Sydney Kris' Journal

[KrisL]

An update on the GJ H4 fruit trade below. Stopped out for 3% profit. Where I was stopped out turned out to be the 32% Fibonacci retracement of the move up. Rather than setting my stop loss for a certain percentage of profit, which is arbitrary, in future I will use Fibonacci ratios or some other grounded assessment of the market.

2013_12_19 gj fruit update2.png

[KrisL]

A couple of trades on EU and GU during Asian trading today.

2013_12_19 eu.png

2013_12_19 gu.png

[snorm]

I've been reading a lot about Elliot Waves recently, as I think a deeper understanding would be a fantastic tool to have in the trading arsenal. I don't think we necessarily need to be expert Ellioticians to be successful, but a solid understanding would help filter certain trades and fine tune trade management.

Anyway, during the course of my reading I came across a couple of things yesterday that are valuable enough to share. Firstly, Edwards and Magee, in Technical Analysis for Stock Traders state "The market trends only 30% of the time." As traders who make their profits from following trends, this quote exemplifies for me the reason why patience is one of the pillars of success in this game.

Secondly, Jeffrey Kennedy (an Elliotician) says that the three steps of successful trade management (in the long term) are:
1. Lessen the risk
2. Eliminate the risk
3. Protect open profits

I like to lessen the risk of my trades where possible by moving my stop loss to trail the candle that broke the AIMS level and triggered my order. We eliminate the risk by turning the position into a free trade as quickly as possible (by either closing half the trade or moving the stop loss to break even). We protect open profits by having a clear exit strategy (set a take profit level based on Fibonacci expansion, trail AIMS levels, trail five candles of the same color, or exit on close beyond the red line).

What do others thing of this trade management philosophy? Anyone do anything different?

Hi Kris

a basic understanding of Elliott Wave is very useful, if nothing more than the core rules, such as W2 not going beyond the start of W1; W4 not going into W1 area; W3 not being the shortest wave, etc - these rules by themselves can be very helpful in managing a trade.

In my many years of trading (about 10 years with Forex) the best trades that I've ever done have been where I placed the trade with SL and TP and walked away from the charts. Moving SLs has caused me more pain than gain; likewise exiting the trade before TP is met. Pick the SL and TP levels with the most confluence and trade with confidence. But that's just my opinion - each to their own (and that's the most important thing)

Nice journal ...

cheers
Steve

[immy]

I've been reading a lot about Elliot Waves recently, as I think a deeper understanding would be a fantastic tool to have in the trading arsenal. I don't think we necessarily need to be expert Ellioticians to be successful, but a solid understanding would help filter certain trades and fine tune trade management.

Anyway, during the course of my reading I came across a couple of things yesterday that are valuable enough to share. Firstly, Edwards and Magee, in Technical Analysis for Stock Traders state "The market trends only 30% of the time." As traders who make their profits from following trends, this quote exemplifies for me the reason why patience is one of the pillars of success in this game.

Secondly, Jeffrey Kennedy (an Elliotician) says that the three steps of successful trade management (in the long term) are:
1. Lessen the risk
2. Eliminate the risk
3. Protect open profits

I like to lessen the risk of my trades where possible by moving my stop loss to trail the candle that broke the AIMS level and triggered my order. We eliminate the risk by turning the position into a free trade as quickly as possible (by either closing half the trade or moving the stop loss to break even). We protect open profits by having a clear exit strategy (set a take profit level based on Fibonacci expansion, trail AIMS levels, trail five candles of the same color, or exit on close beyond the red line).

What do others thing of this trade management philosophy? Anyone do anything different?

Hi Kris

a basic understanding of Elliott Wave is very useful, if nothing more than the core rules, such as W2 not going beyond the start of W1; W4 not going into W1 area; W3 not being the shortest wave, etc - these rules by themselves can be very helpful in managing a trade.

In my many years of trading (about 10 years with Forex) the best trades that I've ever done have been where I placed the trade with SL and TP and walked away from the charts. Moving SLs has caused me more pain than gain; likewise exiting the trade before TP is met. Pick the SL and TP levels with the most confluence and trade with confidence. But that's just my opinion - each to their own (and that's the most important thing)

Nice journal ...

cheers
Steve

Yes, Nice Journal and a Very nice reply.... Well done Stevooooo

[KrisL]

Thanks for the comments and advice guys. Much appreciated! This forum is an invaluable resource for a beginner like me.

I had an interesting morning trading the Asian session around the Tokyo open. I missed a nice move on EU due to a mistake. I put on double the order size that I meant to, removed it, and before I could put on the correct order, price moved and I missed the trade. You can see below that I only missed about 14 pips, but it would've been a nice start to the day. I am mentioning this because I think that my reaction to the situation indicates some progress towards mastering the psychological side of trading. In weeks past, I would've rushed to get into the move, setting an order beyond the entry level. This time, I took a deep breath, moved on, and vowed to take more care when placing orders.

2013_12_20 eu missed opportunity.png

[KrisL]

A rent on EJ during the Asian session today.

2013_12_20 ej rent.png

[KrisL]

Fun and games on the Kiwi today. The first trade is a fine example of what happens when you leave a trade running and go for a swim down at the beach. Really need to get a mobile trading app to monitor this stuff on my phone.

2013_12_20 kiwi.png

[KrisL]

And a couple of rents on the Aussie this evening. Perhaps traded a little too aggressively. Definitely too late into the wave on the first trade, should have filtered.

2013_12_20 au rents.png

[KrisL]

First trade for the New Year was a rent on UCAD. I went for the S2 on M5 (which is my favourite entry), but it didn't work out. The next M5 S2 short would've worked out nicely if I'd been up and watching this pair!

2014_01_02 ucad rent.png

[KrisL]

After the rent on UCAD last night, I took setups on EJ and EU.

I added on to the EJ position, got it to free trade, then closed all but 25% of the position at a nice profit. For the remaining 25%, I set a TP level equal to the 50% Fib retracement level of the last major uptrend, and then went to bed. I awoke this morning to find that my TP had been hit.

2014_01_02 ej.png

I see that Immy also took the same EU setup. I managed this trade by firstly converting it to a free trade. I then took off all but 25% and went to bed (it was getting late here in Sydney). I awoke this morning to find the trade still running, and I moved my SL to the most recent M5 AIMS level. My stop was hit thanks to a 3 pip spread (!!) before price continued south. Still, its hard to complain about profitable trades!

2014_01_02 eu.png

All in all, a nice, stress free start to the 2014 trading year. I'm off to the final Ashes test today, hopefully the fun continues!