Sydney Kris' Journal

[KrisL]

Before I post yesterday's trades, I wanted to ask if anyone else here trades through Dukascopy using the MT4 bridge referenced on their website? I have just started using this for my trading and ran into some pretty significant issues. On more than one occassion, I had a live trade disappear from MT4 but remain live on JForex (Dukascopy's platform). I then had to manually manage it on JForex. There were also some discrepancies in order execution levels. Most concerning, there was an occasion when Jforex didn't pick up my stop loss on a losing trade and didn't pick up the execution of a profitable one!

I am thinking of trying this provider's bridge instead - http://dukascopy-mt4.fairtradingtech.com/ - does anyone have any experience with it?

OK, to yesterday's trades. Caught a couple of ripping moves on AU and EJ. I paid a few rents, but stuck with the pairs and eventually got the rewards.

Firstly, the AU trades. The higher time frame trend was down, and I was looking to get into the continuation of this trend, as you can see from the rents I paid. When price moved in the direction I was waiting for, I closed 50% of the original position at 1:1 and added on with the first break of the next AIMS level.

2013_11_22 au.png

The EJ trades: The yens have been in a recent uptrend and I was looking to get into the continuation of this trend. In the picture below, you can't see the entry and exit points of my original trade (they were removed from MT4 - see first paragraph above). I have shown these as black and red horizontal lines. I traded this quite aggressively, adding on at every opportunity. When my two add-ons were closed out, I moved the stop loss of my original position to the 50% Fib retracement level as calculated from the upper AIMS level, as shown in the picture below. I then had one more crack at a new position, which was a rent, and then I went to bed.

When I woke up this morning and checked my trade, I found that my original position had been stopped out by half a pip, and then the pair moved up another 70 pips! I am happy with my decision to take profits at a break of the 50% Fib level, but next time I will give this level a little more breathing space!

2013_11_22 ej.png

Finally, today I experimented with monitoring the Asian session using seeds on the M15 charts. I work from home, and while I need to make sure I get my work done, its not a big stretch to monitor the markets this way. I simply set an alarm to go off every 15 minutes, and then checked the charts for seeds. If I found anything of interest, I drilled down to M5 and M1 and decided whether or not to take a position. I found this to be an extremely effective use of time. I also found that by regularly checking the M15 charts throughout the session, I was able to get a good sense of the presence and direction of significant trends. Sometimes this can get lost within the M5 and M1 charts, especially if you are watching a lot of pairs.

I know a lot of AIMSters are based in the UK. Hope you guys are watching the cricket.

[immy]

.......

Finally, today I experimented with monitoring the Asian session using seeds on the M15 charts. I work from home, and while I need to make sure I get my work done, its not a big stretch to monitor the markets this way. I simply set an alarm to go off every 15 minutes, and then checked the charts for seeds. If I found anything of interest, I drilled down to M5 and M1 and decided whether or not to take a position. I found this to be an extremely effective use of time. I also found that by regularly checking the M15 charts throughout the session, I was able to get a good sense of the presence and direction of significant trends. Sometimes this can get lost within the M5 and M1 charts, especially if you are watching a lot of pairs.

I know a lot of AIMSters are based in the UK. Hope you guys are watching the cricket.

A Very Good Post and a Very Good TACTIC! I personally trade like this!

ps: we do not need to monitor many pairs but if you want to monitor more than 1 pair on m1 using M15 Seeds is the best option. I'd go for upto 4 pairs using this tactic. However, I like to take the seed as it is because m15 seed is valid only when trend on m15 is nice and clear like a bright sunny day in Jamaican beach with white sand and plenty of members of the opposite worl!

[KrisL]

Thanks for the reply Immy. I can see why you follow the M15 seeds - such an effective use of time, and objective entry points. I'll definitely take on board your comments about waiting for a clear M15 entry too.

[KrisL]

Yesterday, I took advantage of some opportunities, but I also paid quite a few rents and possibly let some trades run longer than I should have. It is obvious to me that I need to be a bit smarter when filtering trades. I think I could also do better in terms of taking profits off the table at appropriate times. I'd love to hear anyone's feedback on this after looking at the way I managed yesterday's trades.

EJ Trades:
I paid a full rent first up because I unsuccessfully tried to get into the first break of the upper fractal on M5. For my next attempt, I waited for the second break on M5 and found an M1 entry. This entry technique offers a much higher probability of success than the M5 S1, but obviously the downside is missing out on a few pips. So far I think I prefer to stick to M5 S2 - much more stress free!

I have been managing my SLs using Fib levels. My goal in doing this is to let my trades run for as long as possible, hopefully into the next wave sequence or the higher time frame wave sequence. The downside of this management technique is that you can potentially miss the peak of the current wave if price reverses. As you can see from my EJ trades below, I both missed the peak of W3 on M5 and got stopped out before getting into the next wave sequence. I took another entry, but obviously that's not the ideal way for this to have played out.

I've been using the 50% Fib level to set my stop loss, and watching the price action around the 23 and 38% levels. Do you think this is the best way to use Fib levels? Should I use the 62 level for my SL and risk giving up that little bit more profit?

Finally, my last trade on EJ was a short, but in hindsight I tried to get in late in the trend. My entry point was the third break of the lower fractal on M5. I should have realised that I had missed the boat, and looked for opportunities elsewhere.

2013_11_25 ej.png

GU:
Again, my itchy trigger finger got the better of me on GU. My first attempt was an M5 S1 - a lower probability setup - and I paid a full rent. My second attempt was the third break of the fractal on M5. I had missed the boat, and was lucky to escape with a small profit. I need to concentrate on sticking to the high probability setup - the M5 S2.

2013_11_25 gu.png

UCAD:
I caught the M5 S2 twice on UCAD yesterday and managed using the 50% Fib level. I missed the peak of the W5 on M5, but still secured plenty of pips. I was probably a bit keen to try and trade the retracement and I paid a full rent. Any thoughts or feedback on how I could have managed this trade better?

2013_11_25 ucad.png

[KrisL]

I have been taking quite a lot of trades the last few days, and I won't post them all in my journal. There were many poor trades and a few good ones, and I have reviewed them all. I am becoming more and more convinced that in order to be profitable, all you need to do is to continuously take the S2 in the direction of the HTF alligator. If you are too late into the trend, don't try to force it, just look for another opportunity.

Also, I have been following others' journals, and I notice that some people (for example Fran) undertake quite a bit of analysis before trading. I will take a leaf out of this book and begin to identify pairs with a trending H1 to target for trades on M5, with entries on M1. What do you guys think about this? Is H1 too far away from M5? Also, I think it is worth identifying significant levels in the pairs you are watching, for example Fib levels of HTF trends, and key support/resistance levels. Not that I will be trading these levels, but I think it is useful to at least be prepared for anything when price approaches a significant level.

What do others think of this? Am I overthinking things?

A nice AU trade below. A couple of entries which I let run for a long time, and a break even trade at the end. What do you guys think of my strategy to let my trades run like this? I am trying to get into the next wave with this strategy, but I am noticing that quite often I miss out on both the peak of the first wave AND the entry into the second wave thanks to my SL, which I generally move to a Fib retracement level of the first wave.

2013_11_26 au.png

[Dave]

Hi Kris et al,
I've refrained from posting in this journal until now as Kris and I are mates outside of AIMS, in the real world! So we thoroughly discuss everything on a regular basis while sipping lattes, and whatever I write here he's probably heard 50 times before. But there's a key statement you wrote here mate that's beneficial for everyone....
"If you are too late into the trend, don't try to force it, just look for another opportunity." This is what we talk about when we say patience is key. If you look at the M5 chart and you can see the S1 is gone, and the S2 is gone, and the third break of the fractal series (let's call it S3) is also gone, then it's getting too late in the wave to get involved so just sit back and wait or make a cup of tea and let that higher time frame wave cool off and come back to the ZL and then look for new opportunities. It's not just about getting into the start of the wave on the M1 chart with an S1 or S2, but also the start of the wave on the higher time frame, as demonstrated by a nice clean M5 S2, fresh cross, freshly opening alli. The AUDUSD chart you've attached is a beautiful example of the perfect entry, the M5 S2 with an S1 on M1, and just trailing the M5 AIMS highs with a remaining portion would have resulted in a significant return. There was even a setup long at the bottom of the M5 wave where it showed an M5 S2 long and would have given a nice few pips from an M1 entry. A great way to filter these trades is to just watch the pattern of the AIMS boxes and the eWave on M5, completely ignore M1, and when M5 breaks out and the eWave momentum supports the direction of the break and gives the S2 and you find yourself thinking, "that's a perfect S2 entry and I'd like to get on board with that", then drop down to M1 and see if you can nail an S1 with a small SL, and if you can't get an M1 entry then take the M5 S2 and that's still a great entry.
As far as significant levels go, I am of the belief that fractals of higher time frames show the levels that need respecting, they represent actual points where the market has found support/resistance, and if price is too close to these levels just wait for it to break them and then look for the setup. Anyway, enough rambling on for now.... 8-}

[Darren]

Great advice once again Dave! :-bd

[KrisL]

Dave, thanks for posting that. Some really great advice there.

This weekend I've been thinking a lot about trade management, especially about taking profits (which is what I've struggled with most since I started trading AIMS). What you said about respecting fractal levels of higher time frames is precisely the conclusion I came too as well. I think it is clear that I have been over-thinking the profit taking side of trade management too much, and am also probably guilty of being too greedy to boot. I have been trying to get into subsequent wave patterns, but I realise now that there is really no need to to do this. Our alligator and AIMS levels will show when a wave is over, and also give us signals to get into subsequent waves if the opportunity arises. It now seems silly to try to get into the next wave by risking profits, when there will be ample opportunity to get into the next wave using our system.

I would only make one small exception to the above, which I will describe below. First, I want to describe my thoughts on trade management in slightly more detail.

The most important aspects of trade management are:

1. Setting your position size so that both your initial stop loss level and the amount you want to risk are respected.
2. Not letting winning trades turn into losers.
3. Taking profits out of the trade when the market makes money available.

Point 1 is both simple and easy. It takes discipline, but this should come naturally if you believe in being a consistently profitable trader.

Point 2 is simple, but less easy. We can manage this by either closing 50% of the trade when it hits 1:1 or moving our SL to BE when we get an AIMS level that allows this (eg if price hasn't reached 1:1, but we get an AIMS level between price and our entry point). We can also reduce our risk by trailing the breakout candle (usually the one that triggered our pending order). It seems to me that once price has broken out into a new trend, it rarely retraces beyond the breakout candle for the duration of the move. Moving the initial stop loss in this fashion also reduces the number of pips price has to move before it hits 1:1.

Point 3 is proving the most challenging for me so far. I have been using Fib levels to get into the next wave, but have had little success, and I now think it is better to take profits based on AIMS levels. Trail AIMS levels, but look to do this on a higher time frame if appropriate (ie if it doesn't move your SL beyond what you are willing to risk and the wave of the HTF is suitably young). If price shows divergence or a red line close, tighten stops. I realise that this is basically what is written in The Setup ebook, and clearly I have been over thinking this aspect of my trading. Not a small amount of greed is also to blame, I would suggest.

The only small amount of creativity with regards to the above would be if we had the opportunity to add on to the initial position. Successfully adding on implies that the trend was/is strong. If we've successfully added on, follow all the rules above (trail AIMS levels, on HTF if appropriate, tighten stops upon divergence or red close) EXCEPT for 25% of your original position. Let this 25% run for as long as possible, but set a target TP level based on a higher TF target zone. Even better, set a TP level based on Elliot Wave predictions (once I've learned how to do this of course - I am only a very enthusiastic Elliot Wave beginner at present).

I'd love to hear any thoughts or feedback on this.

[KrisL]

Quite a few trades for me yesterday. I still feel like I am taking too many trades and that I should be more discerning with the trades I choose to filter. I will continue to work on this, but at the same time I don't want to start hesitating when I see a valid setup. I am looking to strike the right balance between aggressively trading the valid setups without hesitation, and overtrading by not filtering trades correctly.

Yesterday's GU trades: The short trade was a little ambitious in hindsight. I really like waiting for the second fractal break on M5 as this seems to be a high probability setup. I took the S1 in this case and paid a rent. The long trade was a full rent too, but I am happier with the setup which was a proper M5 S2. You can see that after I was stopped out, the market moved significantly in my direction, and if I'd stuck with the pair I would've had another M5 S2 setup that would've worked well. One thing I have noticed since I started trading a few months ago is that quite often a bit of persistence with a pair can really pay off, especially in a market that is trending on a higher time frame.

2013_12_03 gu.png

After paying a couple of rents and a couple of break evens on EJ, I stuck with the pair and eventually got into a decent move. I'm not too distressed about the rents I paid on this pair as the setups were there. I'm very glad that I persisted too. After reading Mark Douglas and taking on board his point of taking profits when the market makes them available, I gradually scaled out of both the original position and the add-on as price reached certain levels. In the end, the profit I took using this method was probably not much different to what I would've gained had I simply trailed AIMS levels. However, the effect on my emotions was significant. I felt stress-free and positive about banking profits from each push upwards which I think facilitated a more objective mindset.

2013_12_03 ej.png

[KrisL]

Again, plenty of trades taken yesterday. I still feel like I am taking too many trades and need to work on filtering the lower probability setups.

Yesterday on AU, I took a couple of rents before catching the move down. I added on aggressively and it paid dividends.

2013_12_04 au.png

I had a break even trade on UCAD. I was only just stoppped out before the market moved in my direction. Oh well, it happens.

2013_12_04 ucad.png

A couple of UJ trades that went nowhere. I was a bit uncomfortable with this pair, as price was range bound for a significant amount of time. Still, if you see a setup, you have to take it in my opinion.

2013_12_04 uj.png

And lastly a rent and a BE on EU.

2013_12_04 eu.png