Joe's Journal

[Joe T]

Orders OPENED today:
0.20 USDCHF long @ 1.0650; tp = 1.0900; ts = 76

Orders CLOSED today:
0.60 XAGUSD long @ 12.50, closed @ 13.44 / +94 pips / +$564.00 / -$3.80 swap
0.60 XAGUSD long @ 13.16, closed @ 13.44 / +28 pips / +$168.00 / -$2.88
0.50 XAGUSD long @ 13.71, closed @ 13.44 / -27 pips / -$135.00 / -$0.41

CURRENT REALIZED BALANCE: $10,216.38

Having started this approach on June 10, 2009 that means I doubled my account on the 42nd day. I'll take that.

Orders PLACED:
BUY LIMIT 0.90 XAGUSD @ 12.50 / tp = 15.50 / ts = 29
SELL STOP 0.2 AUDUSD @ 0.8128 / tp = 0.7800 / ts = 78

[Joe T]

Orders OPENED overnight:
0.20 AUDUSD short @ 0.8128; tp = 0.7800; ts = 78

Orders CLOSED overnight:
0.30 EURGBP short @0.8650, closed @ 0.8684 / -34 pips / -$166.87 / -$0.22 swap

Current REALIZED BALANCE = $10,049.29

Orders PLACED:
SELL LIMIT 0.3 EURGBP @ 0.8800, TP = 0.8500, ts = 47


Notes: Money management is proving critical. More losers than winners this week, unfortunately, and yet my realized balance is still up. Losses get limited and profitable trades run. Pretty simple concept, but the tough part is keeping your fingers from pressing buttons and closing profitable trades prematurely, or panicking over losses. A couple very profitable trades make up for a lot of sins.

Things seem to run in streaks a bit. It's as if the market readjusts itself just a bit every week or two and hits my stops, giving me a string of losses. But this readjusting also sets up future positive trades (theoretically) and then I get a string of wins that outweighs the losses (theoretically). So, patience is key. On the other hand, if I can figure out how to minimize the drawdowns during those periods of readjustment without eliminating the good trade signals as well, then I'll be better off. Time and data are needed on that, so I will just continue to persevere as is. Overall, can't argue with the results so far.

[Joe T]

Trades OPENED today:
0.2 eurusd short @1.4159 / tp = 1.3950 / ts = 86
0.3 audusd short @ 0.8200 / tp = 0.7800 / ts = 78

Trades CLOSED today:
0.3 audnzd long @ 1.2428, closed @ 1.2400 / -28 pips / -$55.02 / -$0.43
0.2 eurusd short @ 1.4159, closed @ 1.4245 / -86 pips / -$172.00 / $0.00
0.2 usdchf long @ 1.0650, closed @ 1.0637 / -13 pips / -$24.44 / $0.00
0.2 audusd short @ 0.8128, closed @ 0.8182 / -54 pips / -$108.00 / $0.00

Current REALIZED balance: $9,689.40

Well... that ain't good. We can expect things like this, but I will also take a second look at my set-ups. It is possible that I was a little too aggressive. Also, the more I look at things, the more I think an EA would help me out - not to analyze the charts, but to help me in fine-tuning the best entry.

If anyone is proficient at MQL and would like to discuss this possibility, let me know.

Basically, I run an EA that trails stops and that's pretty much it. But one of the issues on my limit orders is that it should probably be more of an "alert" point where I start watching price as opposed to getting right in. If I had an EA to "note" this and then place an order when the time is right (as defined by me, of course) it would help. Absent that, since I'm away from the computer most of the time, I'm forced to enter via limit orders, and that is not always the best approach. Let me know and we can flesh out everything that needs to happen in the EA.

Oh, and I also PLACED one more order:
SELL STOP 0.2 nzdusd @0.6570 / tp = 0.6300 / ts = 67

[Joe T]

Very uneventful overnight: no opened orders, no closed orders, no placed orders.

One position currently running (audusd short @ 1.8200).

[Joe T]

Been kind of busy and unable to post an update real time, but I'll catch up. I'll generally say that I didn't rebound from early losses, and continue to see lackluster results this week. As I've looked more closely at the trades, I'm still thinking the general method works well, but the main issue is with the entry point. That said, I cna't lose sight of the overall results - up over 80% in less than 2 months. However, I think I could be doing even better, but more importantly I am uncomfortable with the large potential drawdowns. In a previous week, it looked like it had to do more with a single currency and some correlation, but that's not necessarily the case this week (though the weakening $USD is a definite contributing factor).

There definitely seems to be an issue with the LIMIT orders. The term "catching a falling knife" aptly explains the problem. If I can wait for price to start its upswing rather than trying to buy on the way down, I could have eliminated and/or minimized many of the losses. To do this, I need an EA, since the platform doesn't allow condiitional orders, because I am away from the computer. I am forced to continue testing as is with this higher risk until i can work something out with that. This creates the issue of being more careful on entry points, which is a good thing, but it also may mean missing some otherwise good opportunities, which is a bad thing. If I can get something in place to wait for the uptunr in price, I could probably be a little more aggressive with the "trigger points" on entry.

So, as you can see, I am still working all this out. I have not yet changed the strategy, and even this change I'm talking about is not a change in overall methodology as far as what it is I'm doing. It would be a change in how I treat the buy/sell point. Rather than it being automatic, it would be a trigger to start the process, but there would be some waiting while the right entry point was determined by price action.

Hopefully I can find someone with phat programming skills who is interested in my system's results, who may find it worthwhile to invest a little time in helping out. Obviously, in order to program it, I'd fully divulge all aspects of what I'm doing. If not, I'll just keep testing as is and live with some drawdowns for now and see if they normally rebound. As I said, overall results aren't argued with, but in the short period I've tested I've had 2 major periods of drawdown.

[Joe T]

Here's everything that happened since that last Thursday morning update:

OPENED:
0.2 cadjpy short @ 87.00 / tp = 79.00 / ts = 85
0.3 audcad long @ .8900 / tp = .9350 / ts = 60
0.2 audjpy short @ 77.50 / tp = 71.00 / ts = 95
0.3 audusd short @ 0.8200 / tp = 0.7800 / ts = 78
0.2 eurcad long @ 1.5450 / tp = 1.6300 / ts = 88
0.2 nzdusd short @ 0.6570 / tp = 0.6300 / ts = 67
0.2 usdcad long @ 1.0850 / tp = 1.1600 / ts = 81
0.3 usdjpy long @ 94.96 / tp = 97.50 / ts = 62

CLOSED:
0.2 cadjpy short @ 87.00 / 87.79 / -79 pips / -$165.49 / $0.00 swap
0.3 audcad long @ 0.8900 / 0.8840 / -60 / -$165.49 / $0.00
0.2 nzdusd short @ 0.6570 / 0.6588 / -18 / -$36.00 / -$1.01
0.3 audusd short @ 0.8200 / 0.8189 / +11 / +$33.00 / -$8.55
0.3 usdjpy long @ 94.96 / 94.66 / -30 / -$95.08 / $0.00
0.2 usdcad 1.0850 / 1.0840 / -10 / -$18.45 / $0.00
0.2 eurcad 1.5450 / 1.3\5392 / -58 / -$107.12 / $0.00

BALANCE: $9,124.80

PLACED: 0.3 audcad 0.8951 / 0.935 / 66


I still need to review my set-ups for the weekend, and may not get to it until after trading has opened today. That's OK, as last week's entries will carry over - just may not be the optimal or complete set-ups.


I will be heading up north for three days, and will not have internet connectivity. Trades will run as entered, but no new setups will be entered, and no journal entries will be forthcoming for a couple days.

[Joe T]

I have updated my trailing stops and lot sizes. Rather than list them all every week, I'll just give you the methodology on how they are calculated. I have a spreadsheet set up for this:

Step one: Enter the current pair price (column 1)

Step 2: Calculate the 0.1 Lot $ per pip. This is just $1.00 for all pairs ending in "USD" (except XAUUSD - which is $0.10) and it is 1/Price for pairs starting in "USD" (except USDJPY - which you also need to multiply by 100). For all pairs not including the USD currency, you look at the second pair. If there is a corresponding "USDXXX" pair, you just pull the value per pip from there. If there is a corresponding "XXXUSD" you just pull the current price of that corresponding pair. That covers all the pairs I trade. (column 2)

Step 3: Enter the 30 Day Average True Range from the Daily chart of each pair. (column 3)

Step 4: Select the percent of the ATR(30) you want to use for determining the trailing stop. I use 50%. (column 4)

Step 5: Enter a typical spread for the pair in the next column. (column 5)

Step 6: Calculate Trailing Stop as follows: [(ATR(30) x Percent to use + spread) x 100 or 10,000 (based on # of decimals in price quote)] rounded to the nearest pip.

Step 7: Next multiply the result of step 6 by the dollar value per 0.1 lot.

Step 8: Select risk as a percent of account balance. I use 3%. Multiply balance by this percentage.

Step 9: Divide the result in step 8 by the result in step 7 ($ per 0.1 lot). This gives you the lot size you can trade on this currency pair.


It probably looks complicated, but it's pretty simple to spreadsheet, so all I need to do is enter my updated values and i get my money management parameters.

So, just know going forward whenever I place a trade with a certain trailing stop and lot size, this is the basis.

There are some exceptions, which I will get to eventually.

[Joe T]

I was off camping until Wednesday evening, and came back to a ton of work, a TV/Audio installation, and other stuff that is keeping me off the computer. I probably will not give a trade-by-trade of the account over the last week, but hope to get more in the swing of things again soon.

As for results, I continue to see a struggle with the LIMIT orders. This clearly is not the optimum way to get into the trend, and will need to figure something out here. It will either require closer monitoring of the charts or an EA, as I discussed. However, despite the slump over the last couple weeks, and what is turning out to be a poor win % on the trades, I'm still up near $9000. If I can massage the entry, I'm excited about the prospects of this in terms of more consistency. Still undecided on whether or not a more aggressive Take Profit approach is needed.

So, the deal is that right now I'm taking a loss - usually pretty small - on most of my trades over the last couple weeks. But one win usually is the equivalent of 4 or five of those losses, and occasionally I hit a really nice trend and then the account advances quickly during those periods (As can be shown on this thread). These big wins have not been hit over the last couple weeks, so the account is getting nickeled and dimed down. Money management keeps me afloat, in preparation for (I hope) a new run of big wins soon. In reviewing some of the losses, the trade failed due to the limit entry, where price hit my stop, only to reverse and then hit the trend I was trying to enter. I'm not saying all these would be wins. In fact, there are some situations where the trade wouldn't be as good under the new way I'm looking at entering. But usually the results would have been better. Either a loss turns into a win or a loss becomes a lower loss.

One interesting insight I have to offer is this: When I started this journey a few months ago, I did so somewhat blind by buying an EA that I was supposed to be able to run without knowing anything and I could watch the money roll in. I'm smart enough to realize that this was not necessarily a clever thing to do, but I was interested in the market and felt it was a way to test the waters and learn a bit more. On that account I was correct. It got me started. As can probably be predicted, the EA didn't work out. The interesting thing is how it lost me money. It did, in fact, win a very large percentage of its trades: 75%-90% depending on the time period. It was a scalping methodology. I now realize how screwed up the money management was, though. I'd win 8 trades in a row and start feeling pretty good, only to have ALL the profits wiped out with one bad trade.

So, here I am now, lamenting a period of drawdown where I've lost some money on my account (and rightfully so to an extent. Why not find ways to improve on it?). And overall, I haven't done the math but overall I've probably lost 60-70% of the trades I've made. But I limit maximum risk on a given trade to 3% of realized balance. Further, the trailing stop from the first pip further works to reduce risk. On average, I probably end up losing 1% or so on the trades I lose. But then I hit a trade here and there that scores big, and makes up for a lot of sins.

So, on one method, I won 80%+ and lost money. On another method, I win 40% of the time or so and my account is up nearly 80% from the beginning in less than two months' time (down from over 100% a couple weeks ago, but oh well...).

It's not about win percentage. It's about money management. Now, if I can improve the win percentage, that's great. But staying alive and kicking while I work through that is key, and that's about money management.

My thoughts for the week.

[Joe T]

Lest you think I'm avoiding posting because of my string of bad results, perish the thought.

I've just really been busy with non-Forex pursuits. We're re-doing our house, and just really needed to address other things. This also means I made the mistake of just letting my old limit orders ride without re-evaluating charts, and I've paid handsomely! Full disclosure is something I want to convey here. I don't intend to only post in the good times and pretend the bad times don't exist.

However, posting all my trades over the last couple weeks simply wasn't feasible - I've either been working on the house or have been out of internet access in our up-north camper in Wisconsin. In either case, I haven't devoted much time to posting, and have not spent the necessary time to tweak the trades.

So, I've learned a few things so far:

1) When trades trend well, you can hit some good trades and make up for a lot of losses. A LOT of losses... despite the horrid results over the last couple weeks, I'm up 60%. Now, that's great and all, but I was up over 100% not too long ago and I don't like this protracted drawdown, which is now about 20% of the peak account balance.
2) There just has to be better entries than these LIMIT orders. I have so many losses compared to wins for an extended period of time that it's time to adjust. I am still openly soliciting a programmer to help out with an EA - no takers yet. In the meantime, I'm going to attempt to monitor price and use STOP orders only. Instead of placing LIMIT orders, I will simply track the point at which I would have otherwise entered a trade, and look for an entry point in the direction of the trend once it looks like it's reversed. This means giving up some pips, but it's clear that the LIMIT orders are quite risky. Money management has saved me, but why suffer all these losses? I'm looking for a few more wins and loss mitigation so I can just kind of hover or gain slowly, and then every now and then hit a really nice move. LIMIT orders have had too many losses.
3) Global warming is a hoax. Just go camping up north in Wisconsin in July and tell me how freakin' warm it is...
4) If you aren't going to have time to monitor your charts, then cancel your orders. That was just dumb on my part, thinking that the dated orders would be fine without keeping up on the review.

So, the current balance is $7,967.78.

I have two orders running:
short 0.2 chfjpy @ 90.00 / ts = 79 / tp = 84.00
long 0.2 usdmxn @ 13.1000 / ts = 965 / tp = 13.7000

Both of these were placed as LIMIT orders, but I'll let them run.

I then deleted ALL outstanding orders. Clean slate.

After finally getting back to reviewing the charts, I placed the following STOP orders:
SELL STOP 0.2 audjpy @79.95 / ts = 86 / tp = 73.00
SELL STOP 0.3 audusd @0.8399 / ts = 65 / tp = 0.7950
SELL STOP 0.2 cadjpy @88.82 / ts = 87 / tp = 80.50
SELL STOP 0.2 eurjpy @ 136.49 / ts = 113 / tp = 129.50
SELL STOP 0.3 eurusd @ 1.4366 / ts = 79 / tp = 1.4100
SELL STOP 0.1 gbpjpy @ 160.66 / ts = 149 / tp = 151.00
SELL STOP 0.2 gbpusd @ 1.6898 / ts = 103 / tp = 1.6450
SELL STOP 0.4 nzdusd @ 0.6649 / ts = 59 / tp = 0.6450
BUY STOP 0.3 usdcad @ 1.0703 / ts = 73 / tp = 1.1400
BUY STOP 0.3 usdchf @ 1.0634 / ts = 72 / tp = 1.0900


My chart analysis is staying the same. The difference is that instead of automatically executing a buy/sell at a certain point, I now use that price point as my trigger to start monitoring the price. The above STOP orders could change should price continue in the opposite direction. Due to my lack of ability to constantly monitor, I won't be as responsive as I'd like to be, and will not always get in my optimal entry - giving up some pips. But at this point the risk of that seems less concerning to me than the continual hits on the LIMIT strategy. So, I'll see how this treats me.

[Joe T]

All the trades I posted last night were opened overnight except for the eurusd and the gbpusd. A minor tweak was made on the gbpusd order - execution price now at 1.6900.

No positions closed overnight. Trades right now are operating in profit, so we'll see if that holds and my luck turns around here.

One new order was placed this morning: SELL STOP gbpchf @1.7925 / ts = 108 / tp = 1.7550.