Welcome to my 2010 trade journal!
This is simply to maintain a record of those transactions that I have taken, based on this trend trading method: https://www.forexsoutheast.asia/gene...-road-map.html
* * March 2010 Update * *
As from March 2010 I shall just be trading daily charts due to the simple fact that I no longer have the opportunity to trade H4 charts. My egy must be ammended somewhat slightly to reflect this change - here's a brief summary:
Step 1 -- Key Support Resistance Levels
In my estimation horizontal support and resistance levels will be the key to the market. These are the degrees where the boys are buying and selling and that should interest us, the retail trader.
The very first step is to spot the nearby key levels of support and resistance that could be of use to us. We are not looking to map each and every level but we want to highlight the vital levels that could be a practical place to enter or a barrier to your transaction.
These levels aren't necessarily to the pip levels -- they'll often show as a range.
For an example of what I consider a key level, plot 1.3850 on a EUR/USD chart.
Step 2 -- Discovering The Trend
I am only interested in trading support and resistance levels from the direction of the prevailing trend.
In order to specify the trend we have to first zoom out as much as possible. It needs to be clear which way price is going. When it isn't then it's probably not worth trading!
In an uptrend, each major swing ought to make a greater high followed by a retracement making a higher low. In a downtrend, each major swing ought to make a lower low followed by a retracement making a lower high.
By drawing a trendline (or sometimes more than one) across the highs and the lows of the chart we ought to also get some idea about the tendency.
It is also very important to zoom out to weekly and monthly charts to acquire a better understanding of where we are from the large picture.
Step 3 -- Putting A Trade
So we know the tendency and we know where we are going to trade from (i.e. the vital levels) -- we all need to do now is wait for price to retrace to one of the key levels.
Let's assume we are in a downtrend. On most occasions I shall put a sell limit order in the level. If however I am unsure about the transaction for some purpose (perhaps we've moved a long way out of our trendline and expect a deeper correction) then I shall watch price action in the level. If price blows through the level I shall let it go and wait for price to move up to another level or wait for price to get back beneath the level. Or if price struggles to make it through the level, or forms some kind of candlestick pattern (shooting star, engulfing bars ) I'll look to trade under the level. Vice versa in an uptrend.
Step 4 -- Trade Management
This is where my style has changed somewhat and will be the most abstract area of the method.
Once I put an order, I will not place a default stop loss ofâ€X†amount of pips. Again, let us assume we are in a downtrend. My tough stop is going to be set over the trendline and over a current swing high. It will be put somewhere I don't anticipate it to get struck unless something terrible happens (global disaster!) . This is my emergency stop loss... it is only good practice in the event that I can't get to my trade channel or broker for a few reason.
When a transaction goes against me I will likely stop the trade before my emergency stop loss gets struck. I'll be watching price and how it reacts to the trendline and support and resistance levels. When it's blowing through them contrary to my perceived trend direction I shall close the transaction.
When the trade proceeds in profit I shall only allow it to run. Then when we get to another level I'll be looking to bring another place and so forth.
I shall finally transfer my emergency stop loss but it will be aâ€worst case scenarioâ€. I'll look to shut my transactions in the event the tendency appears to be changing or if we've moved aggressively away from the trendline along with a profound correction could eat up a lot of profit -- in this instance I shall look to shut my transactions along with the point that maximises profit from open positive places and minimises loss from open negative places.
My 2009 journal can be found here: https://www.forexsoutheast.asia/cryp...-0-indior.html
Questions always welcome!
Regards,
Dan