Greg's Forex Journal

Welcome to my new thread. I am an 18 year old college student who has been studying the markets and paper trading forex since about July.

This journal thread is a continuation of my journal-like thread I had in the forex section, which can be found here.

http://elitetrader.com/vb/showthread.php?s=&threadid=136121

I am not currently profitable, and have actually recently completely restructured my trading from predominately trying to scalp the 1 min to trading solely on the 15 min and above. Although I haven't yet been trading this timeframe, I have been watching for the past few weeks and will begin trading again soon.

My focus is mainly on charts and chart patterns, and I believe I am just wrapping up my research on chart patterns and turning toward spending the vast majority of my time on watching the market in preparation to trading. After beginning trading in this fashion, I hope to begin developing a more advanced feel for the market over time.

I will answer any questions as I go along, and there is far more information in my other thread.

Good trading

 

I have just been keeping up with the hourly and 15 min every few bars between exams and studying, and I will be up for a few more hours, but wanted to post my reflection quickly.

Either Saturday or Sunday, I spent about two hours or so editing and deleting many more of the images in my screensaver, and I am nearly completely done. I decided to eliminate all the ones that weren’t teaching me anything, and that I had a better review image somewhere else. All in all, I trimmed about 100 of 300 images (estimated). I also got better images for many, and have been adding several of my own.

As for determining the direction of the market and thinking of trades I would take, I don’t feel like I’m doing badly either. I have realized recently that I have developed my skills for drawing trendlines and S/R so well as to have enough confidence in them to “know” that they will be respected by the market around 90% of the time. For example, when I saw the EUR/USD blow through to the initial 1.34 before last week’s close, and saw it did not respect my downtrend line at 1.3270, I was ready to look for the pullback as soon as the market showed weakness, and it came perfectly. Of course it does not always work out this way, but I am very confident in the development of my skills. I am also starting to pick out bar signals well and beginning to look at reasons for their success or failure, and have found enough of my own patterns to find a few of my own setups.

Good trading.

 

Very honestly have no time for journal entry today, but decided I was going to try to post one of my screensaver images I'm using to try to learn each day so here's number one.

Have PLENTY to write about, which I will get to tomorrow or Thursday

 

Ok, I really could tackle every one of these things in their own separate posts, but I would like to reflect quickly on all of them:

Watching the markets: My strategy lately in watching the markets has been to try to look at my pairs (EUR/USD, EUR/JPY, USD/JPY, and USD/CHF) just after the top of every hour. This allows me to essentially watch the markets all day long, catch the hourly closes, and take in the 30 min and 15 min bars with bundles of two and four, respectively. When I’m not busy I tune into watching a bit more and seeing the bar ranges develop, which has really given me a chance to appreciate the value of closes on bars and not just movements (especially around important levels).

Making my own signals: I am looking at key points in the market on all timeframes, much in the way that my last attachment revealed. I am also looking at failures and how they appear on other timeframes, etc.

I have added a new trading rule that just tells me to carefully read the pair and TF before scanning the chart. I believe this will help me subconsciously internalize movements associated with each.

Market timeline: I have posted before on when I began doing certain things in the markets, but never remembered any concrete times. I spent a bit of time going back and looking at my work, and I believe I have a few rough dates:

February 2008 – began market research

Mid-July – began paper trading options

August 6-7 – began paper trading forex

Market attitude: now that I am not stressing about trading anymore and focusing on learning, I am once again extremely excited about the market. I am also noticing my change of mood throughout my life. I believe this means several things to me – for one, I should limit my trading even when I do begin again. This means watching and studying most of the time. My current plan this month will have me paper trading only one day/night per week, and watching/studying the rest. I believe I should also closely limit this even when I begin trading real money, and slowly step it up as my comfort and experience increases.

Trading hours: Now that I have been watching the markets all day, I am noticing a lot of things about its movement. Firstly, a lot of revolves around London – trading picks up coming into London, and trading is still high in the hours following London close. I have also seen that American session has some good movement, Asian is generally dry except in spurts occurring most often in Asian currencies, and a bit but not even as much between this session. What this means to me: there are at least some tradable moves throughout the day, at least enough to watch the market and pick out possible trade points, but overall any time I can catch in London or the meat of the American session is ideal.

Money plan: I am now considering the possibility of trading live in the later weeks of January. My previous rule was not to trade live until I had very consistent profitability (which I changed a few times, but at least required several weeks of good trading). I am now considering the possibility of a funding an account with just a few hundred dollars, and trading 10-20 cents/pip once a week. Without consistent profitability I have deep doubts of this, but at the same time I think this could create a lot of value with my trading even if I lose $5 per week (no big deal anyway). However, it is also hard to see how this small sum of money would matter, and if it is even worth opening an account. I would appreciate anyone else’s input on this.

If anyone is still reading, I am posting this before my work is done for the day, but I’m going to go ahead and post an intraday pattern I see in the market. I have not traded it, but I see it often as a reversal signal. I call it the double spinners. The examples in my jpg are not that great, but I do see them rather often.

 

you have chart set-ups as your screen saver? can you explain this a little more?

oh and i'm a 19 year old trader in college, but i've been studying the markets for almost two years now.

 

Sure. Back in the middle of November I was trying to find a way to get a screensaver on my screen with a hot key, and saw that windows has a "Photos" slideshow that scrolls through saved images.

Well, to me it was a market opportunity. I decided to put every market image I could in it of value. I scanned about 250 images from books of charts and setups (now still 150), downloaded and put in 100-200 from sites and traders online, plugged in ones from PDFs, and now have about 25 of my own, which I am now adding to them the most.

I have yet to work out how I am going to manage them exactly, but lately I have been leaving the screensaver to play all the ones in the "pool" of images, and then going over my own personal ones for the current month several times per week. Overall, you end up seeing charts and setups all the time, and they really sink in.

 

Well done Greg. I like your approach - keep it up

 

Hi Greg, sorry I havent emailed you lately. You have the right idea, and you have serious traders confirming it.

If I can share more thoughts about trading the forex...I would encourage you to stay Patient ...about going live with real money.... its really better to be cautious and very patient.
The best lesson Ive learned so far, as I mentioned to you, is the pain of losing real money. ...to teach me that I really wasnt ready to go live yet. dont rush yourself. Just maintain the frame of mind about Learning, and learning and learning. watching the price action, on many time frames, and letting your vision become seasoned....thats really what I'm still doing now...and I can tell you ...its the Most Important thing. Many people here on ET will say that Price action is the most important thing, thre 'only thing that matters' , etc ,etc, ....and I now realize that it IS critical, and ,while not ...'the only thing' it is about ...I would say, 85 % of the essence of the game. ...and in particular, learning how to follow the 1 minute candle. and in conjunction with the 30 second candle. ...but before I get too far into the post...I wanted to stay on target about the process of being very patient.... you will get to your goal soonest and best, not by trading real money but by practicing and watching price action in multiple time frames.
let the Vision become clear to your mind. as you watch price action ...at s/r points, and fib levels.... watch all day if you can...and stay patient.
Ive been doing this learning process now for 10 months, and I'm only now finally ready to trade real money....after 3 thousand hours of study time.



You will get there if you can develop the right Vision...to see all the candles on all time frames, and 'feel' the energy of the market , as you watch price action ,seeing all the s/r points, having a feel and memory for what the whole day has been like,etc,seeing all the the indicator signals, and the clock time, etc....alll at the same time , all at once. Its an amazing puzzle to play.
If yoohoo says youre on the right track, thats a big compliment.

 

Thank you for your support, yoohoo and Tom.

I believe I will take your advice and hold off going live for a while. I do believe that every trader needs to get crushed mentally a few times to harden themselves and learn. You can do it in a market crash, by investing all your wealth in real estate in your 50s like my dad did, losing your spare cash by bottom-picking GM like my brother did, a ridiculously volatile forex environment, or plenty of other ways. If I do it (again), it's going to be in a paper account, or a later point when I'm comfortable and experienced so I can defend myself.

I am constantly looking to channel my patience as well.

I don't think I'm going to wait as long as you did to trade, however. It seems that you are using 1 min and 30 sec candles and indicators well after 3000 hours of trading. If you recall from my earlier thread, I basically imploded after using the 1 min for 3.5 months or so. I knew the learning curve would be steep and thought I could tackle it as the quickest way to trading, but I was wrong.

The guy on trading-naked suggested to find one profitable technique and trade it and trade it profitably, and subsequently add others. This yields profitability short term, and a nice building block - a very wise idea. I know of other traders that trade only inside bars and stars.

I think I'm taking the middle road. I'm not taking the long road because of the time required mainly, and if I want to keep my hopes of not needing a summer job I need to work more quickly ("buy" myself some time if you are into puns ).

I once had an argument for resisting the shorter road and learning longer, but I have to admit it is much weaker now that I just tried to get it down in writing. Perhaps I will try to keep it simpler at first, but I think I may anyway after turning toward watching the market over studying complex patterns and hardcore elliott wave as I was just into a few weeks ago.

However, I also recall that trading limits my market vision, so I would rather spend most of my time watching. I will think this over more.

 

Keep doing what you are doing. This approach at your age, and with all that goes on in your life is a perfect way to learn.

You can reduce the TF's like Tom did at a later date if you so wish, but what you learned from me applies to any TF so you pick what suits your lifestyle.

You have the makings of a top trader... a mature analytical head for such young shoulders. Allow yourself time to slowly grow into this.

Cracking the 1 min TF and lower is for those at the top of their game and it requires thousands of hours practice adhering to clear rules. That might or might not be your future, but in any event, you can go all the way to the top young man.