An insight into a Forex trader

Well the final signal came and what a mental ride. It could also have been heartbreak or joy for TUFXP users, depending on whether they use a 30 SL or 35. I’ve stuck with 35 as CM switched to 30 for no reason other than ”most trades go to 35, so I’ll save 5.” If you’re going to do something, make sure you research it and test it, I think that’s two trades in the space of a week where a 35 SL has been the difference between a win and a loss or in other terms a difference of 100 pips!!

Mike raised a good point on Skype about how this trade would appear in backtesting. When it triggered, the PSAR and MA were both showing green making it a valid trade. But a monster reversal candle proceeded and the PSAR switched to red as did the MA before the MA finally turned green again. So despite nearly stopping out, a successful trade and a +26 result on the day after spread making it a slightly better day than usual. It’s still been a mediocre month but I’m sure plenty of good days lie ahead.

I’ve got so much going on in my head, it’s hard sometimes to slow down and not think about trading, I have ideas popping out of my head and the eagerness to succeed is almost overwhelming at times. I’m trying my best to keep grounded and focus on one day at a time and let the good trades come to me instead of me chasing them. Apologies if this blog has turned into a purely TUFXP one, I’ll try and diversify in the next few weeks.

I guess it had to happen after 6 straight wins and happen it did with a real thud. A double loss for a loss of 61 pips after spread for me (I use 35 max loss) and perfectly highlighting Marco’s concerns about poor risk:reward ratio. Marco was one of the few die hard followers along with me who followed the old cash-master method of using two timeframes for a signal. He uses an adapted version of this and I believe he trades it from 6AM-10AM. He stops after two losses which gets around the problem of over trading that seemed to occur in the later stages of the original method. There were days of 8+ trades and I distinctly remember a day of 6 losing trades! Ouch.  He still uses a double timeframe for confirmation but utilizes a trailing stop and based on the daily pivot point and support, resistance areas takes profit where he thinks necessary.  I believe he has had greater success in terms of pips than the new method. I’m still unclear on the trailing stop myself so hopefully he will clear that up for me. I understand using it on the 5 min timeframe but do you use it on the 10 and 15 timeframe also? Also, do you move your stop every time TESS suggests? Thanks for your work, Marco.

Another reader, Mike, did some extensive testing of the new method and this is what he found:

”Hi

for what its worth my two pennyies worth.

trading is long term – just because had bad week – its nothing – keep with the system

had a spare afternoon and went back to 22/2/10 – the earliest tess charts would allow me and recorded every trade from 6am to 10am that qualified using current cm settings – average and parabolic same colour – risking 5% per trade – taking every trade that qualified in that period regardless if already in a trade – using stop loss as indicated by tess – compounding after every trade – starting from £1000 – the profit would be now £4172,80 and the largest drawdown would of been 23%”.

I asked him about the afternoon session and this is what he had to say:

”Seems trading 6am to 10am and then 13.00 to 16.00 produces a profit £2782 and if you remove the afternnon session your profit increases to £4170 – therefore afternoon session seems to produces a lost.”

Another interesting take on the new method. I need to go back to the same date and test the one winner and stop method and compare results to see if the above is in actual fact more profitable.

So a disappointing day and it’ll take 4 winning days to show a profit but fingers crossed yesterday was just a hiccup.

Don’t forget to cast your vote on the poll, would be interesting to get some feedback.

Well it’s been another busy day all round and it was looking a bit glum with TUFXP signalling a trade that triggered by 2 pips before meandering right up to -25 or so. Thankfully, the resistance in place at 1.4711-1.4715 kept it in check and around 15 mins before London open, it simply caved in and reached the scalp. Happy days this week!

I did some scalping which I’ve detailed here and I took 5 wins and 1 loss. I set max risk to 0.5% as I feel it’s always better to practice live than demo. So many things can change between live and demo it’s sometimes night and day especially when scalping. You need to get a feel for spreads, execution etc. I started out pretty early (5AM london time) and took 5 wins but caught out with the big rush at 7.45AM  for 10 pips loss. It’s definitely suitable to sideways markets and as soon as you see a trend forming on 15m chart, it’s time to stop. A pretty decent start though overall.

The EU triangle has been blitzed with a lot of movement since London open. It did initially close beneath the rising trendline but the paper SL was soon hit and it has since risen even further. If it closes above the horizontal line, a long could be considered. So much for chart patterns!!!!

And breathe….Yesterday was manic as my daughter seemed to be on another level of excitement and madness. Trying to occupy an 18 month old who thinks she’s 18 years old and trying to trade is not a simple task. I tried to watch my charts for the first hr but she was just causing chaos and I thought it’d be better to just let the afternoon go and try again today (Thursday). I missed a winner with TUFXP but I’m not disappointed as I’d rather take precautions than trade on less than 100% concentration. When I did take a look at my charts I noticed an interesting pattern forming on EURUSD which I’ve attached. It’s a classic ascending triangle formation:

I only have very basic knowledge of chart patterns but I like to try to develop my ability to read charts and I found this one staring at me. From reading forums and articles, quite a few people think this is a reliable formation but looking further at the chartpattern website , it appears they aren’t actually all that reliable. They provide more profitable trades when breaking the trendline downwards; he scores them on a basis of success with 1 being the best. He rates upwards breakouts 17/23 and downward breakouts 9/23. From what I’ve seen in the past, the tighter the candles get to the top of the trendline and the rising wedge, the stronger the breakout should be. I’m going to keep an eye on it anyway and make a note within my scrapbook.