September 2009. results

+240 pips

+17%

I had nice profitable month. I really need it after June blow up no matter how did I manage to achieve it. Now I can aim toward more reasonable trading that I think already started this week.
Plan is to aim for small number of pips with strict control of losses, no wiggling around. Also building size of positions if my results are positive and I behave totally disciplined. I can't trade larger amounts of money if I can't obey stops and risk parameters. So I turned toward scalping where years of screen time give me advantage.

I found quite an inspiration in blog that I recently came across. I read all posts of The forexbird and it's incredible how scalping works for him and how he became much more disciplined now then in the beginning of the blog.

End of month

Today leader was CHF I think, it was gaining on all fronts and at 11:30 was news time for it. Because it stalled after the news I shorted the eur/usd in my second trade but it didn't move and it was too risky to stay short so I quickly closed.

+9 pips

Scalps

Interesting for me to watch is change in attitude that I have now. With new goal orientation on safer and smaller target I tend to first click exit and then think. I don't need much pips so I grab very fast without second thought. No problem for me with that attitude, let it continue.
On first eur/usd trade I was little absent minded at the time of the entry. I knew about EUR news time and I had some level drawn. When market started to move I just clicked and then I realized why is it moving, I simply forgot it.
On gbp/usd I just took the first wave in 10sec and I was really watching at what exact time should I jump in with help of eye on gbp/jpy and eur/gbp.

+12 pips



Right after my exit GBP had crazy bull run. It's like the same one's that run up that rally first pushed market down to fool as many as they can about a direction of least resistance.

Some new thoughts

To be frank I became tired of my way of trading. You know all this averaging and running bigger risks when things don't turn my way. In few weeks since I returned I got nice results if we look at pips won. But it's majority done by such gruelling trading. The important thing is that if I trade like this I will never be able to trade bigger positions that way. Emotional pressure and stress is so big now with small positions that I could never behave that way with ten times bigger position and financial risk. I need a way to trade more relaxed with defined boundaries so I don't get stressed out. Before when I had such thoughts my main motivation was to stop losing money because I got hit to hard. Well now it's not so much about that. I want more efficient way of trading, without so much emphasis on how much I win but with strict control of my losses.
This new thoughts came when I was thinking about some money in savings account. I calculated that I get less then 4 pips a month for it in interest if I look at things in forex relation and leverage factor of ten. So I'm thinking why am I happy with this? In my much smaller forex account I think about four pips as nothing, so why couldn't I earn doing forex trading instead of interest that I get. Well, no way that I would have courage to swing this big positions with way that I trade. So I see that there is no long turn success with things how are aligned now. I should learn to trade much safer so I will be able to take my size up. With averaging and moving stops there is no way I would dare.
So let put aside orientation toward bigger gains in a week of let's say 50 pips that I had in mind last few weeks. I can have a goal of 10-20 pips a week with safer and much more controlled trading. I would probably be stopped out on many of my trades that I turn in to winners with bigger risk. But if I succeed and became profitable in quality trading that could mean much more long term. I really don't know will I be able to do it taking in consideration my past performance. But I really am eager to go for it. I really got bored of big risks and unpredictability of my reactions. So much that it seams to me that I lose interest in trading more and more with such behavior.

Today was pretty much slow day. I did trade according with tighter risk in mind, somewhere got to be first step.
+5 pips

Junky

I had quite a run last few weeks and days since I returned. Most of it was done with questionable trading practices. I remember from before about a phase that I just went in to today. It's when I take whatever signal without much of thought or observation prior to it and then if it's not going my way I have no intention of taking a loss. It's simply like I don't know how to trade any more. I really don't in this situation and frame of mind. I know only how to average, be there valid reason for it or not.
So I need to cool it off now. Only option if I continue in this state is big, big over leveraged loss. I think that I became addicted to satisfaction of monetary gain and trade only to get another hit of it.
If today market didn't retraced who knows where would I end. So I'm taking a step back. Also I'm glad that I noticed it and I got to say that i don't like that addiction feeling very much. I'm not that good drug user.

+4 pips

Wild morning

I had nice scalp in gbp/usd that put smile on my face. Four minutes later I jumped short in eur/jpy at a spike down without much thinking, bold because of my nice previous trade. In few seconds I was down on a day, losing all profits and with market deciding it's the low for now. Average down didn't help me much. Meanwhile eur/gbp started being crazy again. Gbp was in free fall. I had another scalp in gbp/usd. For my loss in eur/jpy I was watching usd/jpy that was bouncing in the downtrend. So now I had to wait for it to test the lows if it will do it. Also I was now hyped up so I was looking to go long gbp/usd. I had average down also in it, so at that time I had four positions on. When things slowly turned my way I decided to cover eur/jpy in a loss for as much of gbp/usd profit.
After all this eur/jpy did brake morning low and I just couldn't stop myself from trading more. So now I was looking for bounce trades in gbp/jpy but with half size. Taking 10-12 pips profit with a spread of 4.2 isn't worth it. I was probably looking for big fast bounce but I didn't get it.
In whole this mess eur/usd was trading in 20 pips range.

I get most problems from myself if I take a trade unprepared and it goes against me violently. Also as much time passes I'm more and more emotional and base trades on those emotions.

+33 pips, 2.1%

Scalping at work

Interesting, when I have limited resources, limited time, not ideal conditions where I may close all and walk away if it's needed like it's for me at my work place I almost trade better and more concentrated then at home where I'm relaxed and without any disruptions.
I had few trades in gbp/usd using 10sec chart with help of eur/gbp and eur/usd charts. I balanced well between giving trades opportunity to go in break out, fast momentum mode and protecting profits if things don't play out that way.

+18 pips, 1.1%

Big risk

I didn't follow my rules, I let loss run, I averaged losing position. I had too much leverage and too big position for me to handle it with ease. I don't like it, I don't like trading like this. It's mixing of styles, but even if I stay with trade as a daytrade and not a scalp I usually take scalp profit and don't let position or part of it to run.
That big run up before my entry was while I was in the kitchen making myself a coffee. I figured that when it so easily broke recent high it will go up much more. So not only that I had eur/usd long I add gbp/usd as well minute later. Then gbp/usd started to fall based on eur/gbp and eur/usd didn't continue it's run. I really didn't want to get stopped out from long position for bad timing on this strong market. After I averaged one more position in gbp/usd that pair run up more then 20 pips. You can see it at 9:53. I was thinking that is it, it will brake up on both pairs. Well, it was just spike on eur/gbp and my gbp/usd from nice winner turned back in loss.
I was waiting for a brake to the upside, I got not exactly what I wanted. Because eur/usd wasn't strong enough to pass 1.4800, but I did get a brake in gbp/usd. Eur/gbp loss ground and gbp run up. I took all the profit at the same time because eur/usd didn't follow and gbp/usd paused. I had in memory spike from 30 minutes ago and didn't want to risk it again. That gave 43 pips which isn't more then 0.5R probably, because I would lose heavily if things continued against me with three positions on.
Later I had one gbp/usd short trade based on eur/gbp movements.


+52 pips, +3.4 %

Curious case of forex traders

I didn't intend to post today because I had only one small trade that didn't amount to much only 2 pips. I was still busy today with my job. There was around +7 pips but I left it on trying to catch more. It spiked back and I was out. Interesting thing came when I read Stockhunters blog post for today. I borrowed chart from his blog and if you look closely you will see that we traded the same time. It was just after the news when spread settled. This isn't the first time that we are trading the same thing at the same time. This time he was in eur/usd and me in gbp/usd but it's the same move, same reasons. Market started going down after tight range and news and we shot for opportunity.
To me it's really interesting to see how we reacted to the same thing. Who knows how many others done the same thing in this impersonal environment. We will never know.


Update:
Harvey had the same trade (same minute, same move) also. His first trade on the third picture below.

Very quick action

I didn't have time today to trade because of work, I only managed to jump in quick action on gbp weakness. On first trade there was big slippage because of slower internet connection.
+19 pips

Fading the market

First I was considering shorting gbp/usd nearing previous support marked with yellow arrow. I decided to pass on it because I thought that there isn't big potential for a move and that there was option of powerful spike back up. But when market made it's move and it was opposite of my expectations I entered long in a mix of frustration of missed opportunity and going with my idea of pullback. That didn't work and I quickly got stopped out. I didn't have problem with taking that stop and that is great. Less great is my next trade where again I entered long probably still dreaming about spike up. Then everything slowed down and it took 30 minutes for a market to get near my stop 10 pips lower. I'm so non beliver in slow moves, I lowered my stop and averaged calling bottom (I was thinking about Orion machine kicking me with a stick at the time). Who knows would I lower my stops again but it was bottom and I got profit.
We all know my flaws but the main point is that I traded what I think and not what was going on. In reality I was fading the market. When I sell myself a story I'm prone to continue with fantasizing, then I more easily move stops and average. Better for me is to scalp market reality in direction of the move and if I don't see opportunity that I like just wait.

+19 pips

Friday

I didn't do anything how it's suppose to be done. First I closed trade without real reason at break even soon after entry. Then I was shorting eur/usd for break down that wasn't there. Finally in eur/jpy I closed first trade just to cover previous losses leaving much of the move on the table.
+4 pips

Exercise

The main fear that I have in trading is fear of what will I do. So today I exercised exits, stops, trading without much thinking (read doubting).
First I started with eur/usd trade that I went for bounce from trendline on larger time frames. It didn't occur and to my surprise I exit it quickly in a loss. Surprise that I didn't try to maneuver around but just take quick, small loss. So it become interesting for me to see more of that. Only other trade that I would like to mention is first trade in gbp/usd. Eur/gbp weakness translated in some gbp/usd strength, but it was overall weak pair so far. So I had that trade with 10 pips stop. I expected more upside when it brake 530 previous minor high, but on a way to it price twitched down and I hit exit getting only 3 pips on it. Immediately it made 15 pips on upside.

+14 pips, +0.95%

Small trade in gbp/usd pair

After gbp/usd news time without big impact market started to slowly move up. So I figured maybe it's time for bounce because gbp was heavily sold all morning, it was especially weak in eur/gbp pair. That is more swing trading or position trading idea, but I use them very well for beginning of that move if there is any to take a scalp. Maybe it's just construction of my mind, but anyway what isn't. So I took scalp profit and got out when it approached middle of bollinger band and yesterdays support low that was taken out today, marked with blue trend line on 5min chart.
+11 pips, 0.9R, 0.75%

Fly me to the moon

I took part of today's flying market.
I think that profits can be counted around 1R, because market was so volatile.
+35 pips, +2.5%

Changing decisions

Slow day with US holiday. I went long gbp/usd when it start to get strong all over. It was too late in the move to take a scalp but I decided to wait it out. With waiting came out dreaming where it could go. My idea was that if it take out high at 440 it will go all the way to 500. I got action in my direction but not the new high. I could take 1.5R but it was to small in my mind in comparison with idea that I sold to myself.
When things turned I was just waiting when will it start going back up. It didn't it was slowly drifting and I started to lower my stop. Then at some point I add new position with intent that I will lose small amount and stop out both of them or it will reverse. After so nice bounce (where I got b/e price) I couldn't let it go. Then I lowered both stops. In the end I lost 46 pips and not 10 that was original R.
Then it looked to me that it's oversold and I bought 4 positions of the 10sec chart and ride it. Clearly emotional as much as I can be. I got out when loss of a day was recovered. I hoped for more but it wasn't cooperating.
So I finished the day with +3 original size pips.

I don't know. I tell myself that it's o.k. to wait for bigger profit when things are working my way. But if they start to go in opposite direction and I invested much time and expectation I don't follow rules. Then I start swing trading, or whatever it can be called. Maybe playing for 1R or 1.5R should be enough. Making things simpler then they are now with emotional engagement.