TRADE #2 OF STAGE 4: SHORT EURUSD: T1 AND T2 HIT FOR PROFIT; STOP LOSS OUT T3 AND T4. STAGE 4 = 2 WINS 0 LOSSES

Here is a potential trade based upon the 4 hour chart. I am looking at shorting the EURUSD. The reason for shorting includes these reasons: 1. The pair is below the 55 DEMA on the daily chart. 2. The pair is currently below the 55 DEMA on the 4 hour chart 3. The Stochastics on the 4 hour chart is in the overbought territory. I am going to use the downtrend line as an entry area. I also will not trade in the Australian session, of which I am in currently, since my coach informed me this a very illiquid session. UPDATE: 2.25.2010 This trade will be completely and totally profitable with both T1 and T2 being hit for profit. I have let this trade ride for quite a while since I want to capture as much profit as possible. It appears as is my modified trading plan has worked out pretty well for the last two trades. Let's see what can happen in the future with this one. Click on the chart to see the trade so far. UPDATE: 2.26.2010 The remainder of the two contracts were stopped out at 1.3635. So here are the results of this trade: ENTRY SHORT at 1.3680, 4 contracts T1 HIT FOR PROFIT AT 1.3550 (130 pip profit, $1,300) T2 HIT FOR PROFIT AT 1.3470 (210 pip profit, $2,100) T3 and T4 HIT AT STOP LOSS BUT FOR A PROFIT AT 1.3635 (45 pip profit each so 90 pips total, $900) Total pip profit was 430 pips!!!! My new system seems to be working well.

TRADE #1 OF STAGE 4 ENTERED: SHORT USDCAD: T1 HIT FOR PROFIT; STOP LOSSED OUT FOR REMAINDER 3 CONTRACTS. 1 WIN 0 LOSSES FOR STAGE 4..

Here is the modified/streamlined forex plan and a potential set up. Daily chart of USDCAD shows it to be below the 55 DEMA which means I should be looking at a short position. Looking at the 4 hour chart, the stochastic is rolling over to the down side and the pair is also below the 55 EMA on the 4 hour chart. So based upon the characteristics on the 4 hour chart looking as if the pair will decline and the fact that the daily chart is below the 55 DEMA, I am going to set an entry near 1.0480 and then use Fib extensions to get targets. UPDATE: 02 19 2010 The trade was entered on 2.18.2010 at 1.0474 and a stop loss was placed 75 pips above the entry price. So the stop loss was 1.0549. Using the 4 hour chart, Fib extensions were used for targets. T4 is clear down at 1.0010. That would be a 464 pip move. Talk about a long short, but achievable. Click on the charts to see the text associated with them. UPDATE: 02.21.2010 So the trade will be profitable. I will move the stop loss down to near the entry so that I can preserve my profits in this trade. One problem I am having with this one is that when I move my stop loss down on my remaining 3 contracts, I run the risk of getting stop lossed out and then the pair continuing the downtrend. This is the typical error that most traders do - taking large stop losses and not letting winners run. I can't but help notice too that on a 4 hour chart, the pair does a very good job at obeying a 55 DEMA. And the other reason why is that the daily chart also had the 55 DEMA also right near the 4 hour 55 DEMA. There is the correlation on using multi-time frame charts. UPDATE: 2.23.2010 So the trade took a turn for the worse as the USD gained major strength today and took the USDCAD pair to the upside. I looked back at my blog from a few days ago and I was afraid of not letting my winners run and putting my stop loss way too close to the current price. This time, I am emotionally happy that I put my stop loss right near the entry. Oh, yeah. Just for giggles, I put one contract stop loss a little higher to see if I was placing my stop loss too tight. This one got stopped out too. So here is how the trade panned out: Entry: 1.04744 T1 - profit at 1.03867 (87.7 pips or $877) Stop loss out for next contract at 1.04687 (5.7 pips or $57) Stop loss out for 3rd contract at 1.04700 (4.4 pips or $47) Stop loss out for 4th contract at 1.05118 (-37.4 pips or a loss of $374) So my profit for this trade was 60.4 pips or $604.

TRADE # 5 OF STAGE 3: LONG GBPUSD ON 15 MIN CHART: PROFITABLE. STAGE 3 = 3 WINS, 2 LOSSES.

This trade is a day trade that I want to use based upon the newly modified trading plan. I have noticed that I have not been able to be in on a lot of trades due to the fact that I am waiting for the opportunity to get into the trade. So, I have modified my trading to look at what is happening on the daily and 4 hour chart in relation to the stochastics. The reason I am doing this is that I have noticed in my post-trade analysis, there are reasons why I lost in those trades. The reason I noticed: the stochastics was moving in the opposite direction of the way that I was trading. For example, I noted that the GBPUSD trade had the stochastics in the oversold territory when I was looking to go short. So I tried a real quick day trade today to feel for my trades. I noticed the GBPUSD was in oversold territory on the stochastics based upon the daily chart, and that the SlowK was above the SlowD. So I moved down to the 15 minute chart and took a long trade when the SlowK crossed above the SlowD on the 15 min chart. I set my T1 at the current ATR, T2 at 2 times ATR, and T3 at 3 times ATR. My stop loss was entry price minus current ATR. The trade panned out OK for a profitable T1 being hit. I took profits as I watched the stochastics roll over near the OB area so I chose to take my second and 3rd trades as being profits. My total profit was $234 for the 3 trades and for 2.5 hours worth of work.