it is not enough to do our best; we must do what is required". In trading it is required that I don't trade after BW or exit a trade early for no good reason.
I enjoy all of my trading,  all the prep and the waiting BUT it is just that 5-10 mins of anxiety after entering a trade waiting to see if it will go my way that I struggle with.  In these minutes every tick is magnified and becomes more important than a candle,  every fluctuation despite the bar not having closed I react to.  It's insane and it makes me hate myself and self flagellate. To me there is no pain greater than doing all the work then leaving the profit on the table, I'd rather my stop be hit and trade correctly but I'm not doing this.
I had this problem in the past and overcame it by changing my attitude on success (the problem was then that my prep was off! haha). Instead of defining success as a positive P/L I defined it as correct execution (execution bias).  because I don't have it written down in my rules. I've forgotten it and I need to reapply it.

Series of HLs + UWTL =  bias on getting Long

1. Day started with a series of overlapping bodies, not quite BW (no doji) at an obvious buy point (prior high 680 into 693) this was enough to make me to avoid any long setup here.
2.  looks like a failed BO of 686 short but not in my rules to CTT yet, waiting for a TLB- LL-LH.
3.  TLB and LL bias turns almost entirely short, just waiting for the LH.
4.  inside bars form another TTR resembling BW this time inc a doji.
5. LH conf short. despite this working out should have avoided it due to prior BW like action. Good Prep, Poor Patience to wait for the trade, Poor discipline/execution avoiding it! R -0.2
6. LH short entry, wimped out on tick above prior high, good prep, good, patience, poor discipline (discretionary exit also worrying too much about weekly goal of break even). R -0.5


Pink Ellipses are BW markers for me while reading

Better Prep, Patience & Discipline

P/L: £+19.50     R +0.8

Just trying to do the Prep, have the Patience to wait for the correct trade and then trade it with Discipline.
Had a meeting so had to finish 30 mins early...

A HL - HH makes my initial bias long.
1.  Minor TLB prepares me for possible reversal at a test of trend extreme , but bias remains long.
2. Major TLB and LL changes my bias almost entirely short , but must stay with long until an unsuccessful BO of trend extreme (LH).
3. LH Short,  felt a bit early to me but following the PA which did look good. Good Entry, Good Discipline.  R 1.5
4. LH Short,  again felt a bit early, wanted a RL to 1.37694. "correct entry", "correct execution",  but would like to improve it.  My thought of waiting for a RL to 1.37694 was correct and also could have exited on tick above signal bar's high not waiting for ISL to be hit.  R-0.7
5. Major TLB and HH , but bias remains short  until an unsuccessful BD of trend extreme.
6. BW (pink elipse) WTF?! waiting this out.
7. there was another V messy LH short but it would have got stopped out.

Preparation Remains the Problem

P/L £-17.70     R -1

SUMMARY

Bit of a rush this AM.  Woke with conjunctivitis (Latin for puss in the eye) and needed to pop to the walk-in-centre first thing before the queue was enormous, so started earlier than usual (0700GMT) instead of 0730GMT... 

Due to rush but mainly due to messing with my preparation method yesterday (and mentally with it over the WE) I managed to fuck something  that was unfuckable, which is quite a feat really! I now realize what a tisswoss my head is in...So I now just need concentrate on unfucking my prep method (both on paper and and in my head) before I do anything else.   

The funny thing is I know it isn't the market, if anything the market is "trying" to help me.  It's just me being a dick.  Maybe I should have gone to the doctor about that instead? (probably wouldn't have liked the cure though).

For future reference reading this back it sounds like I'm in a fowl mood, but I'm actually quite jolly today! 

Here's the trade.  It makes no sense because I was reading the TLBs wrong. 

There were a series of HLs so market was trending up and my initial bias was long (and should have stayed so).

1. TLB  bias short = wrong because price hadn't then made a LL and LH

2. TLB bias short = wrong because price hadn't then made a LL and LH

3. should have got long here...

4. Instead got short here because my bias wrong (short) so wanted to short next RL (a HH! WTFWIT?!) bad entry,  good management R -1

OUT TO DOCTOR missed the following...

5 ,6,7.  TLB , LL+LH =  Bias truly short now!

8. short next RL, correct but wasn't around for it...

Frustration With Adapted Prep Method, Reverting to Old One! ;)

PL:  £-20.16         R -1

SUMMARY
Tried a simpler method of price action preparation today... it was seriously frustrating because it was too slow, so I was always 2 steps behind market action. I was basically waiting for a close below a Higher Low to confirm a down trend, a close above a lower high to confirm an uptrend and thinking of entering on a PB (long) or RL (short).

Series of HLs =  looking for longs
1.  H1 long, had to hold through PB (5 mins of pain), going smooth then Bam ISL hit.  Poor Trade because Price preparation was too slow.  R-1

Had I used my unadjusted Price action preparation method of TLs, TLBs with HLs and LHs I would have had a far happier day....

Series of HLs = bias long
1. TLB =  bias turns short,  sell on next RL...
2. short on L1 after TL break, good trade. R 2
3. TLB =  bias turns long,  buy on next PB
4. long on H1 after TL break. R 2

Week Summary 141213 (100th Post!)

Just before I start I would like to mention that this is my 100th post. I have never kept a blog for longer than about 30 posts before and the thought of 100 posts in those days seemed like a real achievement.  In reality as I sit here writing it I realize that it is no more important than the 1st, 2nd, 50th or 99th (they are all equally important as each one quite literally marks a step in the right direction). It feels like this blog has a little life of it's own and is currently such a part of my own life I would not feel complete without it. It obviously would not exist without me but it's questionable if it would have lasted this long or made as much progress without the comments, communication, help and encouragement from other traders who have nurtured it (and me for that matter). It sounds quite wet but I feel an overwhelming feeling of gratitude towards the blog, my blogging friends and even a little bit to myself for starting and maintaining it.

Anyway I'll dry tears,  reattach my penis and do this summary :-)

Intraday Weekly PL:£-37.67      R   -1.77

POSITIVES
1. Good Prep,  Patience and Discipline in the first half of the session

NEGATIVES
1. Started week with 20EMA bias
2. Started week with too much bias on TLs rather than LHs, HLs and horizontal lines!
3. Not having enough faith in or identifying W bottoms and M tops
4. discretionary exit (poor TSL method)
5.  using a hi wave candle as a trigger!
6. getting lazy with prep(chart annotations) later in session BIGGEST ISSUE!
7.  poor Patience  later in session (to wait out the BW).  

FIXES
1. removed 20EMA, don't need it!
2. Just got to focus on HLs, LHs and mark them with Horizontal TLs as a guide. In an uptrend if price is making HLs and a PB can't close below the prior HL  stay long.
3. I have added W/M to my Intraday method. in an up trend if price makes a LH after a PB = M top.
4. Poor TSL method. need 2 solid closes with trade then track each subsequent close with trade.
5. Clearly add to guide no trading on hi wave candles
6&7. Laziness is a psychology issue. I get a bit bored start tweeting, or writing up my blog post and volia miss the trade. My motivation should be on getting a good trade.  That self help line "whatever you are thinking about is in the process of becoming" comes to mind.  But I think a more accurate way of saying this is "Good or Bad, whatever you are thinking about is in the process of becoming".  My mind slips and I start thinking I'm bored and want entertainment (ie twitter / blog) and that's precisely what I get.  Entertainment but no trades because I'm too busy doing something else (the thing that I'm thinking about most, entertainment).

ADDITIONS
Forgot to Grade all my trades! (pain in the ass when trying to do a summary!)

SWING TRADES despite mentioning these last week they hadn't actually hit their PTs.  They have now so R+4 hurrah!

SUMMARY
My prep and discipline / laziness were the real issues this week....
I spotted 8 good trade entries (all honestly spotted in realtime). But were not all taken due to wrong focus, or taken and badly managed. I also spotted and traded 2 bad trade entries. But even so if I'm risking 1% on all trades I should still technically be up for the week.  Although the PL doesn't show it, this week feels like a victory because I can honestly say hand on heart that I am seeing more correct trades than incorrect ones.  I also understand where the problems lie. Admittedly these won't be the easiest things in the world to fix but they're certainly not impossible. Might be nice to aim for a BE week next week.

Focus on HLs and LHs and S&R (not TLs)

P/L £-8.40      R-0.4

1. TLB of UWTL  =  looking for Shorts,  this was incorrect  as price PB to the prior HL but did not break it.  The fact is broken/unbroken HLs in uptrends and LHs in downtrends are the best trend indicator.  Just like yesterdays action.
2. Had I concentrated solely on the strong prior HL I would have got long at 2 a PB to it. Price entered BW so just needed to sit this out until some clearer action came along. good trade
3. Not actually BW as none were doji, it was the 3 overlapping hi wave bars that made me fearful...  however none of them were doji so not actually BW.
4.  real BW so waited out...
5.  LL bias changes to Short,  looking for a RL entry
6. L1 short. stopped out on TSL ,  good trade Trailed SL too quick (fuck!) R-0.4

SUMMARY
Positive:  eventually got on track watching HLs / LHs and most recent horizontal S&R  (from the HLs/LHs).  Did see and could honestly have traded 2 had I not been TL obsessed.
Negatives:  had a real bias for trendlines at the beginning of the day that threw me off.  I could have traded 2 long! Also Trailed SL too quick on 6!

Stopped Prepping Action. Mistakes Took Over!

P/L: £-14.70   R -0.67

DWTL TLB + HH =  looking for a long entry on a PB

1. H1 long, into 1.38 but worth a scalp, got slipped nasty on Entry. Exit TSL. Good trade. R-0.23
2. Saw the M top at 1.38,  guess this was the best trade, but didn't have a TL break to confirm it. Need to consider that a trend change has occurred on Ms (HH-LH) and Ws LL-HL). Good Trade
TLB =  bias turns short,  waiting for RL entry.
3. Was thinking of getting short here when price took out the long SLs at bar 0.
4. L1,  not a great trade as signal bar was a massive doji,  exit on TLB bad trade. R -0.44
Price had entered BarbWire with 3 + large bars overlapping. BUT HAD FAILED TO LABEL THIS. HAD I DONE SO I WOULD HAVE WAITED FOR MORE ACTION TO UNFOLD. USING THE LHs AS MY GUIDE TO STAY SHORT.
DWTLs ? were difficult to draw after BW, I must look to the LHs / HLs for direction when this occurs. They would have kept me on track.

SUMMARY
Positive: Good Prep,  Patience and Discipline in the early up move. Unlucky with first trade.  Slow to react off M top but as this wasn't in my rules I traded it correctly (although I will make a change)
Negative: Got lazy in the down move with poor Prep (not labelling LHs and BW!) Patience (to wait out the BW).  But the problem started with PREP! had I ID'd the BW and continued to label the LHs I would have known the that 4 was untradeable , had known the trend remained down due to the LHs and had the patience to wait for a good setup.

Good Read, Lesson Learnt

Series of HLs = looking for Longs

1. Although price didn't close below the UWTL,  it opened below it which was not the strength I wanted to see to encourage a long. I'm not sure if an open below a TL is near enough to a TLB to take the otherside or whether a definitive close is required, I guess time will tell (YES IT WAS). Also the prior candles had tall upper shadows and one was near a RB shape which show weakness.
2. MTOP Saw this Failed H1 (or L2) but Due to confusion from 1 I did not take it (shame). good trade
3. Real body breaks TL =  bias turns to long, waiting for a PB entry.
4. Real body breaks TL =  bias turns to short., waiting for a RL entry.

SUMMARY
Another good read.  I felt I kept up to speed with price action well and recognized most opportunities and threats. It was just the uncertainty of 1 that made me sit out 2.  It's not that I didn't recognize the trade, it's that I was not sure whether it was yet an opportunity due to the indecisive TLB.  I now know I can use any part of the real-body on the other side of the TL as a break signal. 

Swing Trade 251113 Update

R +4

Both my long EU and short UC swings hit their PTs last night.

Problems Started with a Discretionary Exit

P/L: £-14.57    R -0.7    

Initially a series of LHs gave me a bias to the short side...

1. TLB /HH =  bias turns to long,  waiting for a PB entry.
2. Failed L1 long. R + 0.1 ( should have held what's the difference between +0.1% gain and -0.1% TSL loss really?!) Good trade
3. PB Long,  terrible entry because signal bar was a massive doji/Hi wave showing indecision, poor trade.  R - 0.8
4. TLB = bias turn to short
5. RL Short, missed, had lost concentration and having breakfast good trade.

OBSERVATION
their will likely be 2 legs of any move, ( 2 with trend,  one counter). When the 2nd w trend TL breaks this is the higher and earliest probablity CTT.

SUMMARY
Another good read.
Fault1.  should have held first trade,  with TSL, discretionary exit!
Fault2. Entering at bar 3 , despite direction being correct you can't use a hi wave candle as an entry because it is essentially a wide range =  indecision. using a hi wave candle as a trigger!
Fault3. Failed to take Bar 5 trade but this was because I stopped labeling the chart with my read notes. which meant i lost my way. Failed to continue writing read notes on chart!

Incorrect Focus

Price had made a series of LHs so I was initially looking for shorts, this was until price broke the LT DWTL (1). This indicated trend weakness and my bias changed to longs from this point but I had to wait (patiently) for the correct action to unfold (it was either going to range or reverse). Price put in a W bottom I was thinking of buying around 1.37 (2 above a tall bull /failed L1), but felt it was a little early (this was probably the correct entry but I was being too careful).  Once price made the HH (at 3) the trend had definitely reversed and I was waiting for a PB entry. I then missed the perfect entry (4) because I was too caught up with waiting for a PB to the 20EMA (just like JMF3 said to avoid EMA bias in http://eurusdtradejournal.blogspot.co.uk/2013/11/informed-observation-correct.html comment, duh?!) and I was preoccupied sorting out a new tenancy agreement for a flat I rent out.

1. DWTL BO =  trend weakness
2. W bottomMissed Long entry =  thinking of getting long above it's highs where a lot of bear stops would likely be placed  from the i bar short from the following bar. good trade
3. initial HH =  trend reversal
4. PB H1 entry long good trade

SUMMARY
This was actually a very good read but...
Not entering on the failed H1 (2) was stupid.  But at least I recognized this as an entry (this is an improvement!) The other two issues (20EMA bias and focus on flat rather than trading) are entirely my fault. 1. I should have removed the 20EMA days ago and 2. I could have got the flat sorted over the weekend,  despit being ill this is pretty easy work!

Week Summary 071213

POSITIVES
1. Actually made a small profit for the week in my intraday trades. 1% 
2. Swing trades nearly hit PTs so up near 4%. Trades can be seen here http://eurusdtradejournal.blogspot.co.uk/2013/11/swing-trade-reversal.html.
3. Expanding Triangle identification.  
4. Trading BO/BD instead of PB/RL when PB/RL offer poor RRR to trend extreme (due to stops adding momentum).

NEGATIVES
1. Ill,  on antibiotics.
2. Being too greedy in an overextended trend. Should have been happy with a scalpers profit (Trade 1 041213)
3. Trading "with trend" when trend has probably turned! (Trade 2 051213)
4. Not always listening to the market.

FIXES
1. Cannot be helped, just got to get better.  Guess I could have looked after myself a little better (have been burning the candle at both ends).
2.&3. are really one and the same. They are both a case of being late to the party/ trend change. In both cases a major trendline (10 bars +) had been broken. When a major TL breaks you must only expect a test of the prior extreme (scalpers profit) and be getting ready to take the other direction.
4. As Al Brooks says the market operates in a gray zone where nothing is absolute. However I would say it acts in a cumulative way. in both 2&3 the market had made several topping signals.  2 legs up,  M/W,  TL break. Look for and be happy with a cumulation of signals of trend weakness rather than perfection.

ADDITIONS
TBH L/H 1s can be traded in a strong trend and it can get very frustrating waiting for an L2/H2 that never actually occur in this situation.

SUMMARY
Mixed week really. I am happy that I've ended in profit and feel I have made some progress in my observations / price action reading. Always room for improvement though, as can be seen above.

All the Things I Hate

Had to pop to doctors this AM (hate doing that)...

Was initially quite disappointed to have missed the session but seeing the action later was rather relieved. Although there was what looked like down trend in place, it was actually an expanding triangle (which I fucking hate). I know there are more correct ways to identify an expanding triangle but for it is simply when the preceding price action has made a HH then a LL (or vis versa), drawing trendlines to these from prior highs and lows and price is still within them. I would had to have waited for a BOPB or BDRL of this area before trading because to me I have no edge in these situations.

I was aware that NFPs (hate these too!) were out later and have never particularly liked trading around them, even in the London AM session. Perhaps with both these factors I might have avoided this mornings action. Or perhaps I would have thought I was being lazy and traded out of guilt ( probably more likely).

Trade Pullbacks in Early Trend, Breakouts in Late Trend?

P/L: £+32.67      R 1.5

Series of HLs so looking to get long. Despite "M" top, the UWTL hadn't broken. These are my rules but...

1. was considering getting short at bar 1 when price ticked below the middle of the "M" (taking out the bull stops).

2. EMA/TL PB long, didn't feel good after 2 legs up and a "M" top but trying to follow rules.   R -0.33
3. Trend REV to Short.  TLB - LL - LH. R 1.8
I'm a snotty congested mess = done for day.
4.  would have been a straight forward L1 but I wasn't around for it.

Notes:
Listen to the market.  2 large legs up and a perfect "M" top =  market is topping and look for shorts, did the UWTL really need to break in this circumstance before getting short?

Can't help feeling that PB/RL trades are only really that safe at the beginning of the trend. Once a trend develops its probably better to trade BO/BD as these will take out the Counter trend traders stops and so add momentum to the move as they are forced to cover. Had I done this trade 2 could have been avoided.

Why not go with Trend on Failed Counter Trend Setups?

P/L: £-10.40       R -0.5

Been pretty sick last couple of days. Big thank you for the comments and advice to my last post.  I have skimmed through them.  I'm just waiting for the fog to clear in my head before I get back to you/ pick your brains etc... have deleted 21EMA and put some horizontal S&R on for the time being as suggested. But need to re-read to get full benefits of your recommendations.

Spent the day looking for with trend setups,  most of these were either hard to spot, hard to trade or failed.

Series of LHs = trend down, so initially looking for shorts
1. L1 after a TLBO, thought I'd go against the rules and have a go. Duh! or could have taken a scalpers profit at prior low... R -0.5
2. confirmed a W maybe I should have bought at a tick above the prior bar. Or at least used it as my TSL for trade1.
3. knew I had to get long here but couldn't find an entry, guess it should have been a tick above the prior bar? I guess that was a failed L1 so would have taken out a load of stops.
4. Price in BW, leaving this alone.
5. EMA long. missed exhausted and back in bed. : -(

P/L:  £-10.40  R  -0.5

Notes and observations:
1. An L1 / H1 is very likely to test the prior low/high, however unless the trigger is far enough away from the extreme the RRR will be rubbish.  (good RRR L1/H1 might be worth a scalp).
2. As with trend L1 / H1 often have poor RRR.  I could trade Failed Counter trend L1 / H1 (basically trade BO/BD with trend) as this is where Counter trend traders will have placed there ISL, so there should be strong momentum on a break of these levels.

3. Maybe I should start earlier.  There were and have been on prior days nice move between 0630GMT and 0730GMT. 

Informed Observation / Correct Concentration

IMHO the best teachers give their pupils a physical exercise to achieve the correct psychological mindset (what to concentrate on) for achieving a task. A good example of this is a driving instructor getting their pupils to look in the rear view mirror every two seconds.  This exercise makes the pupil observant and while doing so they naturally adjust their speed and distance to match the circumstance. The magic is that the exercise is easier for them to execute than commanding their brain to "be observant".
This is informed observation because they are observing/concentrating on the correct things (front and back), if they were only looking at the Ferrari in front of them, they will more than likely have an accident shortly.
I am not aware of a correct physical exercise (informed observation) for trading. But I do know that the correct mindset (from all that I've read and been taught) is quality over quantity / going for high probability trades, not lots of them. From all that I can understand the highest probability trades are trend trades that occur in some kind of pullback (oversold in an uptrend) or rally (overbought in a downtrend). An argument could also be made for counter trend trades that are overextended from the mean but for now I'm going to keep it simple and just look for trend trades.
I would assume that staying up to date with the trend and it's changes would be the correct physical exercise to help one to trend trade successfully. Focusing on PB and RL are probably most important as these give direction and offer the highest probability trades. 

METHOD
An uptrend = a series of Higher Lows ( I should label these and draw a best fit UWTL touching as much as possible. Going for the most obvious TL!)

A Downtrend =  a series of Lower Highs (I should label each of them and draw a best fit DWTL touching as much as possible,Going for the most obvious TL)

To trade the trend I want to buy when price is Oversold in an uptrend, or Sell when price is overbought in a downtrend. These are the highest probability trades.  The best trades are  TL and EMA PB/RL or if price can't reach them entering on a 2nd,3rd,4th entry after a new trend extreme.

TL PB Trade

EMA PB Trade

2nd/3rd/4th Entry from Trend Extreme Trade

Once a TL is in place you don't need to worry too much about marking HLs/LHs until it breaks as this suggests a possible trend reversal.  On a TL break you need to label the last couple of HLs/LHs and continue to do so after the break to see if you have a reversal.

On a TL Break have no bias , be prepared for a trade in either direction, a reversal or a test of the trend extreme.

Uptrend Reversal Trade

Downtrend Reversal Trade

Initial Stop Loss and Trailing Stop Loss Methods
Long SLs

Short SLs

Week Summary 291113

Quickie as cant be bothered to bore myself or anyone reading this post...

POSTIVES
Trade entries were good with the exception of one.

NEGATIVES
1. Price Action reading.
2. Trade management / Discipline in following trading plan (one and the same thing).

FIXES
1. Price action reading I have fixed for the time being with a guide for identifying the trend and the best entries with it. I have had an additional thought I would like to add... That watching the PBs and RLs are probably most important things to concentrate on as these give direction and highest probability trades.

2. Trade management I just need to follow the guide but I could reorganise it with pics to make it more user friendly. This I have done and will update my Intraday Method tab shortly.

ADDITIONAL 
1. I would like to grade my trades so its easy to see where problems are occurring by using 3 categories...
"good or bad trade" (entry)
"good or bad management" (trade management/ plan discipline). 
"good or bad read" (interpretation of price action).
2.  I need real-time practice and a lot of it. For this reason after the London open session I am going to trade the M30 EURUSD chart throughout the day to gain more price action experience.

SUMMARY My LT goal should remain as doubling the account and moving into a real account. However my major problems are moving with the market and discipline in the trade. Conquering these should be my all encompassing goal and motivation! I don't care if I destroy this demo account or another 100, I've got to learn how to implement my method in reality. Without this I will never achieve my long term aspirations. This is what I've got to work on,

A Quote That Gave Some Cheer

I've been rummaging through that Market Wizards book again (as I'm sure we all traders do from time to time) and came across the Larry Hite interview. A couple of sentences seemed to jump out at me a couple of nights ago.

"There are really four kinds of bets: good bets, bad bets, winning bets and losing bets. Most people think that a losing trade was a bad bet,  That is absolutely wrong.  You can lose money even on a good bet. If the odds on a bet are 50/50 and the pay off is $2 vesus a $1 risk,  that is a good bet even if you lose".

It goes on a but this covers the gist of this particular Hite monologue.  To me the most interesting sentences in this group were.

"There are really four kinds of bets: good bets, bad bets, winning bets and losing bets". 
"You can lose money even on a good bet". 

 I of course know this but its the way in which he phrases it that it particularly pleasing (it's crudeness). In my head when I read these sentences back together I wanted to add to end "the only bet you need to avoid is the bad bet". On further thought I thought this could probably replace "you can lose money even on a good bet" So it reads...

"There are really four kinds of bets: good bets, bad bets, winning bets and losing bets. The only bet you need to avoid is the bad bet".

I actually haven't been taking terrible trades this week (one porker) and this quote helped remind me that I'm not doing as badly as I thought and even helped confirm/point to what I need to work on.  My entries are okay.  My trade management/discipline and reading price need work. And this is what I'm working on. 

Grrrrrrr! A Bit of Progress

P/L: R - 1.34   £-30.82

Okay started today with a clearly defined method I have been developing but seriously simplified it yesterday (I will post it shortly and update my intraday method tab too).

I followed this "new" method of analysing price action and even placed 2 good trades... But ballsed them up by using an incorrect TSL method in the first and letting fear overwhelm me when my ISL was approached in the second. Of course both reversed immediately and went straight into theoretical profit as soon as I did this.

Believe it or not I really do know better than this. I'm knocking the rust off of a month not applying trading discipline and am aware of my mistakes.

Positives: taking good entries, very slowly getting back into the discipline required.
Negative: poor management of positions.

Series of LHs =  looking for shorts along DWTL RL/ EMA RL/ 2nd Entries
1.  TL/EMA RL Short. Exit discretionary TSL good trade. R - 0.46
2. TL/EMA RL Short. Exit discretionary good trade. R - 0.89

Summary:  Stop Thinking, Start Following (the plan). Or how I originally put it "follow the fucking plan!"

Grading trades is very useful!

Home Truths

P/L:  R-2   £-43.44

UWTC break and , LL and LH =  initally looking for shorts.
1. L1 ,  nowhere near 21EMA also entered before my session started!,  poor trade. R -1
Got to expect a test of prior lows?
2. L2 ,  got stopped out again but this was a high prob trade so a good trade.  R-1
3. Failed L2 I missed, good trade but missed. R 4

My lack of real-time experience and ability to adapt to a changing market is really showing. I can see the trades after they happen and I know this is pyrrhic victory (but honestly a month ago I wouldn't have been able to see the failed L2, I didn't even know it was a setup, so this is progress).

My LT goal should remain as doubling the account and moving into a real account. However my major problem is my inability to move with the market, achieving this should be my all encompassing goal and motivation! Without this I will never achieve my long term aspirations. This is what I've got to work on, I need real-time practice and a lot of it.

Missed the Major TC

UPDATE: this post was written over emotionalized. I placed too much emphasis on the LTTC in this post. Actually the PBs and RLs would have guided me here perfectly well with the aid of short term TLs (10 bars). Trade 1 was a good trade, you just didn't change directions fast enough because you were not concentrating on the PBs and RLs.

P/L:  R -0.2  £-4.84

Initially there were a series of LH =  so was looking for shorts.
1. EMA RL Short, exit tick above a HM good trade. R -0.2
I missed the LT UWTC that trade 1 reversed at. I should have got long off the HM  I used as my exit but at that time there were no obvious DWTL breaks so this would have been a low prob trade. It was only later that I drew the more acute DWTL intersecting price action. 
Trend change:  at 2 after price BO DWTL and made a HH and HL =  long.  this was actually a late trend change. The first happened at the HM I used as my exit for trade 1. But I missed it because I didn't have the LTTC in place or the intersecting (but accurate) DWTL. Ironically this was probably the best trade of the session.
2. There were a HH and HL after a DWTL so this could have been a long entry but price was still in a large Triangle and I did not feel confident with an entry still inside the triangle. . Actually this was a HL after a reversal to long so should have been traded.

Summary: Despite missing the LT UWTL and later drawing in the intersecting DWTL that reversed trade 1 I still managed to stay with the trend mentally but my life was made significantly harder because of  missing the LTTC and the DWTL that intersected price as they lead to me having a general lack of conviction / feeling of uncertainty/fear in the move up.
The moral of the story is don't go to work unprepared. 
If I had got the LT UWTC on first thing I would have had strong conviction in the trend change (to long) and would likely have got in on the move. This should be the first thing I do: place the LTTC on the chart.
Also had I placed the DWTL defining the move down to the UWTC through price action, but along the clearest route I would have likely have taken the HM reversal that was my exit  in trade one.

ToDo.
Add to Method : Place LTTC on chart first thing.
Add to Guide:  draw TL along clearest route , even if it intersects price.

Feel like I'm Being Taunted ;-)

P/L: R -0.7   -£15.11

Price had broken above a DWTL and made a HH and HL = uptrend / looking for longs.

1. was an H1 but after the fact I realised that it was trade-able because it had a PC (polarity change) a Range BOPB (breakout - pullback). So was a 2nd E. 

2. was an H1 so was a low prob long and so I avoided it.

3. was an H2 which I took but exited early after price formed a SS(shooting star) and ticked below it. R -0.3

4. was an H3 which I took but probably shouldn't have as it was in a TTR (tight trading range), however I did trade it in the correct direction. R -0.4

Summary:

Good read.  Spotted all the potential trades in real time.  I managed to place a couple of trades. Both trades at market.  The first one because I didn't have time for a stop order, the second because my platform wouldn't except my stop price (it was too tight). Did spot but didn't give much weight to the TCOS. However this was a mistake because price could not maintain itself above the TC (it closed back below it one bar after it closed above it) so trades 3 and 4 were probably doomed to fail... 

Taunted feeling coming from spotting trades but not taking them because following method (they're not H/L2 2nd entries),  this also happened yesterday (missed a good trade because it was an L1)! I just want to trade every with trend setup provided it's on a PB /RL and the trigger is nearer to the 21EMA than the trend extreme. I'm not going to but so far it would have been more profitable. 

To Do:

Add to method: I can buy/sell any H/L1 that touches prior S/R. as they are 2nd entries.

TCOS break and hold above = trend strength,  break and re establish = trend weakness

Difficulty Reading in Real Time

First day back in "realtime". Expecting a few teething problems and fixes so not worried...

Clear set of LHs and a DWTL =  short.  Actually got confused with H/L setup numbering and the fact that H/L1s can be valid setups (2nd entries) if they are PB/RL to an area of S/R.

1. L1

2. L2 but both doji

3. L3 in BW so low prob

4. L4 i should have taken

5. L1

6. L2 I should have taken

7. L1 and near trend extreme

8. L1 but a 2nd entry because RL to 7 high so a valid trade!

To overcome this I need to add to my guide to label the hi/lo of each trend extreme and PB/RL (blue lines on chart).  And I need to ID every potential setup so I am aware of where price is in the order of things (numbers on chart).

TO DO:

Add to method:   label the hi/lo of each trend extreme and PB/RL (so aware of valid L1/1 trades)

Add to method:  Label every setup (so aware of where price is)

Swing Trade Reversal

My last EU and UC swing trades have gone against me (stopped on one, nearly stopped on another).  This is entirely my fault, rather than waiting for a 2nd entry I rushed in, so getting my fingers burnt I entirely deserved ( I know better than this).  They have now set up my main swing setup (a XO/XD of the 21EMA) and as such I am exiting these trades and going the other way. The new trades follow...

I read a good quote the other day that I thought was very apt for this situation and actually for most of my trading to date... 

"You can't make the same mistake twice. The second time you make it, it's no longer a mistake. It's a choice."

I don't think I had really understood that saying "I made a mistake" is just an excuse for poor discipline if I've already made it before. Anyway I like it and am going to try and live by this for a while. No more "shouldn't , could have,  meant to, If I had".  I'm not going to try and do it right, I'm just going to get it right in the beginning!

Waiting for Hi Prob w Trend trades

Clear up set of HLs and an UWTL =  looking for longs.  Just waiting for H2s ,3s and 4s nearer EMA than trend extreme.

Conflicting TLs, resorted to Highs and Lows

Day started with a series on HLs so was looking to get long. There were 2 UWTLs that could be drawn along this series of HLs. Price broke below one one these TLs but I still would have expected a test of the prior trend high , so still long. Price then failed to make a new high at the test of the prior extreme and created a M top and LH from which would have been an ideal short to catch the massive down move. Whether i would have got in on this I'm dubious of as those TLs would have been v confusing in real time ie which one was most important?  However the Highs and Lows seemed to light the path here.  Perhaps when there are conflicting TL's I should focus solely on the highs and lows. Price action is most important after all.

201113 EU and UC swing trades

Saw this and had to have a go.  Both had broken a Maj TL.
EU then made a LL - LH and put in a 2 leg rally to the 21EMA (ripe for a short).
UC had made a HH - HL and made a 2 legged PB to the 21EMA (ripe for a long).

Not the best entry, entered on close rather than Hi /Lo but can't handle watching the D1 chart while day trading so the price I pay.  Going for 1:2 RRR give or take but will watch closely would be happy with 1:1.

Importance of staying with trend even when climatic

Note to self... Don't fight the trend there were a load of traders in last hour or so getting busted by the trying to pick the bottom after this climatic sell off of the EU. The smart traders were staying short!

201113 Fighting the Urge to CTT Again! practice

Clear downtrend this AM with price making LHs . Even when price made a HH had to expect at least a test of the prior extreme low so still a short setup. Would have hoped I would have taken profits where marked at prior S levels.

Side note:  have finally finished Brooks book,  writing notes today.  Working on personal plan/method Thursday-Friday for trading next Monday.