TRADE #1 OF 3RD STAGE SINCE 1ST ORDER EXPIRED; SHORT EURUSD; T1 TARGET HIT FOR PROFIT; T2 HIT FOR PROFIT; STOP LOSS HIT

I have been watching this pair since before Christmas. I originally had an order in before Christmas and it expired - fortunately. If I had entered this would have been a losing trade. Relooking at the chart today on 12.29.2009, the 240 min chart shows the 55 dEMA acting as resistance. I then boiled down to a 15 minute chart. The 15 minute chart has been consolidating for the past few hours. It finally broke to the downside which is what I want. I am going to set an entry at 1.4340 and a subsequent stop loss 70 pips above this. Since I am now trading 3 contracts, I am going to set my first T1 at only a 25 pip profit. Why? Well, I have noticed on a lot of my losing trades that the pair will move that far on the 240 minute chart and if my stop loss is hit it will mean that I have had at least one contract profitable at $25o and this will inhibit major losses. My T2 will then be set at the 50% Fib extension. The T3 will be the ultimate target as it is sitting at the 100% Fib extension AND at the top of the channel at the current moment. Let's see if I get an entry on this one. I am keeping the order open for only 24 hours.

UPDATE: 12.30.2009

My T1 was hit overnight. This was for a $250 profit (25 pips). The pair is also near my T2 so hopefully the target will be hit based upon the downward trend of the pair. The third chart to the right is the current shot of the screen and it shows the trade and where the T1 was hit and where T2 is located. T3 is off the screen. I chose to move the stop loss up to 1.4467 due to my T1 being hit and this new stop loss being 10 pips above the most recent high on the 15 min. chart. UPDATE: 12/31/2009 It's a good thing I chose to move the stop loss up since I would have been stopped out. I still don't like how this thing is moving in a sideways pattern. I need to keep a tight watch. UPDATE : 1/1/2010 Well my T2 has been hit. See the chart to the right. So far this means that I will have two profitable contracts out of three in the first trade of my 3rd level of training. Sound confusing? It does to me too. Basically, my first trade in stage 3 should be profitable. I did move my stop loss down for my 3rd contract. UPDATE: 1/4/2010 My stop loss at 1.4410 was hit. So here is how everything panned out. Entry: 12/29/2009 at 1.4340 to the short side T1 hit 12/30/2009 at 1.4305 for a 35 pip profit ($350) T2 hit 1/3/2010 at 1.4270 for a 70 pip profit ($700) Stop loss hit 1/4/2010 at 1.4410 for loss of 70 pips (-$700) Total profit of only $350. Can't complain for a six day trade. This trade made a smaller amount than my previous trades in stage 2. Part of the reason why is that the EURUSD pair was in a consolidation mode after a downward move seen in stage 2. So it is harder to make money in a sideways market, but it could be achievable if one denotes the areas of consolidation versus trending.

TRADE #1 OF 3RD STAGE: SHORT EURUSD ON LIMIT ORDER; NEVER ENTERED DUE TO ORDER EXPIRING

The chart is the 60 minute chart of the EURUSD of which is in a giant downtrend. I would have used a 4 hour chart, but these were too problematic when drawing trendlines. A few days ago the upper trend line was hit and then the pair rejected any further highs. The intent of this trade is to short when the upper trend line is violated (near 1.4375), and keeping a stop loss near the recent high (1.4416). I am going to start setting my T1 at 1.4350 which is only 25 pips below the short entry. With 3 contracts, I want to be profitable soon so I chose to do it this way. T2 is 1.4305 which is another Fib advance. T3 is at 1.4234 which is a 61.2% advancement of a recent move. (Just click on the chart to see the entries, stops. UPDATE: Over the Christmas season, I let the order expire since I wasn't watching the trade. I was doing a post-trade analysis and I am glad that I let my order expire. I would have hit the entry limit order only to have been stopped out a few hours later. The high was 1.4457 when my stop loss was 1.4416.

TRADE #5 OF STAGE 2: SHORT THE USDJPY: FAILURE. STATUS WILL BE 3 WINS, 2 LOSSES FOR STAGE 2

I am watching a possible double top on the USDJPY based upon the chart attached.

Here is my logic and reasoning.

1. When looking at the USDX, it appears as if it is going to meet an area of a little resistance around $78 as noted in the blog from 12.18.2009

2. The four hour chart shows a resistance line and I expect a short term double top due to reason #1.

I placed my entry near the resistance line at 90.59 and a stop loss above the resistance line at 91.02. This price is also a few pips above the most recent high which should be respected in a double top.

My T1 is sitting at the 38.2% Fib retracement from 12.9.2009 until the most recent high. My T2 is at the 61.8% retracement of the same move.

Again, I have come to the resolution that the two time frame analysis is what is going to work best. I am going to avoid noting the daily chart in the analysis. Thus, my HTF is the 4 hour chart and my entry on the LTF was the 15 min chart.

UPDATE: This trade was a loser, but my loss was only 43 pips. Still doesn't compare to my 145 pip profit on the GBPUSD.

Post analysis, it is noted that the double top didn't hold and the USD was strong enough to push the pair above 91.00. Trade was worth the risk. Nothing really learned except it was a proper entry and proper stop loss.

US DOLLAR INDEX AS OF 12 18 2009

I just wanted to look and see why the USD was so strong in the past few days by analyzing the US Dollar index. The picture to the right is the chart and as one can see, the downtrend has been broken (blue line). The USDX is sitting near $78 at the current moment and that may offer some resistance as that was as area of support back in June and all of August. (red line)

TRADE #4 OF STAGE 2: SHORTING GBPUSD 12 17 2009; 1st T1 HIT 12 18 2009

I am looking at the 4 hour chart of the GBPUSD. Emotionally, I am still boiling from the head fake that I bought into yesterday on the same pair. While getting ready to do a post trade analysis, I am watching the pair come back up to an area of resistance based upon the triangle that is drawn on this chart. http://www.ino.com/ still continues to show that the USD has strength behind it. In my mind, that is counterintuitive to the fundamentals, but I have to follow technicals.

I also know that I am to trade 2 contracts so I am going to scale into this one. Is that a good idea? Hmmm. Another thought to ponder. So after looking at the 4 hour chart, I boiled down to the 15 minute chart to look for an entry. Since the pair is nearing an area of resistance, I am going to place and entry near the resistance. I have drawn another trendline to see what is going to happen here.

So my first entry on the short side was at 1.6207. I am going to wait for the second contract after I see what is going to happen in this triangle on the 15 minute chart.

UPDATE: The 15 min triangle has broken to the downside so I entered my second short position at 1.6183. I am going to set my two targets at 1.6062 and 1.5852. The 1.6062 is the 61.8% extension of the down move and 1.5852 is near the 100% extension of the recent down move. The stop loss is going to be set above the triangle at 1.6277.

UPDATE: 12 18 2009

So my T1 has been hit. This will again make this trade profitable overall leaving me at 3 wins, 1 loss for the second stage of my training. Here is the chart to show how this trade has transpired so far. (click on the chart to enlarge the 60 minute chart) Entry was short at 1.62073. Exit 145 pips later at 1.60620. There is text on the chart to show my next steps. I plan on being patient on this one. Had I stayed in on my EURUSD trade like I had planned, I would have a very handsome profit as my two targets would have been hit.

What I am learning more and more from these trades on the 15 minute chart is that I am relying too much upon the daily trend analysis to enter upon the 15 minute chart. In my course, the instructor had given us directions on how to use multi-time frame analysis to help guide our trading matching a certain time frame on the long term horizon to determine primary trend then boiling down to a lower time from to look for entry. I realized what I am doing is using the daily chart for determining my trend, moving down to the 4 hour to see if it correlates and if it does, move on down to the 15 minute chart to look for entries. So in essence, I am using a tertiary trend and I was letting the daily trend fog the 15 minute trend. Far too often what I am noticing is that the 4 hour chart is correlating with the daily, but my entries on the 15 minute chart seemed to bump me out based upon stop losses as I noticed that I had to have really wide stop losses to accomodate the daily chart. So I went back to my course manual and looked at my notes.

Reanalysis:: I have got to use the 4 hour for trend determining (primary trend) and then use the 15 minute for entry (secondary trend). Two time frames only - forget daily trend since I am entering on the 15 minute chart. Use S&R on 4 hour chart to determine proper entries as I am seeing that S&R is really respected on a 15 minute chart when you draw trendlines on a 4 hour chart. So for my next few trades, I am not going to be using the daily chart. I will use the 4 hour chart for trend determining, S&R, then use the 15 minute chart for entries.

UPDATE: 12.20.2009

I have moved my stop loss down to a few pips above the most recent high in order for me to make this whole trade profitable. My stop loss now sits at 1.6254.

UPDATE: 12.20.2009

This trade continues to do well. I am moving my stop loss down to 1.6168 based upon today's high on the 4 hour chart. It is still looming above my target, but this trade will still be profitable. See the attached chart to see the updated stop loss.

UPDATE: 12.22.2009

Moving stop loss down to 1.6120 to collect more profit if hit. The pair is really nearing my T2.

UPDATE: 12.30.2009

Well my final T2 was finally hit. The whole trade took over two weeks to reach my T2. This shows that I need patience in trading forex utilizing a 4 hour chart.

So here is how the trade panned out.

Short entry at 1.62507

T1 target hit at 1.60620 for a 188.7 pip profit ($1,887)

T2 target hit at 1.58511 for a 399.6 profit ($3,996)

Not bad for a trade. I am realizing that I am going to use my 4 hour chart as my HTF chart and my 15 min chart for entry. Click on the chart to enlarge it and note the text on it. the bottom of the channel was very well respected and my T2 was right on the bottom channel line. In fact it has rebounded off the bottom of the channel line on the last candle.

TRADE #3 OF STAGE 2: SHORTING USDCAD, 1ST CONTRACT PROFITABLE

On a daily chart the USDCAD has broken out of a channel to the upside. If you look on the expanded daily chart you will see that 1.0815 is going to provide some resistance.

Moving on in a little closer to look at the channel and the previous high, I noticed that the previous high at 1.0747 would probably be resistance. I chose to take a short position on an even number as close to 10 pips below this so I set a short entry at 1.0736. My T1 will be the upper channel line at 1.0662 with a stop loss at 1.0807. My T2 will be 1.0574 which is a 50% retracement of the most recent move.

The realization does set in that this in a countertrend trade noting that the 4 hour chart is in an uptrend. Maybe this trade will be a learning lesson for me again much like the countertrend trade I did in class.

UPDATE: 12/17/2009

I don't know exactly how I did this, but I was changing my stop loss order and when I clicked on the chart it immediately closed out one of my positions on the USDCAD short position. So in order to protect all of my profits, I chose to move my 2nd stop loss into the money. So for this trade, my third of the second stage of training, will be a success. This chart is the 4 hour chart and shows where I got out of my position and where my target along with the stop loss are located.

UPDATE: 12.18.2009

I was checking on my USDCAD trade to see how things are going. My second stop loss and my T2 are absent from the chart. I went into Trade Manager and saw that my ordered was "rejected," but I cannot find a reason why. I can only assume that I input my data incorrectly when I changed my stop loss order. So I reinstated my stop loss, but this time I moved it down to 1.0708 on the short position. My T2 has been moved up to 1.0612 which is a 61.% retracement from the most recent upswing.

UPDATE: 12 21 2009

Here is a completely successful trade. Both T1 and T2 were hit with volition. The first chart is a 4 hour chart which shows a perfect trade of a double top and subsequent respect of other trend lines.

Entry was at 1.0736 on 2 contracts. T1 was 1.0612 and was hit a few hours after entry. This was a 124 pip profit.

T2 was 1.0574 and was a 162 pip profit. If you look on the 15 minute chart here, you will see the overall trade and the fluctutions that were present in this pair.

TRADE #2 OF STAGE 2 = FAILURE NOW SITTING AT 1 WIN; ONE LOSS

Well this trade knocked me out at my stop loss. Reasons for failed trade: 1. Bought on breakout of triangle to the upside and used stochastics on daily chart as my guide for an oversold area. I am chalking this one up to a trade that just didn't pan out for the stoch. 2. Jumped on the breakout and should have waited for a little bit of a retracement back to the upper trend line so that my stop loss would be below the lower trendline. 3. Took trade a few hours after the CPI numbers came out which gave the GBP a boost. Maybe need to wait for proper entry rather than trading right after a major announcement.

GBPUSD ENTRY WITH TARGETS

Here are the entry orders. I realized after I looked at my analysis that I am only in the second stage of my training. The first trade was successful with 2 lots and I will take my last trade on the EURUSD as my second trade in the second stage. So that leaves me at 2 wins; zero losses for the second stage of my training.

I have now entered a 3 trade in my second stage. It is in the GBPUSD pair and the pics of the trades are shown in the first picture. (click on them to enlarge).

The second picture here shows the entry, stop loss, and T1 and T2 areas. I entered this trade after the CPI numbers came out today. That is why the USD is getting hit.

UPDATE:

I am watching with angst, my GBPUSD trade. I noticed that 1.6320 is a level of support and that this area probably would be hit as support and the trade may take off to the upside. This goes against the rule of a 50 to 60 pip stop loss, but I have to make the change. Emotionally, I feel as if I should not do this, but I want the pair to hopefully use 1.6320 as support. ACTION: Moved stop loss down to 1.6290

TRADE #2 OF STAGE 2: GBPUSD BUYING OPPORTUNITY

Here is the GBPUSD pair. It has been in a consolidation pattern for a few weeks and looking at the slow stochastics, it is in oversold territory and now crossing the 20 line. Using fib retracements, I am going to expect the pair to retrace back to the 61.8% line. Click on the first chart to see my logic. The second chart is a four hour chart and you can see how it has broken to the upside. and where I have placed the fib retracements on a 4 hour chart.

POST TRADE ANALYSIS

I am doing a post-trade analysis of the EURUSD pair. I had a complete and total profit on 3 total contracts, but today the pair would have hit my second target and would be moving down to T3. Looking at the daily chart, you can see that the pair is now below the uptrend line so I expect the pair to come back and retest the 1.4720 level which is previous resistance from late 2008.

When further boiling down to a 4 hour chart, you can see that there was 2 days of consolidation around 1.4720. I should have considered this an area of consolidation and not brought my stop loss down so tight to this area. I just wanted to be profitable and not lose the position. Ah, the emotion of greed.

So I looked at the 15 minute chart. The area of the triangle shows my entry area. There is text right next to the area of my T1 target that was hit and once that was my greed emotion took over and I tightened my stop loss in. As you can see my stop loss was reached at an area of previous support at 1.4782. Lo and behold this could have been a re-entry to the short side rather than getting stopped out. Good learning lesson.

So my future plans are to continue to look at shorting the pair. Waiting for it to retest the 1.4720 area would be feasible for a reentry. Got to wait for the 4 hour chart to get here then turn back down.

2nd CONTRACT STOPPED OUT

I was stopped out on my second contract. If you look at the chart, I should have kept my stop loss a little higher, just like my third contract and I would still be in. I am very glad that I still have a profit on my 3 contracts no matter what.

When I looked back on my analysis, I was right in choosing to go short. I should have expected the pair to rise back up to 1.4780 based upon the trend line as seen in this chart. The exact point at where I was stopped out is where resistance was expected.

Let's just wait to see what the final contract does.

T2 NEAR TO BEING HIT. MOVING STOP LOSS FOR MORE PROFIT

I was looking at the chart this evening to see how things are going. My T2 is almost a success. I expect it to be hit later tonight. I still want to protect my theoretical profit since I am in sim trading until I pass the test. I moved on contract down to 1.4780 and kept the old contract the same.

This is my first trade in stage 3 of the lessons and since I have all three contracts as profitable, my stage 3 will be one win with no losses.

T 1 HIT FOR PROFIT. MOVED STOP LOSS DOWN TO MAKE WHOLE TRADE PROFITABLE FOR 3 CONTRACTS ON EURUSD

Did a mid-morning check on the EURUSD and noted that my 1st target (T1) was hit and was profitable. You can see the winning trade on this chart. Since I want to keep my whole trade profitable, I set my stop loss above a recent high since I am shorting the pair. Thus, I set my stop loss at 1.4820 which you can see on this chart. (click on it to enlarge it)

Next target (T2) is 1.4654 which is near the 127% Fib move on the 4 hour chart.

MOVED ONE CONTRACT DOWN TO TAKE A PROFITABLE POSITION

I woke up this morning to see how my trade was going. I am glad it did not reach my stop loss as it came very close.

I looked at the chart and moved one contract down to a stop loss of 1.4820 so that I can at least have one contract with a profit and kept T1 as is. I copied the chart to show what I did and click on it to enlarge it.

TRADE #1 OF STAGE 2: SELLING EURUSD

I am seeing the USD strengthen in the past few days as noted by multiple forex pairs, most notably the USDJPY pair and the USDCHF. The strength of the USD was also noted in the EURUSD. Looking at the daily chart, it is in a countertrend move to the downside and the 1.4720 mark may offer some support based upon some highs in late 2008. (Click on the chart to see the daily chart.) Boiling down further, I looked into the 4 hour chart. The four hour chart is definitely the chart I want to see for my entry into the 15 min chart. As you can see in the 4 hour chart, it is in a downtrend which is in the same vein as the countertrend move on the daily chart. Right now as of this posting, the pair is sitting near the 76.4% retracement based upon the 4 hour chart. I would have much more preferred an entry near the 61.8% retracement, but I still like this entry. I will set my stop loss based upon the 4 hour chart at 1.4872. My targets are: T1 - 1.4754 which is the expected move to the previous low (or in essence the 100% Fib move) T2 - 1.4654 which is a few pips above the 127% move. T3 - 1.4502 which sits at the 167% move of the Fib based upon the 4 hour chart. The final chart is the 15 minute chart for my entry. As you can see it is in the final stages of a triangle and I suspect it will continue its downside move. I set my stop loss a few pips above the latest low although in my mind I am telling myself I should set the stop loss at 1.4902. The circle denotes my entry point and I have written into the chart my stop loss point and 3 targets. Let's see how this pans out.