Thursday 12th January

by 22:24 0 comments
I've calmed a little bit since my post earlier today but I still really need to address the confidence area of my trading. 

Had a great entry on EU earlier on today. I committed the cardinal sin and didn't follow my strategy. I moved to BE before I should have and (deservedly in some ways) got stopped out for minimal profit. 

I've annotated a chart which i'll run through now.

As usual, all the fibs coming from the left edge are from the respective high volume or wide range bar areas from the day before. Green for 1hr, Orange for 15, Pink for 5. The first fib I added for today's action was at A, i forgot a line on the chart but you can hopefully see where I mean. This area didn't show immediate weakness as the chart pushed up and bounced along the top of this area. Once (and if) it broke into the body of bar A i was going to look for shorts. We rejected the high of the hourly bar from the day before and broke back into the body of A and then printed a lovely ND back into the high of A. Entered my short on the low of this bar @ 1.2764, my stop was on the high at 1.2791.

We pushed down immediately on the next bar and I was brought into the trade. The increase in volume at B spooked me a bit and this is where it all went wrong.

1st mistake -  Decided I'd cover myself and move to BE, perhaps with yesterday's loss in my mind as well. It pushed up on ND and I barely got taken at BE, but taken all the same. 

2nd mistake - I stopped concentrating, 3 other opportunities presented themselves, the strength I thought I was seeing at B didn't prove itself, we were going down. 1st ND is into the low of the 15min highest volume from yesterday, 2nd ND is into the 50% of A and 3rd ND is into the low of A. Talk about a telegram..

The rest of the chart just covers some points I wanted to make.

C is an interesting bar, in the early days of volume analysis I would see the huge volume and think "great, buying!". This isn't the case, it closes right on the low and was pushing through some support to the left. Next bar is also down and so are subsequent bars. At this stage I would've been trailing my stop, maybe even closing as I'd have been nicely in profit. If I hadn't closed then D would have almost definitely taken me out of the trade as I pulled my stop down.

D represents further weakness, increase in volume, next bar is an upthrust and then a no buying pressure type bar, before crashing back down.

E is important as well, ultra high volume down bar this time closing in the middle, there was certainly some buying in there to close there, next few bars push up but further weakness enters on F, increase in volume closing near the lows.

EUR/USD 5min

Long entry today but I needed to do this to put my mind at rest. I feel i'm reading the charts quite competently. I'm know i'm banging on about it but I really need to sort my psychology out. Got a hold of Trading in the Zone by Mark Douglas today, so will start going through that tonight.

Confidence. Confidence. Confidence.





28. Forex. Trading. Music. Beer. Food. Travel.


Post a Comment