Sunday, March 16, 2008

Rather than fall into the egotistical trap of holding an outdated and simplistic expression as the lock to a potentially profitable and rewarding experience, I am going to write a manual how to trade for the local investors in Vietnam. (I'm referring to the notion, those who can DO and those who can't teach.) As a foreigner and a fluent English speaker there are vast resources available for free on the web that I can absorb easily and efficiently. Whereas many Vietnamese without either investing experience or fluent English skills cannot absorb things so easily. So, a guide is in order.

Why not just recommend a great book like Trader Vic or Market Wizards? Still, the same problem, language.

I will cull the best bits of wisdom and methods I have used to trade successfully and not so successfully.

Sure I'm not a millionaire trader yet and I still suffer severe draw downs for purely disciplinary reasons--my systems are solid I am confident in this finally after years of tinkering. I am sure I can be an asset to the people around me everyday. Not to mention I could create quite a niche market for myself. Perhaps even set up an IB for a forex broker and share in on my students potential success.

So I will be blogging more general about methods and trading ideas than in the past. I will start tomorrow with a general outline of what needs to be presented.

This ought to make me a better trader, or at least a more clear headed one. I would like to think of myself as on the cusp of financial Independence through trading. As a lifetime student of the trading markets, I think becoming a teacher of trading can be the first big step to a maturing process.

Tuesday, March 4, 2008

Great trade to start the week

Back from a relaxing but inpsiring trip to the Highlands. Shaking off the
frost with a swingin day on GBP/JPY. Market opened with a huge
downgap--would seem the Yen has regained its foothold on the currency
markets again. Ws expecting a retreat before strengthening. But you can
never predict that beasts will =)

Doesn't matter. It's irrelevant to my intraday methods now. I really feel
liberated by my current method. It seems regardess of the market
condition, it preforms reasonably well, with the exception of a stalled
trend that doesn't pullback enough for me to exit the countertrend signals
which inevitably form under these conditions. Lately all trends have been
very strong and direct, no half steps necessary allowing full extraction
of profits.

Saturday, February 23, 2008

Mentoring a newbie and trading your own account

Today's Ny trade was rather aimless. Had two semi decent swings and then
we seemed to faded into meandering trade.

I am a bit reluctant to take on my current role as a mentor. Considering I
am just a newbie in my own right. Sure, more than 5 years in the markets
but I'm certainly not rich yet. I am still learning to handle my emotions
and staying under leveraged. Sure I know the basics of short-term trading
and I understand the emotions as well as the math involved to being
considered an expert. However I suppose I am a bit of a self-neurotic
half-been (no, not a hasbeen, I'm still on my way towards success). My
main concern is that it distracts me from being my own boss and taking my
account to a new level. I have to lay down the ground rules about
questioning the method while in trades. I think that will help

Thursday, February 21, 2008

Quick Work for a "professional"

On good days, I will just make a few trades and be done for the day. I
wasn't in fron the of the pc for more than an hour or two. I entered on my
S/R levels after the confirmed price action, I set my targets and my
stops. I was extremely conservative today as you can see from the chart.
Doesn't matter. My account is sitting at all-time equity highs and I am
just beginning to get a taste of consistent profitablity. The key here is
I am setting hard stops, I am walking away from the PC and my edge is
finding its way down to my bottom line.

I had an epiphany of sorts. One day I am going to take this skill I have
been honing and use it from many new places around the world. it is my
nature to always be moving around, trying new experiences and sharing them
with those of deeper roots in the ground. This trading lifestyle isn't
just a dream, It is my future. I have already been to more than 10
countries and within the next 10 years, would like to have visited at
least 10 more. SInce I'm getting older my requirements are a tad more
expensive and I am finding it harder and harder to just pick up and
go--physically as well as emotionally. So more money will be required.
Trading money.

Wednesday, February 20, 2008

Too many trades, more than enough profits

've been trading gbp/jpy with efx now for a while however I still keep a
record of my trades on the whc demo account. I am a real sucker for the
mt4 platform. So simple, and free. It's hard to complain about its
limitations when the bottom line is a huge savings.

Today I made far too many trades in the Asian session. Had I started in
the European session, my profits would have been in excess of 250 pips.
Instead I am hapy to walk away with about 100 for the day. I am really
starting to groove with my current setup. The primary umportance of any
trade always seems to come back to how it behaves on the support and
resistance lines. First bouncing into and then repelling from. Once the
Heiken Ashi candles signal a short term reversal I can then enter knowing
that if the market reverses again, I have my stops in place to keep my
bank roll for another trade.

Finally, liberation from my darker trading emotions have come under

Wednesday, January 23, 2008

Gold and Bernie

Well, I knew with a firm committment to keeping stops in the market that a day like this would come. With the fed on alert Gold was trading extremely erratically. Maybe not trading Gold in this environment is better, but I chose to put the faith in my system. Today 3 stops on the 5 minute chart totaling more than 16 points of losses. But if you consider that it was a 30 point trade from bottom to top, where we seem to be closing. If the goal of this journal is to test my method and develop sound trading principles which will keep me in the game longer, then taking a 16 point loss is actually a small victory in my evolution as a trader.

Friday, January 18, 2008

XAU and the swing pattern

Two trades today so far stretching beyond the kalman level and then trading back inside. All in all, a choppy session so far but expect Gold to try for new highs into NY open.

Thursday, January 17, 2008

Forex ECN's

Well, it may be time to switch brokers once again. It seems the MBT ECN program(which also goes by the name EFX) has established a completely open market for smaller traders. I may have to give it a shot as the demo is an amazingly eye opening experience. I can step in front of the bid, place a market order and not get scalped by my broker, I can even set OCO orders as close to the market as I wish. The only concern would be liquidity, but since I am not one of the big guns, it hardly seems an issue for me.

Spread the word and liquidity will be even better. As a retail trader, we need this business model to survive for our OWN survival.

Triple Convergence

I like when indicators can sync. I don't have much of a backtesting record to verify on 5 minute kalman channels, but I have for both keltners and 1 hr kalman levels. And on this chart all 3 are converging. My expectation is that a nice bounce should materialize from here. Will update in the a.m.

Update: as expected we got a very nice bounce, however I wasn't the only one expecting it. Price failed to touch the 1 hr Kalman level. In the strictest sense of my system, this wasn't a trade. 
But it's nice to see my market map is providing the correct outcome.

Wednesday, January 16, 2008

Early Nikkei Trade

The index always seems to open at an extreme gap. Usually good for a fade. As long as the system signals, I can buy with confidence.

Friday, January 11, 2008

Conservative Exits

With Friday here and recalling the horrible track record I have of fading huge trends on the last day of the week, I chose to exit my spot gold short at the most conservative level logically possible.

I applied the .786 fib retracement from the intraday swing my signal came from and placed my buy to cover order there.

A pretty good week, except for the nikkei trades which missed target 2 out of 5 trades and ended up in losses . Spot gold gave so many profitable trades I regret not following the metal market sooner.

Thursday, January 10, 2008

XAU in retreat

Spot took a dive into the US open today breaking the early range I traded. Now the mode is short.

System has been firing very consistently now. 1hr kalmans scaled on to a 5 minute heiken ashi and keltner bands setup.

The next step is to raise my money management to determine maximum stop loss and profit target levels. For example last week the ideal exit was about 5 points in profit and the ideal stop loss was about 3 points. I will keep a log and attempt to trade these figures sometime in the near future. For now I still just follow the keltners for the primary exit and the peak of the reversal bars used for entry.

Monday, January 7, 2008

Sweet Gold

Seems spot gold has found the kalman levels and is playing along rather well.  The spread on spot is about  half a point during active sessions. With Gold the commodity du jour, I expect this volatility to continue. Today the kalman levels have set up 7 times today, 5 trades for profit. Amazing.

Currently trading Nikkei in the am, Gold when it moves and UsdJpy when the trades set up.